PINSTRIPE
It is strange how we tend to focus on the layers of Government which affect our day-to-day lives less than those we ignore. The UK Government decides to renew our nuclear deterrent, media frenzy, huge money, no actual difference to you and me. The local council decides to change (Government speak for reduce) the collection of our bins, routine decision, small amount of money saved, and an absolute real-life pain in the neck for citizens.
In times of austerity those further up the chain of authority tend to favour themselves over those below. The UK Government has limited scope to be mean to Scotland because of the Barnett formula - although the squealing from Holyrood protests otherwise. The Scottish Government has the ability to starve councils of money - and does - for example Glasgow’s local Government funding per head was £233 lower this year in real terms than it was in 2013/14.
The strain on local councils ratchets up each year. The rapidly rising demand for social care means not just that it may become unaffordable but the ability to provide other services well - bin collection, road maintenance and lighting, maintaining public areas - will simply no longer be there.
Something needs to be done or our lives as individuals and as people trying to run businesses, which rely on solid local services and infrastructure, will suffer.
A black mark against the SNP Government is that they have failed to show the leadership which their strong electoral position allowed them . Instead of having the courage to take necessary but unpopular steps, they are instead so mesmerised by the objective of Independence that they won’t do anything which might lead people to think that an independent Scotland would not be a land of milk and honey.
This is a shame and counterproductive. Pretending that everything will always be great doesn’t persuade people you can govern well. The test the Scottish Government has faced is to do the right thing for the long-term even if that means doing things which are unpopular. They have consistently failed that test.
On the funding of local Government it is, to their credit, the Green Party which, as part of its support for the 2019/20 Scottish Government budget, extracted a promise that the funding of local Government will be consulted on and proposals for change put forward.
Good for the Greens. The SNP should pick up this topic with vigour and other parties should engage positively. The Greens see that more resources and a fairer system are needed but their recipe for change is confused. They think it outrageous that the most expensive property pays only three times more council tax than the cheapest. That’s the wrong point - the real issue is what on earth has the value of your property got to do the level of council services you require and should pay for?
Taxing property is lazy taxation, it’s easy but wrong. The instinct to make property taxation more progressive - which cannot logically be applied to every tax - is dangerous. Look at Land and Buildings Transaction Tax if you want an example, it is so “Progressively” structured that it has distorted the housing market and stops people moving house.
We have to get out of the straitjacket of trying to raise more tax by thumping people with ever higher taxes on what they earn and on their home or we will make Scotland a less attractive place for the people we need to be here. Carbon taxes, paying for more of what you use and local sales taxes are options to consider - and there are many others. Just for once the SNP need to be brave.
Pinstripe is a senior member of Scotland's financial services community.
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