Hansard

I congratulate the Local Government and Transport Committee on its conclusion, which it reached as a result of some excellent evidence sessions, and I thank those who gave us that evidence. The bill has also been before the Finance Committee, and my colleague Derek Brownlee will deal with that committee's findings.

As ever, Mr Sheridan has been consistent, unlike the Liberal Democrats and the SNP. Their attitude is, "Maybe we will; maybe we won't," "We're not sure when, but it might happen," and, "We might put a proposal before the chamber, but we're not there yet." However, as has been said, the problem with Mr Sheridan is that he does not propose a local tax; he proposes a massive hike in income tax, which would be expensive to collect and would add to the central, top-down control of public services. It would be a disincentive to many and would damage the economy, hit modestly earning families and do little to relieve poverty. Today, we heard the ultimate: Mr Sheridan wants to promote fiscal flight. I think that that is what he said.

For a start, Mr Sheridan's bill would lose Scotland more than £345 million of council tax benefit. Whether Mr Sheridan argues it or not, he is suggesting a uniform, national tax with no local accountability over the rate. Under his model, why would we have local councils at all? He proposes that local councils would merely deliver systems for local government rather than design and deliver them for their communities and be accountable to those communities. It seems that Mr Sheridan has much in common with the Lib-Lab Scottish Executive, which foisted new burdens, which are not fully funded, on to local councils. The net result is that those who pay council tax have to pick up the tab yet again—we are talking about 29 per cent of our people.

As I said from the beginning, Mr Sheridan's proposal would need either direct Westminster Government permission to allow the Inland Revenue to collect it or primary legislation at Westminster, if he intends to have it backed on to the current taxation system. Quite apart from his political naivety, the delay in delivering his tax would be excessive. If he were allowed to proceed today, it would not benefit anyone for years, although Conservative members disagree about whether people would benefit. Mr Sheridan argues in favour of progressive taxation, but he seems to forget that 80 per cent of council funding comes from general income tax, which is based on an ability to pay. He made no mention of that. He does not say anything about how we should collect the £700 million of uncollected back tax, other than that we should simply write it off. Where is the justice in that for those people who have managed their lives and paid on time, despite the problems that they may have with the size of their council tax bill?

At a stroke, Mr Sheridan intends to lose Scotland £1 billion, if not more, in the first year, with the write-off of £700 million and the £345 million loss of council tax benefit. I do not remember hearing him quote that figure. I have some sympathy with him when he talks of council tax benefit not working correctly—approximately 30 per cent or more of those who can claim it do not do so. The reason for that is very simple: it is far too complicated and confusing and, for some people, even a little demeaning. Those people account for almost 10 per cent of Scottish households. Conservative members will not ignore that and will encourage their colleagues at Westminster to examine the issue more closely.

Mr Sheridan knows very well that 70 per cent of the households on council tax benefit received the full amount, but he simply ignores that. He is quite happy to have a go at two-income households, which cover about half of workers in Scotland. I have little doubt that, if his tax came into play, we would see a mass of arrears, possibly leading to repossessions, on mortgages that were put in place and budgeted for by such families.

The evidence that the committee received has been mentioned. The approach that the bill proposes would be expensive and bureaucratic. As the minister said, the Burt report is due out fairly soon, which will be a good time for the Parliament to take a constructive view of its contents. We all have a stake in the report, because all members have made an input to the system. In my view, it is not the council tax that is the problem, but the huge rises under Labour and the Lib-Lab coalition, which amount to in excess of 55 per cent since 1997.

I turn to what the Executive has said to date. The First Minister's prediction of a maximum rise of 2.5 per cent is a joke. The Lib Dem Deputy Minister for Finance, Public Service Reform and Parliamentary Business, who is sitting with us, estimated it at 4 per cent, but there has been an almost deafening silence from Tom McCabe, the accountable minister, who seems to do nothing but blame councils for inefficiencies and who fails to acknowledge his responsibility for the additional unfunded burdens that he has imposed on local government, knowing full well that if the sums do not add up, the poor old council tax payer will once again have to pay. As we all know, that hits many pensioners and what I call the new working poor, which Labour has created since it came to power at Westminster—tax-paying families on modest incomes who bear the costs and burdens of starting families and acquiring their first homes.

To an extent, I agree with Tom McCabe that there need to be more efficiencies in local government, through shared procurement, sourcing, contracting and so on, but it is interesting that he totally fails to impose the same rigours on the departments of his fellow ministers. I wonder what has happened to the old notion of collective responsibility in Government.

Mr Sheridan's proposals would be costly and unworkable and would throw away money to which Scotland is entitled. The bill would foster tax evasion and would even encourage the black economy. It would damage the spending power of many Scots, which would hit the economy, and would make Scotland a place in which no one wants to invest or do business. It might even add to the skills drain that we are currently seeing, which affects not only our economy but public services such as the national health service, which need people to run them. Conservative members will certainly not support the bill and support the committee's conclusion.