April 23 2001


Hidden taxes

By now you will all have relieved your Council Tax demand and accompanying publicity blurb announcing the excellent news that there will be no increase this year.

Naturally, the ruling Independent Political (sic) Group is claiming credit for this happy state of affairs, though the truth is that this standstill has nothing whatsoever to do with their stewardship of the council's finances.

How could it when most of them haven't a clue about what goes on?

As I have pointed out previously the County Council's projected spending for 2001/02 is £7.5 million (6%) more than that for the current year, but, because the Welsh Assembly gave them an extra £8 million in Revenue Support Grant (RSG) there was no need to fund the extra spending through increased Council Tax.

Indeed, on logging on to Neath Port Talbot council's website I find them complaining that Pembrokeshire's RAG amounts to some £75 per head more than theirs, or £225 per three-person household; more than enough to account for the difference in the two authorities' tax levels.

In any case, a simple comparison of the Council Tax rates of different authorities is extremely misleading.

Local authorities have four main sources of funding: RSG, Business Rates, Council Tax and charges.

Unfortunately, there seems to be no way of arriving at an accurate figure for the County Council's income from charges, despite last year's call from the Auditor General for greater transparency in this area.

And, of course, the level of charges and the level of Council Tax are inextricably linked.

As a simple example, take the County Council's fairly recent decision to impose a charge for the collection of garden waste, a service hitherto provided "free on the rates".

This, in effect, represents a hidden increase in Council Tax because the people are left paying the same for less.

So, even though Pembrokeshire County Council has the lowest rate of Council Tax in South West Wales, that alone doesn't prove that Pembrokeshire residents are getting a good deal.

Only when we know how much we are forking out in total (charges + Council Tax) compared to other areas, can we make a judgment.

Perhaps some enthusiastic member(s) of the opposition parties will find out for us!

Unintended consequences

Just before Christmas I wrote about Gordon Brown's much lauded coup by which he relieved the Telecoms companies of £22 billion through a cleverly constructed auction of third generation mobile phone licences.

Other European governments latched on to the idea with the result that the Telecoms sector is up to its ears in debt.

How the Labour benches cheered on Budget Day when Mr Brown announced that he had used this unexpected windfall to pay off an unprecedented chunk of the National Debt.

As I pointed out last December, there is no such thing as a free lunch and somebody, somewhere would have to pick up the tab for Gordon's banquet.

So far, the burden has fallen on the shareholders - an undeserving bunch unless you happen to be one, either through your pension fund, insurance policy or endowment mortgage.

Now it is the turn of the workers to feel the heat with Erickson and Motorola both announcing massive job cuts as they find their earnings hit by debt repayment and shrinking order books

Next in line is the taxpayer who will have to pay the unemployment benefits and make up the shortfall caused by the reduction in corporation tax take from the struggling Telecoms giants.

All this would have been predictable for Mr Brown's fellow native of Kirkaldy, Adam Smith, who was the first to demonstrate that an economy is a series of interconnected parts and if you change one factor it is likely to have unintended and often unpleasant consequences elsewhere.

Old Adam would also have had something to say about the government's plans to recruit tens of thousands of extra nurses, doctors, teachers and police officers.

He would have pointed out that these groups of people are among the top 40% in terms of ability and education and transferring them to the public sector would only serve to exacerbate the skills shortages already beginning to affect hi-tec industries.

That could have several adverse consequences including an escalation in rates of pay as companies strive to hang on to their key staff or a decrease in the output of productive industry with a corresponding decline in their ability to pay the taxes to fund the salaries of the extra public servants.

Old Grumpy remembers being in the construction industry in the days before Mr Brown abolished boom and bust.

In the 1960s and 70s governments used public works building projects as a form of economic regulator with the result that the building industry lurched from feast to famine with metronomic regularity.

During boom times it was virtually impossible to find tradesmen and at the monthly site meetings the architect, after complaining that the job had fallen behind schedule, would say "what we need is more bricklayers".

"When I get back to the office I'll see if there's any lying around in the cupboards" I would reply.

Perhaps Mr Brown has some well stocked cupboards at the Treasury, but, in case he hasn't, he would be well advised to attend to increasing the supply of skilled workers before he pumps up the demand.

Red taped

Nobody likes bureaucracy, not even bureaucrats it seems.

Over the past few months I have heard County Council Chief Executive Bryn Parry-Jones twice raise concerns that "Best Value" - the system brought in by New Labour to replace compulsory competitive tendering - could become "a bureaucratic nightmare" run by auditors.

He was even more forthright when asked recently about the delays in processing Objective 1 applications.

"Some parts of the Welsh Office take one part of the decision and others take others". He said.

"This leads to long delays - it is driving us insane.".

"All these bodies have to go through the hoops and make sure all the paperwork is in order. It is incredible that some straightforward decisions take so long" he concluded, with a sigh of frustration.

Such foot-dragging wouldn't be tolerated in County Hall, I presume.

Web of intrigue

Old Grumpy understands that the County Council is insisting that the letter written by its Director of Marketing and Communications, Dai Thomas, to my former Internet Service Provider (ISP) "Freenetname", which resulted in the closure of my website,was all perfectly legal and above board.

That raises the question: as to why Mr Thomas has not sought to close down my present site which contains exactly the same "overtly defamatory and factually inaccurate" material that he complained about previously.

He can hardly claim to be unaware of its existence because I e-mailed the Council with my new web address immediately I was back on-line.

Equally puzzling is why the "leading members and officers" allegedly defamed by my comments on the Enfield affair have not sought a remedy in the courts rather than relying on Mr Thomas to silence me.

In fact, not only do I remain writ-less but I am still waiting for my first solicitor's letter on the subject.

Perhaps they are smart enough to realise that my comments are more likely to stand up to the minute scrutiny of a court of law than their conduct.

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