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Chamber and committees

Meeting date: Thursday, September 22, 2016

Meeting of the Parliament 22 September 2016

Agenda: General Question Time, First Minister’s Question Time, Standing Safe Campaign, Business Motion, Local Taxation, Events, General Question Time, Decision Time


Local Taxation

The next item of business is a debate on motion S5M-01580, in the name of Derek Mackay, on reforming local taxation.


I welcome today’s debate on reforming local taxation. The timing means that we have had ample opportunity to digest the findings of the commission on local tax reform’s report from last December and to reflect on the various alternative reforms that were advanced at the May election. I thank all the commissioners, especially those from beyond the world of politics and government, for their dedication and commitment to the report.

The commission’s report, “Just Change: A New Approach to Local Taxation”, is an excellent piece of work that sets out the fundamental concepts clearly, alongside some groundbreaking research. It was inevitable that any report would not satisfy all shades of opinion, but the work is authoritative, robust and insightful.

The commission’s remit was to examine in considerable detail alternative systems of taxation rather than to make a recommendation for a particular tax. Perhaps the best articulation of why that remit was right—especially for a cross-party and cross-Government commission—was by the commission itself when it concluded:

“We recognise that political parties in Scotland will attach different weights to the considerations we have set out ... and will therefore draw different conclusions about the best way forward.”

I am sure that that recognition of different and perfectly valid views will be reflected in today’s debate. In having the debate, we are implicitly acknowledging the achievement of the commission—and the work by the previous Local Government and Regeneration Committee—in creating the space for change, as is evidenced by the different alternative forms of local taxation that were advanced in manifestos for the elections earlier this year.

It is important to recognise that the report and the reforms that the Government is undertaking are not the end of the story—they are the beginning.

I thought that the beginning was nine years ago with the Scottish National Party manifesto for the 2007 election, in which the party said that it would abolish the fundamentally unfair council tax. Nine years later, the cabinet secretary says that this is the beginning.

I am sure that Mike Rumbles has repeatedly reflected on the fact that the SNP put a proposition to the people through the 2016 manifesto and that we were handsomely rewarded by the electorate of Scotland. That is why we are in government and embarking on further legislation. On our proposition on local taxation, we genuinely want to engage with other parties and wider Scottish society to take the next steps forward.

Will the cabinet secretary take an intervention?

I would like to make progress before I take a further intervention.

We have a mandate to progress with our proposal. A range of views remain on what our next steps should be, and differences remain among and between the parties that are in the Parliament. However, I hope that we can unite on one point: that the journey to a fairer and more sustainable local taxation system has only just begun. The next steps should be about progressivity and the progressive nature of what can be delivered—an approach that is absent from the Tory amendment.

We should all welcome the debate as part of the journey to critically examine all the proposals in a constructive spirit. The task that is before us will not be simple or straightforward. The present council tax was created by the Local Government Finance Act 1992 and it has been largely unchanged since.

The commission put its finger on the situation when it noted:

“Amongst all the taxes we pay, Council Tax is especially visible—every household gets a bill”.

That is in contrast to other taxes. VAT and a number of other taxes are part of the cost of goods and services, so they are not always visible. The realisation of that is what sets “Just Change” apart, as it recognises the political challenges.

I welcome the cabinet secretary’s openness. Will he address the concern of my constituents in Strathkelvin and Bearsden that the council tax that a council raises will stay in that council’s area?

I categorically assure every local authority area that every penny that is raised in council tax will stay in that local authority area. How we propose to allocate revenues towards education is as was proposed in our manifesto, which is through the revenue support grant. What is fairly illustrative about that is that it is similar to how the mechanism of business rates works, and I have not heard the complaint that that mechanism has not worked to local government’s satisfaction. The principle is there, but I am clear that what is raised locally through council tax will stay with the local authority.

Council tax is certainly complex, but that is not the only difficulty. “Just Change” noted the complexity of the current council tax reduction scheme. However, I want to be clear that, although a huge number of regulations—amounting to around 200 pages—define the scheme, that is in part because it needs to work for a vast range of people in real-world situations. That can range from covering people who receive income from multiple sources that could never be captured by a P60 to ensuring that those with specific difficult circumstances—for example, carers—get the reliefs that we think that they need. Council tax reduction is not universal.

The cabinet secretary will be aware that the Delegated Powers and Law Reform Committee ruled last week that the council tax reduction scheme is ultra vires. What is his view on that?

I am familiar with previous challenges to the competence of the council tax reduction scheme. For example, Jackie Baillie used to propagate the argument that it was ultra vires—outwith the powers of the Parliament. She is shaking her head, but I have checked the record. Of course, the argument about the competence of the scheme was being made prior to the transfer of social security powers.

When the UK Government abolished council tax benefit, we were able in partnership with local government to design a scheme to support the most vulnerable in our society through changed liabilities. I absolutely believe that the scheme is within the Scottish Parliament’s competence. We want to enhance and improve the welfare nature of the scheme through changing households’ tax liabilities. I think that that will be welcome news, as part of the reforms, to hard-pressed households that are in difficult circumstances.

I have touched on the complexity of the council tax reduction scheme and the necessity of that complexity to ensure that we protect people now and into the future. The scheme applies reductions that amount to about £340 million to just under half a million households, which is approximately one in five households. Without the scheme, those who are on low incomes or who for whatever reason have no income would be exposed to the full extent of the present council tax system and would be liable for the full council tax, even though they would not have the means to pay. That is a telling thought, given that the commission

“heard much evidence pointing to the futility of taxing those who simply could not pay.”

The council tax reduction scheme offers some support in that respect. In fact, it is more progressive for the lowest-income households. I accept the commission’s criticism of the scheme’s complexity, but I emphasise its importance in achieving the aim of support.

“Just Change” looked at a number of alternative taxes, including a land value tax, which would require further work. Although the economic principles are undoubtedly appealing, we must recognise the difficulties in determining land values in urban areas. I am sure that that debate will continue, but we are embarking on work to secure agreement on a consultation about levying a tax on development and on vacant and derelict land, which would reduce land banking and increase the supply of homes. We will take that forward in a stakeholder round-table meeting imminently.

“Just Change” considers income to be an important potential source of local tax; that includes drawing on the experiences of Her Majesty’s Revenue and Customs in identifying Scottish taxpayers in readiness for the introduction of the Scottish rate of income tax earlier this year.

I am keen to understand whether what the cabinet secretary proposes is the assignment of local taxes for the local community or whether it is just a share of national taxation across Scotland. Is the approach local or national?

We have proposed a share of the national element of income tax through a formula, but we have still to engage with local government on that. We will want to explore that with local government.

There is certainly an attraction to assigning elements of income tax to local areas. I believe that that would incentivise growth and interest in local economies and wider interests, and it would provide greater financial accountability and less dependence on central Government grants. That is certainly in the spirit of what many people are trying to achieve.

We are keen to explore the alternative of tax assignment that the commission identified, and we will formally consult on that before taking the matter forward. That could improve the public understanding of how local services are funded, which is especially desirable given the preconceptions that were reported in “Just Change”, and therefore enhance local government’s financial accountability. It could give local government a material stake in the economy, and it would make overall taxation to fund local government more progressive and linked to income.

People would regard the assignation of taxes as creating instability and uncertainty for local government. Taxes may rise or fall. In the event that the yield fell, what would local government do? Would it just have to make cuts?

I have said to members that we want to discuss with local government how the process could work. We are not putting forward a concluded proposition. That engagement is worth having to understand the benefits and the risks of any such proposition.

The council tax regulations that I have laid set out changes to the council tax and the council tax reduction scheme. If the Parliament agrees to them, they can be delivered from as early as the next council tax year—from April 2017. The changes to the council tax will increase the charges on properties in bands E, F, G and H by 7.5 per cent, 12.5 per cent, 17.5 per cent and 22.5 per cent respectively.

Will the cabinet secretary give way?

I have about 30 seconds to go, and I really need to move to the end of my speech.

I believe that the regulations will unlock finance for education, as expressed in the SNP manifesto pledge, and the council tax reduction scheme changes will provide protection.

Those initial reforms can be delivered at low administrative cost to achieve their purpose. Longer-term change will need more discussion, consensus and engagement. I am certainly committed to that under the motion and through engagement with political parties. I am also committed to that in a positive, constructive and collegiate way.

I recognise that we have embarked on a journey in local taxation. We want to make local taxation more progressive, to deliver the steps that we received support for at the election and to engage further on what can be delivered next in view of the “Just Change” report.

I move,

That the Parliament notes the opportunity for change created by the December 2015 report of the Commission on Local Tax Reform; recognises the initial changes to council tax proposed by the Scottish Government, and supports continued discussion by all parties, with local government and wider society, of measures to improve progressivity and local financial accountability over the current parliamentary session.


I welcome the opportunity to discuss local tax reform in this extended debate.

It is fair to say, and I should acknowledge, that my party has something of a chequered history when it comes to local taxation. The commission on local tax reform stated:

“history shows that reforms to local taxation are politically challenging”.

That might be something of an understatement. It was back in the mists of time in the 1980s that a ratepayers’ revolt against a rating revaluation led to the then Conservative Government agreeing to scrap that form of local taxation. Its replacement was, of course, the immensely popular community charge. We all remember thousands taking to the streets to celebrate its universal acceptance and success.

Despite its undoubted popularity, the community charge was short lived. It was replaced in the 1990s by the council tax system, which was intended to be a property tax and personal tax hybrid system. The council tax is not a pure property tax, such as the rates were, in that properties are valued in bands, and the proportion between the highest property band and the lowest was set at three, which reflected the fact that a personal element was involved.

