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Chamber and committees

Meeting date: Wednesday, March 28, 2018

Meeting of the Parliament 28 March 2018

Agenda: Portfolio Question Time, Bus Services, Local Taxation, Business Motion, Parliamentary Bureau Motions, Decision Time, Earth Hour 2018


Local Taxation

The next item of business is a debate on motion S5M-11290, in the name of Andy Wightman, on scrapping the council tax. I call on Andy Wightman to speak to and move the motion. You have nine minutes, please.


The last time that Parliament had a debate on the future of local taxation was in September 2016, when, rather typically of such debates, we ended up by not agreeing to anything. However, had Douglas Ross, formerly of this place, not been in Switzerland at a football training camp, Parliament would have agreed by a majority to have further discussions. All members did, in fact, vote for amendments that committed them to doing that.

Today, we have an amendment from the Government that says that it is

“open to further dialogue on options for local tax reform.”

I do not have a problem with sitting down to discuss local tax options except that that is precisely what I did—and, indeed, what Jackie Baillie did—in the commission on local tax reform. Our final report, which was published in December 2015, contained 19 recommendations, the first of which was expressed in unambiguous terms:

“The present Council Tax system must end.”

Our two concluding recommendations noted that, with the good will that had been established between Labour, the Greens, the Liberal Democrats and the Scottish National Party, the time for local tax reform had come. The report concluded by saying:

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

However, since September 2016, no substantive discussions have taken place. If discussions are to be meaningful, they must have a clear focus, which needs to be a commitment to scrap the council tax, with all its associated flaws. If we cannot agree on that, we are failing to live up to our responsibilities.

Many of us would keep the council tax in the absence of a better alternative. We cannot resolve to scrap it unless we know what we are proposing to replace it with. What is the Green proposal? Is it a garden tax?

This debate has been bedevilled by claims that we must keep an out-of-date, archaic, regressive tax because we cannot agree on what should replace it. If we are to get rid of that logjam, we should agree to get rid of the council tax and, as our motion suggests, have an implementation group come up with an agreed system for the future.

That is why, at budget time this year, my colleague Patrick Harvie made clear that the Scottish Greens will be unable to enter budget negotiations for 2019-20 unless meaningful progress has been made on local tax reform. He wrote to the First Minister outlining short, medium and long-term options and making clear that negotiation between the parties will be necessary if progress is to be made.

In her response early this month, the First Minister noted a range of initiatives that are under way, including the Government’s tinkering with the council tax, the Planning (Scotland) Bill and the Scottish Land Commission. In other words, she proposed to kick the can further down the road, ignore the commission that she established in February 2015 and wait for more reports, reviews and debates.

Greens are not prepared to wait any longer. We want action that includes as a bare minimum an unequivocal agreement to scrap the council tax. It is a fundamentally bad tax, and I am disappointed that the Government continues to believe that minor tinkering will make the meaningful changes that are needed. In particular, I reject the First Minister’s claim that changes to the council tax have tackled the fundamental regressiveness of the system. I also reject Derek Mackay’s claim in his amendment that the 2016 changes make the council tax “more progressive”. In fact, they make it marginally less regressive, which is a long way short of being in any way progressive.

For the record, I note that taxes can be regressive, proportionate or progressive. Regressive taxes are those where the lower the value of the tax base is, the higher the tax rate—that is the council tax. Proportionate taxes are those where everyone pays the same rate, such as 1 per cent. Progressive taxes are those where the higher the value of the tax base is, the higher the tax rate, as is the case with income tax. The commission’s report showed clearly that the council tax is—and it remains—one of the most regressive taxes in the United Kingdom, in relation to the value of the property and income. The changes that were made in 2016 do not change that.

If members need reminding of that, they can read the report that the Resolution Foundation published last week, “Home Affairs: Options for reforming property taxation”, in which the authors note that someone who lives in a property that is worth £100,000 has

“around five times the effective tax rate ... of someone living in a property worth £1 million.”

The authors articulate the four broad reasons why that is the case. First, the very wide bands mean that properties with widely varying values pay the same tax. Secondly, the fixed multiplier of tax rates between the bands is such that the ratio between bands is far, far less than the ratio of the tax base. Thirdly, property values are more than a quarter of a century out of date. Fourthly, there is huge regional variation. For example, band D properties in Edinburgh are far more valuable than band D properties in Inverclyde.

The Resolution Foundation goes on to argue that, because of its gross regressivity, the council tax looks increasingly like the poll tax, which it replaced, and that its failings are such that the youngest households are hardest hit, because young people increasingly live in properties in the lowest bands.

In her first report, “Shifting the Curve”, Naomi Eisenstadt, the First Minister’s independent advisor on poverty and inequality, urged ministers:

“Be bold on local tax reform”.

She went on to say:

“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.”

That moment of political decision was ducked, but now—three years out from the next Holyrood elections—can be that moment. We have the time to begin a process of fundamental reform and to transition to a fair, modern, transparent and flexible system. Instead, the finance secretary and his colleagues routinely turn up to the chamber and committees and tell us that progressivity lies at the heart of their tax plans. With respect to the council tax, progressivity clearly does not lie at the heart of ministers’ plans.

I understand that some take the view that, as Murdo Fraser observed a few moments ago, in the absence of agreement on a replacement, we should not scrap the council tax yet. However, if not now, when? A succession of reports, analyses and inquiries have all said quite clearly that this iniquitous, regressive and archaic tax has had its day. The Lyons inquiry and the Institute for Fiscal Studies said that we should scrap it. The commission on local tax reform said that we should end it. The Organisation for Economic Co-operation and Development is clear that it is regressive and outdated. The Joseph Rowntree Foundation and the Adam Smith Institute have said that we should get rid of it. Why are we not able to agree at the very least that, notwithstanding the various views on its replacement, the council tax must go?

