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Chamber and committees

Meeting date: Thursday, November 3, 2016

Meeting of the Parliament 03 November 2016

Agenda: General Question Time, First Minister’s Question Time, Point of Order, Burial and Cremation Charges, Digital Strategy, Parliamentary Bureau Motion, Parliamentary Bureau Motion, Decision Time


Parliamentary Bureau Motion

The next item of business is consideration of a Parliamentary Bureau motion. I ask Joe FitzPatrick to move motion S5M-02121, on behalf of the Parliamentary Bureau, on the draft Council Tax (Substitution of Proportion) (Scotland) Order 2016.

Motion moved,

That the Parliament agrees that the Council Tax (Substitution of Proportion) (Scotland) Order 2016 [draft] be approved.—[Joe FitzPatrick]

Each member will have up to three minutes to speak in the debate.


Scottish Green Party MSPs will vote for the statutory instrument, regardless of what reasoned amendments end up as part of the final motion.

The substance of the vote is whether the statutory instrument is approved by Parliament. It should be. We have considerable criticisms of the Scottish Government’s overall approach to the issue, but we agree on some matters. We agree with the First Minister’s adviser on poverty and inequality, Naomi Eisenstadt; with previous commissions, including the Burt commission; with statements that the First Minister has made on the matter in previous sessions; and with the commission on local tax reform’s first recommendation, which is:

“The present Council Tax system must end.”

The statutory instrument will not do that; it merely provides a tepid reheat of a discredited system. However, I repeat that we will support the statutory instrument and vote for it. We will do so because it provides an extremely modest but welcome step in making the council tax, which is probably the most regressive tax in the United Kingdom, that little bit less regressive. However, the tax proposal is fatally flawed, as people’s tax liabilities will be levied without an accurate or up-to-date assessment of the tax base. The consequence is that many people who should pay less tax will pay more tax.

Technically, the debate is about a modest change, but it is actually about something more fundamental. At this time—four and a half years out from the next election—the Parliament has a unique opportunity to build a majority for far-reaching reform that strengthens local democracy, accountability and fiscal autonomy; endorses a fiscal framework for future local government settlements; and provides communities with real power to choose for themselves the scope, extent and quality of local services and how they are funded.

My amendment would alter nothing in the legislation. It would not alter the bands, the multipliers or the rates. It provides Parliament with an opportunity to express its views on the future of local taxation and local democracy.

Will the council tax ever be abolished? Who knows? Will it ever be based on an accurately assessed tax base? Who knows? Will local government in Scotland be granted the kinds of fiscal freedoms that are enjoyed by municipalities and councils across most of Europe? Who knows?

Above all, will the statutory instrument become law tonight? It will if the Scottish National Party votes for it.

The debate makes it clear that the ball is in the SNP’s court. If the SNP votes for the motion, it will pass; if it abstains, it will let the Tories win. Next week, our minds will turn to further important matters. Let us pass the legislation.

I move amendment S5M-02121.1, to insert at end:

“but, in so doing, regrets that the Scottish Government’s proposals for Council Tax reform undermine the principle of local accountability and autonomy and fail to address a number of issues identified by the Commission on Local Tax Reform; notes the opportunities to remedy this during the current session of Parliament, and considers that there should be further discussions by all parties to seek to establish an enduring system of local government finance.”


My amendment delivers the key points in the Greens’ amendment. This Government recognises the importance of local accountability and local democracy, and we agree to continue discussion on the reform of local taxation. However, crucially, we are inserting a key aim of embedding fairness and progressive taxation into those reforms. The Greens’ amendment does not mention progressive taxation, just to enjoy the support of the Tories—only long enough, of course, for the Tories to pull their support in a bid to halt an increase in council tax for higher-value properties, despite their own manifesto proposition. Opportunistic opposition might well be convenient, but the mature and responsible actions of a Parliament of minorities require the Opposition to provide not only a critique but principles on which we can all build. Surely fairness is one of those principles.

This Scottish statutory instrument is purely about the council tax multipliers in consideration of the proposal that won the support of the Local Government and Communities Committee. According to the Resolution Foundation, the proposal will see council tax become fairer and more proportionate. In its report from April, the Resolution Foundation stated that the policy

“would raise revenue in a progressive manner, with the tax rise falling harder on higher income households.”

It will see council tax bills increase for those who live in properties in bands E to H while protecting those on low incomes from any change and protecting the 75 per cent of taxpayers who live in bands A to D. Changing bands E to H will generate £100 million each year of additional revenues for local authorities, which is £100 million that local authorities would not otherwise receive. We will continue to engage with local government on distribution matters, and I have been clear that every penny raised in council tax will stay with the local authority.

