SCOTTISH LABOUR LEADERSHIP: Interim measure would see water charges and other cuts to ease financial burden
By Paul Hutcheon, Scottish Political Editor

A candidate in the race to become Labour's next Holyrood leader has committed himself to abolishing the council tax.

Andy Kerr, the former health minister, wants to ditch the successor to the poll tax and replace it with a reformed system based on property. As an interim measure, he would support council tax cuts and the phasing out of water charges for the elderly.

Local government finance has become a key issue for the three candidates - Kerr, the East Lothian MSP, Iain Gray, and Cathy Jamieson, the former justice minister and current deputy leader - hoping to succeed Wendy Alexander as Scottish Labour leader.

The party's policy on reform of the council tax at the last election was widely ridiculed and prevented Labour from launching a sustained attack on the SNP's local income tax plans.

Now Kerr, who also held the finance portfolio in the last Scottish Executive, has said he would back abolition if he won the contest.

"I would immediately signal a long-term desire to replace the council tax," he said in an interview with the Sunday Herald. "While people are paying so much of their monthly income in council tax in comparison to their mortgage or income tax, they feel as though the system is not working for them.

"That's largely a product of the way the tax has developed over the years, the way that revaluations have not taken place."

He said abolition would have to be preceded by immediate moves to improve the current system.

"In the meantime, I would press for water rates to be removed for pensioners and, secondly, redirect the resources the SNP has set aside for the flawed local income tax, and invest that for reducing council tax bills," he said.

Kerr wants to revisit the findings of an independent report which backed the abolition of the council tax. The Burt report, presented to ministers in 2006, recommended a 1% tax to be levied on the value of each home in Scotland.

But while Kerr does not support this specific proposal, he believes the report should be the starting point for a debate on scrapping council tax.

"We need to return to Burt, build a consensus inside and outside the Parliament, and work with local government on how we respond to abolition of the council tax and what we replace it with," he said.

Kerr is the latest Labour figure to flag up the perceived drawbacks with the council tax.

Former finance minister Tom McCabe last week described the tax as an "unfair burden" and called for it to be scrapped.

He was followed by Gray, who said he wanted the tax "replaced or reformed".

An SNP spokesperson said: "Andy Kerr's U-turn exposes Labour's absurd and unsustainable position on council tax benefit money. They argue that this £400 million would be removed from Scotland if the council tax is scrapped - a stance that Mr Kerr cannot possibly support if his commitment to abolish council tax amounts to anything more than windy campaign rhetoric."