The council tax has its advantages. It is an efficient tax that is well understood and generally accepted, and it is relatively easy to collect. However, it also has its disadvantages. There is no direct link between the size or value of somebody’s property and their ability to pay their tax bills. Single people who live in larger properties will pay much more towards local services than a family of working people who live next door in a smaller property and consume many more council services will. Because there has been no revaluation since the council tax was introduced, many properties now find themselves in the wrong band. That can lead to frustration for constituents who cannot understand why they pay more council tax than those in the identical property further along the street.

It is not surprising therefore that, over the years, there have been a number of attempts to find a replacement for the council tax. Famously, we remember the SNP being elected in 2007 on a manifesto pledge to replace the council tax with a local income tax. My party did not support that, but I accept that the SNP’s success in that election was down in some way to that pledge, which capitalised on the concerns that many people—particularly retired people—had about how their council tax bills were rising.

In the parliamentary session that followed that election, the SNP was not successful in taking those plans forward. It is curious, though, that when it became a majority Government in 2011, it did not pursue the idea of a local income tax, even though it had a parliamentary majority. It now seems to have abandoned the notion altogether.

Instead, we have seen a nine-year council tax freeze, which the Scottish Conservatives have supported. The freeze has given council tax payers relief from what were often painfully fast-rising bills. In the early days of the Scottish Parliament, my constituents often raised council tax bills as a serious issue; that rarely happens now, which I am sure is the case for other members, too.

The Scottish Government’s latest attempt to find a replacement for the council tax involved establishing its commission on local tax reform to look at all the options, with a report published in December last year. It is a thorough report that considers a number of ways forward. The Scottish Conservatives did not participate in that discussion, as we preferred our own separate commission on competitive and fair taxation, which Sir Iain McMillan chaired. The Government and other parties criticised us for not taking part in the Government commission, but we felt that it would be duplication to work on two separate reports at the same time.

The Government’s commission came to the clear conclusion that

“The present Council Tax system must end.”

Unfortunately, its members were unable to agree, beyond that, on what should replace the council tax. In contrast, our commission proposed that the council tax structure should remain largely as it is but be reformed to have a fairer and more progressive local tax, with an increased multiplier for those at the upper end and additional protections for low-income households.

It was somewhat flattering to us to see that, when the Scottish Government finally announced its plans for the council tax, it had ignored more or less completely what its commission had recommended and decided to adopt something similar to what our commission proposed. We welcome that endorsement of all the hard work that was done on the Government’s behalf.

Winston Churchill famously said of democracy that it is

“the worst form of Government”

in the world, until we consider the alternatives. The council tax is a bit like that. Everyone knows that there are problems with the council tax, but no one has yet proposed a better plan to replace it. However, we can continue to have that conversation.

Even if we were to accept the unhappy reality that Mr Fraser paints, in which council tax is described as the least-bad option, is there a reason in principle why, if council tax is going to continue, it ought to be based on antique property values rather than current ones?

Mr Harvie makes a fair argument for a revaluation—I accept that there is a sound logical reason for it. However, counter to that, it would be an expensive and bureaucratic exercise and I can guarantee that we would all have huge queues at our doors of constituents who were unhappy that their properties had been revalued and that their bills were going up as a result. However logical revaluation might seem, there is a political judgment to be made about that.

My party supports proposals to end the council tax freeze, which would allow councils the freedom to increase council tax annually by up to 3 per cent. We support additional protections for low-income households and we support those who are in properties that are in bands G and H paying a bit extra.

We depart from the Scottish Government in two respects. First, we oppose the increases for those who live in properties that are in bands E and F. Those properties can be relatively modest and we do not think that it is justifiable for all those who live in such properties to have a hike in their council tax.

Just as seriously, we oppose the approach that ministers are taking to how the increase in council tax will be dealt with. Ministers want to create a school attainment fund from which money will go direct to schools. We agree with that ambition, but ministers want to fund it by clawing back from councils the additional money—£100 million—that will be raised by the increase in council tax revenues and taking it centrally to pay directly to schools.

Will Mr Fraser take an intervention on that point?

If I have time.

I ask Mr Rumbles to be quick.

What does Mr Fraser think about the cabinet secretary’s statement that all the money that is raised will be kept by local authorities? Does he agree that what the cabinet secretary did not say was that the Government will actually take money away from councils, so council tax payers will be charged more, have their services—

Mr Rumbles, that is hardly quick.

Mr Rumbles made his point perfectly well.

It is not surprising that the Government’s proposal has been met with outrage in local government circles. The Convention of Scottish Local Authorities has made clear its opposition to the plans, which it sees as breaking the link in which taxes that are raised from local householders are spent on local services. There is absolutely no precedent for what is being proposed, which undermines local democracy and local accountability.

I know that our concerns in that regard are shared not just by many of those who are in local government but by other Opposition parties in the Parliament. Our amendment highlights our concern about the SNP’s centralising proposal and I hope that it will have the support of other Opposition parties.

Our plan would be to raise funding from those who are in properties that are in bands G and H only, which would raise an extra £30 million annually to put into local government. That would be new money for local government when, as the Fraser of Allander institute warned just last week, it faces another punishing round of cuts. That money could defend and support vital local services.

Crucially, we will defend the principle of local democracy and accountability and resist the centralising tendency that is all too typical of this SNP Government.

I move amendment S5M-01580.1, to leave out from “recognises” to end and insert:

“but 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; notes the opportunities to remedy this over the current parliamentary session, and commits to further discussions by all parties to seek to establish an enduring system of local government finance.”


They say that we can learn much from history. Let me delve into the recent past to set a little context for the debate this afternoon. It is truly instructive.

Like others, I take members back to 2007, when the SNP said in its manifesto:

“Local taxes can be fairer. The SNP will scrap the council tax and introduce a fairer system based on ability to pay.”

That was the first of many broken promises. Then came 2011 and another manifesto, in which the SNP said:

“Over the period of the next Parliament, we will consult with others to produce a fairer system based on the ability to pay to replace the council tax.”

That went well, did it not? The SNP promised to replace the council tax but instead it has merely tinkered with it—so the broken promises continue.

Roll forward to the 2016 manifesto. Where is that promise to scrap the council tax? I could not find it; in fact, it has completely disappeared. That is perhaps the biggest broken promise of them all.

What we have instead is a set of proposals that are so timid, so lacking in ambition, that one wonders where it emanated from. Alex Neil, who was responsible for local government, is anything but timid. I cannot imagine a scenario where he would sign off on something like this. Was it the First Minister or the Deputy First Minister? I think that we should be told—but no, the cabinet secretary is not going to enlighten us.

After all, history is littered with quotes from John Swinney and Nicola Sturgeon. Remember the “discredited council tax” or “the unfair regressive council tax”? My personal favourite was Nicola Sturgeon saying in April 2007:

“Labour’s hated council tax is totally unfair and any tinkering with bands would not make the system any fairer.”

What delicious irony: here is the SNP simply “tinkering with the bands” and keeping, in their words, a “hated” and “unfair” council tax—exactly what the SNP said that it was against. They say that actions speak louder than words—the SNP’s actions in this case are a mere whimper.

Will Jackie Baillie give way?

Why not? The member is not the quietest of them.

I most certainly am not.

In the “Just Change” report, the commission talked about not only property taxation, but land taxation and income taxation. As the cabinet secretary has rightly said, this is the beginning. We are also talking about consulting on a vacant and derelict land tax and assignation of income tax. Will Jackie Baillie support those moves? Are they not progressive?

I think that that was a speech, Presiding Officer, but I will let that stick.

Let me enlighten the minister. The first recommendation of the commission was to end the council tax. The motion before us today does not even give a commitment to do that. Frankly, I will not take any lessons from the Scottish Government on that point.

It is an absolute irony that the SNP can today, without embarrassment, tell us that this is about change, when all that it has done is tinker at the margins. A decade on, the SNP has not scrapped the council tax, and its proposals for reform are disappointing and lacking in ambition. The council tax is regressive: proportionately, the very poorest shoulder the larger burden. The SNP has merely tinkered round the edges.

The SNP had an opportunity to do things differently. I served on the commission for local tax reform with Andy Wightman. Gathered in the room were experts, practitioners and elected members from local government and from this Parliament. We heard from professionals and directly from communities themselves about what they wanted to see. The officers serving the commission brought together data and modelling to help the members in their work, and we are grateful to them for doing so. Everything that anyone needed to know about local government finance and the options available was in the commission’s report. There were 19 separate recommendations, and I have referred to the very first one, which was:

“The present Council Tax system must end.”

Derek Mackay rose

I think that the cabinet secretary should listen to this.

Seven words—the shortest recommendation, but the most powerful—but the SNP cannot bring itself to implement the unanimous view of the commission by scrapping the council tax.

Jackie Baillie mentioned embarrassment with policy. Does she recollect that, during the course of the election, it was the Labour Party that abandoned the welfare element of local taxation policy? Is she not further embarrassed that she was proposing to replace a property tax with another—Labour—property tax?

I am not remotely embarrassed that, under Labour’s proposals, 2 million households would be better off. Eighty per cent of people would pay less under our proposals, which are far more progressive than the SNP’s ever are.

The commission was a cross-party approach. The cabinet secretary spent about 12 of his 13 minutes telling us how good the report was. There should not have been any surprises there; it was chaired by a member of his Government, so I do not understand why there is a need for delay.

Unlike the SNP, Scottish Labour used the commission’s work to design our policies. We believe that the unfair council tax should be scrapped, and, as I told the cabinet secretary, under our proposals, nearly 2 million households would be better off and would pay 80 per cent less than they do today.

In addition, we would provide local government with a basket of taxes, including a land value tax on vacant economically inactive land and a tourist tax, and we would devolve the surplus from the Crown Estate. We have a range of measures that are designed to transform local government funding.

