Scottish Tories offer £150 council tax cut

With the hugely under-reported decision by the Conservatives to stop matching Labour's spending plans we may soon see tax cuts back on the UK-wide agenda (or at least a decisive attempt to get borrowing under control).  Annabel Goldie has made a decisive move today to put tax cutting on the Scottish political agenda.

A little while ago we published an excellent Platform piece by Derek Brownlee MSP on the great muddle of the SNP's costly plans for a local income tax.  Ms Goldie has today announced that she would divert the £281m subsidy that Alex Salmond plans for the introduction of SLIT (Scottish Local Income Tax) to a £150 council tax cut.  Here's the Scottish Tory leader's full statement:

“The £281 million that Alex Salmond says he can find to subsidise the SNP’s unfair, unworkable and totally discredited new national income tax would be much better used to cut the Council Tax bills of every one of the two million households in Scotland.

“Today I can announce the cornerstone of Scottish Conservative plans to reform and reduce council tax. We would use the government’s efficiency savings to cut the council tax bill of every Scottish household by £150 meaning two million households - 100% of council tax payers - would be better off and we would still plan to go even further with bigger cuts for our older pensioners.

“Unlike Labour, who are long on rhetoric and short on solutions, this is a totally costed, entirely workable plan. It can be done as soon as the SNP finds the money, which they say they can. Indeed, as soon as they can find even some of that money, we can start cutting bills. This is real help in these hard pressed times.

“So it is time for the truth on the Scottish National Income tax plans. They say that 80% of Scots households would be no worse off under their plans. But to make this claim the SNP has to pump £281million pounds in subsidy into the scheme. The real comparison is not between a subsidised LIT and an unsubsidised council tax, but between both bills cut by the same subsidy. As the enclosed study shows, which is based on the SNP’s own data, the tables have been turned.

“Alex Salmond says he can find the money; Scottish Conservatives can spend it better. In these pressing economic times we don’t need a new tax on work – we need a tax cut for all.”

Congratulations Annabel!  Yesterday Essex Tories announced plans for a £200 council tax rebate for low income families and pensioners.  It's your turn soon Mr O...

Comments

[Henry Mayhew - ukipper]

One could quibble with the words 'Scottish Conservatives can spend it better', but certainly an excellent demonstration of conservative values.

For Mr O to cut taxes without tackling the true size of public debt including gold-plated public sector pension liabilities, will be problematic. They must be made transparent in cost, and moved to guaranteed mutual societies alongside transparent contributions for investment. This of itself will force a curtailment of public spending, as it should. Current public sector pensions liabilities are £30bn pa, £15bn of which is hidden in the public accounts.

I would far rather see Mr O be frank about the necessity of investing today for pensions liabilities being incurred today, than announce a window-dressing small tax cut.

The public are beginning to sense that all is not well, to put it mildly. Honesty is the best policy. There is always a solution, and, pace our esteemed ed., it isn't a small tax cut that fails to address the real issue of our loading essentially unpayable burdens on the next generation.

We have to start talking about this and taking action to avert a continuing meltdown in the public finances.

[wtf]

This must be a joke. Are the SNP really going to call their local income tax "SLIT"?

Still, good move by Goldie, although no doubt the mere mention of the word "Scotland" will bring the rapid, foaming at the mouth English Dems onto the site to moan and complain about Scotland's so-called "subsidy".

[Matthew Dear]

Isn't she good! Much underrated. Superb rhetoric - in the old sense of the term. Bravo.

[Dave McEwan Hill]

What silly nonsense. Sad to see the Scottish Tories reduced to playing to the lowest common denominator
The SNP are talking about revolutionising a part of out tax system to make it more fair and Scotland's Tories are talking about a discount, unsustainable except probably as a one-off, which does nothing to remove the iniquities of the Council Tax.
They came away with this sort of scraping the barrel during the election - sell off Scottish Water they suggested and use the money for a customers' rebate (once). See where it got them.
Haud me back, as we say.

[Norm Brainer]

"which does nothing to remove the iniquities of the Council Tax."

The only way to remove the iniquities would be to get the poll tax back, and that isn't going to happen so the best thing to do is give everyone a discount.

Yes, the statement is a bit low... but it's playing them at their own game - a good way of saying that Salmonds plan would cost more and is impossible to impliment and that scottish conservatives would cut taxes if they could.

