Examination of Witnesses (Questions 500-514)
MR PHIL
SHAKESHAFT, MR
TIM JAMES
AND MR
ANDREW SUGDEN
18 MAY 2004
Q500 Mr O'Brien: It is a question of
raising taxes and different taxes provide all kinds of services.
What you are saying is that you would agree to charges being made
provided it was ring-fenced, but you would not agree to the government
ring-fencing moneys for education and social services. You cannot
have it both ways!
Mr Sugden: We did not quite say
that.
Q501 Mr O'Brien: Well, we will read the
transcript when we get it back!
Mr Sugden: There is a high degree
of rigidity around local government revenue, and additional flexibility
does not necessarily mean no ring-fencing at all.
Q502 Mr O'Brien: Would you support a
local income tax as an alternative to council tax?
Mr Sugden: We would see that as
an overly complex means of raising revenue.
Q503 Mr O'Brien: So you would not support
it?
Mr Sugden: We do not particularly
influence one means of raising revenue from the population compared
to another. Our representation is for the business community.
Q504 Mr Brady: Do you see a particular
concern with local income tax in a region that has a relatively
low number of people in work? Might you see the burden too heavily
falling on those people, and might that lead to a flight of people
from your region to an area where there are more people to share
the burden of a local income tax?
Mr James: I think we would need
to see the detail.
Mr Sugden: Absolutely, and our
perspective on a local income tax is the burden it would place
on businesses in terms of administration, rather than necessarily
how it might work in terms of a charging mechanism on the citizen.
Q505 Sir Paul Beresford: What do you
think will happen from the point of view of collecting through
PAYE and the effect on your business and the difficulties of the
variation, depending on where the PAYE employee is living?
Mr James: We have a lot of Inland
Revenue staff work living in our region and I am sure they would
welcome the additional jobs!
Q506 Sir Paul Beresford: But your private
businesses would have to collect through PAYE, and that would
add to your costs.
Mr James: It may do.
Q507 Mr O'Brien: But we are talking of
funding services and the fact that the council tax is not very
favourable so the government is looking at other alternatives
and consulting on this, and one of the issues that is raised by
our colleague, Adrian Sanders, who is no longer with us, is the
introduction of a local income tax, and this is a serious matter
being raised by the Liberal Democrats. I would have expected that
the people in the north east would have been examining research
in this issue as to its effect on local business. Is that not
being done?
Mr Sugden: It is being done by
the organisations of which we are a national member, the British
Chamber of Commerce, and their view is that the additional burden
on businesses would be of major concern.
Q508 Mr O'Brien: Would the abolition
of council tax have an influence on house prices in the north
east?
Mr Sugden: Again it is not something
we have studied
Q509 Mr O'Brien: Do you not cover the
estate agents and builders?
Mr James: We do indeed.
Q510 Mr O'Brien: So you do not have a
view, if the council tax was abolished, as some are saying should
happen, on the impact that would have on housing in the north
east?
Mr James: I think stamp duty might
be more of an issue than the abolition of council tax.
Q511 Mr O'Brien: So you think council
tax does not have an influence on the price of houses in the north
east?
Mr Shakeshaft: It may have a marginal
influence but the patterns of house price rises in the north east
are fairly set in relation to the way they rise across the country.
Mr James: Most of our housing
stock fits in the middle bands. We do not have too many Gs and
Hs, but we have lots at the lower end and lots in the middle.
Q512 Mr O'Brien: How many deprived local
government wards are there in the north east?
Mr Shakeshaft: I cannot tell you
the absolute number. I can tell you it is the highest proportion
for any area.
Mr James: In Newcastle I am sure
we have early teens.
Q513 Mr O'Brien: And the stamp duty is
relaxed in those areas. Does it have an impact on the houses?
Mr James: We have started to see
some growth in house prices in areas like the west end of Newcastle,
but until we know what houses are staying and what houses are
going it is very difficult.
Q514 Mr O'Brien: Is that where the stamp
duty is relaxed at the present time?
Mr James: It is very helpful in
those areas.
Mr Betts: On that point perhaps we can
thank you for your evidence, and for coming today. Thank you.
|