The next item of business is a debate on motion S4M-12176, in the name of John Swinney, on the Community Charge Debt (Scotland) Bill.
15:31
On 2 October last year, the former First Minister announced the Government’s intention to introduce legislation to ensure that councils could take no further action to recover ancient community charge, or poll tax, debts. Today, we are considering that legislation.
With the co-operation of the parliamentary authorities, we have been able to bring forward the Community Charge Debt (Scotland) Bill on an expedited timetable so that it can be in force for the start of the next financial year. As a result, we have not had the time to put our proposals out to full public consultation, but we have consulted the Convention of Scottish Local Authorities and local authorities, which are the only bodies that could be adversely affected by our proposals.
Were local authorities consulted on the principle of the bill?
No. The Government decided on the principle of the bill. The Government takes policy decisions and then we consult on how to take forward those policy decisions. I cannot think of many cases in which we have consulted on the principle of an issue without setting out the Government’s policy position. We consult on the details of our proposals.
I acknowledge that consultation should take place prior to the introduction of primary legislation, which is a point that the Finance Committee made in its stage 1 report on the bill, but there will be circumstances in which the Government believes that we should act swiftly and in which Parliament is prepared to support such action and to adopt the expedited approach. We have sought the agreement of Parliament to go through an expedited bill process to enable us to make the bill effective from 1 February 2015 and ensure that there is clarity before the start of the next financial year. I am grateful to the parliamentary authorities for that agreement.
The Government decided to act because we were concerned that certain local authority leaders had expressed an appetite for using the information that was gathered from voter registration for the independence referendum to reactivate the pursuit of many of the outstanding arrears. We felt that that sat uncomfortably with what we believe was wide appreciation throughout the country for the upsurge in democratic participation during the referendum, which was supported and complimented across the political spectrum. We felt that it would be a rather strange conclusion to that democratic process to use the information that had been gathered to pursue historical debts from a tax that is discredited and which has not been operational in Scotland for more than 20 years.
We wanted to do two things: to act expeditiously to address that point, which is why we have followed a shorter consultation process; and to make it crystal clear that local authorities were absolved of their obligations to collect poll tax debt, which, as I explained to the Finance Committee, was our reason for introducing the bill.
I am aware that some public opinion does not support the ending of recovery of community charge debts. I have received a number of letters on the issue from members on behalf of constituents and from members of the public. I understand the concerns that members of the public who have paid their community charge, as I have done, have expressed. I start from the basic principle that people should pay their taxes, and I do not support people not paying taxes for which they are liable. However, in this case, we are dealing with a tax that lasted for four years, that was the subject of massive political controversy and enormous political disruption, and that was concluded over 20 years ago.
I take the cabinet secretary’s point on that, but surely to goodness this is a breach of the principle that he has just espoused.
It is not a breach of the principle that I have espoused. Mr Brown should look at the data that is available to Parliament. I take one particular example: Angus Council ceased to collect any community charge arrears in 2008-09—that was the last time that any community charge arrears were collected. It has declared that £3,627,000-worth of uncollected poll tax debts still exist in Angus. The point that I am making is that a tax that existed for four years, was the subject of massive political controversy and ended over 20 years ago is now incapable of being collected.
I have given one local authority example, but I can give other examples. No poll tax debt has been collected in recent years in Falkirk, the Western Isles, Shetland and Orkney. I simply make the point that the poll tax fell into disrepute at the time and significant periods have elapsed in which there has been no practical proposition to collect or practical capability of collecting anything like a substantial proportion of the existing arrears. The Government is therefore taking a practical step to remedy the situation.
Despite collections being pursued, around £425 million of community charge still remains uncollected from the four years in which the charge operated in Scotland. Almost all of that £425 million can no longer be collected. In the 20 years that have passed since the community charge was abolished and replaced by the council tax, many people have moved home—even moved away from Scotland—married, changed their name or even, sadly, deceased. They could not now be traced and linked to a debt. Even if a person could be traced, the local authority cannot pursue the debt any further if no attempt has been made to recover outstanding arrears from the debtor in the past 20 years.
In 2013-14, the authorities that still collected community charge debts collected a total of only £327,000. Ten authorities have decided that their share of the £425 million is just not going to be collected. The last stand for the poll tax that Mr Brown is deploying is indicative that the Conservatives have perhaps not moved on terribly far from the application of the poll tax all those years ago.
The community charge that was collected declined from £1.3 million in 2009-10 to £327,000 in 2013-14. If we project that declining rate of collection forward, we can easily see a point at which the costs of collecting become greater than the sums that are collected. Local authorities tell us that the total that they can recover under existing recovery arrangements is £869,000. Councils will receive their share of that £869,000 in 2015-16 by agreement between the Scottish Government and COSLA.
We have given a reasonable length of time and a reasonable opportunity for historical debts to be collected, and a point has been reached at which we must all recognise that the community charge has entirely run its course, despite the affection in which it seems to be held by the Conservatives.
In its stage 1 report, the Finance Committee asked why we did not request information
“on the value of community charge debt that was recovered through informal or sporadic payments”
in order to include that in the settlement to local government. There is no reliable means of estimating that because, by their nature, the payments are informal and sporadic. However, we can look at the pattern of payment of poll tax arrears, which, as I have indicated, shows that payments have steadily declined year by year. In 2013-14, the last financial year for which data is available, payments totalled £327,000, down from £512,000 the previous year, which was down from £923,000 the year before. The payments are petering out significantly.
For years after the community charge’s abolition, collection rates for it and the council tax, which replaced it, were lower than those for the domestic rates which the community charge replaced. I can understand that there may be concern that the legislation will have a similar effect; indeed, local authorities expressed that concern in their submissions to the Finance Committee. However, people objected to the community charge because that tax bore no relation to what people could afford to pay.
Council tax liability is linked to ability to pay through the council tax reduction scheme, which supports those on low incomes to meet their council tax liability in so far as that is possible. The poll tax’s collection rate was around 88.4 per cent; the council tax’s in-year collection rate is 95.2 per cent—that is the rate for the immediate year in which the liability arises. The expectation is that in excess of 97 per cent of council tax will be collected once follow-up mechanisms are used to ensure collection.
Those paying off community charge debt include some of the poorest and most vulnerable who were unable to pay at the time and are now paying small sums towards arrears every week or having them deducted from social security benefits, which, in some cases, will be their only income source. More than 20 years after the community charge was abolished, it could still be many years before some of the debts are cleared.
The independence referendum inspired record numbers of people to register to vote. Many of those people had not voted for decades; others had never voted before. We do not want people to fear being on the electoral registers because of decades-old debts from discredited legislation. The bill will help to avoid that and will ensure that everyone’s voice continues to be heard.
None of that detracts from the clear view that I and the Government hold that people should properly pay the taxes for which they are liable. It is for each local authority to determine the most appropriate means to recover council tax debts. I would expect them, when deciding how to pursue their debts, to do so in a way that is sympathetic to the debtor’s needs and circumstances.
The bill is one step that the Scottish Government is taking to make local taxation fairer; the independent commission that we are establishing in partnership with local government to examine fairer alternatives to the council tax system is another step.
Many members of the public have written to their MSPs, the First Minister and me, pointing out that they paid the poll tax, even though they disagreed with it in principle and despite whatever hardship that may have caused them. They ask that the Government address the issues associated with the abolition of the poll tax. The Government is doing that in the legislation.
