FOR years now, the SNP has been promising radical reform of local tax but has failed to deliver. In 2007, it said council tax was unfair and would be replaced by a local income tax. Instead, the Government imposed a freeze that disproportionately benefited better off households and denied councils much-needed funds. It now plans to end the freeze as well as introduce a tweaked version of the council tax. Nicola Sturgeon calls it bold. In reality, it is timid and, for a government that says it is progressive, deeply disappointing.
One of those who cannot hide her disappointment is Naomi Eisenstadt, Nicola Sturgeon’s own poverty advisor. Earlier this year, Ms Eisenstadt published a report on inequality and one of her key recommendations was that the Government needed to be bolder on local tax reform. Ministers were faced with a central moment of political decision, said Ms Eisenstadt – a chance to introduce a much more progressive system that could improve the lives of Scots at, or just above, the poverty line.
In response, the Government promised to implement the report in full, but the reality on local taxation is that it has only taken a few cautious steps towards a destination that is still a long way off. The reforms for 2017 will make some much-needed improvements such as changing the council tax bands to widen the gap between the rates paid for the most and least valuable properties; the end of the freeze next year is also welcome. However, the reforms are far from the boldness we were promised.
Asked about the Government’s policies, Ms Eisenstadt herself has said they fall short of her recommendation. The tweaking of the current system was a good first step, she said, but it is no more than that: just a first step towards what should be a fairer system. In particular, Ms Eisenstadt said she would like to see a revaluation, and she is right: the current council tax is based on house prices that are woefully out of date and a revaluation would help build a fairer picture and therefore a fairer tax system.
In the end, Ms Eisenstadt has been slightly careful in her language, but the Government’s failure to order a revaluation reeks of caution in the face of a need for radical reform. For the last nine years, the SNP has benefited politically from freezing council tax and now here it is refusing to order a revaluation that could help taxpayers on low incomes.
The Government’s response is that some people’s bills at the higher end will rise (as indeed they will, albeit by a small amount) but to back off from a reform that could ensure everyone pays the right, or at least a fairer, amount is troubling from a government that says it is progressive.
It may be that the opposition parties will now unite to force a rethink, particularly as the parliamentary arithmetic does not look good for the SNP and they will not want to rely on Tory support.
However, the real hope is that the Government will stop tweaking and tinkering with the system and start delivering on its promise to be bold. Scotland’s council tax system needs fundamental reform to make it fairer and progressive – so why doesn’t the Scottish Government just get on and do it?
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