Inverting Tax Collection, Tax Spreads and the seeds of Union reform.

Virtually every penny we pay in tax goes into one big tax stew - at HMRC. It's true that local authorities (with one hand tied behind their back) operate council tax and rates, and to a degree use Fixed Penalty Notices as a form of tax, but otherwise it is treasury that reaps the stockpile. This, is a problem. How about decentralising tax collection?

To be a nimble economy, where citizens are willing and happy to move into different areas for new opportunities, the UK's regions need tools at their disposal. Tax could be the main weapon in their arsenal. Sadly, under the homogenous regime the UK currently operates - competition and incentive is lost.

Counties should collect tax, first.

The idea being that tax is collected where it is earned. If a business' registered address is in Cheshire, then the VAT, PAYE, Corporation Tax is all collected locally in Cheshire.

Democratising the Treasury - The Chancellors' Court.

Regional tax offices could be operated by every county - each with a representative on a new steering body for the treasury - The Chancellors' Court. They would effectively observe the tactical direction of elements of the treasury's policy - with ultimate oversight remaining with the Chancellor. Perhaps directly overseeing the OBR, thus reigning in its bizarre 'quangoised' fiefdom.

Tax Spreads

The new regional collection offices would, rather than enforcing a single regime of tax brackets, be empowered to set local taxes for each tax type. The "range" or "spread" of these powers would be set by the Chancellor. This would allow parties to configure their tax policy in both local and national manifesto and join up democratic choices to be far more relevant. The aim being to engage people much more in local democracy and increase electoral turnout!

The Union Covenant

With tax spreads now set centrally, and the regional tax collection and competition shaping to allow for inclusion in power and national finances - the Union would benefit.

There are, undeniably, millions of voters who supported the model of democracy pursued by the EU. It seems fitting that decentralising tax collection would allow counties to be seen as "members" of the United Kingdom and fee paying. The Union would be responsible for the border, defence and overarching health policies and laws. The counties would have the Growth Remit.

With tax policy empowering regions, the Union itself could be put on a pathway to modernisation and positive democratic reform.

Nationalist Upsides

Such a model could, in a stroke, inverts the devolved administrations' financial eminence. One of the clear issues with devolution has been how it has fed secessionist views, as opposed to securing the Union by offering more devolved power. This doom loop has led the UK (especially post brexit), perilously close to break up, in political terms at least.

Potential...

Imagine a UK where local specialties and skills shaped policy - regions would drive forward and build immense Pareto-like competitive advantages by configuring their tax in a unique way, to appeal to a desired type of internal union migrant.

As with all the policy ideas suggested by SuperCo - this policy could piloted and tested first, to see what discernible impact it might have.