The Scottish Greens bring this debate to Parliament today to make it clear that the status quo is no longer tenable. We are focused on the council tax as a start, but the system of local government finance as a whole is not fit for purpose. We need not only to have a new system of local tax, but to give councils far greater fiscal autonomy and to adopt and agree a fiscal framework to replace the annual arguments about the local government settlement. Just as the Scottish Parliament is maturing as an institution, with new responsibilities for raising public finances, local government should be accorded the same status and the same fiscal freedom that is the norm in countries right across Europe.

Constituents of mine are living in band E properties that are worth less than nearby properties in band B, and the majority of taxpayers are paying the wrong amount of tax, so what conceivable justification can there be for us to do anything other than commit to scrap the council tax? Our on-going inability to deal with the issue should shame this Parliament.

If we are unsuccessful in persuading members to back our call today, so be it, but members should hear this: the Scottish Greens are a party of radical democracy. We believe in the capacity of the local state to organise its own affairs, to be responsible for its own finances and to be accountable to the electorate that it serves. That is why, in the next few weeks, I will launch a consultation on a draft members’ bill to incorporate the European Charter of Local Self-Government into Scots law, which will have implications for what we are debating today.

If we reach no agreement on fundamental reform, my party will not take part in budget negotiations at the end of this year. We reject the idea that we can go on any longer with business as usual.

I move,

That the Parliament believes that the present Council Tax system must end; agrees that its replacement must be a progressive alternative, and calls on the Scottish Government to convene a cross-party implementation group by 31 May 2018.

I call on Derek Mackay to speak to and move amendment S5M-11290.2.


The package of reforms to the council tax that was set out in our 2016 Scottish Parliament manifesto has been delivered by the Scottish Government, with the structural changes having been in place since April 2017. As a consequence, the council tax is now fairer. As this debate is essentially about local government funding, I restate my view that local government has received a fair settlement from the Scottish Government.

The commission on local tax reform highlighted that one of the iniquities of the original council tax system was that higher value properties incurred a smaller amount of tax relative to their value than those in the lower value bands. We addressed that by changing the way that council tax is calculated for properties in bands E, F, G and H.

I recognise the reforms that were made in 2016, but I do not agree with the cabinet secretary that they address the fundamental iniquity and regressiveness of the council tax. They do not address the criticism that the commission on local tax reform made that the tax rate for those at the top is less than the tax rate for those at the bottom. That is still the case.

Andy Wightman referred to “tinkering”. The reforms raise more than £500 million for public services, which is retained locally. I would describe that not as “tinkering” but as a substantial investment in Scotland’s public services, and that is before we even get to the matter of locally determined increases.

The Resolution Foundation was quoted. I am mindful that, in relation to the SNP’s proposition going into the Scottish Parliament elections, it said:

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

Will the minister take an intervention?

I have to make progress as I have only five minutes, I have taken one intervention and I have a lot to say on the Government’s position.

It is a fair judgment to say that political parties will attach different weights to the considerations that were set out in the commission on local tax reform. It highlighted the need for relief to be available for low-income households. The council tax reduction scheme provides exactly that, and our reforms enhanced it, especially for households with children. We have increased the child allowance by 25 per cent, and we continue to refuse to follow the United Kingdom Government’s damaging example of applying a two-child cap.

When local taxation was last debated, I was clear that we were on a journey of reform and that those were just the first steps. I was also clear that I was willing to engage. Members are well aware that we have made reforms through the Barclay review of the non-domestic rates system, and we are interested in engaging further on the council tax, but we have been determined to strike the right balance between protecting household incomes and ensuring that our public services have the resources that they need in order to deliver. I believe that our decisions on tax and the allocation of resources achieve that balance.

In our 2016 manifesto, we set out that the time was right, after nine years, to lift the council tax freeze, but that increases would be capped at 3 per cent and not at 5.99 per cent, as applies in England. That strikes the right balance. All councils have now set their council tax rates for the forthcoming financial year, and all have increased the council tax by 3 per cent, which will mean a further £77 million for local services. Without some sort of constraint, taxpayers would risk facing increases such as the 12.5 per cent increase that the Labour minority administration in North Ayrshire proposed for 2018-19. Where we have asked households to pay more tax, we have done so in a reasonable and balanced way. We continue to be committed to making local taxation fairer and ensuring that tax overall is progressive, and we continue to be open to discussing how that might be achieved.

The Opposition parties may be able to provide a critique of the Government’s position or the existing council tax regime, but there is no majority view on a replacement. In keeping with our collaborative approach on taxation and proposals for further reform, there needs to be serious engagement, and not cheap political points.

Will the cabinet secretary take an intervention?

I have very little time left.

I believe that the discussion paper on the role of income tax in Scotland, and the consultation throughout, was an exemplar in engagement on tax. Even if the Opposition disagreed with the final policy outcomes, the process was one of consultation and sound methodology, with clear tests established.

There is no clear alternative proposition to the council tax, which commands majority support in this Parliament, so an implementation forum seems somewhat presumptive. For our part, we have tasked the Scottish Land Commission with exploring the possibility of introducing a land value tax to ensure that we can take an informed decision on that. There is much interest in it, but limited examples of it in operation.

Local government’s role in the dialogue is fundamental. It would have to implement any changes that followed from decisions that we made, it would depend on the revenues that were then collected, and it would have to deal with any shortfall should the reforms be ill-considered. Changes to local tax must be progressed in partnership with local government and with a clear evidence base. In that regard, the commission on local tax reform did valuable work. Our governance review builds on that as we work with the Convention of Scottish Local Authorities to engage the public and look across all our public services in order to understand the changes that can improve lives and bring democracy closer to the people.