The poll tax is a defunct tax; it is a discredited tax. Local authorities are pursuing increasingly historical liabilities that crystallised more than 20 years ago, and we can all see from the data that the amount collected is petering out year by year. There is a necessity to consign the poll tax to history once and for all. That is the action that Parliament has before it. I encourage members to support the motion.
I move,
That the Parliament agrees to the general principles of the Community Charge Debt (Scotland) Bill.
15:43
I am pleased to speak on behalf of the Finance Committee in the debate.
The bill provides for an end to the collection of community charge, or poll tax, debts in Scotland and will do so with effect from Sunday as a result of the anticipatory provision contained in section 1.
As lead committee, the Finance Committee sought written and oral evidence on the bill. The committee thanks those organisations and individuals who took time to let us know their views.
The committee’s scrutiny focused on a number of issues, including voter registration, the possible impact on council tax collection and the financial settlement to be provided in connection with the bill. I will address each of those in turn before concluding on the issue of engagement and consultation.
Last October, the former First Minister announced that the Government intended to legislate for an end to the collection of community charge debts. The announcement was made following media reports about the plans of some local authorities for its collection. The reports suggested that the increase in voter registration preceding the referendum would allow individuals with outstanding debt to be identified and arrangements put in place for the collection of that debt.
As the cabinet secretary has said, he explained to the committee that the Government was
“concerned that an appetite has been expressed amongst certain local authority leaders”
for information to be used in that way. However, in its evidence, Glasgow City Council said that its figures did not suggest that the expansion of voter registration could be attributed to the re-engagement of people with outstanding poll tax debts. The committee has asked the Government to provide further details of the local authorities that are using or which intend to use electoral register information in this way.
Evidence that was received highlighted the potential for the bill to have “unintended consequences” or create “avoidable risk” in relation to council tax collection, and those concerns related to a perception that similar debts might also be forgiven in the future. East Ayrshire Council, for example, referred to its concern about
“The risk of losing ... income as a consequence of a misplaced public perception”.
When we put those concerns to the cabinet secretary, he made the clear assertion that the council tax remained a live tax, and he saw no similarities with council tax collection in the provisions in the bill.
However, although that position is clear, views seem to differ between COSLA and the Scottish Government on the response should collection of council tax become more challenging. COSLA indicated its understanding that there would be negotiation on the way forward and that local authorities would look for support from the Scottish Government. In contrast, the cabinet secretary said that the Scottish Government would not underwrite reduced collection as
“The collection of council tax is the responsibility of local government”.—[Official Report, Finance Committee, 14 January 2015; c 24, 35.]
The headline figure for outstanding community charge debt in Scotland is, as we know, £425 million, while the financial settlement with regard to the bill is £869,000. In our scrutiny, we sought to understand how the settlement figure had been arrived at and to clarify what portion of the headline figure could be collected, given that, last year, only £327,000—or less than 0.1 per cent—was collected. Obviously, in the 22 years since the poll tax was abolished, many of those to whom debts might apply will have died, emigrated or moved away, so the sum available to collect, albeit unknown, will be considerably smaller than the headline figure.
The bill’s financial memorandum states:
“recovery of much of this debt is now prevented both by practical considerations and by the law of prescription.”
A 20-year prescription period applies to community charge debts, and two conditions need to be met before a debt can be prescribed. First, no claim must have been made by the creditor in court and, secondly, the debtor must not have acknowledged the debt. We sought to understand how one could assess whether community charge debts had been prescribed or not. Dundee City Council explained that it depended on whether there had been contact and the date of the warrant. Given that the community charge ceased to have effect more than 20 years ago, it was also noted that local authorities might have rewarranted the debt.
It is understood that the assessment on which the financial settlement was agreed was based only on the value of debt that could be recovered under existing arrangements, and no account was taken of informal or sporadic payments. The committee understands that the agreed settlement figure is therefore not a full reflection of the total revenue that will be forgone as a result of the bill, but most local authorities that provided evidence are content that it is a fair reflection of what would be forgone in relation to existing repayment arrangements. Indeed, 10 local authorities have already ceased collection of their own volition, and Falkirk Council has not collected anything in the past 12 years, despite having a book debt of more than £5 million. Nevertheless, it would have assisted the committee had more detailed analysis of the financial settlement been available, and we have asked why this information was not requested from local authorities.
Another issue in relation to the collection of outstanding debts was the cost of collection compared with the sums collected. The cabinet secretary stated that
“we can easily see a point at which the costs”
incurred would be greater than the value of the revenue being collected. However, no collection costs were provided, and it is unclear to the committee what evidence the Government used in reaching its conclusion.
Finally, the bill has proceeded rapidly through the stage 1 process; indeed, this debate comes less than two months after the bill’s introduction. A strong theme in the evidence was the speed at which the bill was brought forward and what that meant for consultation opportunities. No formal consultation was undertaken. The Scottish Government stated that that was a result of the limited period that was available for the bill’s development. That said, the Government worked with COSLA on the bill’s provisions, and in a letter to the committee, the cabinet secretary noted that the topics that were discussed included mechanisms for collecting community charge debt; the question whether debts had been sold off to private collectors; and the anticipatory provision to enable the bill to have effect from 1 February.
Asked about discussions between its representatives and Scottish ministers, COSLA summarised by saying that
“the conversation to reach an agreement and come up with a settlement”—[Official Report, Finance Committee, 14 January 2015; c 21, 15.]
was very brief.
Everyone in this chamber welcomed the high level of engagement and participation that we saw last year and we hope that it continues. Although the committee understood the Government’s wish to introduce this bill quickly, we make clear our expectation that consultation and opportunities for engagement should take place before primary legislation is introduced.
The committee supports the general principles of the bill.
15:50
We should recap on where we are with the bill. We are here today because before the referendum we saw a massive increase in people registering to vote—something that should be celebrated. Sadly, a Conservative council leader then said that that registration would be used to go after poll tax debt from some 20 years ago. Alex Salmond’s response to that was that he would legislate, and here we are.
Labour will support the bill and we will work with the Government to move it through the Parliament without delay. Having said that, it is worth making the point that many local authorities have already taken the view that what remains of the debt is not realistically collectable. Indeed, as the Scottish Parliament information centre briefing points out, recovery of much of the debt is now prevented by both practical considerations and the law of prescription. Perth and Kinross Council made the point in its submission to the Finance Committee, which said:
“We believe that further attempts to collect Community Charge debt would be expensive and may come at a cost to Council Tax collection”.
I note that the bill’s policy memorandum says:
“The policy will contribute to the Scottish Government‘s National Outcomes of tackling inequalities in Scottish society, and promoting a strong, fair and inclusive national identity.”
I am sure that most members will remember the time of the poll tax: how unfair the tax was and the masses of people in households the length and breadth of Scotland who simply could not afford to pay. A pamphlet at the time said:
“Under the Poll Tax a two-adult working class family in Edinburgh pays on average £500 more per year. However, Malcolm Rifkind, Secretary of State for Scotland, pays only £400 per year for his castle-like villa in an Edinburgh suburb”.
It was an unfair and divisive tax, and hundreds of thousands of people across Scotland simply could not afford to pay and ended up in masses of debt. Wages were arrested and unforgivable warrant sales took place. Those warrant sales were rightly outlawed by Parliament through a bill that was introduced by comrade Tommy Sheridan.
It is interesting that Perth and Kinross Council’s submission says that many of those with historical debt also have council tax debt, which indicates that people on the lowest incomes have been stuck in that position over generations. The Government’s view on tackling inequalities might stand up, but we need a more coherent strategy in Scotland to break the cycles of deprivation that seem to run through generations of the same families in the same communities. That is why I say, in supporting the bill, that we should not be waging war on people who cannot afford to pay; we should be waging war on poverty.
