greener still and greener

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Greener still and greenerA. R. Prest aa London School of Economics and Political SciencePublished online: 02 Jan 2008.

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Local Government Studies: May/June 1982 61

A. R. PRESTLondon School of Economics and Political Science

Greener Still and Greener

The long awaited government Green Paper on domestic rating, Alternativesto Domestic Rates, 19811, finally appeared in December 1981 after areputedly controversial passage through Cabinet. This document is thefourth major official set of utterances on this subject in the last ten years,the predecessors being the 1971 Green Paper, the 1976 Layfield CommitteeReport (plus ten volumes of Appendices) and the 1977 Green Paper. Itwould be nice to record that at the end of this ten year period the quality ofofficial discussion had improved or even that major new facts or ideas hademerged. It must be said bluntly that such is not the case. The latest effortmakes even the 1971 and the 1977 Green Papers look respectable incomparison. It is a sorry state of affairs if this is the best that theDepartment of Environment and its allies can do after all these years ofdiscussion. Sir Derek Rayner has been charged with cutting out thoseelements of waste in government departments which he could identify; hemight well devote some attention to the Department of Environment if thisdocument is anything to go by.

I shall proceed as follows in this review article. Section I will be concernedwith the main contents of the recent document and some of its generalattributes. Section II will be a detailed commentary on the contents bringingout the reasons for the general judgment expressed above. Finally, SectionIII will contain some concluding reflections on local authority finances andon the nature of government Green Papers.

I CONTENTS OF THE GREEN PAPER

One must first of all make clear that the recent document is strictly limitedin scope in three different senses. It is confined to Great Britain and doesnot pretend to cover Northern Ireland; it is not concerned at all, excepttangentially, with the large amount of local authority revenue which comesfrom central government grants; and within the compass of locally raisedfinances it is essentially concerned with rates on domestic properties and thealternatives thereto rather than with rates on non-domestic properties.

The contents of the Green Paper can be described very quickly. It startsby listing the main requirements for local taxation—practicality, fairness,accountability, cost of administration, the amount of revenue needed,matters of financial control and the desirability of raising revenue at all tiersof local government. Various possible alternatives to domestic rating arepromptly excluded: local duties on alcohol, tobacco, petrol; local vehicle

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62 Government Green Paper

excise duties; licences for the sale of alcohol and petrol; and local payrolltaxes. The reasons for the unsuitability of these various forms of revenueare set out at greater length in Annex A. The main alternatives considered atlength are five in number:

1 . A Reformed Domestic Rating System2 . Local Sales Tax3 . Local Income Tax4 . Poll Tax .5 . Assigned Revenues

These various alternatives are discussed at length and the pros and consexamined in the light of the criteria already listed. The general conclusion isthat none of them is a panacea and difficulties are to be found in theimmediate and even in the further future with any of them.

A number of related subjects are then discussed in successive chapters.The main ones are the implications of the above reforms, singly or incombination, for the grant system; the implications for non-domesticrating; the place of fees and charges in local authority revenues; thecomplications arising from combinations of taxes to replace the ratingsystem; and finally, standard economic aspects are looked at e.g.implications for relative prices, the general price level, incentives to work,distributional effects and so on. Finally, there are three Annexes to theGreen Paper; the first one has already been mentioned (the detailed reasonsfor excluding other possible reforms); the second one sets out a possiblealternative to the proposals in the Green Paper, i.e. the idea that theeducation service should be financed by a high specific grant, theconsequences for local finances and the remainder of the grants systembeing discussed at length; finally, there is a statistical Annex on thedistributional effects, for differing households, of the alternatives todomestic rates.

It must be said straightaway that the whole of this document is veryeconomically written. There is no unnecessary verbosity and that at any rateis a relief after so much that one reads today. The order in which the topicsare presented is also reasonably logical in that various generalconsiderations are raised first; then the detailed possibilities for change arediscussed separately and later they are brought together again in the contextof more general considerations. The exception is the chapter on fees andcharges. It seems very odd to wedge this in between a chapter on non-domestic rating and one on combinations of various reforms. It would havebeen much better to have put it among either the alternatives which arethought to be real runners or in the list of rejected options. It may also bethat the order of the contents gives us a clue to the innate preferences of theauthors in that the Layfield Committee2 strongly preferred the local incometax solution to any alternative method of raising more local revenue,whereas in the most recent document we find that the local sales tax

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precedes local income tax in the order of discussion. It may be that one isreading more into this ordering of contents than was intended but such athought is bound to occur to anyone of a suspicious mind.