For all those reasons, I move amendment S5M-11290.2, to leave out from “believes” to end and insert:

“notes that the present Council Tax system was changed in 2016 to make it more progressive; acknowledges that these changes will result in an estimated additional £500 million over the course of the current parliamentary session; considers that any changes to local government taxation must be done in partnership with local authorities; recognises that the Land Commission is undertaking work on the introduction of a land value tax and that a joint review of local governance is underway, and notes that the Scottish Government is open to further dialogue on options for local tax reform and any plan that would command the clear support of Parliament.”

I warn members that there is absolutely no time in hand, so speeches must be kept to time and absorb any interventions. That is bad timing for you, Mr Fraser. You have four minutes, please.


I thank the Green Party for bringing this debate to the chamber. At least it is consistent in its messages on local taxation, but already in this short debate we have exposed the black hole at the centre of the Green Party’s argument, because we cannot resolve to scrap the council tax without agreeing what we would replace it with.

I listened carefully to Andy Wightman’s speech, but I am no clearer about what the Greens are proposing as an alternative. I have heard them talk previously about a garden tax. I must say that that surprised me, as I thought that the Greens would be in favour of gardens, where they can cultivate their home-grown vegetables—their turnips and marrows—but now it seems that they want to tax those self-same gardens. However, we are not any clearer about what they are proposing.

Will Mr Fraser take an intervention?

I am sorry, but I have only four minutes. Mr Wightman will have a chance to respond in winding up the debate.

Those of us with long memories will recall that, in 2007, the SNP was elected on a clear manifesto commitment to scrap the council tax and replace it with a local income tax. Indeed, the language that SNP politicians used at the time was near hysterical. They talked about the “unfair” council tax or even the “hated” council tax. Of course, once the SNP was in office, even with an overall majority, it took no steps to scrap the council tax, despite all its promises and despite the fact that it was supposedly hated.

As Andy Wightman said, back in 2015, the report of the Scottish Government’s commission on local tax reform said that council tax must go but, just like the Greens today, it could not come up with an alternative proposal. Fortunately, the Scottish Conservatives were there to help out, not for the first time. We established our independent commission on competitive and fair taxation in Scotland, which reported just a month later, in January 2016, recommending that the council tax structure should remain essentially unchanged, but with an increase in the multiplier for the higher bands of G and H. As it happened, the SNP Government rejected the recommendation of its commission on local taxation and adopted proposals that were very similar to those of our commission, although it went further by increasing the multipliers for bands E and F in addition and increasing those for G and H by more than we would have done.

That is where we are. We have already had reform of the council tax, and we do not support further reform of it. Accordingly, we reject the Green motion. The council tax is by no means perfect—no system of taxation is—but it is better than many of the alternatives. The council tax is long established, easily understood, relatively efficient and relatively easy to collect. It is a property tax, and therefore an approximation of a tax on wealth, which is appropriate at a time when we regularly express concern about the bias in our tax system towards taxes on income as opposed to taxes on wealth. Although property may not always be an accurate proxy for wealth, nevertheless, our view is that some sort of property tax should be a component in the overall taxation mix in Scotland, as it is in most other western countries.

Will Mr Fraser take an intervention?

I am sorry, but I just do not have time.

We would support broadening the range of taxes that councils have at their disposal. We would want that to be underpinned by a new fiscal framework between the Scottish Government and local authorities, as Mr Wightman would say. For example, that would involve looking at devolving land and buildings transaction tax to councils and giving them more control over business rates.

There is one more important point to be made, which is covered in my amendment. When we hear parties on the left such as the Greens talking about tax reform, that is often code for higher taxation. The overall income tax burden in Scotland is already higher than that in the rest of the United Kingdom. We do not want discussions on tax reform to be used as a Trojan horse for yet more taxes on hard-pressed Scottish families at a time when our economy is faltering.

We reject the Green plans to scrap the council tax without any clear idea about what would replace it, we support plans to give councils additional taxation powers and we oppose plans for overall increases in taxation.

I move amendment S5M-11290.2.1, to insert at end:

“, but believes that any reform of local taxation should not be used as an opportunity to increase the tax burden on households.”


I thank Andy Wightman and the Greens for bringing forward this important debate, because

“It’s time to scrap the Council Tax.”

Those are not my words; they are the words of Nicola Sturgeon, on 11 April 2007. Eleven years ago, the country was adorned with posters such as the one that I am holding up now, on which the SNP was pledging—

You know how I feel about props.

—to scrap—

Put it down.

—to scrap—

No, put it down.

It is a very important piece of evidence, because it shows Nicola Sturgeon and Alex Salmond pledging to

“scrap the unfair council tax.”

Will the member give way?

Not just now. The reality is that 11 years down the road, we have Alex Salmond—

Will the member give way?

No, not just now. Eleven years down the road, Alex Salmond is a discredited television host, and the discredited council tax is still in place. How can we trust the SNP on local taxation? The changes that it put forward in 2016 merely tinkered around the edges. In evidence to the Local Government and Communities Committee, Professor David Bell said that they did not

“address the concerns ... raised by the commission on local tax reform”

while Kenneth Gibb of policy Scotland described them as “a political fudge”. They did not address the inherent unfairness that people see in local communities and which local MSPs see for themselves in the cases that are frequently raised with them about the council tax’s unfairness.

At the 2016 Scottish elections, Labour proposed to abolish the council tax and replace it with a fairer property tax system based on modelling that was prepared for the commission on local tax reform and which showed that 2 million households—or 80 per cent of all households—would be better off. Surely such a system is much fairer.

Of course, the issue is not just about replacing the council tax but about shifting the balance of power and responsibility and re-empowering local government. In that respect, we have, in recent times, proposed the kind of tourist tax that is used in countries such as France and cities such as Barcelona. This city of Edinburgh receives hundreds of thousands of overseas visitors, particularly during the festival period, and having such a tourist tax makes good economic sense.

