The next item of business is a debate on motion S4M-12423, in the name of Marco Biagi, on the commission on local tax reform.
15:00
In looking at tax, we in the Scottish Government base our approach on four principles: efficiency, convenience, certainty and the tax’s being proportionate to the taxpayer’s ability to pay. Those principles are not new to the Government or in general; rather, they are attributable to Adam Smith, in book V of “The Wealth of Nations”.
The present council tax’s compliance with the first three of those maxims might be debated, but most recognise that the council tax, as set out in the Local Government Finance Act 1992—it has been with us for more than 20 years—does not in a substantive sense adhere to the fourth of those maxims: its being proportionate to the taxpayer’s ability to pay. That is not just our view; it is the view of many people around and outside the chamber who have proposed or suggested reforms over the years to try to address that shortcoming.
Just a couple of weeks ago in the chamber, John Swinney said, in defending the council tax:
“Council tax liability is linked to ability to pay through the council tax reduction scheme”.—[Official Report, 29 January 2015; c 73.]
It is “linked”, but I said that it
“does not in a substantive sense adhere”
to the fourth principle. There is a linkage, but it could be greater.
The 1992 act hardwired in a lack of progressivity. Band H properties have greater liability than band D properties, but their value is at least four times that of band D properties while their liability is just twice that of band D properties. Therefore, it is clear that there is a limit to how close the link is. The values are based on the situation in 1991 and no account has been taken of subsequent changes in relative prices, so areas that have not benefited from house price increases have not seen their council tax bills become lower than those that had a bit of a boom.
The council tax valuation bands mean that there is no differentiation among properties that are in the same band. As with the late and unlamented stamp duty, there is a slabbing effect that penalises properties whose value brings them just into a higher band and no more by charging them the same as properties that are near the top of the band.
Even looking at the banding should raise concern. Some 74 per cent—almost three quarters—of properties are in bands A, B, C and D, and only one in 200 is in band H. It is all based on the assumption—which has been the subject of many debates in Parliament over many years—that the best way of assessing an individual’s ability to pay is by looking at the value of their home.
Since 2008, we have been addressing the worst failings of that flawed system by delivering funding to local government that has enabled all councils to freeze the council tax. With the continuing agreement of all councils in Scotland, that freeze is about to run for the eighth consecutive year. The cumulative saving over the 2008-09 to 2014-15 period for band D households amounts to more than £900 per household. We estimate that that will rise to about £1,200 by 2015-16.
Before the introduction of the freeze, the average council tax per dwelling increased by more than 50 per cent between 1997-98 and 2007-08. That was not just far beyond inflation; it was financially crippling for certain types of household—for example, pensioner households—that were dependent on a modest fixed income, but still earned a little too much to qualify for council tax benefit. For many, there was real fear in awaiting the annual council tax letter dropping through the letterbox onto the doormat. Now, that at least is no longer the case.
In addition, with our local government partners, we stepped in when the United Kingdom Government abolished council tax benefit to ensure that vital reliefs could continue. The council tax reduction scheme, which Gavin Brown kindly introduced to the debate, affords people targeted relief from council tax liability. At its peak, it applied to more than 550,000 people in Scotland. That corresponded to £360 million of support in that year and covered 22 per cent of all households.
We have to contrast that with the approach that is taken in England, where localisation of council tax relief has meant that more than 300 different schemes are being operated, some of which mean that the UK Government’s budget cuts are falling on those who are least able to pay—even more so than the council tax unamended.
Will the minister concede that the suggestion that council tax relief was abolished in Scotland is not entirely accurate, that a significant proportion of that funding was devolved to Scotland, and that much of the scheme that now exists in Scotland is funded from that devolved resource?
Council tax was a reserved benefit. It was abolished. The funding was devolved with a 10 per cent cut, and we have had to step in and plug that gap.
In England, some councils chose to absorb the 10 per cent cut in funding within their budgets, but some now require people who are not in work, including disabled people and carers, to pay 30 per cent of their council tax liability. That is the wrong approach. Instead, this Government has implemented policies to protect people from the fundamental flaws of the present council tax system.
Will the minister give way?
I need to make some progress.
Perhaps with the exception of the Conservatives, we all recognise that the present system, as defined in an act that was passed in 1992, is not fit for 2015. Our 2011 manifesto committed us to
“consult with others to produce a fairer system based on ability to pay to replace the Council Tax”
and to
“put this to the people at the next election, by which time Scotland will have more powers over income tax”.
That is why the First Minister’s statement on the Scottish Government’s programme for government last November set out that we would establish an independent commission to examine fairer alternatives to the current system of council tax, to be advanced in partnership with local authorities, and with all political parties invited to be involved. That is why we accepted the recommendation of the Local Government and Regeneration Committee’s inquiry report, “Flexibility and Autonomy in Local Government” from last summer, to establish a cross-party commission. To that end I am happy to accept Alex Rowley’s amendment, which gives due recognition to the work of that committee.
The first steps in establishing the commission reflected our continuing partnership with local government; we found it to be fully supportive. It proposed joint chairing by the Convention of Scottish Local Authorities and the Scottish Government. Those chair roles have now been taken by me and Councillor David O’Neill, who is the president of COSLA.
Our invitation to the other parties to participate in the commission duly followed through a joint letter from me and Councillor O’Neill inviting each of them to discuss a potential remit and membership. I am grateful to Willie Rennie, Alex Rowley and Patrick Harvie for contributing to the early discussion. That early discussion allowed a proposed remit to be refined and developed, and we were happy to take on suggestions. A number of key organisations that could contribute were identified from outside the world of politics. I record my sincere thanks to Citizens Advice Scotland, the Joseph Rowntree Foundation, the Chartered Institute of Public Finance and Accountancy, the Law Society of Scotland and the institute for society and social justice research as well as the political parties and the independent group in COSLA for all agreeing to nominate representatives for the commission. We met for the first time on Monday this week.
The commission that we have now established, which will be independent of the Scottish Government and COSLA but will report to both, brings to the process many strong voices, differing perspectives and experiences, as well as analytical rigour. On the basis of that first meeting earlier this week, I am confident that the membership has the right mix of skills and knowledge, as well as immense enthusiasm, to tackle the task that it has been set.
That brings me to the remit that has been agreed by everyone who is participating. The commission is being asked to examine alternative systems of taxation to support funding of local government services, with a range of what will, in effect, become tests to apply, covering inequalities, macroeconomics, administration, transition, democracy and scale.
In conducting its work, the commission will engage with communities across Scotland to assess public perception of the emerging findings and to reflect that evidence in its final analysis and recommendations. The commission is not being asked to make a specific recommendation, although it is perfectly entitled to do that if it reaches a particular view. Rather, we envisage that its work will be to develop a profound understanding of all the potential systems.
It is unimaginable that the next Scottish Government—of whichever party or combination of parties it is—will have a policy of maintaining the existing council tax as set out in the Local Government Finance Act 1992.
The commission will help us all to understand what the alternative propositions are, what they would mean and whether they would be politically viable. The evidential approach that will be taken by the commission will provide the basis for the alternatives to be more thoroughly developed and informed than they would be otherwise, and for them to be calibrated against public opinion. The work of the commission will mean that the appropriate knowledge will be in the public domain to allow policy options to be challenged and validated.
We have to be realistic, though. Perhaps we have all been missing something, but my expectation is that there is no perfect solution. There is probably not going to be one that everyone will look at and say, “Yes—that’s the tax that I’m happy to pay. Let’s do it.” The real world is about trade-offs. The work of the commission can allow us to understand the trade-offs and allow policy to be developed to address them. We may well make different choices: instead of thinking that the commission will deliver one main course, perhaps we should expect it to give us a menu from which we can all choose, in the knowledge that all the options have been rigorously tested.
In addition, the commission will look at international practice to see whether there is anything we can learn from abroad and apply to our system here. Furthermore, the work of the commission can provide an administrative route map for implementing alternatives. That is key because, whatever is wrong with the council tax—I have gone into that at great length—it delivers £2 billion of funding for public services. Whatever replaces it must be capable of doing something similar.
With that £2 billion going on funding the staff and workforce who deliver vital services that have to be planned years in advance, we would benefit from revenues being stable and predictable. We cannot afford a future change that introduces unmanageable revenue risks. Equally, the people of Scotland cannot afford a change that exposes them to unfair or unanticipated tax liabilities. That is just one of the real-world trade-offs that it will be for the commission to wrestle with.
Council tax is fundamentally of profound importance to so much of our lives in Scotland—to so many of the services that we deliver. Its replacement must deliver financial accountability to local government and transparency to the more than 2 million households that currently pay council tax.
Council tax today is visible. Aside from income tax that is paid by self-assessment and vehicle excise duty, it is the only tax that we must actually make an effort to pay. Every other tax is collected at source by employers and by providers of goods and services.
As I have set out, however, it is a flawed system. For those reasons, I am delighted that opposition parties and many civil society groups recognise the importance of this work.
I hope that parties in the chamber, in addition to showing their support by participating in the commission, will also show their support by voting in support of the motion in my name later this afternoon.
I move,
That the Parliament supports the establishment of an independent cross-party commission to examine alternatives to the council tax; welcomes this being undertaken jointly by the Scottish Government and local government; endorses the remit as set out in the response to question S4W-24542, and looks forward to its report in autumn 2015.
I call Alex Rowley to speak to and move amendment S4M-12423.1. Mr Rowley, you have 9 minutes.
15:13
Thank you, Deputy Presiding Officer.
I was a bit concerned when I heard the minister starting off his speech by saying that we were going to have the debate today about the merits or otherwise of the council tax and what should replace it. That is not for today; that is why the commission was set up.
