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New Labour tax and cut!The Socialist Party is fighting for:
Tax and cutFar from being the party of ‘tax and spend’ New Labour should be known as ‘tax and cut’. Nowhere is this truer than at local level. Since 1997 the council tax has increased by 70%. Millions struggle to pay ever-rising council tax bills while local authorities use the courts and the bailiffs to retrieve arrears. Tax burdenWe are collapsing under a tax burden, yet the services we are supposed to receive in return are being cut to the bone. The council tax is a deeply unfair, regressive tax where the poor pay most. Those living in the most expensive properties (Band H) pay only three times as much as the lowest. This means that the Blairs, with an income of at least £450,000, pay just £1,140 in council tax. Cuts in central government grantThe government tries to claim that rises in council tax have nothing to do with them, but they’re lying. Councils only raise 25% of their income from council tax, while 75% comes from central government. So a small increase in council spending or, more likely, a cut in the central government grant, results in a high council tax increase. In addition, under New Labour the government grant is tied by a thousand strings to specific spending projects, mainly linked to privatisation. Left with a pittanceThis leaves local councils with a pittance to spend on providing basic local services. The government also decides at what rate the local business tax can be set at. Desperate to please big business, New Labour has continued the Tory policy of refusing to raise the business rate. This means that the proportion of local authority budgets provided by the business rate has fallen from 31% in 1990 to 22% now. The result is a higher council tax. Local councils are not blamelessBusiness rates should be bought back under local control. Of course there should be rebates for small businesses but every area has massive multinationals like McDonalds that are currently getting away with paying minimal taxes. But local councils are not blameless. Whether Labour, Liberal or Tory they have wholeheartedly accepted a diet of cuts, privatisation and council tax increases. Needs budgetA socialist council would set a ‘needs budget’ based not on the dictats of central government, but on the needs of local people. We would then launch a mass campaign to demand the necessary funds from central government - see the example of Liverpool – the city that dared to fight. The Socialist Party is fighting for:
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