Does James Kelly agree that such a tax would have an impact on domestic travellers, who make up 84 per cent of travellers to Scotland?

As the international examples show, a tourist tax has worked fine in France, in regions such as Catalonia and in cities such as Barcelona. It has had economic benefits in those places, and I would argue that it would have economic benefits in Scotland, too. Such a mechanism, allied with the introduction of a land value tax—which I see is gaining traction, even in SNP circles; Alex Neil recently had an article in the Airdrie & Coatbridge Advertiser in support of it—and a social responsibility levy on alcohol sales would raise additional revenue for local councils. Crucially, they would also move more powers to local councils. Things have become too centralised, with local government being penalised by the SNP Government, and this kind of approach would put more revenue-raising powers in the hands of councils.

From that point of view, we very much welcome the Green motion and the suggestion of cross-party talks to tackle this issue and to try to come up with solutions. Time is up for the council tax, and it is time that this inept SNP Government built a proper democratic solution that delivers for local people.

I now move to the open debate, and I ask for speeches of a tight four minutes. I call John Mason, to be followed by Bill Bowman—who will actually have only three minutes.


It is good that we are having this wide-ranging debate and the chance to brainstorm and float a few different ideas. As others have said, there is a lot of agreement that council tax is not ideal, and perhaps most of us would agree that, ideally, we would like to get rid of it. I consider it good that it was frozen for a number of years and that it has now been reformed a bit and allowed to rise.

One problem is that the council tax is based on 1991 values, and any revaluation is likely to lead to significant winners and losers. Those properties whose value has not risen as much in relative terms since 1991—which would probably apply to poorer areas, including those in my constituency—would be winners, because their relative value in Glasgow has fallen. That said, I accept that owners in the west end, where property values have risen by more, might take a significant hit.

Does John Mason recall when he and I used to campaign for the abolition of the council tax? He now talks about reform. Perhaps he could let us know at what point he stopped wanting the abolition of the council tax.

I am going on to that. To give a quick answer, I would support the abolition of the council tax if we could get something better that is agreed on. We need to have agreement from at least two parties on what any replacement should be. The system is fundamental to how Scotland works, and there would be significant upheaval and costs involved in replacing it, as Derek Mackay rightly said, but I would certainly be keen for any new system to have widespread party support and widespread public support and buy-in so that it will stay in place for a good length of time. We cannot change the local government finance system very often.

I hope that we can agree on certain local taxation principles. Local taxation should be linked to the ability to pay, for example. Local government should raise more of its own money so that, as in the Scottish Parliament, what is raised by it and what is spent by it would be more closely matched, and there will always need to be some transfer of resources between richer and poorer areas. I presume that that would be based on need—for example, island costs are higher, and there is more poverty in Glasgow and Inverclyde.

That leaves open certain other questions that we are not yet agreed on. Should every council have the same range of taxes, or should councils choose from a palette of possible taxes? For example, some want a tourist tax and some do not. Is it possible to get one system that suits Glasgow and Clackmannanshire, or is some asymmetric system possible?

The SNP has certainly been keen on a local income tax, which still has strong arguments in its favour, not least the link to the ability to pay.

Will the member take an intervention?

No. I am sorry, but I have no time.

There are some difficulties with a local income tax. Practically, could we have 32 different rates of income tax? Would Her Majesty’s Revenue and Customs be willing or able to manage that? Conceptually, would we abolish the property tax? I have some sympathy with the arguments that Murdo Fraser put forward. That tax is easy to understand and is much harder to avoid than others.

I know that a land valuation tax has been popular with the Greens, although I am not sure whether that is still their first choice. I have had that tax explained to me more than once and have felt that I was beginning to understand it, but I have to admit that I do not think that it is easy to grasp. We need a tax that the public really feel comfortable with. The commission that Marco Biagi set up raised some problems with LVT. Areas in my constituency such as Baillieston are not well off, but people in them have very large gardens as the housing is ex-council housing, and they would perhaps end up paying more.

It has been suggested in the media that the Greens would like a property tax that is based on current valuations. I wonder how that would work in practice and whether they would expect properties to be valued every single year.

Overall, the Government is open to discussion, and I support exploration of the options. However, I would like to see broad agreement in the chamber and among the public on the way forward.

On a point of order, Presiding Officer. I made an intervention in James Kelly’s speech in my role as shadow cabinet secretary for culture and tourism. However, in my haste, I failed to declare an interest.

That is not a point of order, but it is now on the record.


No one will argue that the council tax is perfect. It is based on values that are almost 30 years old and it does a poor job of funding councils. However, the public are familiar with it and they understand it. Any change must not add complexity, and change must not be used to slip in tax rises by the back door. That is the worry whenever we hear the Greens talk tax. Just this week, one of my constituents contacted me to express his fear that local tax reform of the sort that the Greens propose could lead to his losing his home.

That fear is well founded. The Greens’ residential property tax would inflict back-breaking tax hikes—almost half a billion pounds-worth—on already hard-pressed households. Nearly 1.4 million homes—more than half of all Scottish properties—would be subject to the new tax burden.

Mr Harvie has drawn a red line over that issue and threatened to withhold his blessing from the next budget unless his hard-left agenda is adopted.

Will the member take an intervention?

I do not have time. The Greens have had their chance.

It is worrying that the SNP offers no assurance that it will not agree to send local tax bills skyrocketing. Mr Mackay has spoken of his commitment to making local taxation more progressive. The motion uses the very same word. Far from suggesting fairness, “progressive” has become a byword for an ideological obsession with raising taxes. If the SNP and the Greens are truly concerned about fairness, they should accept that simple fairness dictates that the Government should not raise taxes on families that are working hard to pay their bills.