The Green Paper also has the merit that it does not fudge a number offundamental issues. It does not pretend that one could abolish domesticrates without raising more revenue by some other means. It is also fullyaware of the dilemma3 in which the Government finds itself today; that tocontinue with the present domestic rating system is to court unpopularity,but to substitute the most obvious reform i.e. local income tax is contrary toa great deal of what it has said and stood for both before and since thegeneral election of 1979. The document is also courageous in raising thewhole subject of the reform of education finance and the alliedconsequences for the rest of the grant system. Any such suggestioninevitably raises local authority hackles and leads to cries of usurpation ofpowers by central government. It must have been known in advance thatthis kind of reaction would follow and so the authorities do deserve creditfor having had the courage to raise the issue.

It should also be added that the emphasis on some of the subjectsdiscussed is a little different from that in preceding official documents. Oneillustration is the attention given to the discrete nature of many local taxesand the difficulty that they can only be altered in large jumps therebyrendering financial control at local level much more difficult; anotherillustration is the suggested rudimentary form of local income tax on theanalogy of what has happened for many years with parental contributionstowards grants to university students, i.e. that the Inland Revenue shouldsupply information about incomes to local authorities as a basis for a localincome tax.

So much for an account of what is in the Green Paper and of some of itsgeneral attributes. We now look in much more detail at some of the viewsexpressed in the Green Paper in order to see the basis for the generaljudgment expressed about it in the opening paragraph.

II COMMENTARY ON THE GREEN PAPER

I shall make my remarks under five different headings which will be asfollows:-A . The relationship of the Green Paper's conclusions to those of its

immediate predecessors.B . The disregard of other developments and experiences.C . Inadequately thought out arguments.D . The neglect of some central issues.E . Other deficiencies.

A. The Relationship of the Green Paper's Conclusions to those of itsImmediate Predecessors. The first point is the lack of reference to thegovernment documents appearing over the last decade. The Layfield Report

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itself is referred to on various occasions but the reader who is not familiarwith the literature would have no idea of the scale of that Committee's workor of the mountains of evidence and documentation which were publishedalongside the Report itself. There is literally no mention whatever of the1971 Green Paper4 or the 1977 Green Paper5 — let alone any of thevoluminous non-official literature.

Given this unwillingness to tie in the present discussion to even the recenthistorical background, it is not surprising that there is no explanation ofwhy the emphasis now differs very considerably from that seen only a fewyears previously. To illustrate, the local sales tax is now given a much biggerrun for its money than the Layfield Committee thought worthwhile—sevenpages instead of half a page. Whereas the Layfield Committee was preparedto give a good deal of emphasis to greater possibilities of charging for localauthority services, the latest document deals very summarily with thesubject in one and a half pages. As a third illustration, no one would guessfrom the tone in which the domestic rating system is discussed that theLayfield Committee concluded as follows on the subject of rating6:

"our general conclusion is that there remains a good case for a tax on theoccupation of property and for applying it to the widest possible range ofproperties".

It should also be recorded that various matters were discussed at length inthe other documentation but receive little or no mention here. The first isthat the crucial importance of regular revaluation of properties for domesticrating is nowhere emphasised. No one would dream from the blanddiscussion in this Green Paper that the already long overdue revaluationwould have taken place in 1982 but for the countermanding order of theDepartment of Environment soon after the present Government tookoffice. Another neglected topic, though of less importance, is whether thepresent position with the rating of empty property is satisfactory. Anothertopic discussed in both the 1971 Green Paper7 and in the Layfield Report8 isthat of site value rating. The 1971 Green Paper was dismissive on thissubject; but the Layfield Committee went into it more thoroughly, feeling,however, that quite apart from any inherent drawbacks in the tax, the scopefor any such technique was so restricted by the provisions of theCommunity Land Act of 1975, that it would not be worth followingthrough. In fact the Community Land Act has been repealed since thatdate, but nevertheless there is not a single word on this subject in the wholeof the Green Paper. It may well be, that for all sorts of reasons such asystem should not be endorsed, but in a document pretending to study thesubject seriously, reasons should have been given for any such view.Finally, local lotteries are another means of raising more revenue discussedon previous occasions, but not in this report.