Local government funds important things such as teachers, schools and care workers for our older people. Last year, the SNP cut £500 million from the local government budget for 2016-17. We discovered from the Accounts Commission report that was published today that the cuts are not the 5 per cent that was passed down from the UK Government in the block grant; the SNP decided to land a staggering 11 per cent cut on local government—a deliberate choice to cut local services. That is a clear case of continuing austerity—our very own brand of SNP austerity, which is austerity on stilts.

The SNP has a choice: a choice to properly reform the funding of local government—a choice that it has not yet made, because it is too timid. All it will do is continue to centralise control in Edinburgh. I therefore fear for local services and local democracy.

I move amendment S5M-01580.2, to insert at end:

“further notes the SNP manifesto commitments to scrap the Council Tax in both 2007 and 2011 and that the Scottish Government has failed to deliver on those pledges; recognises that its current proposals for reform “fall short of making the Council Tax a ‘proportionate’ tax” as noted by the Scottish Parliament Information Centre (SPICe); acknowledges that, in her report, the Scottish Government’s poverty adviser said that the “Council Tax is widely viewed as no longer fit for purpose” and to “be bold on local taxation”; recognises the level of cuts to funding that local authorities have faced in recent years and the consequent impact on the services that local people rely on; commits the Scottish Government to bring forward reform that is more progressive than the current proposals as well as using the powers of the Parliament to invest in Scotland's economy and its people.”


I am delighted that in these precious two hours we are debating local taxation and discussing the report of the commission on local tax reform. I had the privilege of sitting on that cross-party commission, which the Scottish Government established. We undertook our work in good faith and I thank my fellow commissioners and the members of staff for their diligent hard work in getting us to where we got to—I think that two of them have joined us in the chamber.

As a commission, we agreed that

“There is now a real prospect of beginning a programme to make local taxation fairer—more progressive, more stable, more efficient and more locally empowering.”

We entrusted those charged with taking forward our work to respect the spirit in which the commission was established and in which it discharged its obligations.

We agreed our first recommendation, which is that

“The present Council Tax system must end”—

that took us two nanoseconds. Importantly, we also agreed that

“This is an opportunity that must not be missed.”

That was our closing recommendation, and in my view it is the central issue before Parliament. We have an opportunity that must not be missed.

We have five years, but we do not yet have agreement on some fundamental principles—principles that are taken for granted in the constitutional architecture of local government in other European countries. Many of those principles were enshrined in international law by the Council of Europe in 1985, in the European Charter of Local Self-Government. The former minister and co-chair of the commission, Marco Biagi, confirmed in this chamber that that is an international treaty

“to which we are bound ... It commits us to applying basic rules guaranteeing the political, administrative and financial independence of local authorities.”—[Official Report, 17 June 2015; c 66.]

As I outlined earlier this week, those rules are being breached by the Scottish Government, most notably in the proposed intention to appropriate £100 million from council tax resources and reintroduce rate capping. It is doing that not by statute, as the Tories did—I did not agree with them, but at least they had the courage to do it by statute in the Rates Act 1984—but by stealth, through the back door. If Angela Merkel were to do that in Germany, it would be illegal under article 28 of the German constitution. Indeed, in evidence to the Local Government and Communities Committee this week, COSLA pointed out that this is the first time in the history of local taxation since the introduction of the poor law in 1579 that local taxation has been appropriated for national spending priorities.

None of the important detail is being addressed. I had a constituent who lived in a band E property that is now worth quite a bit less—£20,000 less, in fact—than nearby flats that are in band B. Yesterday, Joan Hewton, who is Lothian assessor and president of the Institute of Revenues, Rating and Valuation’s Scottish association, said that she expected there to be many appeals next year, and that virtually all of them would fail because the current statute insists on 1991 values being used. The commission on local tax reform found that 57 per cent of properties were in the wrong band. If we organised income tax on that basis, the First Minister would be paying no tax today, as she was a student in 1991. Perhaps that is also true for the finance secretary; I do not know whether Mr Mackay was still at school then.

I have another constituent who had problems paying his council tax. Yesterday, the sheriff officers were knocking at his door. According to Citizens Advice Scotland’s evidence to the commission, council tax arrears are now the most common debt that its clients seek advice on. In the words of one money advice worker in east Sutherland, council tax arrears are often the straw that breaks the camel’s back.

Those are just two aspects of the council tax system that the commission looked at and took evidence on, and that are crying out for reform. The Government has said nothing because it has not yet even responded formally to the commission’s report.

I urge ministers to read Citizens Advice Scotland’s evidence and the testimonies of people who, tragically, would be better off if their wages were arrested. I ask them to appreciate that the work we undertook in the commission was about sorting out so many problems that have been lying unattended for far too long and which are in the gift of this Parliament to sort out.

Since the commission reported, a growing number of influential voices have appealed for the kind of ambitious transformation that we sought to initiate. The chair of the commission on housing and wellbeing, the former Auditor General, Robert Black, said in his report, “One year on”:

“One recommendation was to reform the current system of property taxation—the Council Tax. This would seek to put an end to a system that disproportionately affects the poorest households ... Regrettably, there has been no sign that the Scottish Government will reevaluate property values, nor adjust how the tax is calculated, despite many properties sitting in the wrong band.”

Although he acknowledged the Government’s proposals, he argued that

“these changes mean very little to those paying an unfair level of tax.”

Naomi Eisenstadt, the First Minister’s independent adviser on poverty and inequality, urged ministers to

“be bold on local tax reform.”

We have heard from the First Minister that she will accept all the recommendations of Naomi Eisenstadt, who further noted that

“this is a central moment of political decision, an opportunity to introduce a much more progressive system, one that will have important implications, particularly for working households at or just above the poverty line.”

The Scottish Government’s proposals are an embarrassment. It is shameful for a Government whose finance ministers stand here and tell us that progressivity lies at the heart of their tax plans to perpetuate probably the most regressive tax in the UK. However, we can change that, and I think there is a progressive majority in this Parliament to do so. We can, for example, do a revaluation. That is not a complex matter, but one that is simple and straightforward and uses modern techniques.

Will Andy Wightman clarify how much a wholesale revaluation would cost and how long it might take?

The commission on local tax reform took evidence on that and the figures are in its report. I do not recall a specific figure.

Countries such as Denmark not only have regular revaluations through mass appraisal and computer techniques but split the land values into site value and the value of improvements for every property in the country. Estonia, which has the most competitive tax system in the Organisation for Economic Co-operation and Development and levies tax only on the land in urban and rural areas, also does that. Such things are straightforward; the land register contains 70 per cent of properties and information on property values is fed in every single day.

We can accommodate new liabilities through transitional reliefs and tapers, as in Wales. Elderly households can be given deferral options, as legislated for in Northern Ireland in the Rates (Deferment) Regulations (Northern Ireland) 2010—the document that I hold in my hand. None of those things is terribly difficult. Today we published an alternative statutory instrument using powers in the Local Government Finance Act 1992. Ministers could lay an instrument next week to achieve much of what I have suggested.

I urge parties across the Parliament to rise to the occasion, seize the moment and implement the many lessons and recommendations in the commission’s report. We will work constructively with all to do that. I urge ministers to have the decency to respond formally to the report.

I move amendment S5M-01580.3, to insert at end:

"regrets the Scottish Government’s current lack of ambition in the reform of local taxation; endorses the conclusions and recommendations of the Commission, in particular that the present Council Tax system must end, that the new system should offer greater flexibility to local government and strengthen local democracy, that the system of local taxation has to include recurrent taxation on domestic property and that liabilities should be linked to up-to-date property values, and considers that the proposals outlined in the Scottish Green Party’s Fair Funding for Public Services paper and its alternative Council Tax statutory instrument represent a fair and progressive way forward for local government finance."

We now move to the open debate. Time is tight, so I ask everyone to keep their speeches to under five minutes.


I stand as an unashamed advocate of devolution—of devolving power, responsibility and autonomy as close to the people whose lives are affected as possible.

The Gaelic for devolution is fèin-riaghladh, which literally means self-governing. With new and old powers over taxation, all of us in the chamber enjoyed the recent campaign during which we offered the electorate different proposals on tax, including the council tax. Although it was the current Government’s party whose manifesto won a majority, I personally enjoyed the exchange of ideas on how tax is a means of, and an illustration of, self-government, and I continue to appreciate speaking to members on all sides of the chamber about how our taxes can be built on a solid foundation of accountability, fairness and localism.

Today’s debate is the start of reform. As the cabinet secretary said, the commission on local tax reform noted that, of all taxes, the council tax is especially visible and seems to attract most debate about devolution, localism and accountability.

In our 2016 manifesto—which I promoted throughout my local campaign in the largest council area, the Highlands, where people perhaps feel the furthest from Edinburgh, and which I was still elected off the back of—we outlined our intention to start the reform of council tax bands in a fair, balanced and progressive way. Alongside our proposals for raising tax, we very importantly identified the specific uses for the extra funds that would be raised, to ensure that our society is fairer and more prosperous.

Those principles are not new, but how we apply them is. This Government has a proud record of delivering for local communities and mitigating the toll of the last recession on families up and down the country. I have seen that at first hand in the Highlands. By freezing the council tax for nine years and continuing to provide the extra funds to councils for basic public services, the Government ensured that council tax was affordable for hard-pressed families across Scotland. However, we recognise that the time has come to lift the freeze in order to give councils greater freedom, while simultaneously ensuring that any increases are capped at 3 per cent, in recognition of the continuing economic challenges that face many.

It is hard to reconcile what the member has just said with what is happening in Aberdeenshire, for instance, where the Government’s proposals will take millions of pounds away from the local authority, because the grant will be cut. What is happening is the opposite of what she is saying.

I would make two points in response to that. We have made it clear that every penny that is raised in a council tax area will be spent in that council tax area; and our plans are progressive, because it is those with the broadest shoulders who will take on the burden of the increases.

