Council Tax Debt

– in the Scottish Parliament on 5th March 2020.

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Photo of Graham Simpson Graham Simpson Conservative

5. To ask the First Minister what the Scottish Government’s response is to Citizens Advice Scotland’s statement that council tax is the “number one debt issue” it deals with. (S5F-04011)

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Our council tax reduction scheme helps people on lower incomes with the costs of council tax, and we have provided more than £1.7 billion in funding for the scheme since it began in 2013. During that time, the number of claims has reduced due to the unemployment rate having halved.

It is worth noting that the average band D council tax rate in Scotland is £499 less than in England, and that working-age households in England have seen council tax support cut by a massive 24 per cent.

I urge anyone who is struggling with debts or meeting their council tax bill to get advice from their local advice agency or use the Citizens Advice Scotland online tool, and to contact their council to see whether they are entitled to a reduction.

Photo of Graham Simpson Graham Simpson Conservative

Councils are being forced to increase council tax because of years of underfunding by this Government. [


.] They do not like it, Presiding Officer.

The Presiding Officer:

Let us hear the question, please.

Photo of Graham Simpson Graham Simpson Conservative

The Scottish Parliament information centre estimates that the increase in council tax revenue around Scotland will be roughly 21 per cent between 2016-17 and 2020-21, which is a lot.

It is little wonder that we now have people in council tax poverty, yet the number of people using the council tax reduction scheme—[


.] I will repeat that, because Scottish National Party members do not want to listen to it. The number of people using the council tax reduction scheme that the First Minister mentioned has fallen since the scheme was introduced in 2013.

Sadly, the First Minister will not agree to stop the council cuts. Will she agree to work with organisations such as Citizens Advice Scotland to promote the council tax reduction scheme and help to lift people out of a sea of debt?

The First Minister:

Well, well, well. If council budgets are under pressure, it is because of a decade of Tory austerity. I note that local government budgets are under considerably less pressure in Scotland than in England, where the Tories are in government, because of the relative protection that we have been able to provide. This afternoon, we will seek the approval of this Parliament for a budget that delivers a real-terms increase in the funding that is available to our local councils.

Council tax in Scotland was of course frozen under the SNP Government for a decade. Today, as I said, the average band D council tax rate is, literally, £500 lower in Scotland than in England. We continue to provide support to people on low incomes, which is unlike what happens in England. In January 2019, the Institute for Fiscal Studies commented on localised council tax support schemes in England, where—I remind members—the Conservatives are in government. The IFS said:

“This is the first time since the poll tax that many of the lowest-income households have been required to pay local tax.”

That is shameful, but that is the reality of Tory Government.

By contrast, the SNP Scottish Government keeps council tax bills lower than in England and we provide support to low-income households, which is why most people continue to prefer the SNP over the Conservative Party.

Photo of Andy Wightman Andy Wightman Green

Does the First Minister agree that one of the reasons for the levels of council tax debt is that council tax remains the most regressive tax in the United Kingdom, which contributes to the fact that the poorest 20 per cent of the population pay more as a percentage of their income than the top 20 per cent? Does she agree that the council tax should be scrapped as soon as possible?

The First Minister:

We have endorsed the commission on local tax reform’s conclusion that the present system should end. We want to see a consensus in Parliament on what could replace the council tax. In order to make progress, we have sought to convene cross-party talks on identifying a replacement that could be supported by Parliament, and that process is on-going. If there is agreement on a replacement for the present council tax—I hope that there will be—we would be prepared to publish legislation by the end of this session of Parliament, with that legislation being taken forward in the next session. I know that the Greens are on board with that and I would encourage other parties to get on board with it as well.