I want to amend the motion because the Local Government and Regeneration Committee, while carrying out its inquiry into flexibility and autonomy in local government, heard a lot of evidence from a lot of different people who have expertise in local government and government more generally, and they all raised the issue of local government finance and the fact that we need to put local government finance on a stable footing, moving forward. It is important that the Local Government and Regeneration Committee recognised that need, highlighted it in its report and called for an all-party group to be pulled together to try to move that forward.
The committee made the point that local authority funding and expenditure in Scotland in the current year is expected to exceed £11.5 billion across the 32 local authorities. That highlights just how important local government is to every community in Scotland.
It also made the point that the four elements that make up local government funding are council tax, fees and charges, Scottish Government grant and other income. I will say a bit more about the council tax and the percentage that it makes up.
However, the committee also said that one area in which there is almost unanimous agreement among politicians and parties is that the current system of financing requires reform. That view seems to have been around for some time.
I am disappointed that the Conservative group has decided not to participate in the commission because, like the minister, I do not expect that we will reach a conclusion and say, “That’s the system of local government finance that needs to be put in place.” I am much more keen for the commission to look at options and that it is able to produce a useful report that all parties can use as we set out our manifestos and as we look towards finding a sustainable way of managing local government finance.
I am grateful to Alex Rowley for giving way. Is it his view that the commission will not come up with recommendations?
The commission may choose to advise on the benefits and merits of each of the different options that it considers. If it provides an informative report outlining the range of available options, it will then be for the political parties to decide what to do. My party, for example, does not believe that a local income tax is the best way forward, but other parties may want to make a case for that option. If the commission is able to consider the merits of local income tax versus property tax, all that information should be there and should be useful.
More important—certainly from the discussion that we had at the first meeting—is that we will, I hope, engage with civic Scotland, with local government itself and with communities and individuals right across Scotland to discuss the merits and the principle of local taxation and local people paying for local services. There is a wider discussion and a wider debate to be had; I hope that the commission will, in the short timescale that has been set, be able to have that discussion and debate and engage people right across Scotland, because there is no doubt that the council tax freeze has been popular.
Right now, the Labour Party takes the view that it would be wrong to introduce increases in council tax charges when people have, in effect, had a wage freeze for the past four or five years and are currently facing a crisis in relation to family budgets. There needs to be a discussion with communities and with people across Scotland about the type of local government finance that they want. I read a report by Common Weal the other night, entitled “The Silent Crisis: Failure and Revival in Local Democracy in Scotland”. The report highlights that in 2006,
“the Local Government Finance Review Committee”
of this Parliament reported that
“there is the fundamental question about what the relationship between central and local government should be. There is long-standing and unresolved debate about their respective roles. The Committee’s view is that it is essential that the Scottish Parliament, the Scottish Executive”—
as it was then—
“and local authorities grasp the nettle and resolve what appears to be a corrosive argument about their relationship.”
That was back in 2006; we could argue that not a lot has moved on since then. Just in the past couple of weeks, the Cabinet Secretary for Finance, Constitution and Economy has been threatening to cut the budget to local authorities over the issue of teacher numbers. The ridiculous part of that is that local authorities across Scotland do not want to cut teacher numbers but need the money to be able to provide the education service in the first place.
The debate about local government and funding local government services seems to have been going on for some time, but has not been resolved. In 2007, we had a minority Scottish National Party Government that was committed to a local income tax. By 2011, when the SNP had a majority, a local income tax did not seem to be as popular, or perhaps it did not look as though it would actually work. We have travelled some distance, but we have not made a lot of progress when it comes to financing local government. I hope that some of my colleagues will highlight in their speeches why local government is so important and why we need to find a way forward.
Last year’s report by the commission for strengthening local democracy, which was chaired by COSLA, stated that
“50 years ago”
local authorities
“raised well over 50% of their own income through local taxation. As recently as 1998, around half was still generated this way.”
However, it went on to state that
“Today that has fallen to 18%.”
I contacted a number of council leaders. I got an interesting response from Gordon Matheson, who is the leader of Glasgow City Council. He said:
“I am disappointed that the remit of the group narrowly focuses upon council tax, which accounts for 17% of funding to local government and ignores the 83% block of funding that is allocated by the Scottish Government, typical of a highly centralised Scottish state. This is a major omission.”
He went on to say:
“Since 2008/9, Glasgow’s percentage share of the available local government settlement has reduced from 13.91% to 12.81% for 2015/16. In cash terms, this equates to a difference of £109 million for ... 2015/16 ... The distribution formula has a greater impact on Glasgow than the council tax freeze”.
Will Alex Rowley give way?
Yes.
I am sorry, Mr Stewart, but the member is in his last minute.
I am sorry—that is right.
The point is that having the new commission look at local taxation in isolation will not be the panacea for all the local government finance issues. We need a much wider debate, and that is for the political parties to have.
When the parties present their proposals for the elections next year, the question of how we fund local government, focusing not just on the 17 or 18 per cent that comes from council tax but on how we fund all of local government and its important role, will be the important issue as we move forward.
In finishing, Presiding Officer—
Yes, please.
The reason why that is so important is that local government does something every day that Parliament does not do. Every day, local authorities throughout Scotland impact on people’s lives. They are delivering services, and they are at the coalface when it comes to tackling poverty and inequality, and delivering jobs and apprenticeships, and housing—
We take your point.
In all those areas, local government is key. It is far too important—
You must close, please.
—for us not to get the answers. That is why we will support the motion as amended today.
I move amendment S4M-12423.1, to insert after “council tax”:
“as proposed by the Local Government and Regeneration Committee in its 8th report in 2014, Flexibility and Autonomy in Local Government”.
15:22
I begin with a degree of surprise after listening to the first two speeches—from the Scottish National Party and Labour—about what exactly the commission will do. I looked at the commission’s membership: there were some names that I did not recognise, but many that I did. I am therefore staggered to learn that we will get all those people, some of whom I rate highly, together with a secretariat in a room to engage with civic society over a year, at the end of which they will just produce—to quote the minister—a “menu”.
We heard from the Labour Party that the commission will make no recommendations at the end of all that work. I am genuinely surprised that it sounds just like a talking shop. What is the point of getting all those people together if they are not going to recommend anything at the end of the process and there will simply be a menu from which political parties can pick and choose in drawing up their manifestos for the 2016 elections?
Surely Gavin Brown recognises that it is better to have tried, and perhaps failed and been enlightened, than not to have bothered at all.
The point is that, based on what the minister said, the commission will not even be trying to make firm recommendations. I am genuinely confused about what the commission’s purpose is. It sounds from what the minister said as if the plan needs a rethink by the Government.
To put that to one side, Mr Rowley made the point that we were going to make. We chose not to sit on the commission. We are grateful for the invitation from Mr Biagi and Councillor David O’Neill and, as a group and a party, we talked it through carefully. We concluded that we would not sit on the commission for a couple of reasons.
The first reason is that we intend to set up our own commission to look at finance more widely. Ruth Davidson announced the low-tax commission at the Conservatives’ UK party conference in September last year and it was formally launched as the commission for competitive and fair taxation this week, with a range of commissioners who have experience and can bring a lot to the task, and who will ultimately produce conclusions and—in this case—recommendations on what ought to be done.
The commission will look at taxation widely but, given the size of local taxation—when we add everything together, it is about £5 billion in round figures, while expenditure is well over double that—that issue will occupy a significant amount of the group’s resources and will be a key feature of its recommendations. Our view as a party is that we will put our support behind that group’s work instead of diluting it across two work streams.
Can Mr Brown join together an equation that says on the one hand that his group will produce proposals and be independent and on the other hand that it will inform the Tory party’s manifesto for next year? A rather mixed-up picture of Mr Brown’s commission seems to be emerging.
Not at all. Like the many commissions that I know Mr Crawford has been involved in and seen, although we have set up the commission, it will operate independently. Its weekly work will not be set by us and its conclusions will be independently reached by its commissioners. It will then of course be up to the party to decide whether to take all or most of the recommendations on board. That is how most independent commissions work. Mr Crawford ought to know that, having sat on one or two himself.
The other reason why we chose not to join the minister’s commission is that, having thought carefully about where the group might end up, and given the views of the left-wing parties in the Parliament and the cosy left-wing consensus that exists across the chamber, we genuinely do not believe that there is almost any prospect of our agreeing with the SNP or, for that matter, the Greens on what local government taxation should look like.
We know that the Greens want a land value tax; they always have done and I suspect that they will push for that. We know that the Liberal Democrats want a local income tax and that the SNP wants a national local income tax. We do not know what the Labour Party wants, and I suspect that it does not know what it wants. However, we are pretty clear that all those parties would want to hammer taxpayers in a way that we would not.
The land and buildings transaction tax debates during the course of the budget gave a clear example of that, because none of the other parties batted an eyelid when punitive rates were announced that included a staggering 10 per cent on homes that are worth over £250,000. Labour and the Greens were unhappy when Mr Swinney changed his mind and introduced the 5 per cent banding rate, although we did not think that he went anywhere near far enough. Of course, the SNP was happy and so were the Lib Dems, but Labour and the Greens were unhappy that Mr Swinney had moved on the issue at all.
We are setting up our own commission because we think that we are very unlikely to agree with what the minister’s commission concludes. We believe that voters deserve a choice in 2016 based on the independent work done by our commission and by the minister’s commission.
When the Government responded to the Local Government and Regeneration Committee’s report, it said clearly that the choice should be put to the people. Our concern is that, if all the parties simply agree and put only one proposition to the people at the next election, that will be no choice at all. That is why we are not joining the minister’s commission and why we will not support the motion at decision time.
We move to the open debate. I call Kevin Stewart, to be followed by Willie Rennie. We are tight for time, so I ask for six-minute speeches, please.
