Richard North, EUReferendum, links to an article in the Mail, one apparently co-authored by him, which deals with the reported cuts being suffered by local authorities which contrasts with the fact that spending by said authorities has increased.
Richard North also links to the 6 Demands of the Harrogate Agenda; consequently it is worth expanding on how those Demands would effect the shambles that presently we know as local government. On the basis that it is the first demand of the Harrogate Agenda that it is the people that are sovereign it is not just local government that is being discussed here, but democracy per se. The vast majority of that which follows is taken from a pamphlet “still in the making”.
In Britain, the very idea that we have local democracy is a fiction. We do not. What we do have is a local government system comprised of central government agencies, the tasks of which are to administer centrally-defined law at a local level. Local government units have no independent existence or powers. They are defined through the medium of Acts of Parliament. They owe their existence,
their boundaries and their powers to the diktats of central government. They are
funded primarily from the centre and the nature of monies which are collected
locally are directed by the centre, as well as the amounts and terms of
This, by any definition, is a top-down society, and one which has become
increasingly so over time. Therefore, local elections are little more than
extended opinion polls on the performance of central government. There is no
point in getting excited over the election of local officials when almost the
entire extent of their powers is determined by national law. Understandably, therefore, “reform” of local government becomes necessary, although the very idea is unrealistic. How can you reform something you do not have? We need to build from scratch, from the ground up, replacing the centrally dominated agencies with structures, which are truly local. We need structures, which can be considered government in the proper sense of the word, under the proper democratic control of their people.
To that effect, the aim must be no less than to reverse the entire structure of the British state. Instead of the top-down construct, we need to focus locally and create structures from the bottom-up. This is not “localism” in the sense proposed by Prime Minister David Cameron, or anything like “The Plan” offered by Conservatives Daniel Hannan MEP and Douglas Carswell MP. Those options simple allow for a small amount of power to be handed down, or shared, without changing anything fundamental. The idea of central government condescending to hand down some tiny fraction of its power, under carefully controlled conditions, ready to claw it back at a moment’s notice is not a transfer of power – it is simply the granting of a conditional license.
What is bring proposed, therefore, is nothing short of a bloodless revolution. The fundamental building blocks of our democracy become independent local government units which owe their existence not to central government but to
the people who live within their boundaries. To achieve this, the fundamental status of local government must change. Instead of being statutory bodies – i.e., defined by statute, from which they derive their powers, under the control of central government – they become constitutional entities. Their existence, powers and revenue-raising capabilities are defined by the people via the medium of a constitution, approved by a referendum.
The idea is that these local authorities – which could be counties, cities or the
former county boroughs – become legislatures is their own right, making laws
to cover the areas within their competence, applicable within their boundaries.
As local councils once made by-laws, our county units would be able to make
laws in their own right.
Some might think that such local authorities are too small to become
legislatures, but size should not be an issue. Few people realise, for instance,
how small Iceland is, in population terms. With 313,000 souls, it boasts fewer
people than the London Borough of Croydon (363,000) and very substantially
less than the Metropolitan District of Bradford (501,000). Yet Iceland is a sovereign nation. It has its own government, its own parliament, its own laws, its police and even its own fishing policy and navy to enforce it. Despite its small size, the country does tolerably well, with a GDP of $12.57 billion (146th in the world) and a GDP per capita of $38,500, the 24th highest in the global league (higher than the UK’s $36,600, the 33rd highest). It also has its own local government, with 59 local municipalities The idea then that much larger units of population in the UK need a beneficent central government to create all their laws, to control virtually everything they are permitted to do, to fund them and even define their boundaries and their very existence is, frankly, absurd. Furthermore, we tolerate this situation, and even call it democracy. That is even more absurd.
What is needed are units with populations in the order of 3-500,000, making up
between 150-200 primary areas in the UK. Each should be responsible for most
of their own government, with their own constitutions, legislatures, laws and
revenues. Thus, it is proposed our local governments structures should assume
many of the duties currently undertaken by the state. Those might include such
things as the determination and payment of social security and unemployment
benefits – the provision of health services currently administered by the NHS.
It follows that all national laws covering subjects which would then fall within
the remit of local government should become local laws. The local legislatures
should be able to re-enact them if so desired, or they can be repealed or revised.
