Council tax reform in Scotland: SNP needs to realise a home is much more than a financial asset
As a better way of assessing ‘ability to pay’ than property values, a local income tax should at least be part of the conversation
When the community charge, aka the ‘poll tax’, was introduced in Scotland in 1989 and a year later south of the Border by Margaret Thatcher’s Conservative government, the resulting furore was credited with ending her political career.
Her successor, John Major, then introduced a compromise version, replacing the poll tax’s flat rate with different bands based on property values. He’s probably as surprised as anyone that the council tax has lasted so long.
The SNP first promised to reform the system in 2007, but somehow it’s never actually happened. Launching a consultation document outlining several potential reforms, Finance Secretary Shona Robison stressed any changes "won't be complete in this decade", the Scottish Government was “not advocating for a specific reform”, and she hoped to establish a “consensus around a unified position”.
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Up to £3,000 a year more?
Critics may suggest that council tax reform is on a similar schedule to the dualling of the A9 – promised in 2007 and not to be delivered for ten years – and that Robison’s hoped-for consensus is about sharing the blame.
However, in this particular case, it’s welcome the SNP is taking it slowly. Four options in the consultation include the first revaluation of properties since the early 1990s; increasing the number of property bands from eight to either 12 or 14; and reduced bills for the lowest value properties and increased bills – possibly by up to £3,000 a year – for the more expensive ones.
On the political left, the idea of making wealthy people pay more tax is fairly popular. However, the problems with the council tax are the same as they have always been: the value of someone’s house can be a poor indication of their ability to pay a tax – particularly for pensioners on fixed incomes – and coldly treating a ‘home’ as a financial asset ignores strong emotional ties that deserve serious consideration.
As a far better way of assessing ability to pay, a local income tax should, therefore, at least be part of the conversation.
But don’t be surprised if, in another ten years’ time, ministers wary of suffering Thatcher’s fate are still only talking about changes to the thorny old issue of local taxation.
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