15:28
I thank my colleagues on the Local Government and Regeneration Committee for the work that they did on the flexibility and autonomy report. During our deliberations, one aspect that we looked at was the legal and constitutional funding mechanisms that are available to local government. Paragraph 101 of our report states:
“Steps should be taken within the lifetime of this Parliament to initiate an agreed approach to facilitate meaningful debate on alternative approaches with the aim of having a new system identified in time for the next local government elections in 2017. We consider this to be the latest appropriate timetable which would enable candidates at that election to put forward their policies linked to revised funding mechanisms. Given the desirability of reaching consensus we consider this should be done by way of an independent cross-party commission which should include representatives from local government and wider civic society across Scotland.”
I am extremely pleased that the Government has listened to that recommendation from the committee, and I was extremely pleased that every single member of the committee signed up to it, including the Conservative member.
I am quite surprised by the Conservatives’ attitude today, because what we need in dealing with this subject, which is—let us face it—a thorny one, is civic Scotland’s input. Basically, the Tories are saying that they are not interested in civic Scotland’s views. I am glad that the Labour Party, the Greens and the Liberal Democrats as well as many people from civic Scotland have agreed to join the commission.
That criticism would be fair if we were doing nothing but, given that we have set up our own commission, which will engage extremely widely, surely it is unfair.
This is the kind of situation that is faced every day in playgrounds when somebody disagrees with a point of view and they take the ball home. That is what the Tories have done, given what they have decided to do. They have put their representative on the Local Government and Regeneration Committee in a really bad position, because the debate in the committee was pretty immense in terms of the points that we got to. We often disagree about things, but we agreed completely and utterly that this was the right approach to take.
As I said, I am pleased that the Government listened to what we said and took the suggested approach. It is just a pity that the Conservatives have chosen to take their ball home. In some respects, they will miss out on having the views of civic Scotland in formulating their policy—which, let us be honest, will probably not be up to much anyway.
Mr Brown said that all the parties that are involved in the commission will “hammer taxpayers”. I point out to him that the Governments in the current and previous sessions of Parliament have ensured that taxpayers have not been hammered, as they have chosen to freeze the council tax for eight years. I am pleased about that because, between 1996-97 and 2007-08, the council tax on the average house in Aberdeen rose by 81.9 per cent. People in Aberdeen could not bear that burden, so I am really pleased that it has not been added to over the piece.
We recognise that the system is not perfect, but the Government has protected hard-pressed families. I suggest to Mr Brown that, rather than taxpayers being hammered, the opposite has been the case when it comes to this Government and the council tax.
I am pleased by the remit and membership of the independent commission. I hope that it will look at a number of things when it carries out its business, but I will touch on just one. I wrote to the Government recently about the provision for carers in the council tax system. I got a response from the Deputy First Minister, who suggested that the commission should look at such issues. I hope that it will agree to look at how carers have to pay into the local taxation system, as well as other hard-pressed folk in our society.
I wish everyone on the commission all the best and I encourage civic Scotland to engage with it. I repeat that I am pleased that we have moved forward as per the Local Government and Regeneration Committee’s recommendations.
15:35
I have spent the past five years being accused by all sorts of people, in this chamber and beyond, of being right wing. It is refreshing to be called left wing, so I thank Gavin Brown for that, if for nothing else.
The commission is not about deciding whether tax should be high or low. It is about coming up with a taxation system that will work not just for Scotland but for local government, and Gavin Brown’s interest in low tax is no bar to being involved in the commission. He could be involved in it and subsequently argue that whatever we came up with should involve a low-tax element. That would be up to him and his party to decide.
It would be advisable if Gavin Brown sought other political parties’ advice. I know that he will have his own commission, but many more people are involved in the issue. He should seek the advice of others, because the Conservative track record on coming up with local government taxation systems is not good. The last time the Conservatives came up with such a system, it was not universally successful or approved, and it had to be abandoned in a very short period. Perhaps Gavin Brown might like to reflect on history and decide to join the commission, if for nothing else than to save him from himself.
The Lib Dems would be advised to study the more recent history of electoral success.
Is it Willie Rennie’s view that the commission will come up with a recommendation for a tax system?
That should be our ambition. We should aim for consensus—all commissions should look for that—but we should not bind ourselves absolutely to having agreement. We should try to shine a light, because there are an awful lot of misunderstandings and misconceptions about local government finance.
As Alex Rowley rightly pointed out, there is a big argument to be had about the balance of local authority funding in different regions in Scotland and about the balance between central Government and local government funding. We need to look at that to ensure that we have a sustainable system and so that we can be far better informed about how local government should be financed. If we cannot come up with an agreement but at least have a better understanding, we will be many steps further forward than we would have been otherwise.
Local government has been far too party politicised in recent years, so it is admirable of the Local Government and Regeneration Committee and the Government to try to bring everybody together. That is partly to get the SNP off a hook that it finds itself on because of a policy that it is perhaps not so convinced about any more, but the fact that the SNP is willing to work with others is a good thing.
In the 1870s, 4.5 per cent of local government finances were provided by central Government. In the 1880s, the figure was 9.8 per cent, and in 1928, it was 16 per cent. In the 1970s, it went up to 60 per cent, and in 1990, 85 per cent was provided by central Government. That must change if we are to give local authorities the true flexibility that they need and aspire to have.
Just like the United Kingdom, Scotland is a diverse country with greatly differing needs. Some areas might like lower tax levels and some want higher tax levels, but just now they are bound into a system in which they have to follow whatever Edinburgh says has to happen. Any idea that the council tax freeze is anything more than a straitjacket is nonsense. Flexibility is a principle that we should try to establish through any kind of outcome that we agree in the commission. It needs to involve true freedom for local government, so that councils can decide what is best for their communities.
In addition to advocating fairness, Liberal Democrats have been strong advocates of local income tax. We believe that a truly local income tax—not a central income tax that is provided to local government, but a local income tax with variability at the local level—is something for which we should strive, and we have campaigned for it for many years.
We know that there are weaknesses in the system; others have pointed them out. However, we should strive towards a system that is based on the ability to pay. We will put that idea into the commission, and others will put their ideas in.
In true Liberal Democrat fashion, we will have our ears wide open and will listen to what the other parties say. After all, if we can come to a consensus that results in substantial change and if we can shine a light on the financing of local government, we will have provided a great service to the country. We might not all agree—although I would like us to do so if we possibly can—but, even if we do not, we will have made significant progress if we can shine a light on the issue.
As the minister said, we should look around the world and see what works. There might not be any great answers out there that we have missed, and it has probably all been laid before us. The fact is that any change is difficult. We saw what happened in Wales, where a revaluation proved to be incredibly unpopular. Whatever we do, we need to be careful, but we should strive to have freedom and fairness as sound principles for any change.
15:40
I am very pleased that the work of the commission on local tax reform is under way and that the commission has already had its first meeting. Indeed, I was delighted to see the commission’s make-up, and I particularly welcome the fact that one of the members is Angela O’Hagan, who is research fellow at the institute for society and social justice research and convener of the Scottish women’s budget group. Women have sometimes been let down by local government—we need think only of the equal pay issues across Scotland at the moment—and I welcome the fact that a woman with a strong academic voice is on the commission. I also welcome the involvement of the Joseph Rowntree Foundation, the Chartered Institute of Public Finance and Accountancy Scotland and, indeed, my colleague on the Local Government and Regeneration Committee, Alex Rowley, who has considerable local government experience and who as shadow minister for local government and community empowerment will bring much to his role on the commission.
I agree with Alex Rowley that it is a matter of regret that the Conservatives have decided not to be part of the commission. I believe that this is an opportunity for the Parliament to try to reach some consensus, given all the recent work that has been done on local democracy in the Parliament and by colleagues in the Convention of Scottish Local Authorities. The Conservative Party will be missing out in that respect. That said, my experience as a member of the Welfare Reform Committee is that even when faced with overwhelming evidence that austerity budgets and welfare reforms are causing problems, are having a detrimental effect on people and have led to increased use of food banks, the Conservatives at Westminster simply do not acknowledge the detrimental effect on the most vulnerable in our society. That leads me to think that they might not be much missed by the commission. I really think that the people who are involved will come up with some good menus and propositions for what might be possible.
Picking up on Alex Rowley’s comments, I really hope that we can find consensus and work together on this matter, but I have to say that some of the language about the relationship with local government does not help. No council in Scotland—not one—was prevented from raising the council tax; councils had that option but, had they taken it, they would have had to explain to their constituents why they wanted to increase it. Even with the funding from the Scottish Government, they would have had to go forward with the average 3.5 or 3.6 per cent increase just to stand still, and then they would have had to explain to their constituents why the tax was being increased again to raise any additional meaningful sums of money. We would have been looking again at the horrendous prospect of a situation such as that in Aberdeen, where, as Mr Stewart pointed out, council tax increased by more than 80 per cent.
That would have meant something very specific for the local authority on which I served as a councillor—North Lanarkshire—and for my constituents now, and I hope that the minister and the commission will take on board the geographic and demographic pressures in different areas in Scotland and ensure that whatever replaces this system reflects and is fair to the people in the area. In North Lanarkshire, for example, 82 per cent of the population live in band D or below houses, and more than 50 per cent live in houses at band B or below. Moreover, in a recent house price survey, my home town of Wishaw in North Lanarkshire had one of the lowest rises in house property values in the whole of the United Kingdom.
The experience of people in North Lanarkshire, on the whole, cannot be compared with that of those in Aberdeen, Edinburgh or other places where house prices and land values have increased to a great extent. From my point of view, any increase in the council tax would have been so detrimental to ordinary hard-working people that we could never have contemplated it. I am glad that the Scottish Government asked for the council tax freeze.
Does the member agree that people in better-off areas with higher council tax bands benefit more from the council tax freeze than those in the lower tax bands do?