So relatively little mention is made of previous governmentdocumentation, little emphasis is given to the ways in which and reasonswhy conclusions now reached differ from those previously put forward; and

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there are some important omissions from the list of topics discussed.B. The Disregard of other Developments and Experiences. As illustrationsof the way in which the Green Paper disregards theoretical contributions ofrecent years, we may take first the developments in the theory of localproperty taxation and secondly developments in the principles of chargingfor local authority services.

A great deal of literature has been published on the first of these twotopics in the course of the last ten years or so, setting out the circumstancesin which local property taxation may amount to a partial tax on wealth,rather than a tax on the occupation of the property9. I have tried tosummarise some of the literature elsewhere10 and so will not attempt to setout the arguments in detail here. It might be said that this new theoreticaldevelopment was specifically related to local property taxation in the UnitedStates, which is a very different animal to that in the UK; and therefore therelevance of these new ideas to the UK cannot be taken for granted. But anysuch view does not absolve one from discussing their applicability or non-applicability and this is not done anywhere in the Green Paper. This attitudecan be seen from two quotations. It is said that domestic rates "are a tax onthe occupation of housing" and that "domestic rates can be regarded as atax on expenditure"11. The relevance of these recent theoreticaldevelopments to the UK is by no means self-evident. Simply to go on, as ifno one had had any new ideas on this subject, betrays unpardonableignorance of or contempt for intellectual developments.

My second illustration relates to charging for local authority services. Alarge volume published in 198012 concluded that something like 90 per centof gross revenue expenditure (excluding roads) could be thought of as beingamenable to ordinary market pricing processes, rather than beingirrevocably in the public goods category. The same book considered at somelength the implications of charging for such services, whether supplementedby a negative income tax or a voucher system. Nor is that particular volumethe only illustration of developments in this field. To mention two others,we have the well-known work of Bird in Canada" and that of Seldon in thiscountry14. I have some reservations on this subject myself15, butnevertheless this is a major area of intellectual discussion, which the authorsof the Green Paper effectively ignore. There is no excuse for that.

Nor is it just a matter of ignoring developments at the academic level.There is a good deal of experience in other countries in recent years, or forthat matter in this country in earlier years, relating to some of thealternatives suggested by the Green Paper; but this experience receives nomention at all. To illustrate, any discussion of assigned revenues should atleast take on board the point that we did once try this method of financinglocal government in the 1890s and that it proved extremely unsuccessful.With respect to the abolition of rates, there is a model very close to handfrom which experience could be gained, i.e. the abolition of domestic ratesin Ireland in 1978. It would appear that this move has had various side-

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effects which are not wholly desirable. With regard to sales taxation, theauthors of the Green Paper might have done well to look at what the 1971Value Added Tax Green Paper16 had to say on retail sales tax. There wereclear warnings there about the extent to which one could hope to raiserevenue at the retail stage. One would also like to have seen some discussionabout any other EEC country which had combined or had tried to combineits national Value Added with a local sales tax. Although there is a vastamount of literature and experience in the United States on the generalsubject of retail sales taxation the position there is entirely different in thatthere is no national tax on sales or value added. The Green Paper showssome awareness of the problems arising in the USA with the exclusion ofbusiness purchases and cross-border shopping, whether in person or bymail-order, but it must be doubted whether sufficient emphasis is given tothem. Finally, the Layfield Committee did back up its discussion of localincome tax with an account of the Swedish, Canadian and US systems.There is no discussion whatever in this paper of local income tax experienceelsewhere, or of what has been learned from it.

So under this general heading of the disregard of other developments theprogenitors of the Green Paper must answer to a charge of intellectualinsularity; they either do not know, or have chosen to ignore, theoreticaland practical developments relating to their subject, which are of veryconsiderable importance in judging the relative merits of the alternativeswhich are presented.

