Many of us will have been alerted by a nice email from that Chris Rennard chap about the fact that Nick Clegg has been making a speech about "decentralization" to the Local Government Association. That's nice. There's a section, as you would expect, on financing local government and, unusually over recent months it explicitly speaks of "local income tax" rather than just "on the ability to pay".

However it's the last sentence of this section I would like to see us explore more:

If we want local people really to decide on their local taxes and how to finance their local government, why don't we let them. Why don't we say, as in America, that authorities can legislate for themselves as to what they want their tax base to be - incomes, land values, restaurant tables, weighing bins, whatever. Already in a sense councils have some power over where they get some revenue. If they are lucky enough to be asset rich they can choose to invest that in whatever assets they like, within reason, and in some lucky cases, as with West Oxfordshire, that could fund as much as half their current council tax requirement.

Tax competition between municipalities seems to me to be something desirable. Each has different characteristics that might make the mix of things they decide to tax more or less useful. The choice of tax regime can do just as much for local economic competitiveness as any other aspect of public administration like planning policy, say.

Here in Oxford City I suspect, though I've not tried to do the sums, that Local Income Tax will mean people lower down the income scale in Oxford will have to pay more Local Income Tax than our "national typical" suggested outcomes because our median household income is depressed by the presence of so many students. Coupled with being an area of such high housing costs, this will be a double whammy for Oxford residents - their properties, now with no tax on them at all, will cost more and they will also have the income tax taken away from them at source.

But altogether, it would be far better than replacing one centrally determined system with another leaving all there to be discussed at local election times the rate of the local income tax. I could see it being much more interesting if councils and residents started talking about what tax mechanism rather than just what rate they wanted to use.

So Nick, there's that comfort zone barrier again - take us beyond it please, give localities a real dose of power and accountability, not circumscribe how they must do it.