Hansard

Today's debate is about right and wrong, justice and injustice and the unacceptable twin scars of poverty and inequality, which continue to shame our country.

The council tax is a Tory tax. It bears the hallmarks of all Tory taxes. It is regressive and unfair. The council tax hammers pensioners and ordinary workers, but it pampers the very well paid and the wealthy. It is quite simply wrong that even after means-tested benefits are applied, the 20 per cent of Scots who are on the lowest incomes pay more than 5 per cent of their meagre incomes in council tax, while the wealthiest 20 per cent pay only 2 per cent.

According to evidence from Age Concern Scotland, the Scottish Pensioners Forum and others, pensioners have to pay 11 per cent of their incomes in council tax. We in this chamber are completely unrepresentative of Scotland in relation to income. Only 2 per cent of Scottish adults have incomes of more than £50,000 a year. We are part of that 2 per cent. Some 78 per cent of individuals have incomes of less than £20,000 a year. While 52 per cent of Scotland's 2.2 million households survive on less than £20,000 a year, 82 per cent survive on less than £40,000. The Council Tax Abolition and Service Tax Introduction (Scotland) Bill is about those households. It is about Scotland's pensioners, bus drivers, refuse collectors, nurses, teachers, firefighters, nursery nurses, posties and office workers. It is about reversing the Thatcher and Blair practice of making the rich richer at the expense of the poor. It is about taxing the working majority and pensioners less and the best-paid and the millionaires more.

Today is not about more disgraceful council tax rises and consequent condemnation. We have had 13 years of that in which to make up our minds about what we want to do; now is the time for binning the council tax, not bashing it again. This Parliament has the opportunity today to stand up for the majority of Scots and back fair taxation and to vote for higher taxes for those—such as MSPs and others—who are on more than £40,000 a year and lower taxes for the rest. Today, we should declare our intent to tax the millionaires more so that we can tax our pensioners and ordinary workers less.

How shameful that, today, we have Labour MSPs who defend the Tory council tax. A regressive, unfair Tory tax is defended by the party that used to be on the side of the workers. The old Labour Party of the millions has become the new Labour Party of the millionaires.

The Office of National Statistics reported last August that poverty levels under Labour are broadly the same as they were under the Tories, but that inequality of income has grown wider under new Labour than it was even under Thatcher. Under the new Labour Tories, life is more unequal. One in four of our children across Scotland still lives in poverty. Almost one in three of our pensioners struggles to make ends meet. Some 421,000 workers—28 per cent of the total Scottish workforce—are officially low paid.

Our Parliament has insufficient powers to deal with the problems properly. We have no control over pensions, the minimum wage, social security benefits or economic decisions. We need an independent Scotland with real power to transform our country. We need an independent socialist Scotland—a democratic republic—that can utilise all our resources to raise everyone's standard of living by putting people before profit. However, until we secure an independent socialist Scotland—indeed, as part of that struggle—we must utilise fully the limited powers that we have. The council tax makes inequality worse. It has risen by 101 per cent since its inception and by 65 per cent in the past six years. It will rise above inflation again next week. It is regressive and unfair and we have the power to do something about it. We have the power to scrap the council tax today and I urge the Parliament to use that power on behalf of the majority of ordinary Scots.

Local government jobs and services have to be paid for, but fair taxes must be the order of the day. The Scottish service tax would not only be fairer, but it would raise more money for local government than the council tax does. Even the Scottish Executive had to admit in its evidence on the bill that the Scottish service tax would raise £300 million more than the council tax would.

The primary objective of the bill is to tackle poverty and redistribute income from the very highest earners to the rest. Under the service tax, the bus driver on an average pay of £17,300 a year would pay £722 a year less than the bill for an average band D house. The postie on £15,600 would pay £568 a year less than the bill for an average band B house. The refuse collector in a band A house would pay £497 a year less than they pay at the moment.