The point should not be lost that councils in Scotland have been robust in pursuing historical poll tax debt from those who could pay. The decision not to continue to collect poll tax debt, which many councils have made, was not made lightly, given the major financial pressures that councils are under.
As I said in my introduction, most of the debt is at the point of being uncollectable—it is councils that are saying that. Nevertheless, that will leave some people who paid the poll tax feeling aggrieved, which is a point that individuals and councils made in their evidence to the Finance Committee. East Ayrshire Council made the point when it said:
“It is a difficult argument to have with an individual who feels aggrieved that they have paid (and in some cases placed themselves in considerable financial hardship to do so), when others are now being ‘excused’ of their obligations.”
It is important to recognise that many people who objected in principle to the poll tax and many people who struggled to pay the poll tax did pay. To all those people, we should say thank you, as they kept council services running through what was a very difficult financial period for local government.
The poll tax was abolished in 1993 and was hastily replaced by the council tax, which, as we know, has not served the purpose that it was meant for. I suggest that, if we want good public services and if we are to tackle the unacceptable levels of poverty and inequality in Scotland’s communities, we must have strong local government and good public services. We therefore need a system of taxation to pay for those services.
The Scottish National Party Government promised a new system of taxation. To date, it has failed. The consequences of that failure are now being felt across every community in Scotland, with cuts taking place in vital public services.
We will support the bill—in truth, the measures are happening anyway—but our message today must be that we need to fix local government finance and put it on a proper, sound footing once and for all.
15:56
It probably will not come as a great surprise to learn that we will not be supporting the bill at decision time today. We do not take that decision for any great affection or love for the community charge, as Mr Swinney rather lazily suggested. We do not do it because we have yet to catch up. We do it for reasons of principle and pragmatism.
The principle has been outlined by John Swinney himself—he has said it so many times in the chamber—that people should properly pay taxes for which they are liable. What he has not said before in the chamber is that that only applies to taxes with which he agrees or taxes that, in his view, are live.
Would the member accept that there are other principles at play here, such as mercy?
Let us throw in another, then: the idea that two people both vehemently disagreed with the community charge but one of them paid it and made sacrifices to do so and the other may have been able to pay it but did not for reason of choice—yet the first has to pay and the second, thanks to the Scottish Government, does not.
There are a number of principles in play, but it is the Scottish Government that says that people should pay the taxes for which they are liable—yet that principle has been broken. It will ring hollow when Mr Swinney or other party spokespeople for finance mention it in the chamber in future.
Now that, for the last financial year for which data is available, we are collecting £327,000, whereas there is £425 million outstanding, would Mr Brown care to share with Parliament his proposals for collecting the remainder?
The Deputy First Minister will know as well as I do that COSLA is not enthusiastic about the bill and that the majority of councils that responded to the committee—and, indeed, the majority of responses to the committee—were not in favour of it, did not think that it was necessary and were against it for reasons of principle, as I have outlined.
I entirely accept that the £425 million is not an amount that is collectable.
So why is it on the statute?
Mr Swinney asks why it is there, but he put that figure on page 1 of the policy memorandum. He does not like the figure, but he is the one who put it down there.
Even if only a proportion of the tax can be collected—let us say only 10 per cent—that is a significant amount of money, which could go to fund public services. While we are at it, even the amount that Mr Swinney talks about in the legislation—the settlement of £800,000 or so—is money that should and would have been paid by those who were liable for their bills. Instead, however, it will be paid by those who are not liable for those bills. That is why we are against the legislation in principle.
Mr Brown has in no way addressed the fact that, in the most recent year, we are now collecting £327,000. If the trajectory carried on, it would be a lower amount for 2014-15. What proposal can Mr Brown marshal for us that justifies the maintenance of the provisions on the statute book when he and I know that that money cannot be collected?
We do not have a lot of time, Mr Brown, but I will give you an extra minute.
We can justify it simply because COSLA and the councils that gave evidence to the Finance Committee said that there was not a need for legislation. They are not just concerned that the legislation is a breach of principle. Their bigger concern is pragmatic: the idea that the legislation could have an impact on the collection of council tax in future.
Members may shake their heads, but I am simply quoting what councils and COSLA have said to the Finance Committee.
Yes, I know.
Mr Swinney claims to know, but he did not carry out a consultation. He said that he consulted COSLA, but the Scottish Government did not formally do so. We were told by COSLA in committee that the conversation lasted a matter of minutes and that it was simply a conversation about quantum and how much each council was going to get in recompense. There was no discussion of the principles or what impact the legislation could have on payment of council tax in the future.
I can demonstrate to members how far apart the Scottish Government and the councils are. When I asked COSLA whether councils would be compensated if their council tax collection rates faltered as a consequence of the legislation, they seemed to be under the impression that they would be. In evidence to the committee, the COSLA representative suggested that councils would be compensated if that were to happen. When I put the same question to Mr Swinney, he said that there was absolutely no way in which COSLA would be compensated if that were to happen.
We do not know whether council tax collection rates will fall. COSLA has suggested that they might, but the Scottish Government has said that there is no way that COSLA would be compensated. The cost of failure, if that were to happen, would fall on the councils and not on the Scottish Government, which has centrally forced the policy on COSLA, the councils and the rest of the country.
If the policy has an impact, we could be talking about significant sums. There are more than £1 billion of council tax arrears going back over the past two decades or so. It might sound great when Mr Swinney says that 97.5 per cent of council tax is collected, but when one tots up the unpaid council tax it amounts to more than £1 billion.
Even if the policy has a small impact on council tax collection, it will have a big impact on councils and public services. The Scottish Government ought to be on the hook for that, because it is the Government’s policy. The Government has forced it through: it refused to consult or to try to thrash out and see through some of the issues, instead of just pushing the bill through as it is going to do today.
As I said at the start, we are not fighting the policy out of any love or affection for the community charge. We have listened to councils and we think that there are pragmatic reasons for being against the policy, but we are against it too in principle, because—as Mr Swinney said—those who can pay their taxes should properly pay those for which they are liable.
16:03
There are a few issues that need to be dealt with. First, the use of the £425 million figure, which was used when the discussion first took place, has been unhelpful. We know from the evidence that we have received that the vast bulk—indeed, the overwhelming bulk—of the money is uncollectable, for reasons that the cabinet secretary outlined, such as people having moved out of Scotland, changed their names or died. However, that remains the sum total that is being considered.
The second element that is unhelpful relates to COSLA. When the Finance Committee took evidence from Glasgow City Council and Dundee City Council, my committee colleague Jean Urquhart asked whether the outstanding debt was considered to be outstanding by councils, and Glasgow City Council responded by saying:
“As I have said, it was written out of the books in Glasgow in 2003”.
Dundee City Council said:
“Community charge debt is not sitting on the books of Dundee City Council.”—[Official Report, Finance Committee, 29 January 2015; c 12.]
Two councils giving evidence said that the debt relating to the community charge was not held on their books.
The Finance Committee wanted to know whether the same applied for other councils. At the time, COSLA was unable to give us that information. I have to say that it concerns me when COSLA spokespeople arrive at committees and seem unable to provide us with information relating to local government in Scotland. We need to look at how COSLA presents that information, given that it is the umbrella body for all 32 local authorities.