As I said, the council tax is not a fair tax. It has never been a fair tax. The freeze has put a stop to the horrendous increases, a lot of which were done by Labour-controlled councils. As the minister pointed out when he responded to Mr Brown, the increase in the tax band does not even represent the doubling in value. The council tax is unfair. That is why we should come together and get behind the commission in its work as it tries to come up with a system that is truly fair. However, I do not think that the council tax freeze was wrong, by any stretch of the imagination, and I do not think that the Scottish people would have tholed the increases that have been talked about—up to 80 per cent, over time.
No other tax—
Will the member give way?
No, I am not going to take another intervention; I am struggling for time.
You are in your last 40 seconds.
I welcome the fact that Mr Rowley mentioned “Effective Democracy: Reconnecting with Communities”. It is an excellent document that sets out how we should proceed and work together. We cannot take individual decisions about financing; we must think about our whole communities, about empowering communities and about democracy as a whole. The document says:
“Making Scotland a fairer, healthier and wealthier place will not be achieved without a democracy in which people can see how decisions are made, and where communities are active participants in that process.”
I think that the commission will take us a long way towards reaching that goal for our constituents.
15:47
As a former member of the Local Government and Regeneration Committee, I am pleased to speak in this debate and to support my colleague Alex Rowley’s amendment, which recognises the work of the committee and its call for the establishment of a cross-party commission on finding an alternative to the council tax.
I will speak later about my time on the committee, when we developed what was to become the committee’s eighth report in 2014, which examined flexibility and autonomy in local government, and we took part in the European fact-finding sessions, which shaped many of our conclusions.
First, however, I want to speak about my experience as an elected member in local government. In particular, I want to highlight the important work that is being done by local government and the vital services that it provides to some of our most vulnerable and deprived citizens. Through services such as social work and social care, local government is on the front line, tackling inequality and poverty and caring for our elderly and disabled citizens. It is local government that carries the responsibility for educating our children; it is local government that is often tasked with helping those who cannot access employment to gain the skills that they need to do so; and it is local government that houses those who have nowhere else to reside. I would argue that local government is the most important tier of government and is certainly the most visible to our citizens.
In Glasgow, which I represent, it is the city council that has led the fight to tackle poverty and inequality by working within our most disadvantaged communities to increase skills and get people back into work, and it is Glasgow City Council that has led the way in introducing a living wage across the city to protect our lowest-paid workers. Yet, despite the importance of local government and the vital work that is carried out by local authorities such as Glasgow City Council, councils across Scotland have seen austerity plus passed down by this Scottish Government. For example, Glasgow has lost £370 million in total since the SNP Government came to power. The Scottish Government’s own figures show that, if Glasgow City Council got the same share of the local government budget as it got under the Labour Administration, it would have an extra £96 million in its funding for this year alone.
Will Ms McTaggart join me in calling on COSLA to have a full review of the funding formula? I think that that would benefit my constituents in Aberdeen, and I have called for it for a very long time.
I am not sure that that is going to be on the menu for the commission, but it has to be addressed.
It is clear to me that local government in Scotland is not being properly funded and that vital public services are suffering as a consequence. We must be honest about the pressures that our councils face.
Will Anne McTaggart give way?
Okay, but quickly.
During a recent parliamentary debate on local government financing, I challenged a number of Labour members to tell us how much more they would put into the local government settlement and where that money would come from. Can Anne McTaggart enlighten us on that, please?
It sounds like a Green Party moment, asking me to rattle off figures off the top of my head. Yes, we want to see an increase and some restructuring, but I apologise for not having the figures off the top of my head.
Tough and unpopular decisions have to be made—like the ones that Bruce Crawford was implying. Budgets need to be stretched to breaking point, and that is unsustainable. We must now find a way to move forward. We must agree that local government should be properly funded and that vital public services must be protected. Therefore, I welcome the cross-party commission that is charged with finding an alternative to the council tax. I am glad that the work that was done by the Local Government and Regeneration Committee is being taken forward in that way.
The committee sought evidence from other European countries and it immediately became apparent to me that, across Europe, local government is changing to meet the new demands and priorities of its citizens. I believe that local government in our country must change, too. The Community Empowerment (Scotland) Bill, which is currently before the Local Government and Regeneration Committee, gives us an opportunity to bring about some of that change, but communities will not be empowered if the money is not available to back up the bill’s provisions and support them.
Presiding Officer, I see that you are rolling your pen, so I will come to a conclusion.
I welcome the commission and will follow its progress extremely carefully. I also welcome the acknowledgement of the work that was done by the Local Government and Regeneration Committee to establish the commission. However, we must be open and honest about the challenges that lie ahead, including what funding will be needed in the future. Given the pressures that our councils face, I hope that we can begin to move forward and find an alternative to the council tax that is fairer and more progressive and meets the needs of local government. I also hope that we can have an honest and open discussion about the challenges that local government faces and the need to properly fund our vital public services.
15:53
I welcome the debate. Some 10 years ago, I sat in the public gallery of the Parliament, listening to a raging debate on local taxation. There was loud support for a local income tax from the Opposition at that time. Then, as now, it was clear that the existing property-based system of local taxation is not progressive, fair, proportionate, efficient or timeous and does not achieve all that it should and that we should move to strengthen local autonomy and democracy through a proper taxation system.
In pursuit of our principles, as enshrined in the Community Empowerment (Scotland) Bill, we must address a fundamental change in the financing of our local authorities, however they might be structured, so that local democracy and autonomy might be achieved.
We can no longer continue with the current regime. The council tax, which we have rightly frozen over the past eight years given the straitened UK national economic circumstances, might and should eventually become a lost element in the history of local tax revenue garnering.
We must recognise that compulsive action by central Government while working with COSLA has buttressed local government by maintaining annual revenue and capital funding at current levels in 2015-16, with new allocations uprated by finance for new responsibilities allocated to local authorities.
It is to be applauded that local government budgets from 2007-08 to 2012-13 have increased by 9 per cent, demonstrating an accord between COSLA and the Scottish Government over that difficult financial period. I hope—I know—that, with COSLA joining the commission, that relationship will be mirrored.
I am confused by Gavin Brown’s statement that he will consult civic Scotland. Is he expecting to get an answer different from the one that it has already given on the proposed commission? It is shameful, frankly, that the Conservatives have not participated and made this a consensual effort.
The requirement for action, if anything, highlighted the need to change and meet our manifesto commitment to replace an iniquitous council tax.
If Scotland is to compete economically and globally, the nature of local government funding must change. If we are to empower communities, so must we empower local authorities and their associated communities to set them free to achieve returns on local investment, innovation, efficiency and productivity. If we are to compete seriously, we must consider that competitive countries, particularly those in Europe with local governments—
Will the member give way?
Yes.
I have enjoyed the past 30 seconds or so of the member’s speech. Given what he has just said, should the new system be a lower tax one?
Gavin Brown misses the point. When I talked about setting local authorities free, I was saying that it should be right for them to determine the level of tax gathering and revenue that is appropriate for their circumstances.
The competitiveness that I was about to mention with regard to Europe will provide competition between local authorities. That in itself will improve our economic capabilities.
We must look at those local governments in Europe with equivalent responsibilities to Scotland. They garner at least 50 per cent of their income locally whereas, as Willie Rennie pointed out, we have a base of 20 per cent.
Local communities should and must have the right to determine whether they want to pay for better governance and better services in their area. In staying faithful to its remit, I am sure that the commission will, in a short time, construct positive proposals that will not just embrace fairness and efficiency but let us set about using the adopted local taxation system—or systems—to eradicate inequalities in our local areas and to secure the wellbeing of each and every one of our citizens. I am also sure that it will want to hand back power to the citizens. By doing that, we would ensure that there is more direct engagement with local people.
All of us will have a view on what the local taxation base might encompass. There will be those of us who seek a form of local income tax married to a site valuation tax system, with regular assessment of land values, as opposed to the current unfair property values. Both of those taxes would be progressive, fair, more equal, embrace personal income and asset positions and demand more accountability from local representatives. Of course, that will be down to the commission. However, I suggest that it might be helpful to have a brief stop-over in Denmark, particularly to assess the impact of site valuation tax and a local income tax on local and national economies.
The commission is most welcome; its recommendations and the consequent actions will be even more so.
16:00
I welcome the opportunity to speak in this debate on a subject that I believe the Scottish Parliament has had to confront for some time. We cannot defer reform of local taxation again for another term and another session of Parliament. We cannot lurch from one fix to the next, knowing that long-term damage is being done to public services. We cannot continue to tax properties today on the basis of a valuation last conducted in 1991. We cannot pretend that the council tax freeze is anything other than underfunded. As Unison, the leading trade union for local government workers, has said:
“We need to develop a new consensus that provides a long-term solution.”
That is why I congratulate the Local Government and Regeneration Committee on showing leadership on the issue by recommending that an independent cross-party commission on local taxation be established. In doing so, I hope that the committee has brought about the means by which we can finally address the serious, mounting issues surrounding the financing of local government.
Figures cited by Unison indicate that council tax accounts for only about a fifth of the income of our councils in Scotland. There will be variations from one local authority to the next. For instance, there have been times when the income generated in South Lanarkshire has been greater than in its larger neighbour, North Lanarkshire, where the level of need and deprivation is greater. That is because, as others have said, council tax, as a property-based tax, is based on yield from taxing property values, and the values of properties in some of South Lanarkshire’s suburbs are higher.
However, relative to grants from central Government, the overall share of income that is generated through council tax has been declining everywhere, and it will have declined further since the council tax freeze was introduced. A review of local taxation is welcome, but we cannot lose sight of wider issues in the financing of local government. We must be clear about the remit of the commission—what it will do and what it will not do—because council tax is just one income stream.
There have been several reviews into non-domestic rates. One such review, into the cumbersome appeals process, is on-going. More and more businesses are appealing and our assessors and valuation boards are swamped. Many businesses have told me that valuations are completely out of kilter with the property market. The last valuation was postponed and so taxes are effectively being levelled on properties at pre-recession values. Our experience of business rates might offer some lessons for the commission if it decides to continue with some form of property taxation.