We recognise that times have changed and that it is time to lift the freeze. By changing the property bands for those who reside in properties in bands E to H, the council tax is more progressive because, as I have just said, that means that those with the broadest shoulders will pay a fairer share. In practical terms, it means that three quarters of Scottish households—1.8 million Scots—will pay no more council tax than they do at the moment.

As an accountant, I recognise that the council tax is a lever, and I want it to be used to protect family incomes, support local services and deliver a vision of a fairer and more equal society where children will never be discriminated against in our education system because of poverty.

With regard to levers, I also want to put on record my support for the Government’s plan to give councils the option of offering no discount for second homes as a method of tackling rising house prices for full-time residents. As I highlighted in my rural housing speech last week, that issue is of vital importance to people in rural constituencies, and the planned action is an extremely positive step.

The Scottish Government’s plans on local taxation are ambitious but also fair. I also recognise that this is the start of a process and not the end.


By common consent, no system of local government finance is perfect, and it is certainly the case that no system is universally popular. In view of the history of local government finance in Scotland and across the UK, it is a measure of its resilience that the council tax has lasted—although not without criticism and not without flaws—for the past 23 years. In the past, strong criticism has been levelled against the council tax. Many people will remember the words of Alex Salmond, who said:

“There will be no misunderstanding. We are determined to abolish the unfair council tax.”

These are changed days indeed, as Jackie Baillie noted.

I will set out where I agree with the Scottish Government’s approach. After years of debate and aborted proposals for a range of alternatives including local income taxes and land value taxes, ministers have settled on reform of the existing council tax system. I welcome their belated acknowledgement that the council tax is, in essence, a sound system of local taxation. It is hard to avoid, it is transparent, it is comparatively cheap to administer, it has a high collection rate and—in so far as it is possible—it is accepted by taxpayers. We on this side of the chamber also endorse the ending of the council tax freeze.

However, that is not an endorsement of rising council tax bills. As Conservatives, we look to councils to keep a lid on spending to curb taxpayers’ bills, but it is right and proper that those who are elected to serve as councillors should ultimately make decisions on local taxes and bear responsibility for those decisions. At this point, I must depart from the Scottish Government’s plans. It is hard to see the logic of, on one hand, restoring local accountability through ending the council tax freeze while, on the other hand, clawing back a proportion of local tax revenues to be distributed as ministers decide. The creation of an attainment fund is a welcome step; ministers’ proposed method of funding it is not.

As COSLA president David O’Neill said last week,

“There is a clear and honourable link between taxes raised from local householders being spent on local services and this has been a Scottish tradition for generations. The Scottish Government will destroy that link with their plans to use council tax money for a national policy.”

Will the member take an intervention?

I would really rather not. The cabinet secretary will know that we are short of time already. Forgive me.

The attainment fund is a policy of the Scottish Government and it is the responsibility of Government ministers to identify the funding for it from the Government’s own budgets instead of saddling local councils with the bill.

People in band E houses will see a £105 rise, those in band F houses will see a £207 increase and those in band G houses will see a £335 increase. At the very top, band H householders will see their bills increase by £517. Those reforms will affect 674,793 households across Scotland. Although we welcome the proposed exemptions—if not the council tax reduction scheme, which we believe is not within the gift of the Scottish Government—the changes impose a significant additional burden on ratepayers in Scotland that will give further credence to the growing view that Scotland is an expensive place in which to live and work. In my constituency, many higher-rate taxpayers in the aerospace industry have transferable skills that are much sought after and are in demand worldwide. This will do little to encourage them to remain in Ayrshire and in Scotland. As the Government knows, it is difficult enough to retain existing businesses and jobs in Scotland. This additional layer of taxation is just one more obstacle to overcome in trying to encourage further inward investment.

Of course, we all want to see the attainment gap closed, and that work needs to be funded. Nonetheless, we feel that this is robbing Peter to pay Paul. Local authorities are constantly seeing their roles reduced by the Government’s centralising agenda, as functions and responsibilities that used to be theirs are removed and taken to the centre to be put under the ever-tightening grip of the Scottish ministers. In the long run, that is bad for local democracy and accountability, and it is discouraging for local councillors and council staff, who are wondering what their role will be in five years’ time as they approach next year’s election.

As David O’Neill pointed out, this is a

“universal solution to a very targeted issue.”

Although we know that the money, an additional £100 million a year, will be spent on a laudable aim—closing the attainment gap—I just hope that the gap does, indeed, get closed by this measure. I say to Mr Swinney and Mr Mackay that we will be watching them closely. If the money is spent and the gap does not close, the people of Scotland will pass their judgment on them at the next election.


I swear that I saw a shiver running down Derek Mackay’s spine when John Scott threatened to watch him. The minister had better watch out.

This debate has been mired in rhetoric from the very beginning—all the way back to the poll tax days—up to the present day. If members look back to 2007, they will see that Nicola Sturgeon regarded the council tax as “hated”. She said:

“tinkering with bands would not make the system any fairer but would require a damaging revaluation.”

That is an interesting perspective. Even back in 2007, she said that “tinkering” was insufficient, but that is exactly the proposal that we have got today.

All that is despite the other high rhetoric that we have heard in between 2007 and now. Indeed, in 2010, the council tax was regarded as regressive and unfair. In 2011, the Government was going to have a cross-party review, but it took until 2014 for that to happen. Even Marco Biagi, when he launched the commission on local tax reform, regarded the council tax as an unfair measure. Andy Wightman quite rightly pointed out that the commission report said that the council tax should end. Therefore, even up to the present day, the rhetoric has remained strong, but now we have a different policy, which is to retain the exact thing that was before regarded as hated and regressive.

The rhetoric has been ramped up again. We have just heard from Kate Forbes that the proposal on council tax is progressive. I do not know what Nicola Sturgeon was thinking back in 2007. Why did she not hear Kate Forbes in the future saying that its proposals on council tax were going to be progressive?

The SNP even said in its manifesto that Adam Smith principles would be adopted with the implementation of the changes. It talked about the proposals being reasonable and balanced, and said that they would promote fairness. Those are all now the principles at the heart of the hated and regressive council tax, so I find it quite dispiriting that the rhetoric remains high even though the principles have changed.

Willie Rennie is providing a critique of others, which is fair enough, but will he expand on the detail of the Liberal Democrats’ position on council tax? They seemed pretty vague on the matter in their manifesto.

I am glad that Derek Mackay has been studying our manifesto; he is obviously worried about what John Scott will think next.

We have been in favour of a local income tax. We were prepared to join the commission in the spirit of cross-party consensus to seek a long-standing solution for the future. We thought that that was the right thing to do, because local taxes have been the subject of heated political debates over the years. We were prepared to put in our lot with the commission, but we were desperately disappointed when 16 of its 19 recommendations were rejected by the Government within months of the report being published.

Will the member give way?

Not at the moment. We were in favour of ending the council tax. We are now in favour of looking at land value taxation, because we believe that that merits further consideration. In fact, the commission considered that issue. It looked at bringing back into use derelict land, particularly in urban areas. That works in other countries.

Will the member give way?

Not at the moment. It would be possible to adapt the system to work in partnership with the business taxation system, and perhaps to simplify the process. People would also not be penalised for making improvements to their property.

Will the member give way?

Not at the moment. Those are the benefits of a local land value taxation system. Bringing that into a wider reform programme would have significant benefits. Therefore, we welcome today’s proposal that we should continue working on an enduring system, but what the Government is proposing is inadequate.

As members will know, we are also in favour of introducing a real progressive increase in taxation. We want to introduce a penny on income tax, which would not bring in the timid amount that the Scottish Government is proposing for education but would bring in £500 million. The SNP now seems not to regard that proposal as being progressive, but it sees its council tax proposal as being progressive. The world has just turned upside down; I do not know what the minister is thinking these days.

All those proposals are part of a wider package that is required to ensure that we can invest in public services and that we have a proper local system of taxation for the future—not one that just takes money from one part of the country and gives it to another in an arbitrary fashion but one that can invest in public services and deliver a progressive system for the future.


I welcome the opportunity to contribute to the debate on reforming local taxation. The debate is timely and, I hope, a constructive opportunity for the Parliament to come together and discuss continuing reforms to local taxation. That is the key point, because the current Scottish Government reforms are not the last word on the matter, as the cabinet secretary made clear in his opening speech. As convener of the Local Government and Communities Committee, I am keen to support that approach and that debate.

I take issue with members who claim that the current suite of reforms is too timid. Following several years of the council tax freeze, local taxpayers’ council tax will rise again by up to 3 per cent. That is not timid; it is sensible. We well remember the massive hikes in council tax in years gone by, which impacted on many of our communities. A 3 per cent ceiling provides my constituents with a welcome degree of protection.

Bob Doris may feel that 3 per cent is the right limit, but why should it be decided nationally and imposed locally, rather than local councils being given control of their own rates?

Patrick Harvie makes a reasonable point. We are not yet sure of the procedures that will underpin the 3 per cent ceiling. Dialogue must continue on that.

I will address the proposed reform of the multipliers that set council tax levels for people who stay in properties in bands E through to H. For people in band E properties with incomes of more than £25,000, bills will increase by £106 on average. In the wealthiest properties—in band H—the increase will be an average of £517 each year. If we place that in the context of the additional 3 per cent increase, it is no surprise that the Scottish Government is introducing an enhanced council tax reduction scheme to benefit 54,000 households on incomes of less than £25,000 and plans for tapered support for certain households above that income threshold. The Local Government and Communities Committee is scrutinising the statutory instruments that underpin those changes and we got consensus that the changed system is fairer. Whether it is less regressive or more progressive is perhaps a debating point, but there was consensus that it is fairer, and all members should welcome that.