I have also set out to the chamber and the Local Government and Communities Committee this Government’s commitment that the steps that we are taking today are simply the first on a journey of reform. These are the earliest changes that we can make to ensure that additional resources are available to councils from April.

Over this session of Parliament, we can work together to make local taxation fairer. Both the First Minister and I have put that on the record, and I gave that commitment to the committee. If the Parliament votes for our amendment tonight, that principle will be embedded in future reforms.

Next month, I will bring a budget to this chamber. I have already written to each party, asking for their proposals so that we can enter into a constructive discussion. We must be able to go into that discussion knowing that it will be based on positive engagement on all sides, on honouring commitments and on this Parliament embracing new powers. We all have a duty to show that we are beyond party-political games on such significant matters.

I move amendment S5M-02121.1.1, to leave out from “regrets” to “should be” and insert:

“recognises the importance of local accountability and autonomy in taxation, believes that reform should improve progressivity and fairness and calls for further consideration of the recommendations of the Commission on Local Tax Reform and”.


Today we are sitting in uncharted waters. Parliament could be about to vote to allow the Scottish Government to impose a tax rise on local government, claw that money back and then spend it as it sees fit on a nationwide school attainment fund. It is totally unprecedented.

First of all, let us be clear: we on these benches are in favour of a school attainment fund. We need to close the attainment gap after nine years of failure by the Scottish National Party. I imagine that the chamber will be united on that statement—the first part of it, anyway.

However, as the Green amendment makes clear, the Scottish Government’s funding of a measure—any measure—on the back of councils is an attack on local democracy and local accountability. As I said in a previous debate on the matter, it is a basic principle that money should be spent by those who have been elected to raise it and who are answerable for it to the electors. If council tax increases, the increase should be spent by councils. It should be entirely a matter for East Renfrewshire Council, for example, to decide how to spend the £4 million that will be raised by increasing the amounts charged in the top four bands, for Edinburgh to decide how to spend its £15.6 million or for South Lanarkshire to decide how to spend its £5.5 million.

However, in a financial sleight of hand that would do Derren Brown proud, Derek Mackay will allow local authorities to keep their extra council tax—legally, he has to—but will take it back by cutting grants. It is the first time that that has ever happened, and it is a slippery slope.

We will be voting for Andy Wightman’s amendment, because it rightly points out the grave way in which that undermines local accountability and autonomy. It undermines accountability because it is councillors who should be answerable to the people for council tax, and it undermines autonomy because it is councillors who should decide how that tax is spent.

Other Opposition MSPs accepted that when we last debated these measures, and they voted that way—with one exception. Will they stand by their principles today and vote against this measure? I hope so, because principle is in short supply in politics. Simply noting the issues does not go far enough. If members truly believe in localism—and we do—the only way to vote is against this national tax that is being dressed up as local. If the measure goes through, when people get their council tax bills next year they should be in no doubt that part of the increase is nothing to do with their councils and everything to do with the SNP and anyone who votes with it today.


I rise to support Andy Wightman’s amendment and I make it clear that the Scottish Labour Party will be voting for the statutory instrument. As Andy Wightman said, it is a modest movement, but it is nevertheless welcome. That is the view that local authority leaders across Scotland take; any additional funding would be better than none.

A couple of key points need to be made. First, if the council tax was so unfair in 2007—John Swinney and Nicola Sturgeon made it clear that it was unfair and Nicola Sturgeon went further and said that tinkering with the bands was not good enough and that the council tax had to go—how is it suddenly fair today? How could Derek Mackay possibly claim that?

Secondly, on the subject of continuing the discussion, the fact is that the Scottish Government set up a commission that everyone in here, apart from the Tories, signed up to. The one broad agreement that we reached was that the council tax was past its sell-by date and had to go. How many more discussions does Derek Mackay want to have before he makes the right decision and gets rid of the unfair council tax? He talks about bringing forward his budget. The fact is that £100 million will be raised through the statutory instrument, which is why we will support it. However, Derek Mackay intends to take £100 million out of the local government grant in order to fund a national priority. He did not have the guts to be honest with the people of Scotland and say that we will fund education directly by increasing taxes. He is going to hide behind local government.

That is unlike the Labour Party, because we were quite clear that we would fund schools with £100 million by increasing the top rate of taxation. The difference is that we were honest with the voters. I say to Derek Mackay that we will support the statutory instrument because we recognise that it is important that the money goes into local government. It is a step in the right direction, but we have to get rid of the SNP council tax and bring in something that will put local government on a fair financial footing.