Instead of propping up the lamentable left-wing consensus, Mr Mackay should heed the Scottish Conservatives and give councils more control over their budgets. The devolution of business rates income would provide a serious revenue stream and would act as a transformational incentive to grow local tax bases.

Would the member accept a point of clarification?

Mr Bowman gave you such a strange look that I was not sure whether he was giving way.

I must try that again, Presiding Officer.

Local authorities retain the income from non-domestic rates. Is it Mr Bowman’s position that local authorities should also set the poundage in local areas?


Devolving land and buildings transaction tax revenues is just good common sense, given the obvious connection between LBTT and council tax and business rates.

A new fiscal framework—one that recognises the needs of communities and places localism at the heart of council funding—should be agreed to underpin such changes. The Scottish Conservatives propose a mature and measured approach that would give councils more control while offering reassurance to the public. I ask Mr Mackay to use the opportunity of this afternoon’s debate to give Scottish families such reassurance by ruling out any Green grab on local taxes.

I support the amendment in the name of Murdo Fraser.


I apologise to the chamber and to Mr Wightman for missing the opening portion of his speech.

I welcome the opportunity to debate local taxation. By design, the Labour proposals differ slightly from those of the Greens, but the ambition to make property taxation more progressive is a shared one. Underlying our scheme is a plan to make 80 per cent of people better off and to put local government finance on a stable footing, but just as crucial as the policy intention of having a more progressive system is the symbolism of departing from a discredited Tory system that was introduced more than a quarter of a century ago, which was born out of the poll tax. That system has left the majority of householders in the wrong council tax band and has barely been tinkered with since it was devolved to this Parliament. The tinkering that has been done, which has involved increasing the multipliers for properties in bands E to H, has raised £100 million, with the increase falling on the backs of those people who live in the most expensive houses, most of whom can afford it.

The Scottish Government’s promise of a new exemption scheme for 54,000 low-income households was meant to help to cover the new costs, but last month I discovered that fewer than 2,000 households have claimed. We were told that a third of eligible householders are pensioners, which means that thousands of older people are still paying too much. What can only be described as a sticking plaster is part of the council tax reduction scheme, which, although only five years old, is ripe for wholesale review. As a like-for-like replacement for council tax benefit, by design it must compensate for the high costs of the regressive council tax.

In social security terms, we tackle the misery of poverty by boosting incomes in two ways: reducing the high cost of annual bills and directly boosting the incomes of low-income families. A new, more progressive property tax would lower the bills for people in what we know as bands A and B, thereby boosting what are generally low incomes. Because three quarters of the reduction is paid in bands A and B, the overall cost of the reduction scheme would fall, too, and those savings could be redirected to those who need it most.

Today’s scheme, which costs £360 million, is paid to 500,000 Scots each year, although that number is now 11 per cent lower than it was in 2013. There is a £20 million underspend, but to date the Government has no system to track who is missing out. Only a reformed property tax and a more attractive reduction scheme can adequately identify the households that need the most help. A new system that had impressive take-up rates that was run by the Scottish Government and local authorities would deliver far better poverty-relieving payments, such as free school meals or school clothing grants, than the shambolic universal credit system.

Although the Scottish Government appears to approach council tax reform with absolute trepidation, it is worthy of note that the finance secretary is less concerned about tinkering with the reduction system for people on the lowest incomes every year. Given that a promised discussion on the reduction scheme is due this summer, perhaps the Government would be wise to consider a wholesale redesign of council tax, too.


I thank Andy Wightman and the Scottish Greens for bringing this debate to the chamber. I will start on a note of consensus by saying that I have a great deal of respect for Mr Wightman and his erudition on these matters. I was very interested to hear what the Green proposition was, because the motion refers to a “cross-party implementation group”, which rather presupposes that there is something to implement.

The implementation group is designed to scrap the council tax. The member will be well aware that there are different views across the Parliament about what should replace it. There is in place a potential progressive majority to scrap it, so the implementation group is intended merely to make a start—to commit to scrap the council tax.

I thank Andy Wightman for that intervention, but I am keen to hear what the Green proposition is.

It is in here.

I have had enough of props, even if they are Green. Do not hold things up.

In the nine minutes and 11 seconds of his speech, as well as in an intervention, Mr Wightman did not outline to the chamber what his proposition is. The Greens are simply stating that they want to scrap the council tax. Mr Wightman eloquently and convincingly outlined all the flaws, errors and unfairness in the council tax system, which I do not contest, but I do not think that it is correct to simply abandon it without having something to replace it.

Would it not concentrate the mind of the Government if we were able to set a date for the abolition of the council tax?

Setting an artificial deadline could just lead to bad reform, rather than correct reform.

I think that there is consensus across the chamber that the council tax is not the ideal form of local taxation. Rather than having a cross-party implementation group, we could have a cross-party discussion group. If someone is in employment and they feel that their job is unfair and they decide to indulge in the moment, hand in their notice and walk out of their job, it might feel good at the time—

Will the member take an intervention?

No. I apologise, but I have taken two interventions already. I would have taken an intervention, but I am short of time.

If one leaves one’s job and does not have another job to go to, one will face the consequences.

There is clearly a desire among the progressive parties in this chamber to discuss how we can make local taxation fairer, but setting artificial deadlines, as Mr Rumbles suggests, or just scrapping the council tax without a single idea of what we would replace it with would be foolhardy.

I suggest that we begin a process of discussions. We should start with basic principles. The cabinet secretary referred to the consultation document on income tax, which outlines some key tests that should be met, which are to maintain and promote levels of public services, ensure that the lowest earners do not see rises and ensure that any change makes the system more progressive and supports the economy.

Indeed, those principles could be buttressed further with the Adam Smith principles outlined in the consultation document: certainty, convenience, efficiency and proportionality. A strong approach should be taken to make sure that there is no tax avoidance. As Murdo Fraser highlighted in a previous debate, property tax such as council tax is important because it is very difficult to avoid paying it, and there is the potential to avoid other taxes such as a local income tax.