If we were to revalue and were to go for a proportionate system of council tax bands, it would mean that the council tax for band H properties would rise not by £500 but by 250 per cent. We must remember that some of the properties that are currently in band H would no longer be in that band and other properties would move up to it. That is a huge tax increase for any constituent at any band level. It is not that I am unwilling to make such a change, but an important principle of taxation is that we must try our best to get a degree of consensus from our local taxation base as we move towards more progressive forms of taxation. To be clear, the local taxation base is all the constituents whom we represent.

Will Bob Doris give way?

I apologise to Andy Wightman because I do not think that I will have time for his intervention.

Of course we should eventually move towards a revaluation but not at the same time as a 3 per cent increase in council tax and additional increases to the bills for bands E to H that range between £95 and £554, depending on which local authority area someone stays in. However, plans must be prepared at some point for how we move—with consensus, I hope, and in the medium term, I would say—to a revaluation.

The money will be spent on educational attainment, and that will be done in a redistributive way. [Interruption.] Mr Rumbles might learn something if he listens. What will happen is that money will be taken from wealthier families and invested for children who are living in deprivation, including children in middle and upper-class areas who are afflicted by poverty, and whose educational attainment is suffering. I am proud of the reforms, but they are only the first stage.


I am pleased to contribute to this important debate, which I hope will be a reminder to the cabinet secretary that the principal purpose of this Parliament is not for ministers to transmit the will of the Scottish Government to MSPs and to the people but for MSPs to transmit the will of the people to the Scottish Government. People are looking to the Parliament to show a lead, to be bold and to make progress from the Scottish Government’s nine years of frozen initiative, annual budgets, short-term programmes, missed opportunities and lack of imagination.

In the 2015 general election, the Scottish National Party claimed that it would form a progressive anti-austerity alliance, yet its flagship policy of the council tax freeze was, and is, not progressive but regressive, in that it benefits most the richest people in the biggest houses. Of course, it has not countered austerity, either; it has deepened it. People are complaining that local authorities are introducing and putting up charges. What do we expect when the council tax has been frozen for nine years?

The Labour Party’s stance in this debate is straightforward. We should be using a universal and progressive system of taxation on property to invest in the collective provision of public services to lift the whole of society. Instead of using local charges to raise revenue for local government, we should be using fair taxation on the basis of the old socialist idea of from each according to their means to each according to their need.

I do not doubt that we need to change the mood of the country to open people up to the possibility that it can be better than this, and to the idea that good, democratic, accountable public services demand good, democratic, accountable public investment. The question before us is not whether we should raise the money, but how we should raise it. To the Conservative Party I say that we in Labour reject the view that the wellbeing of others and the public interest are achieved only when people pursue personal self-interest. We stand for need before greed and people before profit.

When the SNP first formed a Government in 2007, it did so, as we have heard, on the basis of scrapping the council tax. The SNP even hailed it as

“the biggest tax cut for Scots in a generation”,

which could only have been a reverential nod to the infamous Lawson budget of 1988, which brought about the abolition of all but one of the higher rates of taxation, bountiful tax cuts for the better-off and the biggest tax redistribution from the rich to the poor in the whole of the last century. Of course, the SNP’s proposed local income tax was neither local nor a tax on income. The tax was to be set nationally by the nationalists, and it was a tax on earnings rather than a tax on income; income from interest payments and income from share dividend payments were excluded.

The Labour Party’s stance is clear. We need to ensure that a tax on property remains, because property plays a central role in wealth accumulation and wealth inequality. According to Shelter, the wealthiest tenth of households possess five times the housing wealth of the poorest tenth. Wealth inequality is twice as big as income inequality in this country. According to the report by Shelter called “Know your place”,

“Housing is the single greatest repository for wealth held by individuals in the United Kingdom.”

Therefore, if we are to seriously tackle inequality, we need to concentrate not just on income inequality but on wealth inequality.

Let us win the battle of ideas and persuade people that local government can be an agent of change, a vehicle for investment, a generator of jobs and a provider of publicly run public services and—who knows?—a bit of municipal socialism, too.

We need new horizons. We should be according our old people the dignity that they have worked for, our young people the chance of a job, fair work and a decent home and our children good education. We have it in our gift to create such things, if only we had the will, the courage and the determination.

This does not depend on independence—we can use the powers of this Parliament to do it now. Let us seize this chance to make that change and have the courage of our convictions.


One of the big successes of the Scottish National Party in Government has been the end of the ring fencing of local government funds. When I was a Glasgow councillor under the Labour-Liberal Democrat administration between 1999 and 2007, there was constant cross-party complaint about money being ring fenced. Glasgow might have invested well in libraries, for example, only for a pot of money to appear that was ring fenced—for libraries. I am therefore very pleased that local authority control has been increased under the SNP.

The next question, though, is how we reform local taxation. Again, I believe that we should try to give councils as much control as possible in the same way that we have done with expenditure. Moreover, the fact is that the council tax is not fair and the rich are paying too little.

One of the main conclusions of the commission when it reported last December was that there is no easy solution to this challenge and no one single tax that meets all requirements. Property tax usually does not take full account of income, while income tax can miss out the wealthy who have a low income. My key personal targets in any reform would be to ensure that those with wealth and those who have a higher income pay a fairer share.

Clearly we face certain practical constraints along the way. I have had the land valuation tax proposal explained to me a number of times and it seems attractive in principle. However, I—and I suspect other colleagues—would struggle to explain it in turn, which means that the challenge of getting a wide public understanding for it would be huge.

Will the minister give way?

If the member does not mind, I will not give way, because I have quite a lot that I want to cover. I should also say that I am not yet a minister, and probably never will be. [Laughter.]

Local income tax is also attractive, at least for part of the tax base. However, given the present system, in which Her Majesty’s Revenue and Customs has a monopoly on collecting income tax, it might well be impracticable. As a result, the commission’s broad conclusion to make property and income the main basis for local taxation seems good to me. As it also suggested, allowing local authorities to add smaller taxes such as environmental, resource, sales, or tourist taxes would give additional freedom and accountability at local level.

I was extremely disappointed by the decision to leave the European Union, but obviously we now need to grasp any opportunities that might come along. One opportunity might be to vary VAT rates in the UK, which is something that is not allowed under EU rules and which is why VAT is being assigned in part to the Parliament. As a result, Scotland could have a different VAT rate from the UK and local authorities, too, could set a different rate from the rest of Scotland.

On property valuation, I think that, if we assume that there is to be a local property tax of some kind, we need to get closer to the real valuations of people’s homes. In that respect, I accept Bob Doris’s point in the medium term. The current very broad council tax bands mean that people get incredibly upset if they slip into a higher band. In Glasgow, for example, a move from band D to band E means an extra £360 per year. Moreover, the fact that new properties, of which I have many in my constituency, are assessed at 1991 valuations strikes everyone, including me, as difficult to understand and unsustainable.

I also believe that we need to look at revaluation because no account has been taken of relative changes in property prices since 1991. When I asked one of my staff to look at relative property price changes in the east and west of Glasgow since 1991, I found the results pretty staggering. In 1991, the average price of a sandstone flat was £27,000 on Shettleston Road in the east end and £60,000 on Hyndland Road in the west end. The flat on Shettleston Road has gone up to roughly £63,000, or less than 2.5 times, while the flat on Hyndland Road has gone up from £60,000 to £326,000, or more than five times. That suggests to me that the poorer parts of Glasgow like the east end are paying more than their fair share of council tax, and having no revaluation will favour richer people in the richer areas and disadvantage the ordinary people in the poorer areas.

The commission’s report mentions houses that are worth 15 times as much as other houses but whose council tax is only three times more. That will change to 3.7 times more under the proposed changes to bands E to H, but I wonder whether 3.7 is really fair enough.

I accept that a revaluation of properties has problems, such as the administrative cost and serious increases for some house owners, but it has been 25 years now, and the longer we wait, the worse it gets. If we are sticking with a variation of the council tax, we need to consider that. I accept that it will not be this year, but we need to consider it in the not-too-distant future. If we are moving to a different property tax, we need it to be closer to actual values from the word go.


I am delighted to make a contribution to a debate on a subject that has, over many years, generated much heat and exercised the minds of members of various commissions that have been set up to look into the matter, but which remains such a live issue.

For over 400 years, two things have largely been acknowledged as central to the acceptance of local taxation—first, that the usual method of tax collection has been through a tax on property, and secondly that tax that is raised locally is spent locally. I will return to that later in my speech, although I note with interest what the cabinet secretary said earlier.

Over the years, a number of attempts have been made to reform how money is raised to contribute towards the cost of local services. In 2006, the Burt commission’s proposal to charge a percentage of the capital value of properties was dropped like a hot potato by the Government of the day. The first SNP Government was elected with plans to introduce a local income tax—another plan that was dropped when the many flaws of such a scheme were brought home. The commission on local tax reform was next to have an attempt at resolving the issue but, whilst calling for an end to the council tax, it did not propose a specific new system to replace it. Then, largely ignoring that commission’s work, the SNP Government sought to move forward by supporting the recommendations of the commission for competitive and fair taxation, which was set up by the Scottish Conservatives.

My colleagues and I usually do not mind the SNP adopting sound Conservative ideas, but—and this is a big but—the SNP has certainly put a sting in the tail. While my party supports increasing the multiplier in only the top two bands, the Government intends to increase the tax burden on the 535,000 families who live in homes in bands E and F, thus penalising many hard-working people on middle incomes who might not benefit from any reduction scheme.

Will the member give way?

I am sorry. I have too much to say.

Thanks to the SNP Government, some 535,000 households will be asked to pay more than they need to pay.

Will the member give way?

I am sorry. I have too much to say.

