Our next milestone
is the idea of annual referendums on
government budgets, national and local. Whereas the American Revolution rejected taxation without representation, we go further and
reject taxation (and spending) without consent.
This we call Referism.
It relies on a political philosophy which is entirely compatible with The
Harrogate Agenda, holding that, in the relationship between the British people
and their governments, the people should be in control. The state is the
servant not the master. Control is achieved primarily by holding the purse
strings, where annual budgets must be submitted to the people for approval, via
referendums. The catch phrase is: “it’s our money and we decide”. Governments
are thereby forced to refer to the people for their funding, hence our choice
of the term “Referism”.
At the heart of
any government’s power is money. That is how parliament emerged as a force in
the land, going as far back as 1215 when the tenants-in-chief secured the first
draft of the Magna Carta from King
John. The concession that more than anything else reduced the power of the
monarchy was the principle that kings were no longer entitled to levy or
collect any taxes (except the feudal taxes to which they were hitherto
accustomed), save with the consent of his royal council. He who controls the
money controls the Monarch.
The principle of
financial control survives to this day. In place of the Monarch, the executive
must refer to parliament each year for approval of its budget. Without that, it
runs out of money. Our problem – and the nub of all our problems – is that this
process has become a ritual. No parliament has rejected a budget in living
memory, and none is likely to do so.
Each year we see
the government of the day going through the routine of asking parliament for
money, and we have to watch the charade of approval being given – only then to
see vast amounts being spent on things of which the majority of us do not
approve. Overseas aid is a classic example, where public approval would
doubtless be withheld.
therefore, be real control over budgets. The politicians cannot be trusted on
this – it is not their money. The power must go to the people who pay the bills
- us. Every annual budget must be
submitted to the people for approval, by means of a referendum. The politicians
must put their arguments, and the people must agree, before any government can
levy any tax or spend any money in the relevant period. We, the people, decide.
We, the people, have the power to say no.In discussions
about this demand, however, concern is often expressed that people would simply
vote themselves more money. Fortunately, limited experience of referendums on
taxation suggests otherwise.
This stems from
experiments to assess the effect of referendums on increases in Council Tax,
all in the context, incidentally, where the Department
for Communities and Local Government acknowledged such referendums would take
power away from central government and giving it to local people.
experiment was a referendum in 1999, in Milton Keynes, where the council
offered three levels of increased Council Tax: five; 9.8 and 15 percent.
Residents were able to vote by post or telephone for their chosen option. The
9.8 percent rise would have kept core spending at the same level, while the
five percent increase would have meant cuts. A 15 percent increase would have
provided extra revenue. Forty-six percent of those who voted opted for the 9.8
percent rise, 30 percent for the five percent increase and 24 percent for the
15 percent hike. The turnout was 45 percent.
At the time,
council leader Kevin Wilson told the BBC: “The referendum gave the people an
opportunity to be masters rather than servants”. The referendum, he said, had
succeeded in its aim of reconnecting people with local government and giving
public backing for council tax rises.
In February 2001,
Labour-controlled Bristol City Council then announced that the public would get
a chance to vote on their Council Tax levels, “under plans drawn up to tackle
voter apathy”. The scheme had the backing of government ministers and, if the
public had responded “positively”, the plan was to repeat referendums across
Voters were asked
whether they preferred to increase Council Tax by two, four or six percent, or
to freeze it at then current levels. Of more than 115,000 people taking part in
this referendum - the turnout significantly higher than at local elections -
61,664 voted for no rise, 11,962 for a two percent rise, 20,829 for a four and
19,841 for a six percent rise. Thus, the total of those voting for raised
taxation, at 51,732, was outnumbered by those who wanted to freeze the budget.
response was not “positive” enough. At
the time, The Independent newspaper
was to lament that, “in a victory for the maxim that people vote with their
wallets, the results showed few people in favour of extra spending”. “Voters of
Bristol pick school cuts over taxes”, it reported.
Nor was Bristol on
its own. The London Borough of Croydon on 14 February 2001 asked its 235,000
registered electors to decide whether Council Tax should be increased by two
percent (in real terms, an effective freeze), 3.5 percent, or five percent.
Council tenants were also asked whether their rents should be increased, in
return for additional services.
Then, 56 percent
of the voters opted for the lowest possible rise. A total of 80,383 voted - a
34.2 percent turnout. Thirty-two percent voted for the 3.5 percent increase and
a mere five percent went for the five percent hike. Of the 4,190 council
tenants responding to the rents referendum, representing a 24.1 percent turnout,
just over 58 percent voted for a rent freeze, keeping average rents at £65 a
week. On offer to the tenants had been a community patrol service, community
grants, money advice and debt counselling services – all of which had been
Croydon was to
repeat the experiment the following year, with 74 percent of the taxpayers who
voted opting for the lowest rise on offer, at 3.65 percent, on a 35 percent
suggested that people were most likely to reject extra spending, even when more
services were offered. They also demonstrated that that there was some
enthusiasm for voting on budgets – despite limited local and national media
exposure. In Croydon, voters were not deterred by votes in successive years.
