Here’s a handful of reasons not to trust a single word the SNP say about their “local” income tax (LIT) proposal:1. John Swinney claimed that since 1997, council tax has increased by 60%. But as the average band D bill has increased from £783 to £1,149 over the course of the decade, it was actually only 47%. All other bands rose in the same proportion.
2. Alex Salmond’s spokesman said that the rate would be “3p, not any more or less”. But an SNP statement said that it would be 3p “in the first instance” and that local authorities would later be given “greater flexibility”. Who to believe?
3. In June 2007, John Swinney claimed that 90% of households would pay less if their LIT was set at just 3%. But this March an SNP document inexplicably changed that, saying “under a LIT, 67% of Scottish households would have experienced an increase in net income”. I find myself wondering what proportion of us would be better off, if or when LIT reached 5p in the pound?
4. The SNP initially acknowledged that their plans involve a £450 million annual revenue shortfall, relative to that raised by council tax, but then — again without explanation — they changed that figure to just £281 million. By comparison, third party estimates of the actual amount have tended to range from £742 million (CIPFA) to £831 million (IFS).
5. The scheme, with its nationally set rate, may well fall foul of the European Charter of Local Self-Government, Article 9 of which mandates: “Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.”
SU, I do like your point 5. Especially in view of the loons running around claiming devolution itself was somehow a requirement of the Local Self-Government Charter. (Which it isn't, of course. But you know this, as you've bothered to read it!)
I've had another go at reformulating the LIT / Council Tax Benefit issue.
As is apparent from the Treasury's "Funding the Scottish Parliament" document (http://tinyurl.com/ywyp9j)
CTB is part of the Scottish Block Grant but not the Barnett Formula-governed DEL. It is a NEEDS-BASED part of Annually Managed Expenditure (AME).
If lots of individual council taxpayers didn't NEED the benefit it wouldn't be paid, and no-one would have lost out.
Swinney is asking for this money to be transferred to the Formula-governed DEL budget in perpetuity, irrespective of whether there's a NEED for it. That is a rewrite of the Barnett Formula in Scotland's favour and to the detriment of the rest of the UK. No wonder it's not on.
If Swinney could be bothered to come up with a replacement NEEDS-based formula for this money then there might well be no objection from the Treasury.
Of course, this leaves aside all the other merits / demerits of the policy.
Is this blog actually a unionist blog or "I hate the SNP regardless of what they are talking about" blog?
Surely would you be so verment in your opposition if this tax was introduced by a Labour-Lib Dem coalition?
Point 2 - is this in the context of the SNP trying woo the Lib Dems by saying "we will have a centrally set tax first but later councils will get powers to change it?"
Point 5 - some people see the devolved Scottish authorities as a glorified council - it is certainly in law a subordinate regional body. Certainly they have little financial autonomy and certainly less than the pre-freeze councils. Come to think of it, Wales and NI assemblies do not have any financial powers. Surely this means the UK has violated the Charter already?
To be honest the tax looks good on paper but has more holes in it than a Swiss cheese. From a personal prospective I would support it as my bill halves over night (I earned £22.5K and live in a B band in Edinburgh). However I can appreciate the problems of multi-income households and businesses.
Whether more bands is the answer is the answer, I do not know. Certainly the proposals by Peter Burt (1% on the value of the property) are even more scarier than what is on the table as those living in cities which tend to have more expensive properties will pay more or the same than those in larger homes in the countryside.
I would be interested in your view.
Aberdonian
You've missed the point. This isn't really a post about LIT. It's about the SNP's misrepresentations over LIT. It's about trust.
First four yes, but number five is not relevant to the "trust" argument.
Beg to differ. Don't you think that formulating policy which may breach the law is an issue of trust?
Aberdonian is spot on. What motivates this blog is dislike of the SNP not ‘wishing to promote my firm belief that Scotland's interests are best served within a strong United Kingdom, itself central to a vibrant European Union.’