C. Inadequately thought out arguments. A number of illustrations can begiven under this heading. The first relates to the general nature of centralgovernment interest in local authorities' activities. There is what can only bedescribed as a fluffy set of sentences on page 3 which purports to set out thereasons why central government has a fundamental interest in what localauthorities do with their own financial resources, but fails to make anydistinction between short-term demand management and other long-termreasons. If the view is taken that what is necessary for short-term macro-economic purposes is to control the public sector borrowing requirement bymeans of keeping down the rate of increase in the money supply, then anyproposition that an increase in local revenues matched by an increase inlocal spending is inflationary must be inspected very closely. The balancedbudget multiplier argument has a place, even though a lowly one, in aKeynesian system of thought, but what place does it have in the monetaristsystem of thought embraced by the Government? The long-term argumentis that the government is committed to rolling back the frontiers of thepublic sector and reducing its importance relative to the private sector andthat any such principles should apply to the local public sub-sector as well asto the central public sub-sector. That in turn raises other questions, such aswhether one can construe the 1979 General Election as giving a mandate tocentral government to cut back local government spending out of localrevenues even though local electorates may not have expressed any such

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preference. Two observations are worth making here. Central governmenthas claimed for many years that it must control such local spendingregardless of whether it strongly favoured private sector activity". AndPresident Reagan who can hardly be accused of favouring the public sectorhas recently announced plans for expanding State and Local relative toFederal expenditure.

The next topic is the nature of the goods and services for which localauthorities are responsible. At one extreme, one can take the view that localauthorities should really operate like the private sector in charging for theservices they provide. The other extreme position is to say, as the GreenPaper does about highways and similar local authority expenditure (page54), that they are "all provided by the community for the public good".The basic issue is how far it is possible to isolate the particular beneficiariesof particular services and charge them appropriately and how far thefinance of such services must come out of tax revenue. But there is nocoherent discussion of this subject despite the recent interest shown by non-official sources (see page 65 above).

It might be noted at this point that, as a form of general revenue raising, atax on domestic property has stronger claims than might appear from theGreen Paper. First, the case for taxing land values or land rents has oftenbeen made in the literature even though there are some qualifications totake into account18. Property taxation is a very common form of localrevenue throughout the world. And as far as buildings are concerned thereis no income tax on imputed rents accruing to residential owner-occupiers inthe UK; nor does VAT apply to new construction and the like.

One other point, not dwelt on in the Green Paper, is that rates have thesupreme advantage of being easily ascertainable, or, more accurately, thatthe base for rating is tied to an individual local authority and there is nodifficulty of allocation as in many other forms of taxation.

Another general issue is how far local taxation, whatever form it takes,should comply with any pre-conceived distributional criteria. There isclearly no reason at all why this should be a rigid requirement in that whatreally matters, hard as it may be to ascertain, is the combined effect ofdifferent taxes and different government expenditures on the distribution ofincome rather than the effects of each particular tax and expenditure takenin isolation.

The Green Paper does not score well on general matters of tax incidence.For instance, it talks (page 23) about a move from domestic rates to localsales tax as widening the incidence of local taxation. But it must beremembered that, insofar as a landlady's charges to her lodger reflect thelevel of rates she has to pay, a larger number of people are affected by thelevel of rates than the number actually making rate payments. Nor is theresufficient discussion of the way in which the level of taxation in any onearea will affect people in other areas, directly or indirectly, rather than theresidents of that particular area and how far it may affect migration

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patterns. Finally, the Green Paper does nothing whatever to dispel thecommon fallacy that somehow or other industry or commerce itself pays atax such as rates. In the last resort, any tax must fall on individuals and themore accurate way of expressing any view of this kind would be to discussthe precise way in which a tax formally paid by an individual firm works itsway through the economy whether by reducing dividends paid toshareholders or reducing profit retentions (with implications sooner or laterfor shareholders) or increasing prices to final consumers and so on. One canunderstand why the massed bands of the brigade of business spokes-personslike to pretend that in some way or other many taxes come to rest on'industry' at large and that this is the most horrible thing imaginable. But agovernment Green Paper should do better than that.

The detailed analysis of the distributional effects of different taxes leavesquite a lot to be desired. We have already seen that domestic rates are takento be a tax on the occupation of housing rather than a partial tax on capital.A second point is that no distinction is made between taxation in relation toshort-period income and in relation to lifetime income. The old view of theproperty tax i.e. that it falls on occupiers, takes on a somewhat differentdimension in distributional terms if a lifetime concept is taken19. Finally, allthe old arguments about regressiveness of sales taxation and value addedtax are trotted out (page 23). Little heed seems to have been paid to suchwork as that by Adams20 on the distributional effects of value added taxes .in different Western European countries.

