New Labour, New Regional Tax

Regional assemblies will mean higher taxes, more politicians, and less power for local communities.

The Regions White Paper, published recently by the Labour government, contains proposals to create elected regional assemblies across England.  A Bill paving the way for regional referendums on the assemblies is expected in the Autumn.  Conservatives oppose the creation of a new and unnecessary layer of regional politicians.

The Labour government’s proposals will remove power from existing councils and undermine local councillors.  Shire counties are likely to be abolished and regional assemblies will assume powers in key policy areas such as transport, planning and housing.  Frontline public services will not improve by creating new regional politicians.  New talking shops and additional red-tape will not nurture economic development, enhance the transport infrastructure, or build new schools. 

Labour’s proposed regional assemblies will bring significant extra costs.  The London Assembly currently costs £50 million a year in administration alone – around £7 per head of population.  Eight more regional assemblies throughout England will cost around £300 million a year in administration – enough to employ around 12,000 teachers.  New buildings to house regional assemblies will cost hundreds of millions of pounds.  The abolition of county councils and restructuring of district councils will cost up to £2 billion.  In total, this unnecessary new tier of regional politicians is likely to cost the taxpayer the equivalent of a penny on income tax.

The government has stated that regional assemblies will be partly funded by a new regional council tax.  John Prescott told the House of Commons that regional assemblies “will have the power to raise further funds through a precept on council tax” (09/05/02).  Regional assemblies therefore represent yet another stealth tax on local taxpayers. 

The Liberal Democrats also want new regional politicians and a new regional income tax to pay for them.  Don Foster, Liberal Democrat spokesman, said “no ifs, no buts, we back regional government” (20/09/00).  The Liberal Democrats’ 2002 Spring Conference approved a resolution that states “people in each region must be given the chance to vote for their assembly to have income tax-varying powers” (11/03/02).

Conservatives believe regional government in England will be more distant and less accountable than existing local government.  Regional assemblies will be bureaucratic, undemocratic, costly, and cumbersome, and their powers are vague and poorly defined.  We want to strengthen local councils rather than create more layers of politicians.  Local government is the best mechanism to deliver quality public services and represent local communities.  Conservatives want to re-empower local government and let local authorities deliver what is best for local communities in response to distinctly local needs and circumstances. 

Local government does not need another reorganisation.  It needs the government to give it sufficient funding, more powers and deeper trust.  As Theresa May, Shadow Secretary of State for Transport, Local Government and the Regions, said: “If this centralising government genuinely believed in giving more power to local communities it would be reducing Whitehall interference in local government.  But the fact is that such interference has soared under Labour” (09/05/02).

The Conservative Party has already laid out proposals to scrap the bureaucracy of regional planning requirements and regional house building targets.  As part of our policy review we will look at ways to transfer powers from Whitehall and existing regional bodies to local councils and local communities.