Hating the SNP ain’t going to save the Union - and the only arguments you have put up in favour of staying in the Union are ill-defined wishy-washy maunderings about what it means to be British.
However there is progress in that sm753 has now admitted that the council tax benefit paid to councils to compensate for those whose incomes fall below the threshold at which they become liable for taxation could - and perhaps should? - continue to be paid even if the basis of local taxation is changed. (Swinney is not asking you see for this money to be transferred to the Formula-governed DEL budget in perpetuity - he is asking that it continue to be paid in the same way that it is paid now).
Another bit of opposition to LIT crumbles and falls.
Indy
Your capacity to know my mind better than I know it myself is quite remarkable! Have you considered a circus career? ;-)
I'll leave sm753 to answer for himself.
Only you know what motivates you SU but it is pretty clear from its content what motivates this blog.
"Swinney is not asking you see for this money to be transferred to the Formula-governed DEL budget in perpetuity - he is asking that it continue to be paid in the same way that it is paid now."
Oh really, Indy?
Right now, the CTB funds are paid as a result of individual claims by individual taxpayers - in effect the Government pays some or all of their Council Tax bills for them.
But under Swinney's proposal there will be no mechanism for this to happen. No Council Tax, thus no Council Tax Benefit for individuals to claim.
Please explain how it can "continue to be paid in the same way that it is paid now".
Do remember the Treasury - and the rest of the UK - will expect to see a needs-based formula replaced with another one, not "Let's call it £400m indexed at RPI, awight John?"
Think what you wish, Indy - but I don't "hate" the SNP or anyone involved in it. Such a view would be repugnant to me.
On the substantive issue of trust, however, I note that you have offered no defence on any of the five points.
Aberdonian
"Point 5 - some people see the devolved Scottish authorities as a glorified council..."
Sadly I have recently had to gain some knowledge on this issue.
See Council of Europe / Congress of Local and Regional Authorities Recommendation 49 (1998) - http://tinyurl.com/6oc4e2
"Authorities to which the Charter applies
58. The Charter would not apply to the Scottish Parliament and the Welsh Assembly. "
So the appropriate Euro-busybodies do not see the devolved assemblies as "local authorities". (Actually they see them as "regional authorities", which would come under a "Charter of Regional Self Government", only there isn't one, as the governments couldn't agree it. Thank God.)
The replacement of Council Tax by a centrally-set LIT certainly would be unwelcome under the Local Government Charter. Back in 1997 Resolution 58 (http://tinyurl.com/628a5v) deplored:
" 17. As regards the situation of local self-government in the United Kingdom, notes:
...
b. The limits imposed by central Government on local authority expenditure and the diminishing revenue available for local authorities"
So this could be a little embarassing for those who find this sort of thing important. Which seems to be common in Nat circles.
sm753 The consultation says that councils should continue to receive this flow of revenue (i.e. council tax benefit) under a new system. It has never been proposed that it should be paid to the Scottish Government - as the consultation also says council tax Benefit is paid to Scottish councils to provide financial support for the delivery of local services. The SNP wants that arrangement to continue. The argument about transferring council tax benefit to the Formula-governed DEL budget in perpetuity exists only in your head.
sm753
Thank you for enlightening me on the issue.
However I take it from the language that you seem opposed possibly to devolution (vis a vis your comment on the charter of regional self-government).
I can see in principle why the UK government would want to stop the Council Tax Benefit. Its a pity however for them their colleagues (or at least their three potential leaders) in Holyrood have come round sort of to the SNP's demands on this issue.
Simply because on paper any sort of local finance reform with a property tax might lead to the revokation of the council tax benefit as the new property tax would not be the "council tax" as operated in England and Wales.
(Have you started my reading list by the way?)
Concerning SU/AM2, it is much an anti-SNP blog as a unionist one. I think I know your identidy and some of the letters you have been writing to the press are even more hysterical than some of the worst cybernats.
Maybe you should get a new rigg cut!
Aberdonian
I had thought you were rather more empirically inclined than that. Why the fixation with my identity anyway? No offence, but I don’t care tuppence for yours.