I am sympathetic with the broader thrust of where the Greens are going, because there needs to be taxation that addresses wealth. However, we have a limited suite of powers in this Parliament. We do not have income tax power over savings and dividends and we do not have power over corporation tax. There is a need for a much broader suite of tax powers to implement taxes on wealth and other more progressive reforms that the Greens would like to see.

There is much more that I could say on this, but I realise that time is against me.


I remind colleagues that I am still a councillor in Aberdeen City Council. I have looked forward to participating in this debate to make the case for fairer funding for councils after Government cuts. Despite the increasing block grant, council funding is down in real terms. That is unacceptable and has taken our public debate in the wrong direction. For all the talk of solutions, the debate has not been about the mechanisms that we use to tax people; it has been about how to tax people more.

Benjamin Franklin said in 1789 that there remain two certainties: death and taxes. If we must have taxes, we must choose them wisely. I view tax against three criteria: fairness, effectiveness and fitness for purpose.

On fairness, tax is ideally set at a level at which is it is seen as being levied equitably. When taxes are apportioned without equity, the result is discord. They also need to be transparent.

On efficiency, rates that are cheap to collect and provide optimum taxation levels are the only sensible course. It is not fiscally neutral to take from consumers and give to beneficiaries—there is an economic impact. That is why it is important to consider the side effects of those decisions, and to consider economic growth, which is currently stagnating under the SNP.

On fitness for purpose, tax exists to raise money for public services, not to reorder society in a grand alternative universe that the Greens would prefer. In the real world it is not appropriate to levy one increased tax upon another.

Local taxation is a key element of the overall tax burden because, while income tax rises discourage people from working here in Scotland, local tax rises punish them for living here. Mr Mackay will claim that it is nothing to do with him, but his decision to continue underfunding local government forced every council to increase council tax rates.

Will the member take an intervention?

Very quickly.

The member is in his final minute. If you allow it, Mr Mason, you will still have to conclude.

Today, Tom Mason’s colleagues in the UK Government increased local taxation by 5.1 per cent in England. Does he share my hope that many people from England will relocate to Scotland, the lowest-taxed part of the UK?

That is very unlikely.

We know that every single-occupancy household will face a higher overall tax burden in 2018-19 than they did in 2017-18. A 3 per cent rise in council tax in the cheapest band, band A, more than offsets the maximum income tax reduction of 38p a week. In a written answer, Mr Mackay said that he had capped council tax rises at 3 per cent to “protect household income”. We know that Green proposals go well beyond 3 per cent, so when the SNP caves in to pass its next budget, it will, by definition, not be protecting household incomes.

Scotland deserves better. It deserves a Government that prioritises a high-growth, low-tax economy, boosting wages and creating jobs.

There you must conclude, Mr Mason—please sit down.


I do not know what has happened to Mike Rumbles this afternoon. He agreed with Humza Yousaf on two separate occasions and now he is being cheered on by Patrick Harvie. I think there must be something wrong with Mike Rumbles. [Interruption.] He will not be sacked, honestly, Murdo Fraser.

We have heard from Murdo Fraser and James Kelly that the SNP has been on a journey with the council tax. There was a time when it would take every opportunity to condemn it. Alex Salmond called it unfair and insisted that he would scrap it, but he did not. Nicola Sturgeon said—quite strongly—that she “hated” it. She went on to criticise any suggestion that it should be tinkered with, but then she did that.

Now SNP members seem to be the staunchest defenders of the council tax. When they secured the support of the Greens and the Labour Party for their arbitrary increases to the council tax, I argued that those would not be the first steps towards further reforms but the last steps. We have heard from the minister this afternoon that we will have to get a consensus across the Parliament from the other parties before he will even consider taking our proposals forward. Rather than being with us on developing a consensus, he is going to be a bystander, and his long-grass amendment confirms that.

Let me be absolutely clear—I have said that I will work with any party to find a parliamentary majority, so it is not the case that I will be a bystander. I clearly have a role, as finance secretary, but to ask us to vote for a proposition to abolish a form of taxation without any idea of what will replace it is simply irresponsible.

That is a positive step forward, because it is not what the Government position was before. If the Government is prepared to take part in constructive engagement about the replacement of the council tax, that is a welcome development from the minister. His previous position was that the Government had delivered its manifesto commitment and had no obligation to do anything else, so that is a welcome change.

I commend the Greens for trying again after they were convinced to back the Government last time. Andy Wightman used to make the case that the Government’s previous set of council tax changes violated international law, which was not an argument that I heard him make this afternoon. He cited article 4, article 9 and article 9(3) of the European Charter of Local Self-Government, and he made a convincing case that the Government’s council tax proposals were illegal, before he voted for those same proposals. I wish the Greens well in changing the Government’s mind this time. They seem to be pretty determined not to vote for the budget unless there are changes, and we will be with them on that. We favour the ending of the council tax, as it is unfair.

A land value tax is our alternative, as it would levy a charge based on the real economic value of the land, rather than just on the property on that land. It would be reflective of how well that land was serviced and what value it could deliver for the benefit of wider society. There is a strong set of lobbyists and enthusiasts who believe that a land value tax could be the best way not just of raising the revenue but of shaping the way our society and economy works in a fair and just way.

If we are to deliver change, it must be change that enhances local democracy. I was disappointed with the minister’s earlier comments in favour of capping, because that undermines local democracy. The new local government tax must be a truly local tax that is set locally. That means leaving it to local authorities to set the rate that is right for them, and it must be a step towards allowing councils to raise the majority of the money that we spend. That is our proposal as we enter into this debate in a genuine and optimistic way.


Let me take members back to 2007. The SNP manifesto said:

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

Will the member take an intervention?

