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Meeting of the Parliament 16 March 2011

16 Mar 2011 · S3 · Meeting of the Parliament

Item of business

Local Government Finance (Scotland) Amendment (No 2) Order 2011

Purvis, Jeremy LD Tweeddale, Ettrick and Lauderdale Watch on SPTV

We will not block the council tax freeze and we will vote in the same way as we have done on previous local government finance orders. We register our concern about some of the implications, but the measures will not be blocked by Parliament. I did not enjoy being asked in the Finance Committee to welcome the policy, which I think was the subject of the vote to which Mr Brownlee alluded.

It is interesting that one of the few things that was talked about at the SNP conference at the weekend was how the SNP has delivered the council tax freeze in every year of the session. Of course, the SNP did not want to keep that commitment, as it was supposed to be only a stop-gap measure in advance of replacement of the council tax with a local income tax—a policy for which Liberal Democrats are still arguing. The SNP failed even to introduce to the Parliament proposed legislation on council tax abolition, so it is interesting that the SNP now claims that the council tax freeze is one of its biggest promises kept.

The problem of fairness comes into play and simply cannot be denied. One of the biggest concerns is that those who are on the biggest incomes would pay more under a local income tax, but are the ones who gain more through the council tax freeze, as they are likely to live in the biggest homes.

We speak to constituents about the fairness of the policy. Time and again it is worth repeating that I am fully aware that freezing the council tax helps many families. I am fully aware of the pressures on their household incomes and of the fact that many view the freeze as being a contribution to dealing with those pressures.

However, we must consider the people in the largest homes, who gain the most, and the people in the lowest income brackets, who are not gaining. The figures are straightforward. There are 130,000 households on low incomes that live in band A properties. If a family’s income is less than £15,000, they will have gained not one penny from the £700 million tax cut. If we use the deflators that the Government uses and to which the cabinet secretary has referred, those in the biggest houses—such as those in band G, which had average council tax bills of £1,900 in 2009—are making a cumulative saving of £138 a year. Those who are on the lowest incomes gain nothing and those who are among the highest incomes gain £138 a year.

I asked the cabinet secretary specifically about the distribution of the £700 million between the lowest and the highest—between those in band A and those in band H—because I am fully aware of the figures for band D. I wanted him to acknowledge on the record the situation between band A and band H, but he chose not to, which was a telling omission.

The SNP has blamed reductions in council services on everyone else, when the council tax freeze has caused a revenue shortfall of £700 million. We know from lecture after lecture that the Scottish budget is fixed and that, if we come up with spending plans, we must tell the Government where the money for them would come from. Given that, I presume that £700 million has been saved elsewhere in the Scottish budget to offset the council tax freeze.

We will abstain on the motions. I know that the Parliament will support them, but it is worth recognising that the policy is not fair.

17:12

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Meeting of the Parliament 16 March 2011

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