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Scottish Rate Resolution

Part of the debate – in the Scottish Parliament on 4th March 2020.

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Photo of Willie Rennie Willie Rennie Liberal Democrat

I agree with Patrick Harvie about the council tax reforms. The cross-party group is working on those proposals just now, and I hope that the Government steps up and comes forward with proposals to end the council tax. I think that we are all committed to that, and I hope that it is seen to fruition. We have tried many times in the past, and now is the opportunity to do it. There is a will, and we need to find the way.

This is an opportunity to test the various parties’ positions on tax as well as to decide whether we agree with the rate resolution. At the election in 2016, the Liberal Democrats were up front. We said that we should have what we described as a “modest penny” on income tax to invest in education. We were very clear with people that that was what they would get if they voted for us, and that is what we have argued for in various budgets in this Parliament. We were pleased that the Scottish Government changed its approach; as Patrick Harvie reminded us, it did not make that commitment in its manifesto at the previous election. Therefore, it is, I suppose, a kind of broken promise. I am pleased that it was revoked, but the Government needs to be careful going forward.

If there is predictability about tax, so that people know exactly where we are planning to go over the next four or five years, an element of trust is developed and, therefore, the behavioural change that could come with unrelenting tax changes does not come to fruition. That is where the Government has, potentially, gone wrong. Not only has it increased income tax—which we were sympathetic to—it has increased council tax and other taxes. Although there has not been the behavioural change that some predicted, there needs to be careful nurturing to make sure that such change does not happen.

However, we should, at this moment, reflect on the Conservatives’ position on tax, because we have seen a screeching U-turn—the smell of burning rubber is still wafting around the chamber. They made dire predictions—repeatedly and relentlessly—that we would see massive behavioural change as a result of those income tax changes. They said that there would be cataclysmic events, a massive reduction in the tax take and a big economic shock, and that we would have an exodus south of the border, with all these workers leaving Scotland—that is what they said would happen. However, the reality is completely different, and we know why—those changes have not happened.