As John Healey wrestles with local government finance, claiming all parties will need a plan for council tax to go into the next election, Heather Jameson talks to former local government minister, Michael Portillo, who helped invent the tax Michael Portillo is more than your average former politician – he is an icon for an era. The image of his 1997 parliamentary defeat by Labour new boy, Steven Twigg, has become legendary – an image which encapsulated the fall of Tories to New Labour. So, where were you when you first heard Mr Portillo had lost his seat? But his place in local government represents a far bigger tale – and in the shaping of political history. His legacy continues to cause political headaches today. Mr Portillo was local government minister at the heart of one of local government's most critical moments – the poll tax riots. It was at a time in history when local government finance was ‘the most important political issue' of the day. The anti-poll tax lobby went on to play its part in the downfall of the Government and one of the strongest political leaders the world has seen – Margaret Thatcher. ‘It was like David slaying Goliath,' he says. And he probably isn't exaggerating. Fast-forward to 2008 when, despite the objections of local government, local government finance is still a problem which all political parties have failed to solve. Mr Portillo's remedy of council tax provided a sticky plaster solution for a decade or so, but the fundamentals are yet to be cured. Mr Portillo – now a broadcaster and writer – claims local government is ‘not a speciality' of his anymore. While that might be the case, he does an impressive job of appearing to understand the issues. Local government finance is, he claims, ‘fundamental to the way we treat local government'. Refusing to allow councils control over their own cash is always going to be a problem, and funding from central government is little more than a ‘stealth tax'. A tax raised locally, based on property rather than on incomes, has its limitations, he claims. And he should know, as he – alongside his then-boss, Michael Heseltine – created council tax to replace the poll tax. ‘While it is at a modest level, one will get away with it,' he tells The MJ. But the lack of revaluation, and the increasing burdens from central government which have not been funded leaves the tax vulnerable – particularly when we are heading for a potential slow-down in salaries. He states clearly that he does not advise the Tory party in any way – but if he did, he wouldn't recommend going for revaluation if and when they come to power. ‘The whole tragedy of poll tax was due to revaluation,' he says. Instead, Mr Portillo's solution to the Government's woes over local government finance is a local income tax – or rather, a share of the national income tax to be distributed locally. ‘It is more buoyant and fairer than the property-based alternatives. For someone who was involved in such a political crisis for his own government, which brought about the downfall of the leader he supported, Mr Portillo is very up-beat about being the local government minister. It was an ‘unbelieveably difficult' time, but how many people can claim to have been one of the architects of a new tax? And while many in local government possibly don't remember it so fondly, he claims meetings he held with the authorities he was considering capping were ‘rather lovely'. Facing capping is never a nice prospect, but he says he tried to make the experience as painless as possible, and treat those he met with dignity and respect. ‘There's no point in being beastly.' l Michael Portillo spoke to the SERCO dinner at the Local Government Association annual conference in Bournemouth on Wednesday 2 July.