I draw the Government’s attention to the impact that changes in the Scottish Government’s grant are having at the local level. For example, South Lanarkshire Council has advised that, while the grant levels for 2016-17 are not yet available, it expects that it will have to revise its budget strategy for the financial years beyond 2017. Its previous budget strategy, from May 2013 to 2016-17, assumed that there would be a consistent level of central funding. That has not proven to be the case.
South Lanarkshire Council has warned that if the Parliament is to make laws that have obvious financial implications for local authorities, that should, ideally, be reflected in their funding. In evidence to the Education and Culture Committee, the council specifically highlighted costs arising from new legislation on additional support for learning as an area in which the council wants to meet the Parliament’s expectations but is struggling because of financial constraints. Those issues are important because grants account for so much of a council’s income.
I draw members’ attention to the work of the Scottish women’s budget group, which I raised with the First Minister during our recent public session of the Conveners Group. The budget group directly challenged the assertion in this year’s budget equality statement that there is “parity” in the council tax freeze. It does not accept that the freeze helps people on low incomes, because of cuts to council services, which those in need depend on most. Therefore, I simply remind the Government and members of the commission of the need to consider the distributional effects of any changes in their entirety. What will they mean for those on low incomes, the people who depend on council services most, women and those who already face the greatest inequalities?
The Local Government and Regeneration Committee has helped the Scottish Government and Parliament to take an important step. It has recommended not only that we examine the issues but that we do it in the right way with an independent, all-party commission.
16:05
I welcome the debate and the establishment of the commission. I ask the Conservative Party to reconsider its position and take an active part in helping to devise a modern, fairer alternative to the council tax. No tax is popular, as we have heard, but the commission will help to generate the chance that a new, fairer tax will be accepted across the country. However, it would be accepted even more if the commission was totally cross-party and allowed for all the voices in Scotland to have a say in the creation of an alternative to the council tax.
Before we examine the commission’s role and the possible alternatives that are open to it, it is important to highlight the current situation regarding the funding of local government in Scotland and the problems with the council tax.
In contrast to what is happening in England, the Scottish Government has protected local government funding. The 2015-16 budget provides a total funding package of more than £10.85 billion, with further funding available to maintain teacher numbers. Between 2007-08 and 2012-13, the resources within the Scottish Government’s control increased by 6.4 per cent. Over the same period, local government’s budget increased by 8.9 per cent. That demonstrates the strong financial settlements that have been agreed with local government during challenging financial times.
The difference in local government funding between Scotland and England was highlighted by Councillor Sir Merrick Cockell, the chairman of the Local Government Association, who, following the 2013 UK spending review, said:
“Every year I meet my opposite numbers in Scotland, Wales and Northern Ireland and they listen to us in wide-eyed disbelief at the budget cuts we are enduring and they are not.”
It is important to review the record of the council tax and ensure that the failings of that form of taxation are not repeated when we discuss a new system of funding local government.
The council tax system is unfair and regressive. It taxes a higher proportion of the value of cheaper properties than of expensive ones and bears little relation to a household’s ability to pay. People on low incomes, including pensioners and those in low-wage employment, can pay 20 per cent or more of their incomes in council tax, while those who are better off can pay 1 per cent or less of their incomes.
The abolition of council tax benefit by the UK Government resulted in the funds for supporting people on low incomes being devolved to Scotland but with a 10 per cent cut. The Scottish Government, in co-operation with COSLA, managed to plug that gap. Without that action, more than 530,000 low-income households—including 200,000 pensioners—would face a massive rise in their bills, as has happened in some areas of England.
Before the fully funded council tax freeze, local communities faced enormous rises in their council tax bill. Across Scotland, council tax bills went up by 46 per cent. Other parties have suggested altering the tax bands to try to improve the council tax, but that will quite simply not be enough. No amount of alteration to tax bands or minor changes can substantially improve the tax. It simply has to be replaced.
The establishment of the commission on local tax reform is a positive step towards devising a fairer, more progressive alternative to the council tax. I am pleased that the commission has general cross-party support, with the exception of the Conservatives, and involves external advice from the third sector and other bodies that can contribute their expertise and experience.
We need to examine all the options that are available domestically and internationally to find a fairer alternative system. My colleague Chic Brodie mentioned Denmark. We can examine the approach there and elsewhere.
I also welcome the fact that the commission’s remit is not prescriptive, which will allow it to look at alternative systems while considering the impact on individuals, households and inequalities in income and wealth. It is important that future local taxes should embrace the established taxation principles of efficiency, convenience, certainty and being proportionate to the taxpayer’s ability to pay.
That will be no easy task for the commission, and I am sure that many organisations and individuals will have their own preference for a new system of taxation. There are arguments for and against a local income tax, a land value tax or a hybrid form of taxation based on property and income, but I am sure that the commission will be up to the task.
I gently point out to the Conservatives that the SNP withdrew from the Scottish Constitutional Convention because the issue of independence was not allowed to be discussed. The commission on local tax reform has a remit to identify and examine fairer alternative systems to the council tax; its remit is not prescriptive. I know why the SNP came out of the Scottish Constitutional Convention, but I cannot understand why the Tories do not want to take part in what will be a cross-party, non-party commission, the remit of which is not prescriptive.
If all the political parties can come to a compromise on constitutional matters, surely it should be a lot easier for them to come to a compromise on local taxation. Alex Rowley used the word “compromise”. The commission will allow a compromise to be reached. The Conservatives do not agree. They obviously do not think that compromise is that important.
I warmly welcome the establishment of the commission, and I wish it every success.
16:11
It is welcome to have the opportunity to discuss the best way forward for local taxation. Although the Scottish Government wants the debate to be exclusively about the proposed commission on local tax reform, it seems that a debate on an issue as important as tax should not be restricted to such limits. The discussion should not be confined to political parties’ negotiations; instead, it should consider what form and level of taxation would produce the best outcomes for the public.
We need a practical, well-rounded and sustainable tax system, so we need to hold a wide-ranging inquiry that deals with not just the council tax, but the whole range of taxes that are devolved to Scotland. For that reason, we have set up the commission for competitive and fair taxation. Given the new powers that are coming to the Parliament, the opportunity exists for a broad reconsideration of multiple levels of taxation. We need to get all taxes right if we are to have an enterprising economy that will attract talent, create jobs and finance our public services. That should be the aim of taxation policy; the public’s best interests should be put first.
Unfortunately, the commission on local tax reform will kick the issue into the long grass by freezing the political debate in the meantime. Its premise is built around deals between parties. Its ultimate aim is to reach a situation in which, regardless of which way the electorate votes in future elections, there will be no option of change to the local tax system.
Will Cameron Buchanan take an intervention?
I am sorry—I need to press on.
The Scottish Conservatives will not allow that to happen. It is only right that parties can openly offer alternatives to the Government’s view and that the public are given a real and meaningful choice.
Will Mr Buchanan give way?
I am sorry, but I want to press on.
We will consider the recommendations of the commission for competitive and fair taxation at length, and we will continue our drive for an enterprising economy that funds its public services sustainably and delivers for everyone. The merits of the various approaches should be decided by voters rather than by deal-making politicians in the commission on local tax reform.
Will the member take an intervention on that point?
No, thanks—sorry.
The recently set up commission for competitive and fair taxation, on the other hand, will have the interests of taxpayers at heart. An economy that is overburdened with tax will struggle to fulfil its potential, and taxes that are too low will not allow for sufficient funding of our public services. The point is that taxes need to be thought through very carefully. Furthermore, it seems plain to me that a well-rounded approach that involves considering all the taxes that are devolved to Scotland will be far more practical and sustainable than a bit-by-bit approach. It is indeed worth looking at our approach to local tax, but if we are to have a system that is coherent, competitive and fair, a much wider outlook is needed.
I would like to highlight a crucial attribute of our commission—it is independent. It is made up of experts who are independent of the Scottish Conservative Party, who would like their recommendations to be considered by all parties. It will have six members and will be chaired by the former director of the Confederation of British Industry Scotland lain McMillan CBE. Together, they have a wealth of expertise in business, economics and tax.
Accordingly, I reiterate my belief that, when it comes to taxation, the key principles that are applied should be competitiveness and fairness. Most local authorities are facing financial difficulties at the moment. That serves only to highlight the need for sensible and sustainable taxation policies. With so much at stake, the public must be given a choice rather than a political deal.
It is for those reasons that the Scottish Conservatives do not think that it would be appropriate for all discussion of local taxation to be limited to the commission on local tax reform. Instead, as members have heard, we have launched an expert commission for competitive and fair taxation that aims to produce practical and fair recommendations and to allow the public to judge for themselves.
16:15
Like others, I welcome the appointment of the commission on local tax reform, and I wish it well in its deliberations.
As other members have suggested, how we finance local government is not an easy question. Exploring the issue across the political landscape has to be the right way forward. I am equally disappointed that the Conservatives are not participating in the commission. I agree with Willie Rennie that it is better to have tried than never to have tried at all and that, at the very least, the commission will succeed in shedding some light on very difficult questions. I hope that it will do so.
As we know, if we finance local government spending disproportionately from national taxation, the local element of accountability will be reduced. We know that many local authorities, such as East Lothian Council, believe that local accountability has been weakened by the continuing erosion of local government’s fiscal autonomy. However, others would contend that the public are not necessarily concerned with the source of local government funding, provided that services are maintained. It is clear that there is not necessarily a universal understanding that currently more than 80 per cent of local government expenditure is received from central Government.
