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Public finance expert hails 'imaginative and progressive' council tax reform

publicfinanceThe SNP has today welcomed comments from the Head of the Chartered Institute of Public Finance and Accountancy (CIPFA) on the party’s council tax reform plans – which have been hailed as “imaginative and progressive”.

Writing for PublicFinance, CIPFA head Don Peebles said that while the plans announced by the First Minister this week “have been predictably criticised by her political opponents… a closer and more objective look at what it means in the longer term reveals an underlying imaginative and progressive set of proposals.”

Mr Peebles also made clear that the SNP’s plans to consult with local authorities to assign a proportion of devolved income tax could result in “increased revenue for Scottish councils” – and that the proposals taken as a while are to be welcomed, meaning “property, income and land could all feature as part of the local taxation system.”

On the plans for income tax, Peebles wrote:

“But it is in the longer-term future proposals where local tax takes a different and more imaginative turn. The proposal is to assign 25% of Scotland’s future income tax receipts to councils. This would replace revenue grant and it could result in much-needed increased revenue for Scottish councils.”

The public finance expert added:

“The proposals taken together do introduce a measure of progression to local finances and that is to be welcomed. It means that property, income and land could all feature as part of the local taxation system.”

Commenting, SNP MSP Kevin Stewart said:

“These are welcome comments from a respected expert, making clear that the SNP reforms to Council Tax are both progressive and imaginative – and will have real benefit to Scotland’s councils while protecting low-income households.

“The reforms to Council Tax announced by the First Minister this week meet the key tests of making the system fairer, more progressive and locally empowering, in line with the principles agreed by all the parties on the Commission on Local Tax Reform.

“Overall, the SNP’s progressive reforms will protect three quarters of household budgets, expand protection for low-income families and deliver £100 million to deliver in our schools – and opposition politicians should get behind these sensible plans.”

The SNP's proposals have come under attack from the party's political opponents with Scottish Labour leader Kezia describing the reforms as a "broken promise", a reference to the nationalist's 2007 pledge to scrap the council tax in favour of a Local Income tax [LIT].  LIT was eventually scrapped due to a lack of support at Holyrood and threats by the then UK Labour Government to withhold £400m from the Scottish block grant if LIT went ahead.  

Despite criticising plans to retain a reformed council tax, Kezia Dugdale's party has refused to offer its own alternative to the current system.

In 2014 Scottish Labour's Devolution Commission recommended scrapping the council tax.  The idea was adopted by then Scottish Labour leader Johann Lamont who vowed to replace the current system with one which would see people in larger properties pay more.

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