Cabinet (Meetings)

First Minister's Question Time – in the Scottish Parliament at 12:00 pm on 22nd March 2007.

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Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party 12:00 pm, 22nd March 2007

To ask the First Minister what issues will be discussed at the next meeting of the Scottish Executive's Cabinet. (S2F-2789)

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Our thoughts are with Dennis Canavan. I pass on to him the condolences of my family and, I am sure, all members, at what must be a horrendously difficult time for him and his family.

The Cabinet will meet next week to discuss issues of importance to Scotland. I suspect that we might reflect on the second session of the Scottish Parliament and the progress that we have made. We have the highest employment in the United Kingdom and the lowest unemployment since records began in Scotland, and a growing population. We have delivered reductions in crime, improvements in education standards and, of course, the lowest health waiting times on record. Next week, the Cabinet will celebrate the successful second session of the Scottish Parliament.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I echo the First Minister's comments about Dennis Canavan. The thoughts of us all are with him at this difficult time.

I remind the First Minister that part of Labour's legacy is a council tax that has gone up by 60 per cent. A few weeks before the previous election, the First Minister promised to devise "a fairer council tax" system. Now that we are just a few weeks from the next election, can he finally tell us exactly how he will do that?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

We will certainly do that. This is a bit like groundhog day, but I explain again that the Liberal Democrats and Labour have an honest difference of policy on the issue, as Ms Sturgeon knows. As a result, we sought an independent review of local government finance. That review, which was published last year and informs our decision making, shows that the Scottish National Party's plans for a poll tax for Scotland, announced last week, would not only add 3p on the income tax rate in Scotland but cut vital services locally and nationally.

We have suspected for months that Alex Salmond and Nicola Sturgeon would make big mistakes just before the election campaign started, but we did not expect a mistake quite as big as that. Scotland will reject the SNP's poll tax and we will ensure that our taxation systems remain fair.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

The First Minister's reference to a poll tax is a rather stupid smear, but as he raised the issue, I remind him that when the Tory poll tax was in place he wanted to replace it with a—wait for it—local income tax. He said:

"If we cannot devise a system of local income tax ... then there is something wrong with us."

There might be something wrong with the First Minister, but there is nothing wrong with us.

I asked the First Minister about his policy on the council tax. My party will abolish the unfair council tax. Nine out of 10 people will be better off and most pensioners will pay nothing. In other words, there will be a tax cut from the SNP, instead of a tax con trick from Labour. If the First Minister does not agree with us, that is his prerogative, but if we are to have a real debate it is about time he said what he would do instead. I ask again, what is his policy to reform the unfair council tax? For once, will he give a straight answer to a straight question?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

The answer is very straight. Labour and the Liberal Democrats—I am sure that the Deputy First Minister agrees—will publish their plans in advance of the election. It is right to do that as a party and outside this chamber. Our policy will not be for a poll tax; it will be for a fair system of property taxation.

If Ms Sturgeon checked her historical facts, she would find that the position in the quotation, from nearly 20 years ago, that she used was superseded, because I listened to the experts on the matter. Every expert on local government taxation—not just in the late 1980s but today—says that a fair property taxation system is right for local government in Scotland, just as it is right elsewhere in the world.

What would be wrong for Scotland—and what would be doubly wrong in view of the Chancellor of the Exchequer's announcement yesterday of a cut in income tax, which encourages people to get into work—would be to increase income tax by 3 per cent. That would be a tax on everybody in Scotland who is in work. It would be a tax on two thirds of small businesses and on pensioners. Ultimately, it would be a tax that would drive hard-working, talented young people out of Scotland to lower-tax parts of the United Kingdom. It is one of the worst policies that even the SNP has ever come up with, and I believe that it will pay for that at the polls.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Can I remind the First Minister that the chancellor's budget announcement yesterday doubled the starting rate of tax for the lowest paid in our society? That is presumably why the Scottish Trades Union Congress said that it would hit the majority of workers. It is hard to believe that that came from a Labour chancellor.

I am happy to talk about SNP policy. I will announce it from the rooftops if that is what the First Minister wants. The SNP will abolish the unfair council tax. The First Minister might not like that, but the question for him—four years after he promised to make the council tax fairer—is what he will do instead. He will not answer that question because he has no plans to change the council tax. Is it not the case that if Mr McConnell gets his way, the people of Scotland will continue to be punished by the unfair, ever rising council tax? Is it not about time he had the guts and the honesty to stand up and say so?

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

That is of course entirely untrue, and Ms Sturgeon might regret saying it when she sees the plans that we will announce in advance of the election campaign and when she sees how right the detail of those plans will be for Scotland. They are unlike her plans, which would not only raise income tax for every working person in Scotland by 3p in the pound, but ensure that people on the average wage paid about £700 a year more—and not for the current level of public services in Scotland, but for fewer services. That is a cut of more than £1 billion in local and national services. That is what the SNP proposes—and an income tax increase to go with it.

I do not believe that Scotland should be the most highly taxed place in the United Kingdom. We have ensured, in every year since devolution, that council tax increases in Scotland have been lower than those elsewhere in the United Kingdom, and lower than in every one of the last years when the Conservatives were in power. We will ensure that, here in Scotland, people are taxed fairly and that they do not pay more tax than people in the rest of the UK. The SNP will not be allowed to drive talented, hard-working young people out of Scotland, because we will keep them. We will keep growing the Scottish population and we will keep growing the Scottish economy.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Can I remind the First Minister that the SNP's plan to abolish the unfair council tax represents the biggest tax cut for middle Scotland and for pensioners in a generation? If the First Minister has a policy to reform the council tax, why on earth will he not tell us—four years after he first told us that he had one—what it is? Is it not the case that, whether they mean doubling tax for the low paid or sticking with the unfair council tax, Labour's policies hit the poorest hardest and pile on the misery for middle Scotland? Can I remind the First Minister that people want a fair local tax and a lower local tax? That is why more and more of them are backing the SNP and our policy to abolish Labour's council tax.

Photo of Rt Hon Jack McConnell Rt Hon Jack McConnell Labour

Ms Sturgeon would have more credibility if she asked questions rather than read out prepared speeches, regardless of what the answers are. Whatever sets of policies the two Executive parties put forward in advance of the election campaign, both of them will be properly costed. Neither of these parties will do what the SNP wants to do, and set a flat-rate poll tax, which all of us campaigned against for years and which the SNP wants to bring back to Scotland. The SNP's plans would drive hard-working, talented young people out of Scotland when our population is growing, when our economic growth has been above the trend rate for nine quarters in a row, when our employment rate is higher than that in the rest of the UK, when unemployment is lower, and when our economy here in Scotland is moving in the right direction again.

The SNP wants to tax everybody who is in work and to make Scotland the most highly taxed part of the UK. At the same time, it wants to cut the vital local services that attract people here. SNP members' policy is wrong and they will pay for it in the opinion polls and in the election on 3 May. When we are back, we will reform local taxation fairly and properly for all.