[Michael Veitch]

Dave Hill - The policy is actually to mutualise Scottish Water (like the hugely successful Welsh Water)and use the ANNUAL saving of around £180m to fund a 50% Council tax discount for pensioners. As Annabel Goldie said to Salmond today, that is in addition to the £150 discount for all.

[Dorian Grape of Englandism]

SLIT? Wtf.

I am rather more alarmed by the > English Residential Extra Council Tax > proposal that will necessarily follow.

[tired and emotional]

Good politics Ms. Goldie. Bravo.

[Ken Stevens]

wtf
One would hate to disappoint expectations!

Actually I have no problem with a Scottish Government deciding Scottish things. I merely want a similar arrangement. Whether it would be the English Government resolving such a matter for the country as a whole, on a par with these proposals by Scotland for Scotland, or something left to individual authorities, such as in the Essex County Council debate elsewhere on the site, would be an internal matter.

In this instance, my challenge to "subsidy" is a pedantic one: how does refunding taxpayers' money constitute a subsidy to them?

[Boy Blue]

Dave McEwan Hill - this site's resident Nat - sounds somewhat desperate. This is excellent politics from Goldie and I suspect that he knows it. If the Council Tax can be reformed to make it cheaper than LIT for most people then why on earth would anyone want the whole upheaval and expense of bringing in a whole new system?

As for the charge that 'its is probably only sustainable as a one-off' - you're having a laugh Dave mate. This is EXACTLY the same money that John Swinney is promising to subsidise LIT on an ongoing basis. So what does that say about the credibility of the Finance Secretary with a vocal SNP supporter?

Thank you and goodbye.

[ChrisD]

"What silly nonsense. Sad to see the Scottish Tories reduced to playing to the lowest common denominator"

David McEwan Hill, the intense scrutiny that the SNP plans for replacing the council got in Scotland saw the policy and Swinney's credibility fall apart, quite simple it was unworkable. It was the SNP's first big mistake and made them look very amateurish.

But that did not stop the Salmond, it had the added use of being able to create a row between the SNP in Holyrood and Labour in Westminster over this issue and its funding.

The Scottish Tories have just shot both Labour and SNP foxes in one. Well done to Goldie, Fraser and the team at Holyrood, you have played a blinder.
And judging by the marked drop in the popularity of the SNP's policy proposal in a recent poll, I suspect that the Tory option will be greeted warmly by the public up here.
It also puts the SNP back firmly in the headlights rather than their preferred choice, the Gordon Brown and the Westminster government.

[Scott]

Still based on where you stay, not the actual ability to pay...

[yet another fed up scottish tory]

Too little too late from the Scottish tories- its a fairly obvious move that needed little imagination.

But since they betrayed their principles by backing the snp and have become the shills of scottish politics, what more could we expect. How much lower can our poll ratings fall? Its about time we got some people with some principles and ambition and got rid of the useless drones at SCCO and holyrood.

[Sammy Finn]

With policies like this... perhaps we can win some seats in Scotland after all!

[Andrew Morrison, Glasgow]

It's politically a great move by Annabel, but in practical terms the cut is not large enough.

I have a draft idea whereby the Council Tax could be cut in approximatly half for all. Refer to this link for more info: http://conservativehome.blogs.com/platform/2008/08/derek-brownlee.html#comment-128041534

Note that it's wrote from a Scottish point of view, so the technicalities in England may be different.

But in basics, take social services and education into central government control. At the end of the day, schools all follow the same cirriculum and pupils sit the same exams, so where is the harm? This is not control from the centre, because now we have the opportunity to take powers from the Council and give it to heads and Parent Teacher Associations.

These two areas, for Glasgow council, constitute 2/3rds of funding. The difference between the two thirds and the half allows for an increase in the proportion of local authority spending gathered from council tax.

The end effect will be shifting the burden of expenditure onto central government, where revenues are raised in the progressive method that the SNP hope to achieve with LIT.

It just so happens that we can tear apart bureaucracies, empower schools an establishment by establishment basis, give more say to parents, and less to bureaucrats.

We need a more radical proposal than set out above and I strongly believe there is something in this.

[Dave McEwan Hill]

I repeat, what silly nonsense. The problem is the Council Tax which is unfair on the less well off,not the particular level of it and this measure does nothing whatsoever to address any of the problem.
Its banality.
With headline grabbing inanaities like this the Tories will make no Scottish progrss whatsover.

