Local Government Finance

Question Time — Scottish Executive – in the Scottish Parliament at 2:30 pm on 22nd January 2004.

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Photo of Ms Rosemary Byrne Ms Rosemary Byrne SSP 2:30 pm, 22nd January 2004

To ask the Scottish Executive why it has not set up an inquiry into local government finance. (S2O-1142)

Photo of Andy Kerr Andy Kerr Labour

We are committed to an independent review of local government finance and are currently discussing its remit and format with the Convention of Scottish Local Authorities.

Photo of Ms Rosemary Byrne Ms Rosemary Byrne SSP

Does the minister agree that a Government that takes more than nine months to set up a review of the council tax does not regard the matter as a high priority? Will he also tell me why the Executive has set up more than 40 consultations and reviews of policy since May last year, yet still fails to set up a review into the council tax? Is the Executive too busy misleading the Parliament about the Scottish service tax proposals to examine critically its own policy?

Photo of Andy Kerr Andy Kerr Labour

My answer to many of those questions is, of course, no. We are committed to a review and it will be very interesting. The Parliament has examined the Scottish service tax before and roundly condemned it on all counts.

I must reflect on this morning's activity, although I think that Mr Sheridan just wants to be the first person to be thrown out of the chamber. That might explain his behaviour. Perhaps it was because we are now scrutinising the Scottish service tax and what it would mean for the people of Scotland. The "richest and wealthiest" whom Mr Sheridan talked about this morning are our doctors, our dentists, the professionals in our public services, the head teachers and teachers who work in our—[Interruption.] They are the rich and wealthy whom Tommy Sheridan wants to tax out of Scotland. [Interruption.]

I had the courtesy to listen to Mr Sheridan's nonsense this morning.

Photo of Tommy Sheridan Tommy Sheridan SSP

No more slips of the tongue, Andy.

Photo of Andy Kerr Andy Kerr Labour

Mr Sheridan talks about slips of the tongue and I would like to address that matter. Last week, when we were talking about emergency service workers, he talked about 12 years ago in this chamber, when, of course, what he meant was 12 months ago in this chamber. I know where I was 12 years ago. I was working for a living, but I do not know what Mr Sheridan was doing.

Can I now move on—[Interruption.] Can I now move on to the substantial—[Interruption.]

Photo of George Reid George Reid None

Order. Mr Sheridan, the odd interjection is allowable, but not a running commentary, please.

Photo of Andy Kerr Andy Kerr Labour

Just for the record, so that we are absolutely clear about what I have said about the Scottish service tax, let me say this. For 2003-04, under the current system, a couple with a band D house would pay an average of £1,009 per annum in council tax. Under the Scottish service tax, if they both earned £27,500—two teachers, for example—they would pay significantly more. They would pay £566 per annum more. Those figures are based on current calculations. [Interruption.]

Photo of Andy Kerr Andy Kerr Labour

If we consider Mr Sheridan's philosophy on the national minimum wage and add in its implications for the public sector, another £1 billion would be added to council tax payers' bills to subsidise his policies. Let us get the facts right. Mr Sheridan is upset because, at last, his policies are under attack. They are under attack because they will have a huge impact on hard-working families in Scotland.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

Will the minister confirm that, after consultation with COSLA—as set out in the partnership agreement—the independent review of local government finance will examine the distribution formula as well as the means of raising the council tax?

Photo of Andy Kerr Andy Kerr Labour

We want the review of local government finance to be extensive. It is evident—and the Tories know this only too well—that jumping into solutions for local taxation and its relationship to local government is not a good thing to do. The poll tax is a good example of why things should not be done in a hurry.

I am looking forward to the day when we get the chance to expose not only Mr Sheridan's proposals but the other proposals as well. I do not stand here as an apologist for the council tax. I stand here as someone who says that we can reform the council tax and perhaps make it work. That needs to be scrutinised, as do all the other proposals from members in the chamber, such as the local income tax and the Scottish service tax—I am not sure where the Scottish National Party or the Tories are on this. However, let us hear ideas on taxation. Let us play the ideas out in public and test them to destruction. The last thing that I want to do is to put a tax on the Scottish people that works like the poll tax.