And no, I’m not serial letter writer Alexander McKay.
Nor am I any of Arthur Midwinter (see here), Adam Marshall, Alistair McConnachie, Adrian McMenamin, Aubrey Manning or Andrew Marr – all of whom have been suggested, with varying degrees of certainty, at one point or another.
Nor, for the record, am I Bill Aitken, Brian Taylor, Douglas Alexander, Adam Ingram (the Labour version), Peter MacMahon, George Foulkes, Kirsty Wark, Michael Forsyth or even Gordon Brown. Yes, seriously – a cybernat on the Scotsman forum said he was “sure” I was the PM!
But anyway, I don’t really mind if you keep guessing. The conspiratorial attitude which it reveals is most amusing! ;-)
I just love the idea that someone has suggested you are Bill Aitken.
Class!
Jim
You know, I had wondered about the George Foulkes conspiracy... seeing as how you're the only person on either either side of the fence that doesn't seem to think he is a blustering idiot....
So who's missing... Cairns? ;-)
You are of course free to retain your anonymity and I do understand your concerns re vitriolic posts. But... its cyberspace where wee men pretend to be other than what they are.
And I have to concur in part with Aberdonian that this blog - whilst started well - is starting to read like list of reasons why you hate the SNP and not why you believe in the Union.... What happened to the "interdependence" debate you were going to run...?
Leaves on the Line
Consecutive posts will follow themes sometimes. I did a few on certain aspects of Britishness and some on the Saltire. Lately there's been a bit of a flurry of good old-fashioned "natbashing".
I'm aware of the stated intention of the blog but I would reserve the right to post about the weather if I feel so inclined! Don't read too much into it! ;-)
>>I would reserve the right to post about the weather<<
We've been rumbled! Who leaked to you that the promise more sunshine was going into our next manifesto? And yes, before some clever wag gets there first, I can categorically deny that the source of said sunshine will be Alex Salmonds backside :)
Indy
"sm753 The consultation says that councils should continue to receive this flow of revenue (i.e. council tax benefit) under a new system. It has never been proposed that it should be paid to the Scottish Government - as the consultation also says council tax Benefit is paid to Scottish councils to provide financial support for the delivery of local services. The SNP wants that arrangement to continue."
OK. Enlighten me. What SYSTEM have they proposed to allow this to continue?
Aberdonian
"However I take it from the language that you seem opposed possibly to devolution (vis a vis your comment on the charter of regional self-government)."
My language referred more to the incongruity of these Euro-busybody charters for this, that and the other.
Surely the default response of anyone confronted with a "European Charter of Local/Regional Self-Government" ought to be "What? Why? Have I paid for this?"
sm753 I don't know if they have proposed any system. Is it up to them to decide that? The DWP pays CTB direct to councils now so why should they not continue to pay the equivalent benefit in the same way under the same conditions. It's an income based benefit so I don't see the problem.
Indy
I think we could agree on an income based benefit paid directly to councils. (NB it's not entirely income based as the actual benefit is paid as a % of the Council Tax bill.)
That is NOT what Swinney is asking for. From the LIT Consultation:
"49. The third is as regards a matter of principle. We believe that Scotland should continue to receive from the UK Government the level of funding currently paid as Council Tax Benefit once the council tax is abolished."
So, as I said, they want to be paid the same amout of money as the present needs/income-based CTB, in perpetuity and irrespective of the need for it!
I accept the correction that the money would go to Councils and not to central funds. But it still amounts to an effective rewrite or Barnett with knock-ons for the rest of the UK. It is (or should be) incumbent on all the parts of the government set up to consider these effects and propose solutions - and most incumbent of all on the entity which wants the change!
It should be child's play to think up a needs/income-based "LIT benefit", paid to Councils and calculated as a % of claimants' LIT bills, and which delivers in total the fabled £400/450/whatever-m to start with.
Tell you what. You suggest it to Swinney, and you can have all the credit.