Meeting of the Parliament 05 February 2020
I, too, thank all those who have engaged in the process and who have supported the process in Parliament.
I noted at stage 1—indeed, the minister mentioned this in her opening remarks—that this is the first time that the Scottish Parliament has considered primary legislation on non-domestic rates. That is very telling, because it demonstrates how little interest there has been in Parliament in local tax and how much power the Local Government Finance Act 1992 gave to the Secretary of State for Scotland—now, to the Scottish ministers—in relation to setting the detailed design of the system through secondary legislation.
In September 2013, Derek Mackay—who was here a minute ago—the then Minister for Local Government and Planning, said that the Scottish Government would
“conduct a thorough and comprehensive review of the whole business rates system”
by 2017, which would deliver
“a fairer, simpler and more efficient business rates system.”
That review never took place. Instead, we had the Barclay review, which asked only one question:
“How would you redesign the business rates system to better support business and incentivise investment?”
That was not an inappropriate question to ask, but many other questions should have been asked, too. That narrow focus raises some fundamental points about how we develop policy and legislation.
For example, yesterday, we heard major questions about who sets the tax rate and about the treatment of privately owned student residences. Concerns have been raised about the manner in which section 10 came into being—not as a consequence of any review of charitable relief but as a means by which to raise some revenue to pay for the tax cuts that the Barclay review was focused on.
Too often, the Government, for whatever reason, feels the need to outsource policy development to so-called independent reviews. Instead of reaching out to the public or other politicians with a discussion paper or a consultation in order to gather views on the possible scope of legislation—in this case, we were dealing with primary legislation on non-domestic rates for the first time—it asks others to do the thinking. In the case of the Barclay review, such thinking was framed by an incredibly narrow remit.
We have bills to implement any reforms that are needed, but, not surprisingly, MSPs have their own ideas about the reform of non-domestic rates. We have to work within the confines of the stage 2 process to develop our ideas. The Non-Domestic Rates (Scotland) Bill was the first time that any member has had the chance to do something, because there has never been the opportunity up until now.
In her opening remarks, the minister talked about the past few weeks being “bumpy” and about aspects of the process being used as a “plaything”. I call it democracy, and I think that we should improve the system.
Since stage 2, I have had meetings and conference calls with many business groups. Although we disagree on many issues, it was something of a surprise to hear that they agreed with me that the comprehensive review that was promised back in 2013 is still needed. I pointed out that it was bit late for that, but there we are.
I will conclude by saying something about my attempt to repatriate rate setting to councils. That was not agreed to, but I am sure that it will happen. Yesterday, I quoted comments made by the constitutional steering group—which drafted the standing orders for the Parliament—in its 20th anniversary report:
“The Scottish Constitutional Convention recommended that the Scotland Act should commit the Scottish Parliament to securing and maintaining a strong and effective system of local government, embodying the principle of subsidiarity ... What we have seen instead with successive governments is a tightening of central control over local budgets and spending priorities. Our view is that the benefits of bringing decision-making back to Edinburgh in 1999 should flow through to proper empowerment of local communities through their local representative bodies.”
As I highlighted at stage 1, the removal of that tax base from the control of its historical owners—local government—is, in our view, a violation of international law. Article 9 of the Council of Europe’s European Charter of Local Self-Government provides legal protection. Article 9.3 states:
“Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.”
Today, they do not. We do not believe that the removal of that tax base from the control of its historical owners can be allowed to persist, because it violates international law. We cannot support the bill, but neither will we stand in its way. The Greens will abstain on the motion at decision time.