Turnout increased marginally in the second year. And crucially, fears that
electorates would necessarily vote for more spending did not materialise.
was the ability of electorates to handle multi-choice votes, a capability that
gives much more flexibility than having to stick to a straight “yes-no”
Labour defeat in the 2010 election, the idea of Council Tax referendums was
taken up by the Conservatives. Communities Secretary Eric Pickles. He declared
that by 2012, he wanted people to be able to reject Council Tax levels “if they
exceed a ceiling agreed annually by MPs”, by voting on them in referendums.
This was based on
a promise made in 2007, whence Mr Pickles called the plan a “radical extension
of direct democracy”. In actuality, though, it was a considerably watered-down
version of the earlier referendums – which themselves did not allow for
outright vetoes. Nor was there any suggestion that they should apply to central
government spending. Pickles averred that he was “in favour of local people
making local decisions”, and also said he wanted to reverse the presumption
that central government knew best when it came to deciding local priorities.
“Let the people decide”, he went on to say – but only on local issues.
Eventually, in the
Localism Act, the referendum principle was adopted, requiring local authorities
to put any increase of two or more percent in core Council Tax to the people.
Unfortunately, precepts – such as charges for Police and Fire Services – and
other levies were not limited, permitting overall rises above the two percent
the commitment of most local authorities to democracy, for the financial year
2013-4, none increased their taxes in a way that would have triggered a
referendum. Some cut public services. A number increased core taxes only by
1.99 percent, keeping them under the referendum threshold, while also
increasing precepts and levies.
In an attempt to
block the precepts loophole, Communities Secretary Eric Pickles tightened the
"referendum lock" in a clause in the Local Audit and Accountability
Bill. This attracted considerable opposition from the Local Government
Association (LGA), which claimed it to be, "a significant threat to both
local government’s financial stability and infrastructure investment". It
would leave authorities unable to invest in major infrastructure schemes such
as transport systems, putting jobs and investment at risk. 
A Department of
Communities spokesman responded, saying: “There is no reason that the Bill will
affect infrastructure projects. If local authorities want to raise Council Tax
because of levying bodies then they should be prepared to argue their case to
local people in a referendum”.
But the attitude of the LGA illustrated quite how far we have to go, and the
degree of opposition to democratic controls over taxation.
principle of these referendums was a welcome development, therefore, its advent
has not seen any great increase in accountability. In any case, Referism goes
much further than a simple veto on increases in Council Tax and – even at local
authority level – it needs to. As we have seen, when local authorities have
been prevented from increasing Council Tax, they have simply developed
alternative ways of increasing their revenues.
Referism also applies nationally as well as locally, giving voters the power to
reduce central government taxation. It also enables voters to control spending.
A weak block on a preset level of increase is merely a sop, and does nothing to
redress the power deficit.
As for costs of
local referendums, in the 1999 experiment Bristol spent £120,000 on each poll,
while Milton Keynes estimated £150,000. Tower Hamlets Council has estimated
that a standalone referendum might cost up to £250,000 but, if combined with
council elections, it would cost around £70,000 extra. Translated nationally,
the total cost of local budget referendums would be between £30-60 million.
The late Sandy
Rham, an IT expert and founder of the EU
Referendum blog forum, suggested that the software on current lottery
terminals could be adapted to allow their use for voting. A system that handles
£6.5 billion in annual ticket sales could very easily handle around 40 million
votes in a referendum. Add an online facility and you have a quick, cheap
system of conducting referendums. Such a system is not only desirable but also
necessary to minimise costs and disruption. Furthermore, they lie within the
realms of possibility. E-voting has been
successfully trialled in Norway.
To bring down
costs even more, Swiss and Californian practises could be adopted, where – if
need be - voting on two or more issues is combined, perhaps to fall in the same
period as the annual budget referendum. With that, there is no reason why
referendums should be time-consuming, disruptive or expensive.
What then concerns
doubters is that, should the people fully exert their power, government might
be deprived of funds altogether. But there is nothing to stop safeguards being
adopted to avoid this – in the short-term, at least. There should be no problem in having a fixed
date for a referendum, with the vote held well before the financial year for
which each budget applied. If a budget was then rejected, there should be
enough time for governments to resubmit, and again seek approval.
If a budget was
again rejected, and it was too late to resubmit before the start of a financial
year, there could, for example, be a system where permitted income stood at a
proportion of the previous year’s figure, with adjustments made once a budget
In the USA,
however, if Congress does not eventually approve the budget, the administration
can no longer pay its bills. That tends to concentrate minds. In the case of
Referism, the people could stop the money, giving them a continuous power. By
contrast, a one-off referendum, offered by the
government for its own tactical advantage, is to concede power to the centre.
Power resides with the body which decides whether there will be a referendum,
and determines the questions. When there are annual referendums, as of right,
power resides with the people.
power, the politicians decide how much they are going to spend, and demand that
we pay them. Consultation is meaningless as we have no means directly of
refusing their decisions. After the
event, we are then graciously allowed to hold our elected representatives to
account at elections. But can anyone really assert that the current election
processes change anything, or indeed are capable of changing anything?