[Dave McEwan Hill]

The site's resident Nat (that's me apparently) isn't desperate at all - in fact I'm rather enjoying this. There are two very obvious prolems with this lightweight stuff from Scotland's Tories
One - nobody believes there is the slightest possibilty of Scotland's Tories being in any position to do this and
Two - nobdy believes they would do this even if they could.
I must say I appreciate the largesse of Conservative Home which allows me free rein of my views. I tried poking a few pointed sticks on the Labour Home site and they closed me down and blocked my comments.

[Dave McEwan Hill]

That should be "problems" and "nobody" on my last post

[Chris]

And what would David "Scottish blood in my veins" "some of my ancestors were in the Scottish Empire" "sour little Englanders" Cameron be doing about Council Tax in England?

Nothing? Hardly a surprise from that anti-England bigot.

The recent announcement on the Barnett Formula has shown that the Tories intend to let the electorate in England go hang.

[Jake]

Scotland is welcome to arrange their internal taxes whichever way they like as far as I am concerned. Just as long as they don't do it with English money.

It would be nice if England had the same freedom to arrange our internal taxes via an English parliament and government responsible to and elected by the English people, instead of being ordered what to do by the British government which clearly couldn't care less about England ( other than to extract money from us to send to Scotland et al- see the latest report from the TPA)

[Andrew Morrison, Glasgow]

Those who criticise Scotland would do well remember that they support a Unionist party, and they should guard their criticisms because the mainstream public will construe it as anti-Scottish sentiment. It is indeed the Scottish public that have a problem with the Conservatives, not the English, so I think any complaints of bias against England is only the rare mutterings of EngDem supporters. Besides, there are other areas of the UK that receive greater funding per head than Scotland, such as counties in Northern England and also Ulster.

As for Dave McEwan Hill, the local income tax is not a more progressive tax in terms of taxing the richer to a greater extent than the less well off, because it is calculated based on income only, and not the assets of the person. For instance, a person with no inherited fortune who is doing well for himself by having a well paying job, and a wife from a similar background also with a well paying job, will find it more difficult to amass assets. This is clearly in contrast with the very wealthy who have inherited millions and have no need for any income, who under the new supposedly ‘fairer’ rules, would pay nothing (remember investment and savings income is exempted under the SNP proposals).

Basically, the SNP’s policy will reduce social mobility. The Council Tax, as supported by the Conservatives, is fairer on these grounds because it is calculated by reference to the rateable value of property, and in that context IT IS progressive: those who don’t have a lot of money and have to live with flatmates or with family pay much less assuming the property’s Council Tax bill is shared among the residents, whereas those who are wealthy and own a large and valuable property pay more. This is regardless of whether they are wealthy enough to avoid work or not.

This policy can only be sold to the public on it’s fairness properties, and as we can now see, these fall at the first hurdle. Now even Mr Salmond would find it hard to explain that way, Mr Hill…

[Alan.Su]

The Quote "Still based on where you stay, not the actual ability to pay"
Yes it is but the whole point of Council Tax is to provide the services that the residents use so they should pay for it.
In my Borough 45% of the spending goes on 'Culture and Leisure'. If the residents were ot support it we could give them a 45% reduction in Council Tax.
The Council Tax below the level of the County taxing is directly related to the services supplied locally. All the residents need to do is band together and as a group ask the Council to stop providing what they do not want. If there is enough opposition to a non-regulatory (ordered by Government) service I am sure that any Council will be happy to oblige and scrap it.

[Dave McEwan Hill]

The weaknesses Andrew Morrison identifies in the proposed LIT are the very same weaknesses in our Income Tax system so I presume he has the same quarrel with that. However I would enthusiatically support any government - Tory or otherwise - which sets about extracting a fair level of tax from these tax dodgers he identifies by bringing in measures that pull in tax from their other revenues. They are mostly Tory supporters of course.
I see the Scottish Tory initiative that headlines this issue described as "economically illiterate" in today's Herald. I couldn't agree more.

[Andrew Morrison, Glasgow]

Not really Dave, because income tax is charged on the interest earned on capital owned by the very wealthy who do not work - your party's proposal exempts investment and interest income from the calculation.