If we defeat the Government today, Parliament will take the first step towards bringing an end to the council tax. The Liberal Democrats will vote against the Government’s amendment, as it eviscerates Andy Wightman’s amendment, which we will support. We will oppose the Government on the draft order. We are opposing the Government because we have a long track record of supporting true local democracy, we favour the true reform of local taxation to a progressive land value tax and we respect the work of the commission on local government taxation.

If the Government wins, it will embed the council tax, which the SNP has told us it hates but about which it has done absolutely nothing for a decade. The minister will need to forgive me for being a bit sceptical of new promises now. This could be the only real chance that the Parliament gets to vote on council tax reform. If the Government wins today we will only get talks about talks about talks. If the Government wins today, it will undermine local democracy by imposing an unfair redistribution mechanism over the heads of councils. The more councils raise, the more they will be punished.

If the Government wins today, it will be a message to carry on as normal. If the Scottish Government was serious about investing in our schools to get Scottish education back up the international rankings, it would back our plans to use a tax over which it already has control. To raise £500 million every year—five times as much—to transform our education system, the Government should put a modest penny on income tax. That would be fair, progressive and moderate. It is bizarre that the Government might even vote against its own tax rise today, so if we defeat the Government, Parliament will be taking the first step to bringing an end to the council tax. I urge Parliament to take that step.

To wind up the debate, I first call Andy Wightman.


One of the most impressive witnesses at the local government evidence session at the commission on local tax reform was a councillor from the Scottish Borders. She told us that she wanted to go into the next election with a manifesto stating what her party proposed to do if elected. She wanted to tell her electors how much her proposals would cost and how she proposed that they be paid for. In other words, she wanted to do what most politicians in a representative democracy want to do. However, in Scotland that ability has been eroded to the point where it is really not possible to make such an offer, as councils today are, in the words that Tom Johnston used in writing about burgh reform in 1832,

“mere miserable starved caricatures of their former greatness”.

Derek Mackay has repeated the assertions that he made on the radio this morning seeking to justify the mechanism for redistribution of moneys among councils by arguing that it is a well-established practice. It is not. It is a practice that was introduced by Mrs Thatcher. It was introduced in the Rates Act 1984, when non-domestic rates were removed from local control and centralised. That act also introduced domestic rate capping, which is another proposal from the SNP that no doubt Mr Mackay would argue is traditional and well established.

Mr Mackay said that we are on a journey. I look forward to that journey. I hope that we can all get on board the bus. I think that some parties will get off the bus a little sooner than other parties, but I hope that, when we do get on that bus, everything comes on the bus with us and nothing should be off the table, and I would be happy to be on the same bus with everybody in this chamber. Perhaps we should call the bus the commission on local tax reform.

At no time have Scottish Greens ever sought to block this legislation. We took great care not to do so in committee and we are taking great care not to do so tonight. I commend my amendment to members.


The Greens might think that they are on a bus, but I would argue that it is the Tories who are taking them for a ride. What the Greens are proposing is to remove progressive taxation as a fundamental principle to get the Conservatives on board only long enough for them to try to stop us raising the council tax for higher-value houses. Mr Wightman is wrong. It is the case that there is redistribution in local government, and it was not just under the Conservatives, and it is not just under the SNP; such a regime existed under the Labour-Liberal Executive for years as well. The principle remains the same. Every penny that is raised in council tax will stay with those councils.

The SSI is just about the multipliers. The Opposition parties cannot even agree on what they appear to be uniting to agree on. The Tories say that it is about no change, the Liberals and the Labour Party think that it is about some change or that it is about raising income tax rather than council tax, and the Greens think that it is about radical reform. Actually, the vote is about changing the multipliers, which is a reasonable, balanced approach that is in keeping with the mandate that the Scottish Government secured in the election at which we got, in an open and transparent way, the consent of the people to take forward our proposition, which also won the support of the Local Government and Regeneration Committee of the Scottish Parliament.

Our reforms are “more progressive”. Those are not my words but the words of the Resolution Foundation. They can be implemented as early as next April, so we can generate £100 million a year for our public services, for local authorities and for targeting on education—something that we have all said that we would agree on. Of course, 75 per cent of council tax payers pay no more as a consequence of our balanced reforms.

The Opposition told us for long enough that the council tax freeze was unsustainable. We have introduced a package of measures that will take forward sustainable increases to ensure that we generate more for public services in a progressive way.

We recognise our responsibility to taxpayers, to local authorities and, most importantly, to our young people. We will see that additional funding delivered. Most importantly, this party and this Government will not let petty party politics stand in the way of doing the right thing for Scotland’s children and for taxpayers across the country.

That concludes our debate on the council tax. The question will be put at decision time.