The question, then, is whether the debt can be collected, and we heard pretty strong evidence that it cannot. We also heard pretty strong evidence that there will come a tipping point at which the expenditure in relation to pursuit of the debt would outweigh any money that could be collected.
Another interesting issue that was raised relates to the 20-year prescription and the fact that, essentially, the entire debt was being reapplied through summary warrant in order to circumvent that prescription. Therefore, it was not that the debt could be pursued. The summary warrant was simply being reapplied for in order to get around the element of prescription—and not because the debt could physically be pursued.
On the issue of precedent that Mr Brown raised, we have heard in the debate the evidence that we found, which is that 10 local authorities have unilaterally taken the decision not to pursue community charge debt. If Mr Brown’s contention and the fears that were expressed at committee were accurate—that that action would result in council tax debts and council tax payments showing a tail-off—we would have seen evidence of that. I would have expected us to receive evidence to that effect from the councils that have taken the decision to cancel community charge debt.
Will the member give way?
I am in my last 30 seconds.
I can give you more time, if you wish.
In that case, I will take Mr Brown’s intervention.
Will Mr McDonald acknowledge that Dundee City Council, which he quoted and which is in favour of the bill, raised in quite intelligent terms the concerns to which he referred?
I did not say at any point that those concerns were not raised. I am simply saying that, if those concerns were in fact material, I would expect to see evidence from the councils that have taken the decision to cancel the debt. Some of them took that decision over a decade ago, according to the figures that were presented to the Finance Committee.
Finally, on the issue of requirement, there was a question about what evidence there was of councils saying that they would pursue the debt. However, Jim Gifford, the leader of Aberdeenshire Council said:
“If we are asked to write off these debts we will do that but we expect to be fully compensated for the amount of money sitting on our books”.
That raises the question whether the debt is being held on the books in some local authorities but not in others. However, it was Mr Gifford who raised the question of whether the referendum electoral registers could be used post referendum to pursue the debt. That position was not just confined to the Conservative Party, though, because Councillor Willie Young, Labour finance convener of Aberdeen City Council, said:
“For the last number of years we have been looking to see how we can claw back poll tax arrears. We’ve still got approximately £1.8million to recover. The referendum gives us an opportunity to see how much money is due and how we can pursue it.”
You must begin to close now.
The position was not restricted to one council leader; there was a pattern of potential pursuit through the referendum electoral registers.
I think that the right thing to do is to take the action that the cabinet secretary is taking, and then we can move on and enjoy the flourishing democracy that the referendum sign-ups have created.
16:08
I support the bill, which feels very much like the last nail in the coffin of the poll tax, but we should remember—keeping things in perspective—that that actually happened in England more than 10 years ago.
Although I support the bill, I think that we should recognise that there are some genuine concerns and take them seriously, and we should also question some of the details of the bill.
Having heard the evidence in the Finance Committee, I think that the main concern is about the possible effect of the bill on council tax collection. I therefore think that we have to send out a very clear message that this is a one-off bill because of the particular circumstances of the poll tax and because, to a large extent, there is not much left that could be collected, given that many local authorities recognised that and have stopped collecting already.
We also have to recognise, although Conservative colleagues may not agree, that the poll tax was a completely unacceptable tax—certainly by far the most controversial tax of my long life—because it bore no relationship to the ability to pay. The bill is already in a unique category, which means that we should not draw analogies too much between it and the council tax.
I also recognise that some people feel that it is unfair that they have paid and others have not. We have all had letters about that. Again, however, I think that we have to repeat some of those points to them about the uniqueness of the tax, councils not collecting, there being not much to collect and so on.
The Finance Committee report raised certain questions, and to some extent the cabinet secretary has already responded to most of them. The first was whether the bill is necessary at all, since we did not find evidence about the use of electoral registers either currently or prospectively. We have had two examples quoted—by Alex Rowley and Mark McDonald—of politicians saying that they were going to use them. I had not heard that before. It may well be that that was the trigger for the bill, but equally the committee heard Glasgow City Council saying that it did not believe that all the new people on the register were around at the time of the poll tax. There are obviously conflicting views on that, but given the evidence that has been mentioned today I think that we have to accept that there was perhaps a certain trigger that the First Minister was responding to.
The point about consultation is important as well. The Finance Committee put it quite delicately and tactfully, saying that consultation should take place prior to legislation. I think that the cabinet secretary suggested that that is not always the case, but I think it is a feature of the Scottish Parliament not just that committees consult on bills when they are published but that Governments tend to consult on the contents of bills before they appear.
The point that I was making was that the Government does and will consult on the substance of measures in ordinary course. What the Government does not consult about is the purpose and the policy intent, because that is the Government’s choice as to what it wants to do in its programme.
I think that we could discuss that further, but I want to finish on the financial aspects of the bill, which are clearly important. If we say to the public, “£425 million”, they will say, “Goodness me, that’s a lot of money”, but of course only £327,000 was collected last year, and the councils seem to be fairly happy with the less than £1 million that will be distributed to them, although the committee did raise a point about informal or sporadic payments, which the cabinet secretary responded to.
Finally, the committee made a point about there being no estimate of potential savings, although Perth and Kinross Council stated as a fact:
“further attempts to collect ... would be expensive and may come at a cost to Council Tax collection”.
This Sunday will be the end of the poll tax. That is a matter for celebration, but, as Alex Rowley said, we should not become too fixated on the past, because the urgent necessity now is to fix local government finance. I think that we are all glad that there is now a process, which is going to start soon, to try to do that.
16:12
I echo a lot of the comments that Alex Rowley made. In this speech, I will go back further than the Iraq war, which I spoke about in my previous speech, to the period of the poll tax, at which time this Parliament had not been re-established and was still awaited. The Tories called for the poll tax to be introduced in Scotland a year earlier than elsewhere. At that time, the SNP was not forming a majority Government. We were a minority party with fewer MPs than the Greens currently have MSPs. Perhaps some members on the Opposition benches should realise that standing up and speaking out for what is right, whether on the poll tax or Iraq, can pay electoral dividends.
I was proud, at that time, to lead the can’t pay, won’t pay campaign by the Scottish National Party. Those who could pay would not pay so that those who could not pay would never have to pay. We did not accept that there should be non-registration, as Tommy Sheridan proposed, because we argued that that would lead to people coming off the electoral register, and they did. It is only due to the hard work of activists in recent years, with the referendum, that we have got many of them back on the register.
We also realised that non-registration would incur a fine and a significantly greater penalty than simply not paying, so we discouraged it, but we encouraged people not to pay and to stand firm, shoulder to shoulder with those who just could not pay. We encouraged people to act collectively and seek strength in numbers.
We said that, once the battle had been won, those who could pay should pay—and the battle we did win. We defeated the poll tax. As with the Iraq war, hundreds of thousands marched. We had a significant level of political debate—not as much as last year with the independence referendum, but a significant amount. People participated, and we brought down the Prime Minister, Margaret Thatcher, as the Tories will never allow us to forget.
I was proud to pay my poll tax at the end of it, and I paid 10 per cent more. People need not worry about the effects, because I, along with other can’t pay, won’t payers, contributed more through the 10 per cent surcharge that was levied on me, Sandra White and all those on the SNP benches.
It was the right thing to do, as Alex Rowley said, because the tax was part of the efforts by the Tories to commoditise tax at local authority level and to get to a situation in which those who did not have kids would ask, “Why should I pay for education?” and those whose children were not disabled could just bless their lucky stars and ask, “Why should I pay for care for those who are mentally or physically handicapped?” The belief was that it should be done on a purely per capita basis, regardless of ability to pay or—as Alex Rowley and, I think, Malcolm Chisholm said—any consciousness of what someone had to look after. That is why we fought and defeated the poll tax.
