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Council Tax

Finance and Public Services and Communities – in the Scottish Parliament at 2:00 pm on 16th September 2004.

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Photo of Mike Pringle Mike Pringle Liberal Democrat 2:00 pm, 16th September 2004

To ask the Scottish Executive whether it considers the council tax to be a fair system of local authority taxation. (S2O-3216)

Photo of Andy Kerr Andy Kerr Labour

With due respect to the member, it would not be appropriate for me to comment on the issue when the Scottish Executive has recently instigated an independent review in order to look at local government finance. Once the review team has submitted its recommendations, we will respond to them.

Photo of Mike Pringle Mike Pringle Liberal Democrat

I thank the minister for that brief reply. Does he agree that, when local taxation requires pensioners to pay 9.2 per cent of their income, whereas the Prime Minister pays only 0.6 per cent of his income, it is time that Scotland took the lead and replaced the property tax with a fair local income tax?

Photo of Andy Kerr Andy Kerr Labour

All forms of taxation will be tested to destruction through the work of the independent review committee. For people on low incomes, there is a council tax benefit system. Indeed, a quarter of households in Scotland benefit from that system, as do 40 per cent of the elderly population. I quote the Help the Aged campaign report:

"The Council Tax, like property taxes in general, is 'regressive' - it places a proportionately higher burden on those on the lowest incomes rather than those on the highest."

However, it goes on to say:

"But the benefits system modifies this regressivity".

Photo of Tommy Sheridan Tommy Sheridan SSP

The minister did not mention the part of the report that says that the council tax is a pensioner tax. Who is on the independent review for which the minister took nine months to develop a remit? When will it report to Parliament on its findings?

Photo of Andy Kerr Andy Kerr Labour

I am surprised that the member does not know that the review is being led by Sir Peter Burt, who is being supported by others. It would be inappropriate for ministers to instruct an independent body on when to report. All forms of taxation, including the very regressive form advocated by the member, will be tested to destruction and destruction is what will happen to that particular form of taxation on hard-working families in Scotland.