Tom Commis

Aristotle determines the maximum population for a democracy to be 100,000 citizens. At this level individual citizens can influence policy directly not just by proxy. This government is always pretending to bring powers closer to the individual e.g. by devoloution but these efforts are clearly bogus.
I've had an idea which I would like to tentativley propose, it is that small areas (say the borough council) would take on most of the powers of a state, e.g. tax raising, criminal codes, etc. The 'statelet' could set it it's own income tax rate but the money would be collected centrally and distributed proportionatley: lets say there were 100 statelets one of which had a tax rate of 10%, that statelet would get 10% of 100th of the total income not 10% of it's own income.
The statelet would use it's tax revenue to purchase services such as health, education and policing and prisons from the central govt. (so an area with a 10% tax rate couldn't afford free health care or heavy punishments for criminals). The central government would remain responsible for foreign policy and defence.
The advantage of a system such as this is that it allows a great diversity of law and practice within the same country without the drawbacks of lack of services.
I am aware that none of this will happen but is it a good idea in theory?, could the country hold together organised like this?.

lkelly

I like it. I think it's fine. I'm no expert on economics, though. Ideas like this have economic implications, and I can't comment on them from such a perspective.

Lawrie Boxall

Essentially this is the thinking behind a "Europe of the Regions". Great idea - it's just a pity the EU got there before we did.

Paul Birch

Aristotle may have been a bit optimistic there. In the absence of fancy cyber-space tricks perhaps fewer than a thousand individuals can be expected significantly to affect policy.

This isn't quite clear. By "total income" do you mean the gross national income, or the total government revenue? There are possible objections either way. I'd like to be sure just what arrangement you envisage before I comment further.

David Agnew

[quote="Tom Commis"]Aristotle was right. This is the upper limit not just for real accountability, but also for efficiency: The columnist Richard Littlejohn has formulated 'Littlejohn's Law of Local Government' which states that the bigger the council and the bigger the budget, the worse the services.

You are right; they are bogus. Devolution makes the quality of government in the UK even worse. Not only does it cost a lot of money (the £430m+ bill for the Scottish parliament building is just the tip of the iceberg), it actually makes government less accountable. We now have the bizarre situation whereby Scottish MPs have no power over certain matters (eg education) in Scotland, but they do in England. In 2004, New Labour shamelessly used its Scottish MPs to force through top up fees in England. Devolution - democratic? I think not!

Abolition of the devolved parliaments should be central to UKIPs plans to democratise the UK.

This would result in two income tax rates - the local and the national. The problem with the local income tax is that most people would not work in the area where they live, so in a commuter town 'statelet', the tax base would be very small. The alternative would be to apply the local tax at the place of work. This would be a bureaucratic headache - a large employer may have to apply 10 or more tax rates to its employees according to where they had come from.

Currently one of the reasons that local authorities are not accountable to their electorates is that there is little correlation between what they spend and what they raise in tax. This is because most of their income comes as grants from central government. There needs to be reform in this area so that all local government income is raised locally.

It may be better to provide services itself rather than to buy them from central government. The advantages of bigness are largely a myth.

I think that local government needs to be kept small because some of them think that they are states already: For example Birmingham council even has a foreign policy - It sent its leader, Sir Richard Knowles to oversea the South African elections.

Yes, and it would mean that it would be easy to move to a statelet that suits your political tastes.

It is a good principle. In my opinion all local government should be small and unitary (with elected mayors to act as coordinators in the cities). I support strong devolution to this level (even of responsibility for social security). This would discourage social security dependency, as people would be aware that their neighbours are paying for it.

It should be UKIP policy to return all the powers removed from local government by the Thatcher government.

Small, truly accountable local government would result in an impovement in the quality of people attracted to it (because they would then have genuine power and responsibility). It would be good for civic pride, and if people feel that they 'own' their local communities, they are less likely to trash them. This would improve the quality of life.

A truly local tax system would improve the efficiency of local government (the electorate would not allow them to waste money on politically correct non jobs as at present).

Tom Commis

Paul Birch wrote:
fewer than a thousand people can be expected tosignificantly to affect policy.

Maybe so but those thousand will be the ones with an interest and a persuasive argument.

Paul Birch wrote:
This isn't quite clear.


No it isn't well expressed but what I men is that a rich area and a poor area with the same tax rate and population would recieve the same income distributed from central government. The rich area would still get more from business rates etc. (if they imposed them).

David Agnew wrote:
This would result in two income tax rates - the local and the national.

No, there would be no national income tax, all the national govt. (just defence really) would be paid either by a compulsory contribution of a fixed amount from each statelet or from tariffs on imported goods or other sources as was the case before income tax.

Thanks for the replies, there are many objections to the idea I know and
I haven't thought it through fully. It might be useful to discover how much power can practically be given to local authorities.

Paul Birch

Yes, I get that. But if you did mean that each area should receive an amount equal to the national per capita income, multiplied by its population and its tax rate, while the inhabitants of each area contributed their personal income times the local tax rate, you should appreciate that in general it won't add up. Central government will typically collect less in revenue than it is required to disburse in grants (if, as is likely, wealthier areas set a lower tax rate - or lower tax rate areas attract wealthier residents).

Let's look at a simplified example. Two regions, one poor, one rich, both with a population of one million. The first has an average annual income of £1,000 per person, the second £10,000. The first sets a tax rate of 20%, the second 10%. People in the poor region pay £200 a year each (£200m in all); those in the rich region pay £1000 a year (£1b in all). The average national income is £5,500 per person. So the poor region gets £5,500x20%=£1,100 per person (£1.1b in all, a net gain of £0.9b); the rich region gets £5,500x10%=£550 per person (£0.55b in all, a net loss of £0.45b). Total government revenue = £1.2b. Total government expenditure = £1.65b. Shortfall = £0.45b.

Note further that it is then in the local interest of the poor region to push its tax rate as high as possible - even to 100% or above - because the higher the tax rate the higher its net receipts from central government. It can afford to bribe its electorate with generous welfare benefits.

Similarly, it is in the local interest of the rich region to push its tax rate as low as possible - even to 0% or below - to minimise its net contributions to central government.

Thus, even if we adjust all the grants downwards pro rata to match total revenue, the system will be unstable and divisive; the country will tend to split INTO phpbb_wealthy low tax regions and poor high tax regions, with the latter trying to live off the former.

Er ... the uniform non-domestic (business) rate is collected nationally, so this wouldn't work - unless you meant to scrap the current business rates and let the local councils collect their own (if they wished).

Anthony Butcher

100,000 people is roughly the size of contituencies under the AV+ system of PR, if it is ever introduced to Britain.