A refrain which runs right through the Green Paper is that of makingmore people pay for local services, no doubt on the basis of the usualcontrast between the single pensioner household and the three adult workerhousehold being confronted with the same rate demand. The first commentrelates to the numbers involved. There are already twenty million domesticratepayers in Great Britain and twenty-five and a half million individualsliable for income tax and so one is only talking about a 25 per cent increasein the number of possible contributors and not a larger figure21. The secondpoint is that as we have already argued it is quite fallacious to assume thatonly ratepayers bear rates; other members of the household will sufferconsequences of domestic rate increases as well as the head of thehousehold. Thirdly, even though the unmarried working son living at homewith his parents is not confronted directly with rate demands he is likely tobe a ratepayer later in the life cycle.

A variant of the theme that more people should pay rates is that thedistribution of the rate burden is inappropriate. It is important to make adistinction here, which is not to be found in the Green Paper. Oneproposition is that payments should relate to benefits received. This is acomplex notion in that the three adult household may currently benefitmore than the single adult household from, say, street cleaning and so thatdoes call for some additional charge. On the other hand, the same wouldnot be true of school education services—and any argument that everyone

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benefits at some point in the life cycle from this service is open to thecounter-argument that most people will pay rates at some point in the lifecycle. The alternative basis for saying that rate demands are inappropriatelydistributed is that the same rates bill may be paid by two households withvery different income totals. This situation can be partially dealt with byrate reliefs and the like; but the only complete answer is that domestic ratesshould be abolished and replaced by a local income tax.

Another topic on which a great deal of attention is concentrated is thealleged lack of buoyancy of the local rating system — without everexplaining exactly what is meant by buoyancy. There is good reason tothink that a tax base consisting of land and buildings is likely to beresponsive to general economic progress and to inflation. So it can hardlybe the case that there is a lack of buoyancy from one revaluation to another.The Layfield Committee in fact calculated that the compound annualpercentage rate of increase of rateable value in England and Wales betweenthe re-valuations of 1963 and 1973 was something like 12VS per cent perannum22. So the Green Paper must be referring to the situation in the yearsbetween revaluations. But the severity of that problem obviously dependson the length of time elapsing between valuations and on whether, forinstance, rough and ready adjustments can be made over such periods (seebelow. So lack of buoyancy is due to political or administrative weaknessrather than anything else. The yield from personal income tax would alsolack buoyancy if one used the same income base from 1973 to 1982regardless of what had actually happened to incomes in the interveningyears.

D. The Neglect of some Central Issues. We have just mentioned ratingrevaluation. More generally, far too little attention is paid in the GreenPaper to the way in which the rating system has been allowed to run downover the years and as a consequence the crucial distinction between theinherent and the unnecessary faults of any such system of taxation isobscured. It is not just a matter of revaluation not taking place, as it shouldhave done, but one would also have thought that the very differentexperience of England and Wales on the one hand and Scotland on theother in the last thirty years or so should give rise to some comment. To takevery recent events only, there was a revaluation in Scotland in 1978 andanother one, for non-domestic property, has been announced for 1983. Weshall return to this subject later but simply note now that there is no shadowof any discussion of these matters in the Green Paper. The nearest it gets toany discussion of mass appraisal for rating revaluation purposes is to referrather obliquely to a beacon system; but mass appraisal as is known in, say,California, is obviously not a subject which gentlemen should discuss. Noris any mention made of the idea explored at some length by Foster et al.23

that a very rough form of annual up-rating by means of a price indexbetween revaluations would be a valuable tool to use in levying local rates.This is after all what insurance companies do nowadays with respect to

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house and contents valuations and it is not at all clear why, if such a systemis acceptable in that context, it should not also be accepted in the ratingcontext.

E. Other Deficiencies. I shall distinguish four separate points under thisheading. The first relates to where the discussion in the Green Paper isincomplete. One or two examples may suffice. It is not brought out, forinstance, how charities would fare under any alternative system to domesticrates. Presumably, they would be exempt from local income tax (and sobetter off) but not from local sales tax (and so worse off). Similarly, whenthe document discusses local income tax, it simply says that any tax oninvestment income would have to be divided among local authorities, butwithout giving the first indication of how this should be done. These areillustrations which could be multiplied; what they serve to show is that thereare a lot of dark corners not explored by the authors of the Green Paper.