In Scotland, we have had a council tax freeze, which has capped the overheads for many hard-pressed families over the past eight years with considerable success, despite the concerns and opposition of some local authorities. I was glad that Alex Rowley accepted that the council tax freeze at the present time is popular. However, we should also bear it in mind that, despite criticism of the Scottish Government, the position of local government in Scotland in a time of austerity has been better protected than the position south of border has been, as David O’Neill has conceded.
The demands on local government are, of course, increasing. We have to accept that the days of such council tax freezes must inevitably be drawing to a close, and it is right and proper that we work towards a revised system of local finance in good time for the next local elections in 2017.
The council tax is clearly a blunt instrument. It can certainly be easily criticised in the context of reducing inequality. My colleague Stuart McMillan talked about previous plans to increase the number of bands at higher levels. That was really tinkering, and it would not have had a significant impact. However, I must accept that the Scottish Government’s land and buildings transaction tax sets rates that the Scottish Government believes are more proportionate to house prices while seeking to protect those at the bottom of the housing ladder. Therefore, banding and playing with the rates at the top are not completely alien to the Government.
Nationally collected income tax contains a redistributive element in its rates, of course, although I accept that that may not be redistributive enough for many who favour rates of income tax in excess of 45 per cent. That redistributive element would be maintained in seeking to fund local government by local income tax.
The ability to pay must be central to any replacement system. Indeed, the commission’s remit makes it clear that future taxes should be proportionate to the taxpayer’s ability to pay. What does that mean in practice? For example, is it right that single folk should receive discounts or exemptions from local taxation that is otherwise payable, irrespective of their ability to pay? If a person owns property or land, those things are assets that have a value on which moneys can generally be raised. Any tax that is based on value should reflect that. In national taxation, we do not tax on the basis of the extent of usage of public services by individual taxpayers, so it is not clear to me why similar considerations should not apply to local taxation. However, for people of whatever age on a fixed income who may be capital rich but income light, that presents a problem that local income tax might have avoided. Grappling with that kind of issue has to be part of the commission’s thinking.
I am not sure of the details of the mansion tax, but if it is purely a tax on value, I assume that that kind of concession will not be made. I do not know whether any Labour member can enlighten me on the details of the mansion tax. I will leave it open for anyone to interrupt me on that point.
What about charges? That is a thorny area—more so in a time of austerity. I do not accept the argument that charges should be considered as a form of local taxation, but they can cause considerable distress to the disadvantaged. Kevin Stewart has talked about the position of carers. I do not know how charges fit into the helping to tackle inequality agenda, but I hope that the commission will pay some attention to that. Is it right that charges should fall fully within a local authority’s discretion? That is certainly worthy of debate.
How do local authority commercial enterprises feature in the assessment of local government finance? Can they play a bigger role? What financial impact would they have in the context of local government funding?
What about council tax benefit and its successor, the council tax reduction scheme, which is tied in with the concept of the ability to pay? How should that operate? At present, more than 0.5 million people benefit from that, but clearly there is a bureaucracy attached. Is that inevitable with any scheme that is based on the ability to pay? Again, that is something for the commission to consider.
I am not sure what can be gained from looking at international experience. I think that Mr Brodie referred to Denmark earlier and I know that members of the Local Government and Regeneration Committee visited Germany, Denmark and Sweden. Hopefully the commission will cast a wide net in trying to learn from international experience.
Although we might agree that
“the present system of local government finance is broken”,
as the Scottish Labour devolution commission indicated, finding an alternative that is fit for purpose will not be easy. I wish the commission well.
16:21
How our local councils are funded is certainly one of the most contentious issues in Scotland and across the UK. That is no surprise when we consider that local government often has the biggest impact on people’s lives. From the education that our children receive to how often our bins are collected, the decisions that councils make touch people’s lives more directly than many of the decisions that we take here at Holyrood or are taken down at Westminster.
Strong local democracy empowers local people to be in charge of their own lives and to decide the priorities for their communities. However, a report from the Carnegie UK Trust found that only 21 per cent of adults in Scotland agree that they can influence the decisions that affect their local area.
We have seen in today’s debate that most of us agree that devolution should not stop at Holyrood. Devolution should be about ensuring that all decisions are taken as close as possible to the communities that they affect and that local people are involved in shaping those priorities. An important principle of local democracy should be that councils are accountable to the communities that they serve for the decisions that they make.
Increasingly, we see that councils are losing that power and that Scotland has become more centralised in the past few decades. Our councils are increasingly at breaking point and it is disappointing that it has taken so long for the debate that we are having today to happen, but it is welcome.
We talk a lot about empowering communities and ensuring that the power to shape our lives is in our own hands, but when it comes to local democracy, our local authorities’ hands are increasingly tied. We only need to look at what our councils are achieving to imagine how they could transform our communities further with more freedom and more financial resources to do so.
There is absolutely no doubt that reform is needed. The fact that such a small proportion of the money that local authorities spend is raised locally undermines our local democracy. Most of us agree that the current system of local government finance is broken and as a result we are seeing local authorities resort to desperate measures.
In Fife, I have been campaigning alongside parents against a possible cut in the school week. Thankfully, the campaign has been a success and the proposal has been withdrawn, but parents cannot understand why our councils are being put into the position of having to look at cutting the hours that our children are taught in school while pressing ahead with the roll-out of national policies such as free school meals, at the same time as the Scottish Government is underspending on education and other areas that our councils are having to cut. That simply does not make sense to most parents I have spoken to but, thanks to the funding crisis that local government faces, it is the reality right across Scotland.
Alex Rowley highlighted a similar example when he talked about teacher numbers.
Will the member take an intervention?
No.
That situation puts pressure on local authorities to deliver centralised commitments. As always, the poor in communities right across Scotland are the ones who are paying the price as local authorities are forced to resort to charges as the only way of bringing in extra revenue, or cutting services that are often a lifeline to locals.
Scottish Labour supports the council tax freeze, but we all know that it can only be a short-term measure. At a time when individuals and families still face a cost of living crisis, the freeze is a welcome boost to family budgets. However, we cannot get away from the fact that the freeze is underfunded and it dilutes the power of councils to deliver front-line public services.
Would Cara Hilton be happy to go to her constituents as a Fife councillor and suggest to them that, just to stand still, they would have to have an increase of at least 3.4 per cent and, to generate any money from the council tax, they would face 8 or 9 per cent increases, which were the norm before the council tax freeze came in?
What I would be happy with is if the SNP were honest with people about the council tax freeze and the impact that it is having on our public services. It is unfair that local authorities are bearing the brunt of austerity from Westminster and here at Holyrood. At a time when 83 per cent of our local authority budgets are controlled by the Scottish Government, councils are in an impossible situation.
Despite that, councils such as Fife Council are achieving great things. Fife Council is investing money to renew and regenerate our town centre in Dunfermline; investing in early years and early intervention to end the cycle of disadvantage; creating new and much-needed apprenticeships for our young people; and building new and much-needed council houses to provide affordable housing for local families. Those policies are transforming our communities and transforming people’s lives. Imagine what Fife Council and other local authorities could do and deliver if they were properly resourced.
The link between taxation, representation and spending is vital for effective democracy. At the moment, that link is broken. It is time for change. Change is long overdue and I am pleased that we are now seeing action. In common with other members across the chamber, I warmly welcome the commission on local tax reform and I look forward to hearing its findings when it reports in the autumn. I am not sure whether it is in the commission’s remit, but I hope that, as well as council tax, business rates will be considered. Devolving business rates to councils would help restore the link between local economic development and higher revenues, giving local authorities much more freedom to use them in ways that support the local economy and give our high streets a boost.
I agree that the commission should look at the overall local government settlement to give councils a fairer deal. There is no doubt that a lot of work needs to be done to find a solution that delivers a fairer deal for local authorities and for local taxpayers—a solution that secures the future of local services, which our communities rely on. Whatever the outcome, we need a system that delivers a long-term solution for funding local government services so that local finance is no longer a political football—a system that establishes a clear divide between the roles of central and local government in determining local budgets, which is fair and progressive and which ensures that our public services are sustainable now and in the future.
Whether that solution is a fairer council tax reformed to make it more progressive or whether it is a different solution altogether, this is a welcome debate and I hope that it is one in which folk will engage across Scotland. I congratulate the Local Government and Regeneration Committee on making the recommendation for a commission and I look forward to its findings. Securing cross-party consensus on reform is very important, so, Tories aside, I hope that we can work across the chamber to make this happen.
16:27
As some of my colleagues have said, in our 2011 manifesto we in the SNP committed ourselves to consulting during this session of Parliament on a system to replace the council tax and to have a system principally based on fairness and the ability to pay. I am sure that the commission that has been set up to take on that work has all our best wishes and will carry the hopes of the vast majority of our people that a fairer system of local taxation will emerge from the process.
From the era of the Tory poll tax, when millionaires paid the same amount as ordinary families, to the unfair council tax, which is based on property values and not on a person’s ability to pay, Scotland has basically had a system of local government taxation for over 25 years that the majority of people fundamentally did not agree with and currently no longer support.
That gives the commission a good starting point and I hope that all the members who serve on it will relish the task. It looks nicely balanced and has a good mixture of national and local government representation as well as some experienced people from civic Scotland. I wish our colleagues well, two of whom are part of the chamber debate today—Mr Biagi, the minister, from the SNP Scottish Government, and Mr Rowley from Labour.
The commission has quite a remit. It has to identify more than one possible system. Any system that it identifies must be fair and must support the delivery of local services. The commission has to take into account income inequalities, the housing market, the revenue-raising capacity of all of the options, administration costs, timetables for implementation and of course transition to whatever new system may emerge.
In doing that important work, the commission will also engage with Scotland’s communities and include an assessment of what they think of the emerging proposals. I can already see some useful stress tests that might apply to the process, but the commission will no doubt come up with its own.