Left to central government would be foreign policy and relations, including the
framing of international law and making treaties with other nations. We would
see central government take a hand in making maritime law and deal with
matters of national security and defence. In what would effectively become a
federal-style body, central government would also concern itself with cross-
county-border crime and serious, organised crime.
There then comes the inevitable question of who pays, and more particularly
how. Control of taxation is at the heart of true localism, to which effect it is proposed that those local governments should become the primary tax collection
bodies. It is also envisaged that they collect most if not all taxes from people
and enterprises within their borders. Instead of the system where only a fraction of their income is collected locally via Council Tax and charges, with the balance made up from subsidies from the centre, local authorities would collect all taxes. They would deduct their income from them, becoming financially self-sufficient. Thus, they would not only collect Council Tax, but income tax, sales taxes, corporation taxes and most other taxes currently collected by the centre. After they had taken what they needed to fund their own operations, they would remit the balances to central government.
By this means, rather than the centre subsidising local government, the
relationship would be reversed. Equity would be achieved by having poorer
authorities remitting less, per capita, to the centre, and the richer authorities,
like the City of London, would pay more. The funding would be managed on
the same basis as the precepts currently collected locally, from which are paid
the police, fire services and transport authorities. Only in extreme emergencies
would we expect any transfers of funds from centre to local authorities, such as
in the case of a major natural disaster.
When local taxation prevails, allied with local democracy, there is every
opportunity for variable rates and real tax-competition between local authority
areas. That in itself could result in something we have never had in this country
– a downward pressure on taxation. This is the “small government” which so many people profess to want, but even then – despite the local units being constitutional bodies – that does not guarantee freedom from central government interference. We see in the United States constant tension between federal and state governments, and the encroachment of the centre. Here, as always, the currency of power is money. The federal government, with its own vast income stream – far larger than state revenues – is able to bribe States with cash inducements or bludgeon them by withholding cash.
The answer, therefore, must be to control the flow of money. The centre should
have no (or very limited) taxation powers. Nor should it be allowed to borrow
to finance a deficit, except in very exceptional circumstances, and only with the
explicit permission of the people. It must not be able to bribe its way to power.
Taking in for the moment the idea of Referism (about which more follows later in this post), we then see budgets at local and central levels controlled by annual
referendums, firmly limiting the expansionary tendencies of all governments.
What is more, there is an important side-effect: Westminster MPs become even
less important than they are now, while democratic representation at local level
becomes more important. In some respects, this also solves some of problems we have with MPs. One might expect seats to be apportioned on a county basis, with approximately one per 120,000 head of population. The boundaries would be fixed. As population varied, so would the number of MPs, keeping constituencies wholly within the bounds of specific local authority areas.
The reckoning should be, incidentally, based on population rather than
electorate, as our MPs should be representing the interest of all of their
constituents, not just those who can vote. This ratio gives a House of Commons
roughly the same size as it is at present. Some might argue that, with a reduced workload, fewer MPs would be needed, with a ratio of perhaps 200,000 or more for each representative, possibly stretching to one per 500,000 head of population. Where the United States House of Representatives manages to make do with 435 voting members, our House of Commons might be able to reduce itself to less than 300, saving considerable expense. We might expect numbers in the House of Lords to be proportionately reduced – with perhaps only a hundred or so working members needed.
Details of how and under what conditions MPs (and members of the upper
house) are selected might be left to the electors of the county, embodied in each
local constitution and implemented by the local legislatures. After all, if we are
to have localism, then the terms and conditions governing the employment of
our representatives should be decided locally. We could also envisage a situation where MPs are no longer paid from central funds, but by their counties. It would be for the people of each county to decide how much their representatives were paid, how much should be allowed by way of expenses, and how they should be held accountable. If one area wanted to introduce a method of MP recall, that would be up to them. Thus do we see democracy closer to the people, with government – local and national – under the direct control of the people. When you think about it, anything else isn’t democracy at all.
Earlier the word “Referism” was mentioned and in this respect it brings to the fore Demand #5 of the Harrogate Agenda which stipulates that no taxes should be raised nor any money spent without authorization. Referism is a political philosophy which states that, in the relationship between the British people and their governments, the people should be in control. The state is the servant not the master. Control is primarily achieved by submitting annual state budgets to the people for approval, via referendums. The catch phrase is: “it’s our money and we decide”. Governments are thereby forced to refer to the people for their funding, hence the term “Referism”.
