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Plenary, 06 Dec 2006

06 Dec 2006 · S2 · Plenary

Item of business

Council Tax

Brownlee, Derek Con South of Scotland Watch on SPTV

Indeed he is not. He is even reluctant to grace us with his presence, but there we go.

There was one occasion when Mr McCabe made it to Parliament and on which he told Mr McLetchie that the report "remains under active consideration". The First Minister said to Nicola Sturgeon during First Minister's question time in November that he had made his view clear, so the Minister for Finance and Public Service Reform is coming from a very different point of view.

The Deputy Minister for Finance and Public Service Reform, Mr Lyon, confirmed in his evidence to the Local Government and Transport Committee that the idea of taxing every home in Scotland on its value is very much alive. It is not surprising that Labour is minded to support the idea, because it has just imposed it on Northern Ireland—yet people are surprised that Labour does not field candidates there. I am not saying that the council tax is perfect, but it is infinitely preferable to a local property tax.

There are also problems with a local income tax. Evidence from HM Revenue and Customs on the Scottish Socialist Party's Council Tax Abolition and Service Tax Introduction (Scotland) Bill estimated that it would take nine years to get the service tax up and running, and that is for a tax that would have one set of rates rather than 32.

The Lib Dems and the nationalists both support a local income tax. The Scottish National Party makes that clear in its amendment. I wonder which would be the more terrifying prospect if the Lib Dems and SNP were to surge ahead in the polls: the idea that a coalition between the two would impose a local income tax in Scotland or the idea of Mr Lyon as finance minister and Mr Swinney as his deputy.

Not every Lib Dem is in favour of a local income tax, however. No less a figure than the president of the Liberal Democrats, Simon Hughes, said on his party's plans for a local income tax that "there was a flaw". What was that flaw? It is that it means

"different things in different parts of the country".

Not like a typical Lib Dem policy, then?

Just in case Labour members are a little too comfortable now, we read during the summer that

"a source close to Labour's policy forum"

thought that the idea of a council tax discount for pensioners "had legs". However, the policy does not need legs of its own when Labour members are running away from it so quickly. I wonder whether that is because they burned their fingers badly in 2005. Members may remember that, just before the 2005 general election, the Chancellor of the Exchequer announced a £200 discount on council tax for pensioners. At that time, he said that it was

"a measure that is fairer and worth more to … pensioners than all other proposed schemes."—[Official Report, House of Commons, 16 Mar 2005; Vol 432, c 269.]

The press release that accompanied the announcement said:

"the Government believes it is right to help elderly households with their council tax."

The decision was right in 2005 before an election, but wrong in 2006 after one, when the payment was scrapped. That was not because the chancellor believed that the principle was wrong: if we believe The Guardian, it was scrapped "to damage Labour's chances" in the English local elections in May. We must hand it to him—it certainly worked.

The fundamental issue that we confront is a choice between the Lib Dems, who propose a local income tax and other measures that could not be implemented quickly, and people who prefer a pragmatic approach that would achieve results. The plans that we have proposed are costed, affordable and sustainable. They are simple to understand and would be easy to implement. More important, they would deliver lower tax to pensioners next year, rather than in nine years. All that is required is the political will.

I have pleasure in moving the motion in Annabel Goldie's name. I move,

That the Parliament notes the recommendations of the Independent Local Government Finance Review Committee report but opposes its central recommendation of a "local property tax"; agrees that the 60% increase in council tax levels since Labour came to power has left those on low incomes struggling to pay their council tax bills, especially our pensioner households, and therefore calls for a 50% discount on council tax for all pensioner households aged 65 and over in Scotland, as proposed by the Scottish Conservatives.

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Plenary, 06 Dec 2006

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