No. Derek Mackay did not take an intervention from me, so I am not taking one from him.

That was the first of many broken promises that were to follow. The 2011 SNP manifesto promised to replace the council tax—that went well, didn’t it? Roll forward to 2016, and the promise to scrap the council tax had all but disappeared.

Our history is littered with quotes from John Swinney and Nicola Sturgeon. Do members remember “discredited council tax” or “unfair regressive council tax”?

Will Jackie Baillie take an intervention?

No. Tom Arthur refused to give way, as well.

My personal favourite quote was this:

“Labour’s hated council tax is totally unfair and—

Will Jackie Baillie give way to me?

No. Perhaps Joe FitzPatrick should sit and listen to this:

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

That was Nicola Sturgeon in April 2007. What delicious irony: here is the SNP simply “tinkering with the bands” and keeping a “hated” and “unfair” council tax, which is exactly what the SNP said that it was against. Council tax is regressive. Proportionally, the very poorest shoulder the largest burden. A decade on, the SNP has not scrapped it, but we can.

I must have done something wrong in a previous life because I served on the commission for local taxation, together with Andy Wightman. The Tories refused to participate, so Murdo Fraser asking parties what they propose is a tad cheeky, even for him. The commission heard from experts, communities, professionals and elected members, and there was data and modelling. Everything that we need to know about local government finance and the options available to us was in the commission’s report. There were 19 recommendations, the very first of which was:

“The present Council Tax system must end.”

At seven words, it was the shortest recommendation, but it was the most powerful, and the SNP cannot bring itself to implement the unanimous view of the commission by scrapping the council tax.

To all the SNP members, including the cabinet secretary, I point out that the commission was chaired by a Scottish Government minister. There were Labour, Liberal Democrat, Green and SNP representatives, and they all agreed. Guess what! That makes a majority in this chamber. Is the cabinet secretary saying that the SNP minister who was the chair got it entirely wrong?

Will the member take an intervention?

Will the member take an intervention?

No, I am not taking an intervention. Why do the SNP members not listen?

There is a clear majority to replace the council tax, but let me also quote from the 90-page report, alongside which there were several other volumes of evidence, to remind the cabinet secretary that it said:

“this report serves to inform the design of ... alternatives”.

That is what the Green motion is about. Let us have that discussion. Let us move it forward. We welcome the Greens’ motion and will be supporting it. We have sympathy with the principle behind the Tory amendment, but the Tories have clearly done a deal with the SNP to remove most of the Green motion and stifle progress, and for that reason we cannot support it.

The SNP has a choice—a choice to reform local government funding and to make it fairer for the people of Scotland—but I regret that it appears to be far too timid to make it.


The Greens say that today’s debate is about fairness. Nothing could be further from the truth. The Greens want to scrap the council tax, but that would mean hiking taxes for hard-working families, which would mean penalising aspiration. As Murdo Fraser said, the Greens have no alternative and no idea. Bill Bowman talked about the tax not being perfect, and many people would support that.

Over the past few months, it has become increasingly clear that the SNP, the Greens, Labour and the Liberal Democrats want to increase taxation. Only the Scottish Conservatives have the confidence to challenge that cosy consensus, but it is a fact that we should not be thinking about hiking any taxes at this time. Last year, UK growth was 1.7 per cent, but the Scottish economy forecast growth was just 0.7 per cent. Even with that, the OECD has forecast that Scotland will have the lowest economic growth rate in the developed world for the next three years. Why would anyone want to put up taxes during that time?

There is no doubt that there is an opportunity to debate local taxation, and it is clear that, although there is a strong public awareness of the council tax, there are undoubtedly flaws in the system, going back to 1991. However, there is little public appetite at present to reform the council tax. Perhaps that is why the SNP has failed to deliver on the promises in its manifesto, having been in government for the past 11 years.

Will the member take an intervention?

No. Time is very tight.

There are nevertheless many ways in which we could deal with trying to support the taxation from councils. The Scottish Conservatives support widening the range of taxes that local authorities can use. For example, there are strong cases for allowing councils to keep all their business rates income and to ensure that there are incentives throughout the location to inform and support.

The Scottish Conservatives believe in empowering our local communities by devolving new financial powers to our councils to improve accountability and to drive growth locally. However, today’s call from the Greens for reform of local taxation is less about that and more about trying to get tax rises through the back door. I am happy, therefore, to support the amendment in Murdo Fraser’s name to the Scottish Government’s amendment, and I encourage members across the chamber who believe in supporting hard-working families to do likewise. By doing that, we may get a fairer system.


I will need to check the Official Report, but Alexander Stewart referred to introducing new local taxes and I am genuinely interested in what the Tories’ secret plan for those new local taxes might be. Every party has suggested that there is potential for local discretion in that area, so there is a bit of consensus from every party in the chamber, which is why I am not walking away, contrary to what Willie Rennie might say. I believe that we can find consensus.

I am sorry, Presiding Officer, but I missed how much time you said I had. I am sure that you will be generous.

You have five minutes.

Thank you.

As well as the party politics, there is a serious point to be made in this debate. Yes, there was the commission on local tax reform, but subsequent to that there have been parliamentary elections and, arguably more important, local government elections as well. It would be fair at least to engage with the Convention of Scottish Local Authorities on what it thinks about the future of local taxation, because elections are important.

The Tories have asked what we are doing and whether we are delivering on our promises. I was elected on the 2016 Scottish Parliament manifesto that set out what we would do on council tax and that is exactly what we have done. All my colleagues in the SNP are in the same position in that regard. However, I recognise that we are in a Parliament of minorities and that we need to reach a consensus with others. My door remains open to discuss the matter but it is unreasonable to say that we will scrap the council tax without an alternative. We need to test many of the issues on local taxation.