In my view, fairness and the ability to pay must be at the heart of any new system. Nobody likes paying tax; some people these days seem to dislike paying their taxes so much that they will do anything to try and avoid it altogether. However, more important than the details of any new thresholds, bandings or rebate elements that might be part of any new local tax system, the public will expect that it will be generally fair and, hopefully, simple enough to understand.
For me, the big message of the past eight years has been the SNP Government’s council tax freeze. That freeze means that the average band D taxpayer will have saved more than £1,600 by 2016-17. That is a substantial saving for households, especially during these economic times, and our councils will get an additional £70 million this year to implement that freeze. One of the consequential effects of a freeze is that the lowest-income households in Scotland get the greatest benefit, as the saving that is offered by the freeze represents a bigger percentage of their net earnings than it does of those of people on higher earnings.
The overall council tax bill was getting out of hand. In my authority, the previous Labour administration had increased it by 61 per cent over 10 years. The public were concerned about such escalations and I shudder to think what the level would be now if that sort of hike had been allowed to carry on.
The Scottish Government has protected local government funding compared with the drastic real-terms cuts in England, as my colleague Stuart McMillan mentioned. More recently, as a result of UK Government policy, the SNP has had to introduce other mitigations to help protect the poorest and most vulnerable in our communities. Stuart McMillan also mentioned the UK Government’s abolition of council tax benefit, with the Scottish Government putting £69 million towards alleviating that.
We also protect low-income families from the bedroom tax—a tax that is arguably just as bad as the poll tax. Some £90 million has been committed to fully mitigate the bedroom tax and, from April to December last year, more than 100,000 awards were made under the discretionary housing payment scheme. That is real help from the SNP Government for the poorest in our society.
However, we should not be in a position where a Scottish Government is continually having to nullify the negative measures that the UK Government is meting out. Who knows what it might do next? One thing that we know for sure is that Labour MPs have supported the Tories down in London in agreeing on another £30 billion-worth of austerity cuts, yet Labour MSPs come here and argue for more money. If either of those parties is left to its own devices, people in Scotland will face even more hardship.
Will the member take an intervention?
I am just winding up, sorry.
This work to come up with some real proposals for change in how we apply local taxation comes at a time when the Scottish Government is offering further progress on engaging with and empowering our councils and communities. Ring fencing has dropped from nearly £3 billion to about £200 million, which means that councils now determine many of their own priorities. The new Community Empowerment (Scotland) Bill will go further, allowing councils to offer local business rates reliefs, for example, to fine tune help for local business throughout Scotland.
Communities, too, will be able to drive change themselves and to shape and deliver the local services that the new local tax will support. In that regard, the new commission’s work will be pivotal in helping to bind all this together and I wish all my colleagues the best of luck in doing this important work for the people of Scotland.
16:33
There have been some very interesting elements to the debate and a number of speakers from every party touched on wider issues that we ought to debate in the future, although they were not strictly within the remit of today’s debate. Talking about the relationship between central and local government, as Mr Biagi did, is key and is something that we all need to reflect on. It reminds me of something that former Labour MSP Charlie Gordon once said in this chamber, which has stuck with me for a long time. He asked, “Do we want local government or do we want local administration?” That is a question that we should all ask in the lead-up to elections next year and in 2017.
We heard about the need to look at Government finance more widely, and we heard latterly from Cara Hilton about the need to look at devolution downwards from Parliament to local authorities. In the past couple of years, powers have shifted from local authorities, health boards and colleges to Parliament.
There are strong arguments, too, for devolving some powers downwards from local authorities to smaller entities such as community councils. Some of our local authorities are particularly large and geographically widespread, so there is an argument for pushing powers down to local communities where that can be done reasonably well.
There have been some good elements in the debate, but I want to focus on the meat of the issue. We heard a lot of speeches, mainly from SNP members, about how awful the council tax is, despite John Swinney’s resolute rearguard defence of the council tax in this very chamber just a few weeks ago, when he made it sound like one of the best taxes that has ever been introduced.
The thing is, however, that I heard all those speeches from the SNP in 2007, and in 2008 and 2009—and then the party went quiet on the issue of local government taxation, despite having made a pledge. I know that Mr Biagi was not an MSP at that time, so he may not realise that the world did not begin in 2011, and that there was a commitment before then.
The SNP had seven key commitments in 2007. Its manifesto stated:
“The SNP will scrap the Council Tax and introduce a fairer system based on ability to pay. Families and individuals on low and middle incomes will on average be between £260 and £350 a year better off. Nine out of ten pensioners will pay less local tax.”
That was in 2007. Can the minister tell us what happened?
I would be delighted to do so. I ask Gavin Brown to take just one moment in his speech to acknowledge that that did not take place in no small part because his party voted against it.
I appreciate that Marco Biagi was not a member of the Scottish Parliament at that time, but I note that the Conservative group is 15 strong now, and we were 18 strong then, but even with 18 MSPs we did not manage to outvote the SNP. I have no doubt that had there been the political will from the Administration at the time, with the support of the Liberal Democrats, the Greens and the late Margo MacDonald, the SNP could have got the measure through. When we debated local income tax, there was only just a majority in favour of it in the chamber, so the outcome was down to lack of a political will rather than to lack of numbers in the chamber.
I apologise to Willie Rennie for describing him as left wing earlier in the debate. I am advised by him that he is centre left and not left wing.
I also apologise to Kevin Stewart for describing him as left wing. Listening to what he had to say, it is clear to me that he is actually a low-tax MSP. Kevin Stewart is a tax cutter; he is not left wing in any way, shape or form. Let us hear it straight from him.
I do not have a problem with being called left wing, and I am not necessarily a tax cutter, but I believe that when we have an unfair tax we have to tackle it. The council tax is unfair, and that is why we have the freeze. I believe in progressive taxation, which Mr Brown certainly does not.
Kevin Stewart is the rarest of creatures. He might be the only one I know—he is a left-wing tax cutter. My goodness! What a debate we have had today.
Willie Rennie hit the nail on the head—probably without meaning to—when he said that the real reason for setting up the commission was to get the SNP off the hook. The SNP has a bit of a political problem with local government finance, so it wants political cover for its local income tax. Mr Rennie was quite right to say that.
I wish the commission well and I hope that it sheds some light on the issues. However, given what I have heard today, my hopes are not high. We have a Labour Party that is basically convinced that there will be no recommendations from the commission at the end of the process, a Liberal Democrat party that believes that there really ought to be some recommendations at the end of it all, and the SNP, which wants a menu of options for us all to choose from at the end.
There appear to be differing views even within parties. Roderick Campbell spoke strongly about trying to end the single-person discount because—according to him—it is very unfair that single people currently get a discount.
Chic Brodie argued strongly for a local income tax for which local authorities set the rate, but that is Liberal Democrat policy. I know that he used to be a Liberal Democrat, but I did not realise that in many ways he still is. We then had Cara Hilton arguing that business rates ought to be included. I will be interested in what the minister will say, but I am pretty sure that that suggestion will not, given the outline for the commission, be considered. Perhaps the minister can address that in his closing speech.
We have outlined clearly why we will not be part of the commission, and what we are going to do. We had a range of responses to our position. Chic Brodie described it as “shameful”, which is probably a bit strong. Roderick Campbell is “disappointed” and Clare Adamson said that we will not be missed. However, I was heartened by Kevin Stewart’s response because his position is that he is rather worried that the Scottish Conservatives will “miss out” by not being part of the commission.
I wish the commission well, but I have outlined very clearly why we will not be part of it and why we will pursue matters with our commission.
16:40
I will pick up from where Mr Brown left off. I said when introducing the debate for Labour that in 2007 the SNP Government had a commitment to a local income tax but that by 2011, for whatever reason—whether it was the unpopularity of the local income tax or the fact that it would be very difficult to make it work—that had not happened. Mr Brown rightly pointed out that during the period from 2007 to 2011 there was an unofficial coalition between the Tories and the SNP. Perhaps, had there been a will to do it, the Tory-SNP coalition could have brought about a local income tax.
Mr Brown may also be right that the SNP Government wants to be let off the hook in terms of the council tax freeze policy, given that it does not know where it is going to go on that and the damage that is being done to local authorities’ services. The fact is that because local government is so important, as so many members have emphasised, and regardless of the reasons why the Government has decided to go along with the Local Government and Regeneration Committee’s report, the Labour Party in Scotland is going to work as part of the commission so that we can look at what options are available, look at where consensus can be achieved, and look at what wider consensus is out there in our communities.
The one thing that is absolutely clear is that we need to put in place a long-term sustainable financial programme for local government. It is far too important for us not to do so. That is why it is so disappointing that the Conservative Party has not signed up to the commission. Gavin Brown said that one of the reasons why the Conservatives have not done so is all the left-wing parties in Parliament. However, I thought that Willie Rennie addressed that fairly by pointing out that the commission will not talk about the levels of taxation that are to be charged but will simply look at the options that are available for systems of taxation.
It would be wrong for any party at this stage to say that it will sign up to whatever outcome the commission arrives at—that is not how it will work. I hope that we will get from the commission a well-informed report that provides a number of options and sets out opinions, views and flaws, because there is no perfect system of taxation. I think that it was Willie Coffey who said that at the end of the day no one actually likes to pay tax but that people will pay tax if certain principles are achieved in respect of fairness and the ability to pay. The Conservatives certainly have a track record of not delivering on that.
Will Alex Rowley give way?
No. I am sorry, but I want to make some progress. I will see how far I get, because I want to pick up on other issues that have been raised in the debate.
Clare Adamson made a number of valuable points about the impact of a tax on the ability to pay of the most vulnerable people in our society, and about the importance of having a proper system of local taxation that can address policies at local level. I sincerely believe that local government is key to our tackling inequality and poverty, and that it is necessarily more key than the central Government. The central Government can provide the strategy and the finances, but if we look around Scotland at the 32 local authorities, we see that it is local government that is on the front line. The work to tackle inequality and poverty day in, day out is done by local government.