According to the Scottish Executive, the average income in Scotland is £20,000 a year. Two individuals on £20,000 a year would have a household income of £40,000. According to the Scottish Executive, only 17 per cent of households actually have that level of income, but even on an average income of £20,000 per year, those workers will pay less. They will pay £450 each in service tax, so their household bill will be £900. The average band D council tax bill is £1,094. Under the bill, even workers on average pay will save £200 per year.

The bill will make ordinary working families better off. The convener of the Local Government and Transport Committee, Bristow Muldoon, tried to undermine the bill by referring to average earners on £25,000 per year, but there is nothing average about that—according to the Scottish Executive, only 10 per cent of Scottish households have an income of £50,000. Secondly, workers on £25,000 per year would pay £675 each in service tax. If their household income is £50,000 per year, it is likely that they will live in homes in band E or above, but even they will pay less under the service tax than they pay under the council tax. The firefighter and the nurse will pay less. The police constable and the nursery nurse will pay less. The teacher and the secretary will pay less. Based on their incomes and on the average council tax bands, ordinary families will pay less. The bill is a worker-friendly bill from a worker-friendly party.

The vast majority of Scotland's workers will pay less, but the biggest winners will be the Scottish pensioners and the lowest paid because the first £10,000 of income will be exempt. Some 450,000 pensioner households live on less than £15,000 per year and 220,000 single pensioners live on less than £10,000 per year. They will not be subjected to humiliating means tests, but will automatically be exempt. The bill is a pensioner-friendly bill from a pensioner-friendly party. Instead of scrimping and saving and worrying about council tax rises, Scotland's pensioners will start to enjoy life a bit more and will have in their pockets an average of £20 to £25 per week extra to spend on themselves.

The bill will help the vast majority of Scotland's workers and pensioners by removing the humiliating means test and increasing to £10,000 the threshold at which people begin to pay additional local government tax. The bill will also generate extra resources for local government services. The bill is backed by three major trade unions: the Public and Commercial Services Union, the National Union of Rail, Maritime and Transport Workers and the Fire Brigades Union; by the respected Scottish Pensioners Forum; by the Poverty Alliance, which represents anti-poverty groups throughout Scotland; and by the Glasgow city branch of Unison, which is the largest trade union branch in Scotland. Those organisations back the bill because it is beneficial to workers, pensioners and the poor. It effects a redistribution of income that is long overdue.

Of course, not everyone will pay less, because we have to raise enough money to pay for local government jobs and services. Every member in the chamber will pay more. On average, MSPs will pay £2,500 more. The multimillionaires will have to stump up more, including the 277 who live in Edinburgh in postcode district EH4, the 240 who live in Aberdeen in AB15, and the 176 who live in Glasgow in G61. Instead of a piddling £2,800, Mr Brian Souter, on his £3.24 million income, will pay £641,000. That represents less than 20 per cent of his salary and leaves him £2.6 million to keep the wolves from the door and £400 million in the bank. Then there is wee Ephraim Belcher, a friend of the Tories. Wee Ephraim, of Scottish sausage fame, could afford to donate £250,000 to the Tories, so he could afford his new Scottish service tax bill of £555,000. He would survive, given his income of £2.8 million, of which £2.3 million would remain. Of course, he always has the £48 million that is in the bank.

Some have suggested that if we taxed the rich appropriately, they would leave the country. What a shame that would be. I could not give a damn. The concern of this bill and of this party is not for the rich minority, but for the pensioners and the ordinary workers, who are society's real wealth creators. If more money is put into the pockets of the majority of Scots, anyone with a semblance of economic understanding knows that under the marginal propensity to consume, those millions of people will spend the extra income; in doing so, they will generate more demand for jobs and services and a boost in our economic activity.

Today is about general principles, and the general principle of the bill is to replace the council tax with an income-based alternative. The challenge to the Scottish National Party and the Liberal Democrats is this: if they believe in that general principle, they should vote for the bill and lodge their amendments at stage 2. If they refuse to vote for the bill, they will be exposed as political fraudsters and devious deceivers.

On behalf of Scotland's workers and pensioners, I move,

That the Parliament agrees to the general principles of the Council Tax Abolition and Service Tax Introduction (Scotland) Bill.