At the heart of power is always money. That is how parliament emerged as a
force in the land, going as far back as 1215 when the tenants-in-chief secured
the first draft of the Magna Carta from King John. But the concession that
more than anything else reduced the power of the king was the principle that the
king might not levy or collect any taxes (except the feudal taxes to which they
were hitherto accustomed), save with the consent of his royal council. He who
controls the money controls the King. Thus, the “Council” gradually developed
into a parliament and thence, in effect, became the King. The principle of financial control survives to this day. The executive (the former king) must refer to parliament each year for approval of its budget. Without that, it runs out of money. Our problem – and the nub of all our problems – is that this process has become an empty ritual. No parliament has rejected a budget in living memory, and none is likely to do so. Each year we see the government of the day pretending to ask parliament for money, and we have to watch the empty charade of approval being given – only then to see vast amounts being spent on things of which the majority of us do not approve. Overseas aid is a classic example, where public approval would doubtless be withheld. The ritual, therefore, must turn back into substance, with real control over the annual budget. The politicians cannot be trusted to discharge this duty. They have their fingers in the till and a vested interest in maintaining high levels of expenditure. The power must go to the people who pay the bills – us.
The means by which this must be achieved is through an annual referendum.
The budget must, each year, be submitted to the people for approval, coming
into force only once approved. The politicians must make their case, put their
arguments, and then ask us for money … and they have to say please. We, the
people, decide whether they get it. We, the people, have the power to say no.
In discussions about this process, however, the great fear most often expressed
is that people would simply vote themselves more money. However, the
limited experience that we have of referendums about taxation levels suggests
In February 2001, for instance, Labour-controlled Bristol City Council held a
referendum on its Council Tax, asking voters whether they preferred to increase
it by two, four or six percent, or to freeze it at then current levels. Much to the
chagrin of the Council, more than half the voters opted for a freeze. Sentiment
was such that, had a reduction been on offer, that would have been the preferred
choice. Of more than 115,000 people taking part in this referendum – the turnout
significantly higher than at local elections – 61,664 voted for no rise, 11,962 for
a two percent rise, 20,829 for a four and 19,841 for a six percent rise. Thus, the
total of those voting for raised taxation, at 51,732, was outnumbered by those
who wanted to freeze the budget.
Nor was Bristol on its own. The Council was just beaten to the punch by the
London Borough of Croydon, which on 14 February 2001 asked its 235,000
registered electors to decide whether Council Tax should be increased by two
percent (in real terms, an effective freeze), 3.5 percent, or five percent. Council
tenants also voted on whether their rents should be increased, against an offer of
improved services. Then, 56 percent of the voters opted for the lowest possible rise. A total of 80,383 voted, a 34.2 percent turnout. Thirty-two percent voted for the 3.5 percent increase and a mere five percent went for the five percent hike. Of the 4,190 council tenants responding to the rents referendum (24.1 percent turnout), just over 58 percent voted for a rent freeze, keeping average rents at £65 a week. On offer to the tenants had been a community patrol service, community grants, money advice and debt counselling services – all of which were rejected. Croydon was to repeat the experiment the following year, with 74 percent of the taxpayers who voted opting for the lowest rise on offer, at 3.65 percent, on a 35 percent turnout.
Interestingly, this experiment in direct democracy had started in 1999, devised
as a means of protecting Council Taxpayers in England from unwanted
excessive increases set by billing authorities. At the time, the Department for
Communities and Local Government acknowledged that this was taking power
away from central government and giving it to local people. Another participant was Milton Keynes, which put to its voters the choice of three levels of increase, ranging from five to 15 percent. Residents were able to vote by post or telephone for their chosen option. A 9.8 percent rise would keep core spending at the same level, while the five percent increase would have meant cuts in the core budget. A 15 percent increase would have provided extra revenue. Forty-six percent of those who voted opted for the 9.8 percent rise, thirty percent for the five percent increase and twenty-four percent for the 15 percent hike. The turnout was 45 percent. Council leader Kevin Wilson illustrated the point of the exercise with a
comment to the BBC, telling it that: “The referendum gave the people an
opportunity to be masters rather than servants”, declaring that the referendum
had succeeded in its aim of reconnecting people with local government and
giving public backing for council tax rises.