On public services, let us remember the gearing effect, which was going to cause either the poll tax to rise incrementally year on year or public services to be cut and pulled back. That is why we fought the tax and that is why the Government is correct to bring in this bill. It was an evil and iniquitous tax, and it would have been catastrophic for local authorities, not just for the poorest. That is why it was defeated.
There will be some who have deliberately not paid, but there are always those. The people who worry Gavin Brown will be the same people who do not pay any tax and whose view is that that is for the—
The former minister is making a passionate speech, but if he feels so strongly, why did he never propose this legislation in his seven years as a minister?
I would have thought that local authorities would have used the common sense that they were born with and not sought to be vindictive. Sadly, that is not what happened after the referendum. What we saw was done previously in the southern states of America against black people. Research by institutions such as the Pew Research Center found that people in southern states used such circumstances to discourage those who sought the franchise in order to ensure that those who might not vote for them would not be able to vote against them.
That is why the bill has been triggered, and it is on that basis that the tax deserves to be consigned to history. Those who cannot pay now—those whom those shameful authorities are seeking—are those who, in the main, simply cannot pay, and they need help, not punishment. On the other minority that Mr Brown refers to—
You must close.
—I agree: let us deal with those corporates and those big businessmen.
16:18
The bill has made many headlines through its aim to remove liability to pay community charge debt. This is a point of principle that is being stated, not affection for the tax, as we have said many times.
Despite all this attention, we in the Parliament and the public are still left with many unanswered questions that are a cause of great concern. How is this fair to those who paid their tax? Will it stand up to a legal challenge from those seeking compensation? Will the compensation that is being offered to local authorities match the true cost of the bill? What will be the total effect of the worrying precedent that the bill sets on tax avoidance?
That is what I want to focus on. Why has there not been a public consultation on the bill? It is apparent that the policy was rushed into existence by a Government that was thinking only about narrow politics and not about fairness for the people of Scotland.
One of the most worrying aspects of the bill is its total disregard for the majority of people who have paid their taxes in good faith. We have heard that the total collection rate was approximately 88.4 per cent, and it is clear that, although some people avoided paying the community charge altogether, others paid their contribution whether or not they agreed with it in principle. Inexplicably, the Government is choosing to side with those who have avoided paying their tax. What kind of Government rewards tax avoidance?
Does Cameron Buchanan accept that 10 local authorities had already said that they had reached the point at which it would cost more to collect the tax than they would receive, and that many other local authorities were fast reaching that point, so that it would make no sense to continue to try to collect it?
I accept that partially, but this is more about the point of principle that tax should be collected. Only 12 per cent of the tax was uncollected because people would not pay.
The Government is choosing to side with people who avoided paying their tax. I have heard from many constituents who say that they paid the tax and they think it grossly unfair that people who deliberately did not pay are being excused. I completely agree with them. Hard-working taxpayers should not be forced to subsidise tax avoidance. The Scottish National Party’s rhetoric is grossly irresponsible.
That leads me to another point, which is as yet unanswered by the Government. Will the people who paid the tax in good faith be reimbursed? The Government simply cannot claim that it is acting fairly if it is nullifying some people’s debts and ignoring the people who paid. As we have pointed out, there is a strong possibility of legal challenge in pursuit of compensation on the matter.
On compensation, it is important that we fully understand the bill’s implications for local authorities’ finances, given the compensation that the Government is offering. At first glance, the £869,000 that is being offered, which is only 0.2 per cent of the total uncollected debt of £425 million—I think that that answers Alex Rowley’s point—does not seem to be nearly enough.
Will the member give way?
Certainly.
Please be brief, Mr McDonald.
Perhaps I can explain to the member that £869,000 is the amount that local authorities themselves said that they would collect, through collection procedures. The vast bulk of the £425 million is uncollectable.
I accept that a lot of it is uncollectable, but I am really trying to make the point of principle that we should not reward people who do not pay tax.
The projected amount of informal or sporadic payments that might be made to local authorities is not included in the £869,000 once-and-for-all settlement.
Furthermore, the compensation figure completely ignores the potential knock-on effects for future tax payments to local authorities. This is the point that I really want to make: writing off community charge debt will set a damaging precedent, whereby people who avoid paying tax might expect their debt to be cancelled by a future Government. Concern about the risk of losing council tax has been echoed by councils, yet the Government has explicitly ruled out compensation for local authorityorities that suffer from a knock-on effect on council tax collection.
I want to express serious concern about the process by which the bill was introduced. The SNP tried to use the high levels of democratic engagement in the referendum to justify the bill, but it has not put the bill out for public consultation.
You must draw to a close, please.
Despite all its rhetoric, the SNP has neglected to gather and analyse the views of the public. The policy is typical of a Government that repeatedly chooses to grandstand rather than deliver genuinely fair policies, in Scotland’s best interests.
I am afraid that we have just about used up the extra time that we had. Members will need to take interventions in their own time from now on.
16:23
I wholly support the bill. Members might think that I am occasionally cool towards Government bills, but I am happy to say that I have no reservations about this one.
A few members talked about principles. There are a number of principles at work here, and we need to take them all into account. First, we should all pay the taxes that our elected Government sets, whether we like them or not. That is just, as Gavin Brown said.
However, there are other principles at stake, which Gavin Brown seems to be ignoring. For example, the community charge or poll tax was a particularly unfair tax, which took no account of people’s ability to pay. Another principle is that, in practice, a lot of the outstanding tax is unlikely ever to be paid and there is little point in throwing good money after bad. Collection has fallen every year, from £4.6 million in 2003-04 to £327,000 in 2013-14.
Cameron Buchanan’s speeches are normally good, but I was slightly disappointed by the one that he just gave. The reality is that all bad debts are written off eventually. Most of us pay our electricity bills, but a few people do not do so and eventually the electricity companies write off the bills. This is not just to do with the poll tax.
I was talking more about the point of principle than the amount that is collected. The principle is that the tax debt should not be written off. That is the point that I was trying to make.
There is also a principle that, in practice, what is the point of cutting off your nose to spite your face? That is the kind of logic that we are seeing from the Tories today.
Another principle is that we do not want to discourage people from registering to vote, and another principle is that there has to be a place for mercy in our systems. In the health sector, we know that people cause themselves health problems, but we still help them. Similarly, we know that some people get into debt through their own fault, but we still have a responsibility to help them.
How do we balance up all these principles? Is this the right bill at the right time? I have to say that I think that it is the right course of action. The timing was prompted by talk of pursuing new voters, but 10 councils had already stopped pursuing these debts. Although the gross value of the debt is £425 million, I understand that all of that has been provided for and that the net debt in the accounts is nil.
There has clearly been consultation with councils on the detail of the bill. The question that has arisen is whether there should have been more consultation on the principle of the bill. On the one hand, I have had objections from one or two constituents. On the other hand, the committee got only 12 submissions, which suggests that, for many people, it is a dead issue. On the whole, I am in favour of consultation, and I can think of some acts that have been passed by the Parliament that needed a lot more. However, the Parliament is much better than Westminster at consultation—we need only look at the situation with stamp duty land tax to see that that is the case—and sometimes we just need to step out and take action.