Not content with asking people on middle incomes to pay more, the SNP Government also proposes to change something that has been central to acceptance of the system for hundreds of years: the principle that tax that is raised locally is spent locally. I believe that national taxation is the vehicle to iron out disparities between communities, not the sending of tax that has been raised in one area to other areas.

Will the member take an intervention?

No. I am sorry.

Local taxation is to meet the specific needs of the community from which it is raised. On that, I am happy to agree with the Labour president of COSLA, David O’Neill, whose comments on the planned changes were mentioned by John Scott.

If the Scottish Government is determined to press ahead with the proposals and it forces middle Scotland to pay more, the least that many people will expect is that the extra money will contribute to the maintenance of local services in their community and not be siphoned off for a policy—no matter how worthy it is—that should be funded nationally.

Will the member take an intervention?

The member is not taking interventions.

Council tax now accounts for the raising of only about 12 per cent of town hall expenditure, the percentage having fallen dramatically in recent decades from a split of approximately 50:50 between money that was raised locally and grants from central Government. That has meant that councils’ discretion to raise money has been much reduced. Now, with the ending of the council tax freeze, the SNP again steps in with its centralising agenda—over the heads of elected local councillors—and attempts to take local money to fund a national policy, thus continuing the process of reducing councils’ discretion to meet the aspirations of local residents.

I believe that we must take the opportunity to restore that discretion, not continue to remove it. The Government must abandon the constant centralising of power to itself at the expense of local councils. Councillors have a vital role to play in our democracy, but without giving them discretion, and indeed responsibility, interest in local councils and turnout at local elections will diminish.

I remind the chamber of part of the remit given by the Government when it established the commission for local tax reform—the requirement to consider the impact of alternative local tax systems

“on supporting local democracy, including on the financial accountability and autonomy of Local Government”.

I urge ministers to look again at their centralising and penalising proposals, to remove the increased tax burden from middle income families and to maintain the principle that taxes raised locally are spent locally.

I remind members that the time allowed is a tight five minutes, which means that they should err on the other side. I call George Adam.


Thank you, Presiding Officer, for hinting that I should make haste with my speech.

As a former local councillor, I understand how important local government is and how councillors can work to make a difference in their local communities. I am also aware that local taxation has always been a hot topic, because it is the one tax that a member of the public can actually tell someone how much they are paying to the exact amount. Unlike other forms of taxation, it does not come out of their salary at source; they pay it themselves directly and that is what makes it so controversial, because they look at the local authority and ask, “What am I getting for what I’m paying?” We can see from the Government’s ideas, beliefs and proposals that it wants to give local government the opportunity to be more flexible and open about its finances, and that demonstrates that we are moving towards a position of showing that we can make local government accessible to members of the public.

Another thing that has been mentioned in the debate is that every one of us in this chamber believes that we have to do something to bridge the educational attainment gap. We all agree on that part of the debate, and the fact that the Government has said that the £100 million that will be raised will be used to close the educational attainment gap is part of something that we have all bought into, whether that is done by local authorities or by the Scottish Government itself. When members of other parties say that that is an issue, I feel uncomfortable with that.

I ask the member to reflect on what he has just said. Of course we all support action to close the attainment gap and to improve educational outcomes for all young people, but it is untrue to suggest that the political parties across the chamber have bought into the idea of in effect hypothecating local revenues to pay for a national policy.

It is about delivering in the real world so that the attainment gap is actually bridged. If we have to find a way to make that happen by working in tandem with local authorities, I see that as a way forward.

One of the most important aspects that we must consider is the fact that the Scottish Government’s proposals are protecting household incomes in Scotland, and that 2.4 million households in Scotland will be protected from any undue rises in council tax in 2017 by the capping of increases at 3 per cent. That ensures that our communities, families and friends will not return to the sky-high annual tax increases that they received in years gone by. Before this Government came into power, a lot of individuals in our communities were paying for rises of up to 60 per cent over a period, and it is important that the public are protected from that so that there is flexibility and so that people can see value in local government. I am a great believer in local government.

Will Mr Adam take an intervention?

Yes, I will, because the way you hold your hips just kind of made me stop there.

I know you like it, George.

Mr Kerr, I do not think that you should read anything into that.

Given that point, George, how would you respond—

Please use the member’s full name.

How would George Adam respond to The Press and Journal talking about families in Aberdeen and Aberdeenshire handing over £47 million that is to be pumped into educating youngsters in other parts of the country?

My belief is that bridging the educational attainment gap is the responsibility of every single one of us in the chamber. We should desire that every child in Scotland, regardless of where they are born, should get the opportunity. If Mr Kerr wants to play politics and just keep certain things or look after his own wee patch, he can carry on. I want to look after the people of Scotland and ensure that they get that opportunity in future.

Many of us know what local government does but, as a former local councillor, I think that we have to make sure that local government is scrutinised so that it is open and transparent. I appreciate the fact that the Scottish Government and cabinet secretary see this as a starting point, because the commission itself saw what we are doing as only a starting point.

I have here an email that I received earlier:

“I stay in Paisley and have a house in Band E.”

The house next door is

“worth approx. £50,000 more than my house yet is only Band C ... As an SNP member, I have emailed my local and regional parties to support a full review, but the reply they sent was fluff.”

Is that a fair description of the Government’s policies?

I do not remember saying that to anybody. If anybody came to me with that case, I would take it very seriously. I do not believe I would say it was fluff in any shape or form. We have to deal with that issue.

I see where we are as being a start. Others have talked about land tax and other ideas, but we are delivering for the here and now and taking the opportunity to make sure that we can get the money so that local government can build and look to the future. Let us see what we can deliver further down the line.


The question of how we properly fund our local authorities is crucial to the public services that we all rely on, our schools, our local economies and particularly to the most vulnerable people in our communities.

It is those vulnerable families who are being hit the hardest by the Government’s continued underfunding of local government. Those who are least able to cope with service cuts are bearing the brunt of the SNP’s 11 per cent cut to our local authorities. As Kezia Dugdale said at First Minister’s questions earlier today, that is more than double the rate of the Tories’ cut to the block grant.

On this side of the chamber, as Jackie Baillie pointed out, we recognise the need for fundamental reform of local taxation. We are committed to abolishing the unfair council tax once and for all. We support the introduction of a fairer system that is based on the value of a property, so that nearly 2 million households will be better off. Our calculations are based on modelled evidence that was provided to the commission on local tax reform, and on which all four parties are now relying.

We would also broaden the tax base and empower local government by devolving new tax-raising powers such as a tourist tax and a land value tax. Such devolution of power to local authorities is long overdue and it would allow them to raise revenue from previously untapped streams. It would also allow our local authorities to ensure that everyone who benefits from local services contributes to them, with the richest paying their fair share. A number of local authorities have called for these powers, including Renfrewshire Council, which the cabinet secretary and I represent.

It is also important to note that Scottish Labour has said that we would raise additional revenue through income tax. By asking the richest in society to pay a 50p top rate of tax, we would generate additional money that we would use to invest in public services such as education.

If we want first class public services, we have to pay for them. Actions have to match the rhetoric we hear so often in the chamber. We will not succeed in improving our education system and closing the attainment gap if we continue to slash the budgets of local authorities and limit their ability to invest in our young people’s future.

The report of the commission on local tax reform states:

“The present Council Tax has therefore rightly become discredited in the eyes of the public ... it was made clear to us that people expect a change.”

A decade on from their promise to scrap the council tax, the Scottish Government’s proposals are still not nearly bold enough.

It is not just me saying that. As Andy Wightman said earlier, the SNP Government’s own poverty adviser Naomi Eisenstadt is also calling for bold action. She said that

“local tax reform is a real opportunity to protect the incomes of both the working poor and those at risk of in work poverty. But it will require boldness and vision.”

I am from Aberdeenshire and I am interested to know what the member thinks about the situation of people in that area, where house prices are very high. If there was revaluation there, it would really impact on people who do not have high incomes, such as teachers and those who work in public services. I feel that there may be something missing—

Can you just make it a short intervention? I think that you have made your point.

Our proposal will result in 80 per cent of people—2 million households—being better off and we are committed to ensuring the fairest possible new replacement tax.

The Scottish Parliament information centre has described the Government’s proposals as falling

“short of making the Council Tax a ‘proportionate’ tax”.

The commission says that

“the present Council Tax system must end”

and that local tax needs substantial reform. In his motion today, Mr Mackay talks about “the opportunity for change”. I hope that that is exactly what his appointment as finance secretary will mean, for not just tax reform but his constituents in Renfrewshire and Inverclyde.

I hope that when Mr Mackay announces his budget, he ensures that Renfrewshire and Inverclyde will see much-needed increases in their funding. It is quite simple—a cut to the local authority budget is a cut to councils such as Renfrewshire and Inverclyde and it will be his constituents and people across Scotland who will be the ones who continue to suffer the consequences.

Finally, the cabinet secretary faces a choice on local tax reform. He can work with Scottish Labour to abolish the council tax completely and replace it with a fairer property-based system, which would see 80 per cent of households pay less, or he can continue with what Professor Kenneth Gibb described to the Local Government and Communities Committee as a “political fudge” that does not resolve the underlying problems. The cabinet secretary’s constituents and people across Scotland deserve a lot better than that.


I welcome the report of the commission on local tax reform, as well as the opportunity to contribute to this debate on reforming taxation. It is probably fair to say that some will consider the new council tax to be less regressive as opposed to more progressive, and I recognise that much remains to be done as we work towards creating a fairer and more sustainable system of local taxation. However, what is proposed is an improvement.

As has been made clear, the changes that will come into force from April of next year represent an important first step. I welcome the fact that the Scottish Government remains open to further change and discussion, although it is rightfully exercising necessary caution and gradualism and developing a fuller understanding of the potential impacts and implications of any changes before their implementation. An example of that goodwill in relation to further discussion and reform is the commitment to consult on enabling councils to levy a tax on development, and vacant and derelict, land to reduce land banking and increase the supply of homes.