Buoyed by the result the following year, Bristol announced that the public
would get a chance to vote on their council tax levels, “under plans drawn up to
tackle voter apathy”. The scheme had the backing of government ministers and,
if the public had responded “positively”, the plan was to repeat referendums
across the country. Clearly, the response was not “positive” enough. At the
time, The Independent newspaper was to lament that, “in a victory for the
maxim that people vote with their wallets, the results showed few people in
favour of extra spending”. “Voters of Bristol pick school cuts over taxes”, it
headlined. The Bristol experiment was not repeated by Labour.
What the experiments showed, however, was that there was some enthusiasm
for voting on budgets – even though there seemed to have been very limited
local and national media exposure. And in Croydon, voters were not deterred by
votes in successive years – turnout increasing marginally on the second year.
The experiments also demonstrated that electorates are capable of dealing with
multi-choice votes, a capability that gives much more flexibility than having to
stick to a straight “yes-no” vote. Furthermore, there seems to be a willingness
amongst the voters to block expenditure. Thus, fears that the electorate will
necessarily vote for more spending might be overblown. Following the Labour defeat in the 2010 election, the issue was taken up by the Conservatives. Communities Secretary Eric Pickles declared that by 2012 he wanted people to be able to reject Council Tax levels “if they exceed a ceiling agreed annually by MPs”, by voting on them in referendums.
This was based on a promise made in 2007, whence Pickles called the plan a
“radical extension of direct democracy”. It was not. Instead, it was a
considerably watered-down version of the earlier referendums – which
themselves did not allow for outright vetoes. Nor was there any suggestion that
they should apply to central government spending. Pickles averred that he was
“in favour of local people making local decisions”, and also said he wanted to
reverse the presumption that central government knew best when it came to
deciding local priorities. “Let the people decide”, he went on to say – but only
on local issues. While this was a welcome development, Referism goes much further than a simple veto on any increase on Council Tax. Not only does it also apply nationally as well as locally, it gives voters the power to force down budgets, with the ultimate power of veto if the government does not come into line. It is also able to control spending. A weak block on a preset level of increase is merely a sop, and does nothing to redress the power deficit.
As for costs of the referendums, the Bristol events cost £120,000 each, while
Milton Keynes estimated £150,000. Tower Hamlets Council has estimated that a standalone referendum might cost up to £250,000 but, if combined with
council elections, the additional cost was estimated at around £70,000.
Translated nationally, the total cost of a referendum would be between £30-60
However, it was the late Sandy Rham, an IT expert and founder of the EU
Referendum blog forum, who suggested that the software on current lottery
terminals could be adapted to allow their use as voting terminals. A system that
handles £6.5 billion in annual sales could very easily handle 40 million or so
votes in a referendum. Add an online facility and you have a quick, cheap
system of conducting referendums. Such a system is not only desirable but also
necessary to minimise costs and disruption. Furthermore, Swiss and Californian practises could be adopted, where – if need be – the voting on two of more referendums could be combined, perhaps to fall in the same period as the annual budget referendum. There is no reason why referendums should be time-consuming or expensive.
What then concerns doubters is that, should the people fully exert their power,
government might be deprived of funds altogether. But there is nothing to
prevent there being safeguards to prevent this – in the short-term, at least.
There should be no problem in having a fixed date for a referendum well before
the financial year for which each budget applied. If a budget was then rejected,
there should be enough time for governments to resubmit, and again seek
approval. If a budget was again rejected, and it was too late to resubmit before
the start of a financial year, there could – for example – be a system where
permitted income stood at eighty percent of the previous year’s figure, with
adjustments made once a budget was approved.
In the USA however, if Congress does not eventually approve the budget, the
administration can no longer pay its bills. That tends to concentrate minds. In
the case of Referism, the people could stop the money, giving them a
continuous power. By contrast, a one-off referendum, agreed (or not) by the
government, on a grace and favour basis for its own tactical advantage, is to
concede power to the government. We, the people, still have to ask the
government for a referendum. When there is an annual referendum as of right,
power resides with the people.
Without this power, it is hard to accept that we have anything that approaches
democracy. As it stands, both at local and central level, the politicians decide
how much they are going to spend, and how much we are to pay them. We are
never consulted, and have no means directly of affecting their decisions. The
way the system is supposed to work is that, if we disagree with the decisions
taken, we hold our elected representatives to account at elections – i.e., after the
event. But can anyone really assert that the election process is any barrier to the
ever-increasing government expenditure and control?
Reverting to the article by Christopher Booker – and having read the above – would you not agree that if we are to be “fleeced”, whether by national or local government matters not, we the people should be able to decide such?