In the consultation responses, Glasgow City Council commented on the increase in voter registrations and said that it did not think that that was due to poll tax non-payers re-engaging but was much more to do with the additional registration among younger voters. It also said that its debt policy is aimed at breaking the cycle of debt for the individual and at directing resources toward critical collections, which benefits people and services. I have to say that I completely agree with that approach.
The £869,000 that is being refunded to councils is not big money, and most councils and COSLA seem to be happy with the split. We heard grumbles from North Lanarkshire and a few others, but my feeling is that they were being a bit overoptimistic about how much they might have collected in the future. I think that it is a bit odd that Dundee is getting £305,000 for its £11 million debt, whereas Glasgow, with £125 million debt, is getting only £20,000, but I suspect that we can live with that.
I am happy to give my support to the bill today, and I feel that it is a good balance between justice and mercy.
16:27
I reiterate one sentence that the cabinet secretary said in his opening speech. He said that, even if a person could be traced, if no attempt had been made to recover outstanding arrears from a debtor within the past 20 years, the local authority cannot pursue the debt any further. We have to remember that. That is why the proposition in the bill is extremely sensible.
Another reason to end the collection of this iniquitous tax is that it is completely undemocratic to threaten people who registered to vote in the referendum with sheriff officers in relation to a debt that is more than 20 years old. We have to remember that, as well.
Kenny MacAskill mentioned that the poll tax was introduced in Scotland in 1989, which is one year before it was introduced in England and Wales. We were used as guinea pigs. We should never forget that, at any point at all.
Alex Rowley was absolutely correct when he said that the tax was an attack on the poor. How can it be right that someone who stayed in a mansion or even a castle—I will not name any names—paid the same in tax as someone who lived in a one or two-bedroom house? That is why the poll tax was very iniquitous.
I want to share some of my experiences from the days when I campaigned against the poll tax. Like Kenny MacAskill, I was part of the can’t pay, won’t pay campaign. Some of us had our wages arrested, and most of us paid a 10 per cent surcharge at the end, so more money was paid in that way. Some of us even had warrant officers and warrant sales in our houses. We entered into that campaign to support the people of Scotland—some of whom I represented, as I was a councillor at the time—in the face of this iniquitous tax.
I went on marches with many other people. With others, I stood outside the doors of the houses of young mothers with kids when warrant officers came round. We prevented them from removing goods from those houses. Those young mothers could not afford to go out and buy a new cooker or whatever. We ended up going round the doors handing out a list and saying, “If a warrant officer comes to your door and none of us is here with you, show them this list and make sure they know they can’t take these essential items from your house.”
We worked to enable our communities to ensure that the warrant officers did not take out of people’s houses the essentials that they needed for their families. I am proud of the part that I and many other ordinary people on the ground played in the grass-roots campaign against that iniquitous tax. People who could hardly afford the basics were paying the same as people who could very well afford their luxuries and were penalised by an iniquitous poll tax levied by a Westminster Government.
I thank every single person, not just those who were in the can’t pay, won’t pay campaign, but all the ordinary people who saw the poll tax as unjust, unfair and immoral and stood together to defeat it and bring down the Thatcher Government.
16:30
As a new member of the Finance Committee, which the convener informs me I am highly privileged to be a member of, I have had the chance to hear the evidence on the bill and, along with the majority of members who have spoken today, I support the legislation.
It is quite wrong to link the issue of outstanding community charge debt to electoral registration. Indeed, I have some issues with local authorities using electoral rolls to pursue wider debts as well. Such matters should not affect efforts to encourage as many people as possible to take part in the democratic process. That is why I asked the cabinet secretary whether other legislative solutions had been sought to address the issue that the bill rightly seeks to resolve.
It would have been legitimate for the Scottish Government to look at other ways of ensuring that local authorities did not use the electoral register after the referendum to pursue those debts. Although I support the bill, it is regrettable that there was, in effect, no consultation with anyone before its introduction.
I understand the reasoning behind the Government acting speedily, but the fact that COSLA was simply informed in a phone call of the Government’s intention to legislate on the same day that the announcement was made to Parliament is not acceptable. The committee refers to that in its report. To be fair, the cabinet secretary acknowledged to the committee that the situation was not optimal. Given the place that the Scottish Government was at when the announcement was made, I suspect that the cabinet secretary might not have had a huge influence over arrangements for the former First Minister’s statement.
There was also a case for at least curtailed public consultation on the bill, but given that the matter is of great importance to local authorities, whatever our views on the merits of the legislation, consultation with COSLA should have taken place. Frankly, it was disrespectful to councils not to have done so.
There has been no great political divide among councils in pursuing the debt. The council that will receive the greatest proportion of the financial settlement is Dundee City Council, which is an SNP administration, because it has been the most assiduous in pursuing the debts. When the SNP formed the administration in Aberdeen and convened its finance committee, the local authority recovered almost £155,000 in poll tax arrears between 2007 and 2012.
Other authorities have effectively ceased collecting the debts already. Although it is right that the committee raised the question of fairness for those who paid their debts despite opposing the poll tax whereas others, who did not pay, are now exempt, the issue of practicality is rightly taken into consideration. Many local authorities have found that the costs of collection have not justified pursuing the debt.
It is important that we send out a message that we are in an exceptional circumstance with regard to an historic, deeply unpopular and unfair tax, and that we must all pay our contributions to local authority taxation so that our councils can carry out their vital work.
I am disappointed that there was not proper consultation with councils on the bill. It would have been appropriate to give at least some time to looking at other legislative options, but ultimately I agree with the principle of the bill. In essence, it simply gives legal effect to the approach that is already being taken by most councils in Scotland, and if it is looked at from the perspective of ensuring that the poll tax is now fully consigned to history, that can be no bad thing.
16:35
A form of poll tax was first levied in 1275. It was used again in 1379 and was resurrected in 1641 in England to finance the raising of an army against Scottish and Irish uprisings. Another form of poll tax was first levied in Scotland in 1699.
The poll tax that was officially known as the community charge was a tax to fund local government in the United Kingdom. It was instituted in 1989 by the then Tory Government of Margaret Thatcher and replaced rates, which were based on the notional rental value of a house. The new poll tax was first trialled in Scotland—it replaced rates from the start of the 1989-90 financial year—by a Tory Prime Minister who Scotland never voted for. It was highly contentious and was opposed by many in Scotland. After its introduction in England, which caused riots on the streets of London, it was rightly binned by the new John Major Government, after the resignation of Margaret Thatcher.
After 20 years, councils are still trying to collect this iniquitous tax. The bill, which was introduced by the SNP Government, will put an end to the scourge that is the poll tax, which is an old tax that is hated by many in Scotland. In the referendum on Scotland’s independence, millions of Scots were engaged and, for many, it felt like the first time in a long time that they had something to get out and vote for. It was therefore worrying to hear the story that some local authorities intended to use the increase in democratic participation, and particularly in electoral registrations, to pursue old poll tax debts.
I want to highlight another important issue, which is the need to seek the power from Westminster to control the electoral register, and in particular to remove the ability to sell the register to private debt collectors. It is not right that the people of Scotland should be discouraged from participating in Scotland’s thriving democracy by the fear of being pursued by private debt collectors.
As members know, councils are well within their rights to use current information to assess council tax liability. Unlike the imposed and hated poll tax, the council tax forms a key part of local authorities’ finances, and the Government has continued to take action on it while in office. The Government has frozen the council tax since 2007, and our council tax reduction scheme protects more than 500,000 of our most vulnerable citizens from increased liabilities following the UK Government’s abolition of council tax benefit. That is in stark contrast to the actions of the Con-Dem Westminster Government, which continues to impose its austerity agenda on the people of Scotland; I hope that the people of Scotland will reject that in May.