Although the current reforms may not go far enough for some, they will undoubtedly leave us in a better place than we were before, and I welcome the variety of contributions that we have heard from across the chamber. As a member of the Local Government and Communities Committee, I can answer Kate Forbes’s question to Andy Wightman. The information that we were given by SPICe was that a revaluation would cost between £5.5 million and £7 million and would take two to three years.

There is no such thing as a perfect tax and I do not think that anyone is claiming that these reforms will solve all the problems, but they are by no means the end of the road.

I will move on to talk about some of the good things that are coming from the reforms. The council tax changes will work towards the redistribution of wealth in our society from those who can most afford it to those who most need it.

Does Ruth Maguire not agree that those in bands E to H are not necessarily the rich or the wealthy? They are actually middle-income families in areas of high-value property, such as Aberdeen and the north-east.

It is fair not to make assumptions about people who live in a particular type of property, but the cabinet secretary set out in detail what is being done to assist those families who would struggle to pay. Those in the four lowest bands, A to D, will experience no increase in council tax. That means that there will be no increase for three out of four households, and that the poorest households in particular, which are already suffering under Tory austerity, will not be hit by any increase in council tax.

The Government’s plans to extend the council tax reduction scheme further will ensure that nobody is disproportionately affected by those increases. For example, those who live in high-banded houses but who have an income of less than £25,000 will be exempted from increases through the council tax reduction scheme. The child allowance within the scheme will also be increased by 25 per cent, which will be a further boost to low-income families across Scotland and will help nearly 140,000 children.

Figures that were released by Scotland’s statistician in June 2016 showed that the council tax reduction scheme already supports half a million Scottish households and its extension will support tens of thousands more. More important still, the £100 million that will be raised from the increase in council tax on the four highest bands will be invested in our schools, thereby supporting our wider progressive aim in Government of closing the educational attainment gap between the most and least deprived children in Scotland. The cash that is raised for education will be spent by headteachers themselves, in a concrete example of the Government’s commitment to empowering schools and giving headteachers greater autonomy.

Local government will also be empowered through this reform.

Does the member think that it is acceptable to increase the autonomy of headteachers while decreasing the autonomy of our local authorities?

There is an argument to be made that headteachers and schools know how best to spend money on education and are best placed to help us to close the attainment gap.

We will make local government more financially accountable to its local communities and give local authorities greater responsibility for their own finances, leading to less dependency on grants from central Government.

As we go forward, I stress again that this is a first step, and I welcome the Government’s openness to doing further work. I urge all parties, local government and wider society to focus on the real and positive changes within the reforms and to work constructively with us over the coming session of Parliament as we implement the first steps towards creating an even fairer and sustainable local taxation system.


I am very glad that we have had this debate. Derek Mackay also welcomed the debate and said that the timing was beneficial; I am sure that he is grateful to the Greens for pushing for the debate to happen in the first place.

We were clear that a debate on the report of the commission on local tax reform should happen before the Scottish Government asked Parliament to vote on its modest adjustments to council tax. It is important that we have had that opportunity.

Most members, in their contributions today, have placed the issues in historical context. A lot of members have brought up their favourite quotes and speeches from 2007. I will pick one totally at random—it is Bob Doris’s speech from 2007. We all enjoy Bob Doris’s passionate speeches. He said:

“The detestation that society felt for the poll tax in the late 1980s and early 1990s still exists for the council tax.”

He also told us:

“I believed that there was a clear majority in Scotland in favour of scrapping the council tax. We must strive to find such a majority in this chamber too—a majority that cuts across traditional party lines”.—[Official Report, 21 June 2007; c 984.]

That is still as true as it was when he said it.

I have here another speech from as far back as just a year or so after devolution began, from my party’s first parliamentary incarnation, Robin Harper, setting out our position on land value tax. In fact, Andy Wightman reminded me a few minutes ago that even Lloyd George is due some credit in the debate.

The debate goes back a long time in history, and yet Derek Mackay tells us that this is not the end of the story but the beginning, and that the journey has only just begun. I am not sure that I can take that argument seriously.

Mr Mackay complains that the concept of progressivity is absent from Murdo Fraser’s amendment. More to the point, it is absent from Government policy, and that is the issue that we are here to debate today. We are debating not only the marginal changes that will happen with the multiplier, but the context of rate capping being reintroduced by policy announcement instead of by statute, and the co-opting of resources from local taxes for national policies at the very time when we now have national tax powers to raise the revenue that we need for national priorities.

Murdo Fraser gave us his own unique take on the history of local taxation debates. Although he argued for the simplicity and ease of collection of the current system, he acknowledged its serious flaws. Critically, his amendment sets out the flaws in Scottish Government proposals for adjustment. Murdo Fraser contrasted the commission’s conclusions with his party’s proposals for adjustment, which bear some similarity with current SNP policy. There was a little history from Jackie Baillie, too. She co-opted some of Nicola Sturgeon’s speeches, to attack today’s SNP policy. She said that tinkering around the edges is not what the commission called for.

It is worth recalling that when the commission was proposed, it was explicitly expected that political parties would offer their proposals for serious change to the people at the election. Now we are told that today is just the beginning of the journey. If real reform is to be achieved during this parliamentary session, it will be without the opportunity for voters to have their say.

As my colleague Andy Wightman said, a central conclusion of the commission was that this parliamentary session offers an opportunity that should not be missed. Andy Wightman also set out some of the treaty obligations around local control of rates and resources. The Scottish Government’s proposals fly in the face of those obligations.

Andy Wightman cited the injustice that is experienced by some of his constituents—injustice that will not be addressed by the Scottish Government proposals. Mr Adam said that we should deal with such cases. Yes, we should, but we will not deal with them by adopting the Scottish Government’s current proposals.

Andy Wightman also gave the roll-call of opposition to the Scottish Government’s minor, marginal adjustments at the edges of council tax, and he challenged the Parliament to rise to this opportunity. Greens have done so. Not only have we proposed an alternative statutory instrument, which the Scottish Government could adopt, but we have published “Fair funding for public services”, which sets out a five-year transition to a better local taxation system, with more local control. Under our proposals, there would be local economic decision making for our councils and most households would pay less; indeed, there would be a £10,000 tax-free allowance, as well as a system of reliefs for the people who needed them.

Session after session, this Parliament has failed to grasp the issue. The coalition parties did not agree. The minority Government did not have the votes to get its proposals through. The majority Government did not have the will to act. This session cannot fail again.

As for assigning income tax, Mr Mackay knows the problems that arise from a complex mechanism between one level of government and another. He is dealing with those problems right now, as he tries to construct his budget. Let us not impose something even more chaotic on our local councils.

I make one last appeal to the Government. At this very moment, with new tax powers coming to the Scottish Parliament, it is time that we stopped hoarding at national level what should be local decision-making powers. Let us empower local government and allow it to make the choices that it should be—and in most European countries would be—free to make.


Ruth Maguire, speaking for the party of government, said that this is the first step. If that were true, we might be able to try to build on the proposals that the Government has brought forward. However, this is not the first step. Even at this stage, I ask the cabinet secretary and the minister to work with the other parties in this Parliament to look again at the proposals and bring forward an approach that will put local government on a sound financial footing.

Will Alex Rowley reflect on the fact that that is what my motion says? I want to work with parliamentary colleagues to take forward issues that we have debated today. That is the offer in the motion. The Conservative amendment calls on us to do that, too, but suggests that we should not worry about the progressive nature of taxation proposals; in contrast, our motion says that progressivity should be a foundation of our discussions.

The Government motion tries to reach out to the other parties but simply does not go far enough. If this was the first step, the proposed approach would be the way forward. However, as Murdo Fraser, Jackie Baillie and other members pointed out in this good debate, in 2007 the SNP came into government with a promise to replace the council tax. It said that a council tax freeze would be introduced as a short to medium-term measure until it could bring forward an alternative.

At the time, Nicola Sturgeon said:

“Labour’s hated Council Tax is totally unfair, and any tinkering with bands would not make the system any fairer”.

If, in 2007, it was so unfair and any tinkering with the bands would not have made it fairer, why does the SNP seem to be suggesting today that tinkering with the bands will make it fairer?

I was not here in 2007 but, as I understand it, the Government did not get enough support to scrap the council tax at the time, and Labour was in opposition.

The Government has had two full terms of office, but we still have the council tax. In 2007, the SNP was absolutely clear on the issue. Nicola Sturgeon said:

“It’s time to scrap the Council Tax.”

Nine or 10 years later, we are back here tinkering with the council tax. That is nine years during which many local services have been buckling under financial pressure but, yet again, the SNP is bottling it when it comes to bringing forward a replacement. I suggest that it wants to tinker again.

Bob Doris said that the reforms are not the end but the start. However, the SNP has had 10 years and we should be much further forward. Local government cannot continue to take the cuts that it is taking or the impact on communities.

The SNP set up a commission, ignored what it said and brought forward yet again a sticking-plaster solution that will further damage local services while continuing to undermine democracy. Derek Mackay said that it is difficult. This morning, I reread the submission to the commission from Unison Scotland, of which I am a member, and found a comment that best describes where we are at. It says:

“We must find a solution. The problems are not technical they are political. It’s time for some ‘grown up’ decisions to be taken across all political parties.”

Sadly, it seems that, when it comes to funding local services, the only party in the chamber that cannot face up to making such decisions is the party of government: the SNP. Instead, it yet again proposes another fudge that simply fails to address the issues at hand.

Who will be the losers as a result of that failure? For starters, it will be the people who need to access public services. The report “Social Work in Scotland”, which was published this morning by the Accounts Commission for Scotland, shows that social care services cannot cope with the increasing levels of demand and that older people who need those services are being denied them. The situation is predicted to get much worse unless something is done.