Secondly, the attention paid to the poll tax idea is out of proportion to itsmerits. It is difficult to see how this concept can get good marks whetherviewed as a tax or whether viewed as a charge for services rendered.Previous government documents have been quite incisive on this and relatedissues as one or two quotations will show. Thus the Green Paper of 197124:

"a flat rate pay-roll tax falling on the employee will be no more than a crude andinequitable form of income tax and is not, therefore, discussed here."Obviously a general poll tax is different to a tax on employees; but one

wonders why the general sentiments expressed in that quotation do not stillapply. Similarly the Layfield Committee spent very little time on the poll taxidea, more or less dismissing it out of hand25. In view of these previouscondemnations, or at any rate, total lack of approval of any such proposal,it is very hard to see how anybody could have thought it was worth theattention paid to it in this recent document.

Thirdly, it is rather odd that, given the history of central governmentattempts at controlling local expenditure in the last year or two, there is nodiscussion of the relationship between that subject and the ways in whichrevenue can be raised locally (e.g. revenue buoyancy might be thought of asa disadvantage in this context).

At one particular point the Green Paper is simply disingenuous. It isstated on page 31,

"In some countries the system of collecting tax from wages and pensions isradically different from PA YE".

As there are no other countries outside the British Isles with the samewithholding system as that in the UK, this sentence is totally misleading andit is a disgrace that it was ever allowed to appear in a government document.

Ill REFLECTIONS ON LOCAL GOVERNMENT FINANCE

When we come to concluding reflections the first point is that in no sensecan it be claimed that there is a lack of knowledge of the problems or of the

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relevant alternatives. We have seen above that these matters have beenintensively discussed in various government documents in the last ten yearsand even more intensively discussed at non-official level. But that is not all.As I have shown elsewhere26 these discussions have a very long historicallineage and most of these topics, such as the case for a local income tax andso on, were discussed at length in weighty official reports of 1901 and 1914.So I would emphasise very strongly that there is no lack of knowledge of theissues at stake. The Green Paper itself lists a number of alternatives to ratesand it is not difficult to think of others not mentioned. We have alreadyreferred to site value rating and also to the rough annual adjustments torateable values to prevent them falling' too far out of date in inflationaryconditions. There are also other possibilities such as the re-imposition ofSchedule A or the imposition of city centre congestion charges with theproceeds being made available to local authorities. There have also beensome striking advances in public/private cooperation at local level in theUSA recently27. An even more important issue is whether the InlandRevenue Valuation department should remain responsible for ratingvaluations in England and Wales. We have to face the fact that this systemhas never worked nearly as successfully as the localised one in Scotlanddespite the high hopes held out when this reform took place just after WorldWar II. If local authorities were themselves given the responsibility formaking rating revaluations, then the government would be deprived of oneof its most powerful tools for obstructing the proper working of the presentsystem. This idea clearly needs to be thought out in detail (e.g. the need forsome sample checking to provide reasonable conformity) but it is the sort ofimaginative change which is conspicuously absent from the Green Paper.

The fundamental issue, it is abundantly clear, is that central governmentis the cat playing with the local authority mice. It is in central governmentinterest to keep up the charade of saying that local authorities areindependent, a valuable and essential part of democracy, and so on, and totake all possible steps to see that they are nothing of the sort. If in fact thissituation is to continue, and if solutions of the kind mentioned in thepreceding paragraph are ruled out, then the future for local authorities inthis country is very dim indeed. In these circumstances, it would be far morehonest to abandon any attempt at local independence and reduce them all tobeing agents of Whitehall and be done with it.

The comments so far in this section have been of a general nature whichcould have been made at any time for many years. It should be added thatthese problems have been multiplied in recent years by the series of foolishacts of central government and opposition parties. First of all, the 1972reform of local authority boundaries was carried through without priorinvestigation of local finances. This was a real example of putting the cartbefore the horse, if ever there was one. Secondly, the ConservativeOpposition made a serious mistake in committing itself without adequateforethought in 1974 to the abolition of domestic rates. Thirdly, theConservative Government of 1979 made an equally serious mistake in

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abandoning the projected rating revaluation of 1982 without consideringthe consequences. So this succession of misguided judgments and mistakenpolicies exacerbated the already festering sores.