The bill will right a wrong that has existed for too long and it will compensate councils for outstanding amounts, in line with current collection rates. The people of Scotland will no longer be pursued for a tax that they did not want and did not vote for. The Government has a record of taking action to protect the people of Scotland, which is exactly what we will continue to do if we support the bill today.
We turn to the closing speeches.
16:38
I begin with a quotation from the written evidence that North Lanarkshire Council submitted to the Finance Committee, which states that the council finds it
“incongruous that a Bill ... considered necessary as a result of the ‘high levels of democratic engagement’ ... will not be subject to a formal public consultation.”
The council went on to ask:
“How are the views of the public, the majority of whom have made payment of their Community Charge liability, to be understood?”
That is a perfectly fair question that merits an answer from the Scottish Government. The Government said that there was not time to do so, yet the Finance Committee managed to have a consultation on the subject—albeit that it was fairly swift—and it raised a number of issues.
The member is right that the Finance Committee undertook a consultation. Can he refresh the memory as to how many members of the public responded to it?
From memory, the Finance Committee received 12 responses in total and probably four of them were from members of the public. I might not be exactly right. However, the number of people who respond to a Finance Committee consultation is surely bound to be smaller than the number who respond to a formal Government consultation on proposed legislation. The number of people who responded to the Finance Committee on the Smith proposals was probably in the region of 20 to 25; the number who responded to the Smith commission itself was more than 14,000. Had there been a formal public consultation by the Scottish Government, it would have got considerably more responses than we got from the shortened Finance Committee consultation.
I draw Gavin Brown’s attention to the fact that a committee consultation can, when there are strong views on an issue, attract a strong response. I recall that the Equal Opportunities Committee managed a 12,000-response consultation. The Finance Committee’s consultation pales in comparison.
It is difficult to disagree with those numbers, but my point is that, if we got a considerable number of issues coming out of a mere 12 responses, how many other issues that the Government could have addressed would have come out from a formal public consultation?
The way in which the Government has approached the matter is not good enough. If we are going through a formal programme of government, it is not good enough for the finance minister of the current Scottish Government or any Scottish Government simply to say, when the committee asks him the question:
“We are where we are.”—[Official Report, Finance Committee, 14 January 2015; c 32.]
To return to the principle, members have stated that they do not find the £425 million figure helpful. As I said earlier, I accept that it is clearly not the amount that can be collected. I suspect that the majority of it cannot be collected, but if only 10 per cent of it is collectable, that is still a pretty sizeable sum. The Government does not know and has been unable to say what percentage is collectable. It is not good enough for it simply to say that it thinks that most of the debt will not be collectable. It must have some idea of what could be collected.
The local authorities have told us that they have payment arrangements in place that would draw in £869,000-worth of poll tax debt, of the £425 million. As I said to Parliament in my opening speech and in my appearance before the Finance Committee, once 20 years has elapsed from debts, it is impossible to resurrect them in order to collect them. With that information, will Mr Brown tell us how much of the debt he believes it is possible to collect? Does that not make the case for the pragmatic decision to get rid of the debt?
The Government is unable to do the work to tell us how much could be collected, but it expects one MSP to be able to put an exact figure on it.
Mr Brown knows what I mean. He should give an answer.
I will correct the cabinet secretary, who is getting uptight, which is always a sign, as it was at First Minister’s questions. [Interruption.]
Order, please.
The cabinet secretary said that COSLA was asked how much it thought local authorities could collect. It was not asked that. It was asked for how much authorities had formal collection mechanisms in place. That is not the same question as how much local authorities think they could collect. If I am wrong on that, I am happy to give way.
The point that I am trying to get Mr Brown to understand is that, given what I have said to Parliament about the period that has elapsed since the debts were incurred, it is impossible to resurrect the debt collection arrangements. We have asked local government what it can collect and it has told us that the amount is £869,000.
Mr Brown, you need to draw to a close.
COSLA was asked the exact question that I put.
We are deeply concerned about the impact that the bill could have on council tax collection. Mr Swinney said in his speech that council tax is linked to the ability to pay, but only a couple of years ago, he and Mr Salmond specifically said:
“The council tax is an inherently unfair tax with a very loose connection to people’s ability to pay”.
I will close with one final thought.
It really must be a quick one.
The cabinet secretary attempts to talk about principle. We do not want people to fear being on the electoral roll because of decades-old debt. However, he and his Government are extremely comfortable using that same expanded electoral roll to collect decades-old debt for council tax.
16:44
I thank the Finance Committee and its clerks for their work in scrutinising the bill in the run-up to today’s stage 1 debate.
I am clear that the intention behind the bill was to respond to concerns that were expressed when some local authorities considered using the increase in voter registration to help them to collect historical poll tax debt. That would have sent out the wrong message about democratic participation. That said, it is interesting that COSLA does not believe that legislation is necessary. Indeed, a day after the announcement, the former First Minister Alex Salmond said that he does not believe that legislation is necessary, either. He noted that the bill will have “no practical effect” because there is already a legal bar on chasing debts that are more than 20 years old.
Glasgow City Council and COSLA do not believe that the increase in voter registration can be attributed entirely to people who did not pay their poll tax. It has been suggested that much of the increase was to do with the very welcome increase in the number of 16 to 18-year-olds who registered to vote for the first time. Of course, they were not even born when the poll tax was introduced, never mind being in debt as a result of not paying it. I understand that that applies to the minister, who was six at the time.
I was slightly older than six, but not much.
Jackie Baillie has raised the issue of prescription. The Finance Committee heard that a number of local authorities reapplied for a summary warrant in order to circumvent the 20-year prescription. Although, technically, Jackie Baillie is correct, that issue remains live in a number of areas in which local authorities circumvented the legal bar through reapplying for a summary warrant.
I accept that. Although the premise for taking action might not have been entirely evidence based, there were concerns, which is why I have sympathy for the cabinet secretary’s position.
Scottish Labour will support the general principles of the bill, but in doing so we are alive to the concerns that the Finance Committee identified and those that have been expressed by members in the debate. I hope that those concerns will be addressed by the minister in his closing remarks.
First, there is the question of consultation, which there is no getting away from. It is fair to say that, despite Mr Swinney’s best attempts at a very elegant explanation, the lack of consultation of stakeholders at the start of the process was undoubtedly unhelpful—never mind the lack of consultation more generally. In the circumstances, I understand the need for speed and, in particular, the need to ensure that we reach a timeous conclusion at stage 3, but I do not accept that a much longer—or, at least, a more detailed—conversation could not have been held with local government before the bill was published.
I agree with the cabinet secretary—the poll tax has run its course. It was totally discredited and overwhelmingly rejected. It was then, and is now, an unfair tax. However, I acknowledge—as many other members have done—that people who paid their poll tax, and who in many cases struggled to do so, will feel that the Government’s decision is unfair. Alex Rowley was right to thank the people who paid it, because they helped to sustain the local services, including schools and care homes, on which we all rely.
It is unlikely that the debts would be collected at any point in the future. The amount that is collected has declined to a very small amount, and there are legal and practical difficulties in collecting such old debts. In some cases, the debts were inherited from predecessor authorities and there are practical issues with collection because the debts are paper based rather than computer based.