On the subject of social work, I suggest that we need an urgent review of children and families services, because the level of underfunding is putting massive pressure on staff and on their ability to meet the growing demands that are being placed on them.

Local communities up and down Scotland are seeing the impact of the SNP Government’s failure to properly fund local government. It affects the local environment. There are cuts to the local groups that are the backbone of community organisations and to youth services, which means that they deliver fewer services for young people in the community. Local libraries are becoming fewer and fewer. Even where local services survive, the increasing charges are a barrier to many people trying to access them. I cannot talk about cuts to local services without mentioning the state of our streets and roads right across the country—the next time you drive over a pothole, just remember: it was the SNP that done it.

Right across Scotland, we are seeing a complete lack of investment in public services, roads and infrastructure. Today, we have an opportunity, which I hope the Parliament will take, to once and for all put local government finance on a sound footing.


This has been an important and interesting debate, and there have been interesting speeches, which started with Derek Mackay’s. He told us while keeping a straight face that the journey has only just begun but, as Jackie Baillie and Patrick Harvie pointed out, that is far from being the case. The journey started a long time ago and has been going round in circles ever since. I thank Murdo Fraser for giving us a unique historical perspective and spelling out some of the issues.

We come to the issue on the back of a report from a cross-party commission that was set up by the SNP but was largely ignored. The commission on local tax reform came up with some proposals that are definitely worthy of consideration, such as revaluation, which Bob Doris seems to agree with. The Conservatives see no merit in scrapping council tax, but reform is needed. We never agreed with Nicola Sturgeon when she described council tax as “hated”, and we welcome the SNP’s conversion, largely, to our way of thinking.

However, we are vehemently against the council tax double whammy that could be unleashed on more than half a million households. Part 1 of the whammy is the automatic rise in tax for ordinary Scots, which councils will have no choice over, and I will concentrate my remarks on that. Part 2 is the potential additional 3 per cent rise in some bands that has not been announced anywhere other than in the SNP manifesto.

Let us deal with part 1. The Scottish Government’s proposal to raise £100 million on the back of councils takes us into uncharted waters. It turns what should be a local tax that is set locally and spent locally into a national tax that is set and spent by the Scottish Government, although it is collected by someone else.

I think that Graham Simpson was in the chamber when I said that every penny that is raised through council tax will stay with local authorities. The adjustment that we make will be to the revenue support grant, in a similar fashion to what happens with business rates, which the Conservatives do not seem to object to. The Conservatives do not seem to understand local government funding. Council tax will stay with local councils—how much clearer can I be?

I thank Derek Mackay for setting that up for me. As he well knows, there is no mechanism for the Scottish Government to take council tax from councils. It will grab the money in another way, by cutting the grant, as he well knows.

When I challenged John Swinney last week to explain why the change should not be seen as more centralisation, he was unable—or unwilling—to answer the point. That is because it is more centralisation. It is a dangerous step towards goodness knows what form of local government reorganisation the Scottish Government has in mind.

The Scottish Government’s proposals breach what has been a central tenet of our taxation system thus far: that the taxes that we pay are set by the politicians who are elected to spend them. If the tax is council tax, it should be set by councillors, which is a point that is apparently lost on George Adam. If national Government wants to raise money, it should use the levers that are available to it, such as income tax, and it should not get others to do its dirty work.

In the 1760s, the American politician James Otis said:

“taxation without representation is tyranny”.

Although I would not put what is being proposed quite as strongly as that, it is a very serious matter—in fact, it is unheard of. Money has been ring fenced in the past, but it has still been passed to local government to spend. What is proposed is entirely different. It could be called the robbing Peter to pay Paul tax, or, for the purposes of next year’s council elections, the nat tax. It is outrageous for the Scottish Government to get someone else to raise money for it.

People must be under no illusion that, when they receive their higher council tax bills next year, some or all of that increase, depending on where they live, will be down to Derek Mackay and John Swinney—two political highwaymen who are riding off with their swag bags and chortling to themselves that it will be councillors, and not them, who will get the blame. The Scottish Government’s motion has a brass neck for mentioning local accountability, because that is precisely the opposite of what the SNP proposes, and that is why we lodged our amendment.

Let us look at some of the detail. A lot is missing so far. We know, for instance, that there are disparities in the increases that people across the country will pay. Someone who happens to live in a band E property in Aberdeen will pay an extra £113 a year. For someone who is in a band H home there, the figure will be £554.

Will Graham Simpson give way?

Mr Simpson is in the final minute of his speech.

That is sad, as I would have been glad to give way to Mr Stewart.

For those who live in the Western Isles, the increases will be £94 and £461 a year for band E and band H properties respectively.

Big questions are still to be answered. Mr Swinney has not yet told us how the money is to be divided up, under what criteria and by who, and nor do we know what the mechanism for taking the money from councils will be. We can guess at it, but it is not spelled out in the legislation, and that may even be illegal under European law, as Andy Wightman said. You could not make it up. Council tax needs reform, but the way to do that is not to turn it into a national tax.


It is fair to say that we have had an interesting debate. Before I address some of the points that have been made, I will reflect a little on the wider policy context. First and foremost, we have all been able to draw on the definitive work of the commission on local tax reform, which was chaired by not only Marco Biagi but David O’Neill—I say that to set the record straight for Jackie Baillie. I thank all the commissioners, who invested considerable time and effort to deliver a report that brings the issues alive and which set out the impacts of change and how they might be administered.

The commission talked not only of property taxes but of income and land taxes. As the cabinet secretary said, this is the beginning of a journey. We have put forward proposals to readjust council tax and we will consult on a vacant and derelict land tax and on the assignation of income tax, which will cover all three areas that the commission considered.

If the journey is just beginning, when on earth will it come to an end?

With the co-operation of all parties, we can discuss the way forward, and then we can maybe see when we will come to an end. Mr Rennie earlier suggested a new land value tax, which was not mentioned in his party’s manifesto. No one has indicated today how long their proposals would take to implement, and the Conservatives have not given us any proposals at all.

In developing the reforms that are before Parliament, the Scottish Government has maintained adherence to the Adam Smith principles of taxation: efficiency, convenience, certainty and being proportionate to the ability to pay. For all its flaws, the present council tax does in fact tick some of those boxes. It is efficient to administer. Administration costs only 1.9 per cent of the total that is collected in taxes. Payment is not administratively burdensome; rather, it is relatively convenient. Certainty for the taxpayer is crucial in these tough times, as people need to be able to plan and budget. Is the present council tax proportionate to the ability to pay? On its own, it is not. “Just Change” highlights that very issue, but there is a system of reliefs to council tax that take account of need and income.

The minister tells us that people need to be able to plan for their financial futures—so do our local authorities. How on earth does assigning a proportion of income tax and, I assume, abolishing council tax and leaving councils reliant on unpredictable income sources give them the ability to plan for the future?

As I said, we will consult local authorities to allow them to plan for the future.

The Resolution Foundation has said:

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

Many people seem to have disagreed with that today, but the reality is that the policy is more progressive. Meanwhile, from their amendment, it seems that the Conservatives want to take progressivity right out of the equation. As the Cabinet Secretary for Finance and the Constitution described, the council tax reduction scheme means that net council tax liabilities are progressive for the lowest-income households.

Our reforms to the council tax also reflect a pledge by the First Minister—the commitment was repeated in our manifesto—that the additional revenues that are raised will contribute towards raising standards in schools and closing the attainment gap, which will deliver opportunities for our young people, no matter what their family background is. However, anyone who listened to some of the speeches today would think that the Government was going to take the £100 million and keep it all for itself. The reality is that that money will go down to local levels to support children and raise attainment in this country. Surely all parties in the Parliament should welcome that ambition.

Can Mr Stewart tell me who will divide up the £100 million? Will it be councils or the Government?

We will discuss those issues with local government—that has been made clear from the start. [Laughter.] I do not see what is funny about that. That is the way in which we normally conduct business: we consult local government and come to an agreement.

Will the minister give way?

No—I will not take an intervention.

Another thing that seemed to be lacking today was a basic understanding of how local government finance works with regard to distribution methodology. We have agreements with local government about needs-based distribution that have been on the go for years. That happened under previous Tory Administrations and under previous Labour and Liberal Democrat Administrations. I do not know what is different now.

I will address the issue of distribution. The approach is not about raising funds in one council area to distribute to another, even though the redistribution of public money on the basis of need is a long-established and fundamental principle of the funding that we provide to local government; rather, it is about raising educational attainment. Any council that chooses to increase council tax will keep all the additional revenues from that tax rise, so local financial accountability is preserved. Councils will still retain all council tax that is raised in their area. No council will be financially worse off, but an additional £100 million each year will be available to spend on schools and children and on getting to grips with the attainment gap.

Will the minister give way?

The minister is in his last minute.

Other parties proposed changes to taxation in their manifestos of May this year, with receipts to go directly to schools. Our manifesto proposed that the additional funding that council tax reform raised would be allocated directly to schools, on the basis of eligibility for free school meals, from 2017-18. That is best for our kids. The proposal is not about centralising power; it is about empowering schools to create the best possible opportunities for our young children. Some folk in the chamber do not seem to want that to happen at all.

We heard from some members about revaluation. According to the Scottish Assessors Association, revaluation would cost some £7 million or £8 million and would take two to three years. Beyond that, it would hit places such as Aberdeen and Edinburgh, where the rate of house price inflation has been highest, the hardest—something that Mr Kerr missed out of his speech.

You must wind up, minister. The next debate is waiting to start.

The debate has seen the fulfilment of—

I am sorry, minister, but you must conclude. The next debate is already squeezed.

I urge all members to support the Government’s motion.