Clare Adamson went on to make the point that no council was prevented from raising the council tax. She is right, but there was a penalty of £X million. In Fife’s case, it was £4 million. As I said at the first meeting of the commission, Fife Council asked two questions on the council tax as part of the budget consultation. It asked whether people would be prepared to pay additional council tax if the money was ring fenced for education, and whether they would be prepared to pay additional council tax, first if the penalty was there—as I said, it was about £4 million—and secondly if it was not. The answers that came back were that people were absolutely not prepared to pay more if the £4 million penalty would be incurred before we had even started, but a majority said that, if the penalty was removed, they would be prepared to pay more money.
I should be clear that Scottish Labour’s position is that we would not increase the council tax now because we have a cost-of-living crisis, which was mainly brought on by Gavin Brown’s party.
Will Alex Rowley take an intervention?
No. I do not have time.
People have, in effect, been on wage freezes and have in many cases had wage cuts over the past five years, so it is not the right time to introduce taxes on hard-pressed families.
However, we have to find a way forward, and there is an indication from public consultations that have taken place in local authorities throughout Scotland that people recognise that local services need to be paid for. The minister might want to touch on this when he sums up, but that is why one role that the commission must play is in engagement with civic Scotland. It must engage with communities throughout Scotland so that we can get a wider discussion and debate about the types of services that we want.
Going back to an earlier point that Mr Rowley made, I note that although the commission is barely four days old he has suggested that the Labour Party might not sign up to any proposals that it comes up with. Is that the position of the Labour Party four days into the commission?
What I said was that the Labour Party will bring forward for its 2016 manifesto a vision of local government and how we see it moving forward. The council tax represents something like 16 or 17 per cent of local government finance. We want to see a much bigger vision for how local government delivers for the people of Scotland. I would not expect any party to say today that it will sign up to the outcomes of a commission that will report in August. We will get a lot more information, and the commission can work to inform all the parties. It is just a pity that Gavin Brown’s party did not get involved—but that is perhaps more to do with its lack of commitment to a local say and the acknowledgement that the state actually has a role to play in government
Kevin Stewart also made the point that it is important to engage with civic Scotland, and I absolutely agree with that. He and his committee have done an excellent job in getting round Scotland, talking to people and listening to their views about local government. I hope that the commission will pick that up.
Anne McTaggart made a point about poverty and inequality, and there is an example in Glasgow City Council—the authority that she was a member of. The city deal that has been struck with the seven or eight authorities in the Clyde and Glasgow area is going to bring about major change and major investment in the wider Glasgow area, and that has been achieved by the local authorities working with the Scottish Government and Westminster.
There are many routes to finance other than the narrow council tax; we need to remember that as we look at our vision of the future and how we move forward.
I realise that it is time for me to wind up. I welcome the commission, and the Labour Party in Scotland will work with the other parties. It is just a pity that the Conservatives are not going to join us.
16:49
The commission is here to achieve greater clarity; that is its fundamental mission. If this debate has achieved anything, it is that I am now quite clear on the Labour Party’s position on the council tax freeze. I have heard repeatedly from Alex Rowley that Labour supports it. Perhaps that is a result of the Labour Party’s new leadership but, nevertheless, I am glad to have that clarity, which we, and all members, will factor into on-going debates about local government funding and the council tax freeze.
The council tax freeze, which Labour claims that it invented—even though Cara Hilton might dispute that—has been both fair and funded. It helps those at the bottom twice as much, as a proportion of their income, as it does those at that top, and no wonder, because council tax is a regressive tax. It hits the poorest hardest, so putting it up hits the poorest hardest and not putting it up helps the poorest the most. That is fairly simple.
On the wider issue of local government funding, which the debate has touched on, broadly there are three big chunks to what the Scottish Government spends money on: health, which everyone here agrees we have to protect; local government; and everything else. Between 2013 and 2016, the local government chunk is increasing by 2.6 per cent in cash terms. Everything else is increasing by just 1.0 per cent in cash terms. Let us accept that local government is under pressure—ideally, I would not to be in a situation where I was getting a 2.6 or a 1.0 per cent cash increase. However, we are all under pressure here, and there are Government departments coming under far more pressure than the local government finance team.
If you need an example of what austerity economics can mean for local government, you just need to look at England, where local authorities are facing in the current spending round a real-terms cut of about three times what local government in Scotland is facing. That is just today, but there is also tomorrow. If we look ahead to the spending round in 2020, there are massive implications for local government funding from the Conservative Party’s spending plans. The First Minister has set out an approach in which UK public spending should rise in real terms by 0.5 per cent per year. According to Office for Budget Responsibility analysis, that would result in the debt to gross domestic product ratio declining, but it would have massive benefits for local government if for no other reason than the fact that the £59 billion gap between the First Minister’s and the Scottish Government’s ideal situation for the UK and what the Conservatives plan to do would perhaps mean between £4.5 billion and £5 billion in Barnett consequentials. That would have a huge impact on the funding available to local government. A funding gap of £4.5 billion to £5 billion is broadly equivalent to every penny that we spend on nursery, primary and secondary schooling in this country, and the consequences for local government would be severe.
The Conservative Party’s plans would see us live out a decade of austerity and return to public spending levels not seen since the 1930s. If we want to protect the core funding that goes to local government, as well as the taxes that it raises to make up the rest, and protect the needy and vulnerable who depend on the vital services that councils provide, we have to work together as much as we can in this chamber to resist that austerity.
We all agree on the need to find more revenue, but I hope that none of us would want to raise it from those who are least able to pay. Gavin Brown should be aware of the difference between a tax that takes into account ability to pay, which to an extent council tax does, and one that does not. His beloved poll tax, which he has spoken about in previous debates, took no account of that whatsoever.
In Westminster in 2010, Labour and the SNP went through the lobbies together to oppose George Osborne’s VAT rise, because we agreed that, although it would create more money for vital services, which was needed, it would hit the poorest hardest and it was the wrong way to do it. That is the principle that we have here.
Will the minister acknowledge that, under the current system, the poorest are not hit hardest, because they are supported to pay their council tax through the benefits system, and that is 90 per cent funded by the block grant from Westminster?
The poorest were certainly not helped very much by the 10 per cent cut to the scheme that was made by the UK Government and which the Scottish Government had to step in to deal with. We should also remember that people who are just above the level required to qualify for council tax benefit suffer very severe increases. I used to think that the Conservative Party supported the person in the middle, the person of modest income and people such as pensioners on low but fixed incomes, but those are exactly the kind of people who have had difficulties with the council tax system.
Gavin Brown suggested earlier that Kevin Stewart was a left-wing tax cutter. I will leave that for the discussion afterwards, but this is not about cutting or raising tax. I simply point out that, when the VAT vote went through, every Conservative in the House of Commons became a right-wing tax increaser. The measure of the principle is not whether tax is going up or down but who it is going up or down for. In looking at the funding of local government, this commission has to set out that kind of cost benefit analysis, assess the options and provide the next Scottish Government—whoever that might be—with a platform on which to base local tax reform.
I previously described this as a menu.
The Local Government and Regeneration Committee recommended that the commission examine other ways in which local government can raise funds. This is not just about the council tax. Will that be on the menu for the commission?
As Willie Coffey has pointed out, the commission already has a quite ambitious remit and a tight timescale, and its focus is on replacements for council tax. However, the broader debate is in process. I have had meetings with COSLA about wider local government finance, and that debate will continue.
Going back to the menu analogy, I think that, if the commission produces a menu and Labour decides to order the meat and potatoes of council tax—in other words, stodgy but a bit familiar—it will still be well informed in its decision. The Greens might look at land value tax—the open-topped Scandinavian sandwich that everyone looks at but not many order—while others will consider some kind of fusion cuisine. However, what we will have will be a suite of informed options.
Did he say “sweet”? Is that the pudding? [Laughter.]
As the remit makes clear, the commission will identify and examine alternatives. We have to do that, because only a brave person will predict that the commission will unite around one option. However, we can unite around an assessment and a suite of options and lay the groundwork for relatively rapid—
He’s on about his sweet again.
I hasten to add that I meant “suite”, not “sweet”.
Thank you.
I am sure that there will be something for dessert, but that is a debate for another day.
That process of change, which will probably happen quite quickly after the 2016 election—let us face it: we cannot continue a council tax freeze for 40 years; there has to be some long-term solution—has to carry legitimacy for those of us in the chamber as well as for the public. As a result, the commission is going to lead a participative process. In fact, that was one of the biggest topics that were discussed at the commission’s first meeting, and we aim to finalise and launch a written consultation very soon.
We also want to go out and have face-to-face meetings around the country to understand what the public want and expect. After all, we have had these commissions before. Commissions of the great and the good have examined things behind closed doors; local authority commissions have looked at the issue but have not really had the power to implement any changes; and there have been academic, professional and single-party examples. This commission brings together the people who could, as the next Government, be in a position to implement change. It has a wide political buy-in around the chamber that makes it uniquely capable of being effective.
In mentioning that wide political buy-in, however, I am very sorry that Gavin Brown did not just abstain from membership of the commission but actually asked, “What is the point?” I sometimes wonder that myself when I listen to Mr Brown speaking, but the point of the commission is to go through a process of engagement. Is the commission that the Conservative Party has set up going to examine all kinds of taxes as part of its remit? If no one from civil society or with a social justice background is on it, is it going to be able to examine things in enough detail? Will it be able to provide the detail for the carers whom Kevin Stewart mentioned? Will it be able to provide the detail on how regional mechanisms will work, which Clare Adamson highlighted? Will it provide clarity for everyone?
The commission on local tax reform will do that. I ask everyone to support it. If the Tories are not going to do so, it will, sadly, be just one more example of Scotland going one way and them going another.
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