The majority of local authorities have—rightly, in my view—focused on pursuing council tax debt, because there is much more chance of recovery, but Kenny Gibson was right to raise concerns about the potential impact on council tax collection of what is proposed. I think that local authorities do very well to achieve an in-year collection rate of 95.2 per cent, which rises to around 97 per cent by the time they have taken appropriate measures.
Jackie Baillie will be interested to learn that, in 2013-14, nine of the 10 local authorities that had ceased collecting poll tax debts achieved rates that were above that level.
That is interesting and it bears out my point. That is where I think that we should focus. I do not want to dwell on the difference of opinion between COSLA and the cabinet secretary, but I do not think that we would want any unforeseen consequences of the bill whose general principles we will agree today to impact on those very good collection rates. Should that happen as a direct result of the bill, will the Government commit to holding a dialogue and reviewing the position with COSLA? That would certainly be helpful.
There were, of course, concerns about whether councils would be adequately compensated, but I note that COSLA has agreed the amount with the Scottish Government.
Alex Rowley hit the nail on the head: the real debate is not about the bill, important though it is, but about how we finance local government. I welcome the commission that the cabinet secretary has set up—we will participate fully in it—but the importance of local government lies in its provision of essential services. It provides, for example, teachers for our schools, home helps for our older people and maintenance workers to clear our streets. There can be no more important time for clearing our streets than now, because they are covered in snow and ice. Local government has borne the brunt of the Scottish National Party Government’s cuts.
I look forward to consigning the poll tax to the dustbin of history this evening and at stage 3 of the bill, but there is a wider problem that the SNP does not really want to talk about. We must urgently debate the underfunding of local government that is a direct result of the choices of the SNP Government.
16:51
I thank everyone for a debate with many perspectives.
I want to take us back to the important starting point of the bill, where we were and the motivation to maintain the integrity of our electoral register. That is such an important point that we cannot overstate it. Doing that is the basis of not just my remarks, but of our elections, the structure of our constituencies and the democracy of this country.
Last year, people who had never taken part in an election dared to step forward and have their say on their nation’s future, and were hit by an unquiet remnant of our political past. There was an 85 per cent turnout and there were 4.3 million people on the register, which was an all-time high. However, if we listen to some people, they should have marched into the polling station and been handed a bill rather than a ballot paper.
There were different responses in the aftermath of the referendum, but I assure Malcolm Chisholm that there were responses that led to concerns. Some were gung-ho, but others expressed doubt and drew on the statutory duty on local authorities. The Abolition of Domestic Rates Etc (Scotland) Act 1987 and the Local Government Finance Act 1992 make it the duty of every local authority to collect the taxes that they are owed. I say to Jackie Baillie that that is why we must put the issue beyond doubt by extinguishing that liability entirely.
My second point is that the poll tax is a dead tax in a way—although in a way it is not. If I wanted to dare to contradict the Deputy First Minister, who has described it as a dead tax, maybe I would describe it as an undead tax. It is like a ghost that is clanking its chains in the night to disturb the living. Who is kept up at night by its howls? Surely by now it is not the people who had the ability to pay. It is time that the poll tax was laid to rest.
There is a difference between reward and recognising reality. Mark McDonald succinctly pointed out that bad debt is a concept in accountancy. I am sure that Gavin Brown, with his well-lauded finance background, is well aware of that. John Mason spoke about how electricity companies and utilities work.
The experience of debt write-off has been good for some. I have a note from the House of Commons library that cites a £5 billion debt write-off—in the prices of the day—in 1989, which was the notorious first year of the poll tax. That day, the water companies had their debts written off by the United Kingdom Conservative Government so that they could be privatised. Debt write-offs can be used as an instrument of policy. I may not have agreed with that one, but this is the time for that approach.
John Mason summed it up when he spoke about the principle of mercy. However, even in accountancy terms, when only £2 out of every £1,000 are collectable, administrators will say that it is time to liquidate. By doing that, the £425 million-worth of debt, which is not just a ghost but a phantom number, can finally be still.
If councils are listening and are concerned about the future collection of council tax, particularly historical council tax debt, does the minister not think that they will be concerned to hear the minister say:
“Debt write-offs can be used as an instrument of policy”?
Administrations have used write-off for different purposes, including housing debt and for privatisations. To respond to the thrust of what Gavin Brown has said—other than his seeming worship of the poll tax—of course I believe that people should pay their taxes.
Kenny MacAskill and Sandra White set out the campaign that the SNP ran at the time. It supported non-payment as a form of protest and said that people should withhold the tax temporarily until it was abolished and then pay it back—or, pay it back plus 10 per cent, in the case of some particularly enthusiastic protesters. As Alex Rowley said, we should recognise those who did that.
Liking it does not come into it. The tax was imposed by the mandate of a Parliament that had a right to rule, although this party has always sought—democratically—to remove that mandate.
When it comes to tax avoidance and the Conservatives, why are they showing such enthusiasm for this issue? Why the pleasure in harrying people to the modern-day equivalent of a debtors prison?
I saw a Citizens Advice Scotland briefing from September 2013 highlighting the UK Government figure for benefit fraud, which was £1.6 billion in 2012. Campaigners often contrast that with figures from the National Audit Office, for example, which, in 2012, reported that HM Revenue and Customs had 41,000 identified open tax-avoidance cases, totalling £10.2 billion. When the UK Conservative Government is better able to collect tax, perhaps we will be sure that its motivation is to have healthy public revenue rather than just to pick out a certain group of people for extra attention.
We must also remember that the bill is not the first step down this road. The Scottish Government will not be the first to take this action. At best, we will be the 11th, because 10 councils have taken the step and West Dunbartonshire has stated similar support. More than that, last year, 24 of 32 local authorities collected less than £10,000-worth of debt. That is no great spring of cash; it is a trickle that is drying up. Indeed, in 2009-10, £1.3 million was collected, followed by £1.2 million, £900,000, £512,000 and £327,000 in the subsequent years. The time will soon arrive when collection costs outweigh any remaining revenue.
After 20 years, most of the debt is simply not collectable—that is already the law. Debts expire, even taxes. The bill draws a line under the issue and says, “Enough.”
Malcolm Chisholm’s starting point—the singular unfairness of the poll tax—is my conclusion. Marx did not have many adherents in the UK Government in 1989. However, many professed to adhere to another philosopher: Adam Smith. His first maxim on tax said:
“The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities”.
Campaigners called it the poll tax because they knew the history of the poll tax and that it was the name given to taxes levied in England from 1377, as Richard Lyle mentioned, which required payment of the sum of a groat to finance the war on France. People did not stand for it and revolted.
We can go further back in history. Theophanes the Confessor chronicled that, in 722 AD, when the emperor in Constantinople sought to levy a poll tax on his domains in Italy, he was met by outrage and rebellion.
The poll tax was a tax so bad it not only made Wat Tyler burn the temples of London, but made Rome declare independence from the Roman empire. Anyone should have known better.
A Hansard answer in 1991-92 showed that 6.34 million people received some kind of benefit. That means that everyone else paid the same, whether they were the spiritual inheritor of Wat Tyler or lived in an imperial palace.
If I am talking about history here, that is because for me this is history. When the first poll tax bills dropped through doors in April 1989, I was more interested in the sandpit in Mrs Dougall’s classroom and whether Optimus Prime was the better leader of the Autobots. It is depressing that this supremely unfair tax is still being used.
Let us go back to where we started. Instead of dwelling on the matter, let us remember the participative outflow—the democratic spirit—of the referendum. If £869,000 to write off a bad debt is the price of our democratic renewal, it is one worth paying.