Portillo comes out for Local Income Tax

by Stephen Tall on September 7, 2008

There’s a rather remarkable turnaround from former top Tory Michael Portillo in his column in today’s Sunday Times:

Labour – and the Conservatives – have manoeuvred themselves into the stance of opposing taxation (at local level at least) based on ability to pay. It is not an easy argument to sustain. [The SNP’s Alex] Salmond has effortlessly cornered his opponents and could be just a few moves from checkmate. … His proposal cuts away at Labour support because it is redistributive towards poorer voters. However, the Tories need to watch out, too, because it would also help those widows in large houses, the core supporters for whom they invented the poll tax 20 years ago.

The debate may well be confined to Scotland and to how it will shape attitudes to independence there – but it should not be. If we altered the way local authorities raise their money, we would change the nature of our country for the better.

I became minister for local government just after the Thatcher government introduced the poll tax to England, the year after the Scots had started to pay it. I defended it then and later under Major I worked to scrap it and replace it. Having thought hard about local government finance, I am convinced that an income tax supplement must be part of any equitable local tax system. I admit that earners would pay more and high earners much more, but greater social justice is not a powerful argument against it.

More importantly, raising the money in that way would enable local government to grow in scope and importance. By comparison with almost every country I know, we suffer from chronically weak local government and from central government that is too powerful. Decisions are made remotely, national policies are imposed although they are inappropriate in most localities and terrible amounts of public money get wasted.

You can read the whole article here – and perhaps marvel at the way Mr Portillo manages to write 800 words on Local Income Tax without once mentioning that it’s been Liberal Democrat policy for the past two decades.