I suppose that the Scotland Commonwealth games team in Australia will be proud of the policy somersaults that parliamentarians have made. If we want to go back to 2007, we should ask what every other party’s position on local taxation was at that point. We committed to consult in 2011 and we have done that. In 2016, we committed to reforms, which we have delivered and which put an extra £500 million into Scotland’s public services. It is significant to say for a moment that local government has had a fair settlement from the Scottish Government. Yes, in part, that is because of the constructive approach from the Greens. I acknowledge and accept that.

The Tories’ contribution was almost laughable. I understand their pragmatic position but, in Tory-run England, council tax rises are above 5 per cent, so it seems a bit rich for them to criticise the Scottish Government. Of course, that makes England the highest-taxed part of the United Kingdom. The Tories have opposed rate capping despite it being in the Tory manifesto and tried to take credit for the changes to the multipliers that they actually voted against when push came to shove.

We will take forward a tax debate because it is really important that local government has continuity and security of funding to deliver public services throughout Scotland. Local authorities have a degree of discretion, which we have said we will examine further. Members should not dismiss the serious governance review that we are undertaking in partnership with local government and COSLA, or the work on land value tax, further local discretion and further local and community empowerment. Nor should they dismiss the commitment that I have given previously, and which I restate, on ensuring that we can deliver a more progressive system.

In essence, that is the offer that I have made to the Opposition political parties but we must do that in a reasonable, fair, evidence-based and pragmatic way. Considering what further refinement we can make is a reasonable and fair approach that gives certainty to local authorities to plan their resources while acknowledging the difficulties in any alternative to the council tax. We are advancing a serious proposition to engage with the other parties over a period of time in a fashion that can find consensus, recognising that we have to strike a balance. Of course we will respect the Parliament’s position in that regard.

On the continuing financial outlook for local government, I will continue to work in partnership with local authorities to give them the best possible settlement that we can and to see how we can empower them to make more decisions more locally. That is all the more reason to engage in the reviews that are under way and not to walk away from them. We should engage in a spirit of consensus and positivity, and with a constructive approach to ensure that, if we refine the system further, we can do so in a fashion that commands confidence, as—I believe—we did with the engagement on income tax.

You must conclude, cabinet secretary.

We have delivered on our manifesto commitment and we will keep on delivering.


I thank the members who have taken part in the debate, but I must express my frustration that, nearly 20 years after devolution began, we are still trying to break the log jam. I say to Mr Arthur that I do that in the knowledge that every aspect of local taxation—taxation for local services of any form we wish—has been in the Parliament’s devolved competence from day 1.

If a local income tax was to be administered, should it include savings and dividends? The Parliament does not have such a power.

We do not have that power and I do not support a local income tax. I will come on to that later.

I am pleased that nobody has defended the council tax on its merits, which is understandable because the system is fundamentally broken; it is regressive—it is still regressive after the recent tweaks—and 25-plus years out of date, with most households and properties in the wrong band. It is absurd to continue with a system of taxation when we know that most people pay the wrong amount.

I welcome the case that was made by members, including James Kelly, that this long-standing argument needs to be addressed and that there is a need for wider reform of local council services and new fiscal powers that offer flexibility. That wider reform needs to include asset wealth, in the form of property, as part of the tax base—there seems to be consensus on that. Bizarrely, I agree with Murdo Fraser on that argument: property wealth needs to be included.

In the earlier arguments on local income tax, I was never convinced that that was the right option. It is clear that even its advocates must see that, in the context of devolved power over national income taxes, the case for an additional local income tax is messier and less necessary.

I need to draw attention to some unwelcome comments, such as the suggestion that the Greens are pretending that there is no alternative. The Green proposal is not a prop but merely a document to refer to, which we published more than two years ago. Other parties have proposals, too. We know that consensus needs to be built; we are not insisting in this debate that other parties should just adopt our policies wholesale. We recommend only that we endorse recommendation 1 of the commission report—that council tax has to go—and then we can begin to build consensus.

Derek Mackay claims that he has addressed the unfairness of the council tax and he cites the Resolution Foundation. However, it is clear that, although the SNP’s tax increase would raise revenue in a progressive manner, it has not said that the resultant tax, as amended, is a progressive tax—it absolutely is not.

Does Patrick Harvie agree that if the Scottish Government were to set a date years in advance for the abolition of the council tax, that would concentrate minds and we would achieve something?

Absolutely. We seek an implementation group—if the Government wants to call it something else, that is fine—that needs to crack on with the job and make progress. That would begin the prospect of legislation in this parliamentary term. We have suggested a five-year transition period to any new system, so we are talking about a long-term argument. However, progress will not be made on a long-term argument unless the first steps are taken. There is an idea that there is no majority for a specific replacement, but that is for one reason only: it is because we have tolerated an unjust status quo for so long. That is our collective failure across the political spectrum over years as a Parliament.

However, it now seems that a measure of consensus has emerged in the debate, as shown in comments by members from the Greens, Labour, Lib Dems, some in the SNP and even some Tories—for example, those who made the case for a broader range of local tax measures and those who supported a land value tax—who did not echo the nonsensical rhetoric of a garden tax. It is as if Murdo Fraser imagines that gardens are not already counted in the valuation of properties, whereas the problem is that they are counted in a valuation scheme that is out of date and broken and in which most households are in the wrong band.

I would like to say a great deal more. I hope that we will have many more chances to progress the debate further, because it needs to be progressed. The range of options is out there; the argument that we have addressed the fundamental unfairness of the council tax is spurious. We need to crack on and get this job done. People in Scotland have voted for donkey’s years for political parties that said that they wanted to scrap the council tax. Let us all now commit. We can reach a measure of consensus; if we agree that we will pass legislation during this parliamentary session, we will have done something that is economically sensible and socially just. I commend the motion in Andy Wightman’s name.