Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: http://www.socialistparty.org.uk/issue/547/6376

From The Socialist newspaper, 10 September 2008

Scotland council tax to be scrapped

The SNP government has set out its proposal to scrap the discredited council tax and replace it with a local income tax (LIT). Without a majority in the Scottish parliament, the SNP will have to rely on backing from the Lib Dems, Greens and independents to get this change through.

Brian Smith and Philip Stott

The SNP was elected in May 2007 with a pledge to abolish the council tax. It will not be until 2011 at the earliest before we see the back of it. In the meantime local authorities have agreed to freeze the tax at its current rate for three years.

The council tax is regressive, benefiting the rich, and is widely despised. Socialists have campaigned for its scrapping and replacement with a tax based on ability to pay for years. Tommy Sheridan laid a bill in the Scottish parliament to abolish the council tax in February 2006 and ironically the SNP voted against it.

The SNP's scheme is in fact a modified version of Tommy's proposal. Its plan is for a 3p in the pound LIT, collected through the PAYE system. Scotland finance secretary, John Swinney, claims that over 80% of households will be better off or no worse off. The examples cited include a pensioner on under 20,000 paying LIT of 374, and a worker earning 25,000 paying 593.

Clearly the number of workers in the household is crucial if comparisons are to made with the council tax. In fact a working couple, both on 25,000 would pay over 1,000 a year in LIT, making little difference compared to the current council tax.

However there is no doubt that in terms of fairness the SNP's plans are more progressive than the council tax. Accountants KPMG, tax avoidance specialists of the super-rich, said that the plans will lead to many high earners leaving the country. Brian Souter, Stagecoach boss, would pay 28,750 instead of 1,930 and Fred Goodwin, RBS chairman, would have to cough up 120,000 rather than his current 2,338. Low-paid workers and pensioners living in poverty will no doubt charge down to the airport to wave off poor Brian and Fred.

Shortfall

The LIT will raise significantly less money than the council tax, creating a 750 million shortfall. The SNP says this will be covered through the money currently paid from the UK government to people who qualify for council tax benefit and from the 2% annual "efficiency savings" that they have demanded from local government.

The SNP's position is that the 400 million of council tax benefit is "Scotland's money", but the UK treasury has floated the idea that if the council tax is abolished in Scotland then they are under no obligation to place this 400 million in the annual Scottish block grant.

The SNP have also said that another 70 million will have to be found each year to sustain the rate at 3% in the long term.

There are also additional one-off costs in setting up the new tax and an ongoing yearly cost of administering it, so it is clear that the SNP's plans would not increase funding for local government services (unlike the Service Tax promoted by Tommy Sheridan) and would probably in fact lead to further spending cuts.

It would be churlish not to treat seriously any plans that seek to replace the council tax with a more progressive scheme. However, the SNP's proposals could have been even more progressive if they had adopted a multi-tiered rate that saw the rate of LIT increase as income rose, rather than a flat rate one.

A more punitive redistributive tax on the rich could also raise enough money to maintain or even increase local government spending.

Public spending cuts are not what local government workers and the communities they serve, hoped would be the outcome of abolishing the council tax.

What is required, alongside a progressive alternative to the council tax, is a decisive increase in local government funding. This could not only maintain jobs and services and allow a living wage for council workers, but also deliver a real expansion of local government to meet the needs of working-class communities. Unfortunately, the SNP shows no signs of fighting for that.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 10 September 2008:

Housing Crisis: Brown has no answers


War and occupation

End the wars and occupations

USA: Defying police, students walk out against the Republican national convention


Socialist Party editorial

US mortgage bank nationalisation - sign of deepening crisis


Scotland

Scotland council tax to be scrapped

Scotland: Council pay battle at critical stage


Socialist Party workplace news

Workers' anger surfaces at TUC

London bus workers inspired by strike

Fighting for decent pensions

In brief


Socialism 2008

Come to Socialism 2008!


Socialist Party campaigns

May Day detainees fight for justice

No to post office closures

Boom to bust in Cardiff Bay

Fans pay for the success of the 'beautiful game'

Protest against harassment!


Socialist Students

Fighting start to freshers fairs

Young workers ripped off

Bangor University students union fees referendum


Environment and socialism

Can we have 'the right to travel' - without adding to climate change?


Socialist Party review

Richard Dawkins: The genius of Charles Darwin, (Channel 4)


International socialist news and analysis

Thailand in grip of political deadlock


 

Home   |   The Socialist 10 September 2008   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

Tax:

triangleYoung people being strangled by debts

triangleNasty party imploding...drive out the Tories

triangleThem & Us

triangleProblem gambling soars by 33%

triangleAmazon tax halves as revenues soar - nationalise now!

Scotland:

triangleWhere is Scotland going?

triangleSwansea Socialist Party: Is the National Question finished in Scotland & Wales?

triangleScotland - SNP loses but Labour could've won more

triangleMay and Tories must go!

Council tax:

triangleBristol's Labour mayor calls anti-austerity march - now stop making cuts!

trianglePlans to bring A-levels back to Knowsley abandoned

triangleFight Tories' callous cuts pushing 200,000 more kids into poverty

SNP:

triangleElectric atmosphere at Corbyn rally

triangleCorbyn could re-win Scotland with a socialist approach to independence

Local government:

triangleUnite local government sector plans strike ballot

Reports and campaigns

Reports and campaigns

18/10/17

Art

'Dazzling' Bad Art show points to socialist future

18/10/17

Democratic rights

Conference on state spies and sabotage: who's watching who?

18/10/17

Council

Sheffield Labour council threatens peaceful protesters with prison

18/10/17

South West Wales

Hundreds turn out for rally aimed at removing west Wales Tory MP

18/10/17

NHS

Uprising to save the NHS!

18/10/17

Socialism

Can you donate to the Socialism 2017 appeal?

18/10/17

East London

No cuts - hands off King George A&E!

18/10/17

North London

North London hospital workers fight cuts and job losses

18/10/17

Leeds

Striking back against the sackers' charter at Leeds University

18/10/17

BAE

Nationalise to save jobs at BAE Systems

18/10/17

Royal Mail

Workers' anger increases after Royal Mail bosses block strike - back postal workers

18/10/17

Schools

Schools "can't go any further" - stop the cuts: set deficit budgets now

18/10/17

PCS

PCS ballots members to send message to government: scrap the pay cap

18/10/17

Swansea

Socialist Students 'welcome' Hillary Clinton to Swansea

18/10/17

Local government

Unite local government sector plans strike ballot

triangleMore Reports and campaigns articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle13 Oct The end of the Tories?

triangle11 Oct Nasty party imploding...drive out the Tories

triangle11 Oct CWU fights court attempt to stop national strike

triangle11 Oct The fight against racial discrimination is tied to fighting against...

triangle11 Oct Catalonia: Workers can finish what Puigdemont won't

triangle6 Oct Boeing bust-up threatens thousands of skilled jobs

triangle4 Oct The nasty party turns on itself... but the Tories must be driven out

More ...

triangle19 Oct Waltham Forest Young Socialists: Deaths in police custody

triangle19 Oct Swansea Socialist Party: Spanish revolution 1936-37

triangle19 Oct Cardiff East Socialist Party: Is equality for women possible under capitalism?

triangle19 Oct Wirral Socialist Party: The October 1917 Russian Revolution

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Archive

Archives:

October 2017

September 2017

August 2017

July 2017

June 2017

May 2017

April 2017

March 2017

February 2017

January 2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice

V2