Liberal Democrat leader Nick Clegg privately wanted to give councils powers to impose new taxes including road-pricing, workplace parking taxes and local beer and cigarette taxes, it has emerged.
In his role as Deputy Prime Minister he also said councils should be free to impose a tourism tax, such as taxes on visitors staying in hotels, and to scrap existing council tax discounts including the 20% discount for people who live alone.
The proposals were set out in a letter from Mr Clegg to Eric Pickles, the Conservative Local Government Secretary, in 2011 – but were rejected by Mr Pickles.
The latest revelation about the behind-the-scenes debates within the Coalition government comes as Tories and Lib Dems fight a series of pitched battles in marginal seats such as Berwick-upon-Tweed.
While Conservative leader David Cameron and Labour leader Ed Miliband are the only politicians with a chance of becoming Prime Minister after the general election, many of the seats the Conservatives have a realistic chance of gaining on May 7 are held by their Lib Dem Coalition partners.
Mr Clegg wanted councils to have “a much wider range of taxation and charging powers” which they would be free to use.
The aim would have been to ensure councils were “self-funding” rather than depending on funding from central government for most of their income, as they do now.
Specific proposals in the letter to Mr Pickles included giving councils “complete freedom over discounts rather than mandating them to offer specific discounts to single people, empty homes, second homes etc”.
The letter continued:
“There is a set of further tax powers that could warrant further consideration, including, but not limited to: fuel taxes; sales taxes; landfill taxes; workplace parking levies; utility taxes; ‘tourism taxes’; local airport levies; duties on alcohol, tobacco and other substances; and stamp duty”.
> He left out a Fresh Air tax. Pay-to-breathe…
And the Government should consider give councils charging powers covering “parking charges; speeding fines; waste collection; road pricing” and more, the letter said.
Mr Clegg told his Cabinet colleague:
“We should drive to ensure that local authorities have the greatest range of revenue raising powers at their disposal and are as unencumbered from central government restraints as possible.”
The letter was written as the Department for Communities and Local Government considered plans to allow councils to retain some of the business rates they collect.
But it has emerged now as the battle between the Conservatives and Liberal Democrats in marginal seats becomes increasingly bitter, with the two Coalition parties lifting the lid on internal Government discussions from the past five years in an attempt to embarrass each other.
Lib Dems are defending a majority of 2,690 in Berwick.
Both parties have accused the other of secretly backing plans to impose regional pay – which would mean public sector workers such as nurses or teachers were paid less in the north east than those in the south east.
And Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, has said that in 2012 the Conservative Work and Pensions Secretary, Iain Duncan Smith, distributed ideas for cutting the welfare bill which included limiting child benefit and child tax credit payments to two children – cutting up to £3,500 from a family with three children – and means testing child benefit, which would cut payments by £1,750 for a middle-income family with two children.
Mr Duncan Smith also wanted to remove child benefit from 16 to 19 year olds, a cut of over £1,000 for parents of a single child, according to the Lib Dems.
George Osborne, the Conservative Chancellor, retaliated by claiming the proposals were contained in a policy document “that was commissioned by the Chief Secretary himself”.
In a statement responding to the letter’s publication now, a Liberal Democrat spokesperson said:
“This Tory spin shows their true colours.
“They simply don’t trust local people and want to govern every aspect of people’s lives from Westminster.
“The proposals in this letter could give local authorities the power to LOWER these taxes in response to the wishes of local people.
“Liberal Democrats believe the best decisions are taken by those closest to the people those decisions effect.
Source – Newcastle Evening Chronicle, 30 Apr 2015