SNP must think again on council tax

The SNP ought to be heading for a defeat on local taxation in the Scottish Parliament today.

Every SNP leader since John Swinney has promised to axe the council tax. There was no room for doubt in their 2007 election manifesto. “The SNP will scrap the Council Tax and introduce a fairer system based on ability to pay”, was the promise. But after nine years in government they seem to have changed their tune.

After three manifesto pledges, endless leaflets and independent reports, the SNP decided that the best replacement for the council tax was the council tax. Instead of sweeping reforms we got plans for minor changes. There was nothing radical about their plans at all.

In 2014 the Scottish Government asked an expert Independent Commission to look at the options for tax reform. After more than a year of painstaking work they came forward with a report which ran to almost 100 pages, setting out the reforms that were open to the government. The SNP ignored 16 out of the 19 recommendations.

Tweaking rates and bands by a decimal place does not amount to scrapping the council tax. It simply entrenches it. If the SNP insist on portraying these reforms as substantive then they make it much more difficult to get real change over the next five years of the Scottish Parliament. Parliament will only want to do this once.

Ministers say that the money will be used to pay for an attainment fund for schools. They will decide how to allocate the money to schools across the country. Local authorities won’t have a say. This means the policy adds up to the top-slicing of council income to fund national policies. Councils such as Edinburgh, Aberdeen and Aberdeenshire will see their grant cut to pay for education in other parts of the country.

Ministers have claimed laughably that these councils will keep the additional funding they raise. The reality is that any money they get from the increase in the council tax from Band E properties and above will be taken straight back off them pound for pound by a cut to the grant they get for everything else their council does. By our calculations, people in Edinburgh could end up as much as £45m out of pocket over the next five years. The SNP plans would give to councils with one hand and take away with the other.

Extra funding for education is essential. The Scottish Government’s record on closing the attainment gap in education is poor. Money should be spent where it is needed. Some councils would do well out of the new arrangements. But if the SNP want to introduce a national policy then it should be paid for out of central government funds. They should not tie the hands of councils by cutting local funding in this way.

In essence, they are hoping to take credit for increasing spending on education and avoid criticism for tax hikes by passing the buck to local authorities.

The SNP are master of the rhetorical flourish. We have become accustomed to hearing ministers talk about empowering councils and putting power back in the hands of local communities. But make no mistake, what these plans represent is an attack on the freedom of councils to spend money raised locally through the council tax in the way that works best for them. Senior council officials in Fife have already told MSPs that this move will diminish local democracy.

The Liberal Democrats have an alternative. Our penny for education plan, with a penny added to income tax rates, would raise five times as much to invest in education and it would be clear where this money was coming from.

There is no consensus at the Scottish Parliament on the SNP’s council tax plans. We will debate them in some detail at Holyrood on Thursday. SNP Ministers need to remember the promises that they made back in 2007. They need to listen to the recommendations of the Independent Commission on local tax reform. They need to go back to the drawing board and look again at options for reform. 

I hope the other opposition parties will not be taken in by the SNP and will join us in voting against the government.

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