Yesterday, the First Minister announced that the Scottish Government would freeze the Council Tax next year. While many will welcome any help with the cost of living crisis, this is the least effective way to provide that support. I thought my days of explaining why had ended, leading me to agree with Andy Wightman’s response, “Dearie me. I thought we had finished with this nonsense." This refers to the 'stop-gap' freeze that lasted nine years until 2017.
I get the politics of this. The SNP has just been hammered in a by-election in which the voters made it clear that the cost of living was their number one priority, not independence. Yet the conference coverage has been dominated by the debate on independence strategy. In that context, the focus of the First Minister's speech needed to be on the people's priorities, hence the big announcements on the Council Tax and NHS waiting times. Not consulting the Scottish Greens was also a helpful nod to the SNP's 'tail wagging the dog' faction.
So, what’s wrong with another Council Tax freeze?
The Scottish Green's had a few hours to respond, and Ross Greer correctly says, “As we have repeatedly highlighted, council tax is a ludicrously broken system. It hasn’t been accurate since before I was born, with most people now paying the wrong rate as a result of those 1991 valuations." Since the excellent 2006 Burt Report analysed the options, the story of Council Tax reform has been one sticking plaster after another. I have lost count of how many consultation submissions I have written since then. I am also old enough to remember when the SNP leadership agreed! Another sticking plaster when the Scottish Government is consulting on new proposals, however inadequate, appears to demonstrate policy-making on the hoof.
The Greens were not the only ones caught out by the announcement. COSLA was also not consulted, which disrespects the new start promised in the Verity House Agreement. This is, after all, a local government tax, and the rate is a matter for individual councils, not the central government. It will also further reduce the proportion of funding raised locally. By dictating almost all council finance from the centre, councils become local administrators rather than local government – unable to respond to local needs and be accountable to their electorate.
Then there is the cost, at least £100m, to compensate councils. Only this week, the IFS highlighted the dire state of the UK finances. This means Barnett consequentials are unlikely to save the Scottish budget as they have in the past. Coming from a Scottish Government that has just told UNISON that there is no more cash for council workers pay, this is not clever industrial relations either. In fact, the only group to welcome the freeze was the tax dodgers alliance. As the STUC put it, "Local services are crying out for investment, and today's announcement combined with a decade of inaction will only make the situation worse." Let us not forget that the last freeze was not fully funded, and councils were forced to increase service charges.
The Scottish Government were consulting over a modestly progressive increase in the Council tax bands - proposing bills for Band E to Band H homes go up by 7.5%, 12.5%, 17.5% and 22.5%, respectively, in April. In contrast, a Council Tax freeze is regressive, disproportionally benefiting better-off households. This is a graphic I did in 2017, which shows just how much the last freeze benefited the wealthy.
If the Scottish Government has the cash to support families through the cost of living crisis, they should focus on progressive measures like the Scottish Child Payment and strengthening the public services we all rely on. A tax handout for the rich is a regressive policy.