Another reflection which comes from reading the Green Paper is the newdimension which can now be given to the Principle of Unripe Time, adimension that Cornford28 can never have envisaged. Thus we read on page22 that a local sales tax administered by the Customs and Excise is notpossible for several years because their computer system is due for anoverhaul. On page 30 we are told that the Inland Revenue could not take onboard a local income tax until they have finished the computerisation ofPay as You Earn, and that effectively rules out any such change until the1990s. Finally on page 66 we are told that, even if it were desirable, a localvehicle excise duty would be impossible in the near future, because theSwansea computer centre is also due for an overhaul. So clearly the moderncomputer is the bureaucrat's best friend in the sense of being an effectivebarrier to any change of any sort for a long period to come!

My final point in this rather melancholy survey is to refer to what seemsto be a change in the content and purpose of Green Papers. When thesedocuments first made their appearance in the late 1960s, the generalprinciple was, that they would put forward proposals for a specific set ofchanges, so that opinions could be collected before the preparation oflegislation. This was the perfectly sensible idea of thinking about the snags,before Parliament took action. Nowadays, Green Papers seem to havedegenerated into being stalling devices. There are no clear proposals in thisPaper and it is hard to visualise any substantial changes coming out of thediscussion. What one really needs now is a new colour for such papers; andto emphasise the idea of blocking any forward movement the appropriatecolour would be red.

REFERENCES

1. Alternatives to Domestic Rates, Cmnd 8449, 1981, HMSO.2. Local Government Finance, Report of the (Layfield) Committee of Enquiry, Cmnd 6453,

1976, HMSO.3. This comes out very clearly in the House of Lords debate on the Green Paper. See

Hansard (Lords) February 10, 1982.4. The Future Shape of Local Government Finance, Cmnd 4741, 1971, HMSO.5. Local Government Finance, Cmnd 6813, 1977, HMSO.6. Layfield Committee Report, op. cit. p. 182.7. Green Paper, 1971. op. cit. pp. 26-28.8. Layfield Committee Report, op. cit. pp. 170, 437-440.9. P. M. Mieszkowski. "The Property Tax: an Excise Tax or a Profits Tax?" Journal of

Public Economics, April 1972.10. A. R. Prest. Intergovernmental Financial Relations in the United Kingdom, Research

Monograph No. 23, Centre for Research on Federal Financial Relations, AustralianNational University, Canberra, 1978.

11. Alternatives to Domestic Rates, Cmnd 8449, 1981, op. cit. at pp. 4 and 60.12. C. D. Foster, R. Jackman and M. Perlman, Local Government Finance in a Unitary

State, Allen and Unwin, 1980. at p. 528ff.13. R. M. Bird, Charging for Public Services: A New Look at an Old Idea, Canadian Tax

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Foundation, Toronto. 1976.14. A. Seldon, Charge, Temple Smith, 1977.15. A. R. Prest, "On Charging for Local Government Services", Three Banks Review,

March 1982.16. Value Added Tax, Cmnd 4621, 1971. HMSO.17. A. R. Prest, Intergovernmental Financial Relations in the United Kingdom, 1978, op. cit.

pp. 2 7 - 3 1 .18. A. R. Prest, The Taxation of Urban Land, Manchester University Press, 1981.19. H. J. Aaron, Who Pays the Property Tax? Brookings Institution, Washington, D. C,

1975.20. D. W. Adams, "The Distributive Effects of VAT in the UK, Ireland, Belgium and

Germany", Three Banks Review, December 1980.21. Cmnd 8449, op. cit. p. 33.22. Layfield Committee Report, op. cit. p. 148.23. C. D. Foster et al. op. cit.24. Green Paper 1971, op. cit. p. 20.25. Layfield Committee Report, op. cit. p. 188.26. A. R. Prest, Intergovernmental Financial Relations in the United Kingdom, 1978 op. cit.27. New York Times, October 31, 1981.28. F. M. Cornford, Microcosmographia Academica, Bowes & Bowes, Bodley Head, 1908.

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greener still and greener

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