Robert Colvile: The LibDems wouldn't localise power to the individual

Robert is Director of Direct Democracy.  For the next part of this series, Dr Lee Rotherham will look at the obstacle of the EU.

This isn't something you'll read often on this site, but here we go: the Lib Dems were right, and we were wrong.

Back in the 1980s, the Conservatives had a problem – how to deliver services at a local level when councils were run by people like Ken Livingstone or Derek Hatton. Their solution was to emasculate local government, believing that Whitehall could do things better. That prescription was, most people now recognise, flawed.

Localists such as our group, Direct Democracy, want to set this right. There are Lib Dems who think the same way – the 'Orange Book' group, for instance. And Conservative Home's new poll shows that while Tory supporters do not want to see David Cameron and Menzies Campbell sitting together at the Cabinet table, there are areas – such as decentralisation – they could join forces on. So, would such co-operation work?

As the example above shows, the Lib Dems have long been keen on local power – the  'manifesto' by blogger Stephen Tall makes extensive mention of it. But there is a critical difference between their localism and ours. Theirs is based on trusting and empowering town halls. Ours is based on trusting and empowering the individual. For example, the Lib Dems dislike selecting candidates through open primaries, an idea of ours that Tory associations have embraced.

This culture clash would make the reform of local government finance – one of the keystones of the localist agenda – particularly difficult. This is hardly the sexiest of subjects, but it is vitally important, and contentious (remember the Poll Tax?). The Lib Dems want to replace council tax with a “local income tax”, set locally but collected nationally under PAYE. But how closely would any of us associate that line on our tax bill with our council's levels of service? Councillors could sit back and count the cash, without any incentive to do their jobs better. Even worse, many people do not pay income tax, and would be free to vote in high-spending councils without picking up the bills.

The Direct Democracy alternative is different. We would replace VAT with a Local Sales Tax: everyone would pay, because everyone buys things, but councils would be able to vary the rate to attract consumers. This system would not only more accountable – it would, for the first time in Britain, create competition between tax areas, and downward pressure on tax rates.

So, while the Tories and Lib Dems could co-operate on some important parts of the localist agenda, for example in devolving control of public services, a true meeting of minds is unlikely. Their localism stops at the town hall. We believe that local government should draw additional powers downward from Whitehall, never upward from the citizen.

The key proof of this is the Lib Dems' support for European integration, something impossible to reconcile with their supposed commitment to localism. How can you argue that decisions should be taken more closely to the people they affect, and at the same time that they ought to be made in Brussels? How can you decentralise power in the UK while simultaneously centralising it in the EU? That alone should probably lead localist Tories to keep their distance.

This is the latest in a series of articles about LibCon co-operation.  The ConservativeHome.com editorial on LibCon co-operation can be read here.  The editorial summarises a survey of Tory members' views on working with the Liberal Democrats.