MSPs vote to increase council tax, but motion notes reforms fall short

Opposition parties have struck the Scottish Government a blow as MSPs approved reform of the council tax system which will see those living in more expensive homes pay more.

The SNP proposals, which will see charges increase for properties in bands E to H, raising an extra £100 million a year, were voted through at Holyrood.

But the opposition parties combined to pass an amendment from the Scottish Greens which made clear the changes "undermine the principle of local accountability and autonomy".

The motion, passed by 64 votes to 63, further claimed the Government had failed to address issues raised by the Commission on Local Tax Reform, which had recommended scrapping the council tax, and added that there "should be further discussions by all parties to seek to establish an enduring system of local government finance".

While the SNP had previously pledged to abolish council tax, Finance Secretary Derek Mackay insisted the changes would make the system "fairer and more proportionate".

Mr Mackay said: "It will see council tax bills increase for those in properties in bands E to H, while protecting those on low incomes from any change, and protecting the 75% of taxpayers who live in bands A to D."

He told MSPs: "The steps we are taking are simply the first in a journey of reform. These are the earliest changes we can make which ensure that additional resources are available to councils from April."

But Green MSP Andy Wightman claimed the Scottish Government's reforms were a "tepid reheat of a discredited system".

He said the current system is the "most regressive in the UK", and added that the changes will only make it a "little bit less regressive".

Afterward the vote, Tory finance spokesman Murdo Fraser said: "With this vote, the SNP has condemned its own council tax plans.

"Not only does it hike tax for hard-working families, the policy completely undermines local accountability and autonomy too."

The money raised by the changes will be used to help close the attainment gap in Scotland's schools, with the SNP saying the cash will go directly to headteachers instead of local councils.

Mr Wightman said after the vote: "Level heads prevailed tonight and educational attainment will be boosted by £100 million. But what has also prevailed is an agreement by all Holyrood's five parties that the current system of local taxation is broken and that in this five-year Parliament we have an opportunity to fix it."

As Holyrood debated the issue, Tory MSP Graham Simpson said the Scottish Government was imposing a tax rise on local government but would then "claw that money back and spend it as it sees fit on a nationwide school attainment fund".

This, he said, was "totally unprecedented" and "an attack on local democracy and local accountability".

Mr Simpson added: "It's the first time this has ever happened and it's a slippery slope."

Labour's deputy leader Alex Rowley was also critical, telling MSPs that the commission that looked at local taxation had agreed council tax "was past its sell by date and had to go".

He demanded: "How many more discussions does Derek Mackay want to have before he will make the right decision and get rid of the unfair council tax?"

Liberal Democrat leader Willie Rennie said there would be "talks about talks about talks" about reforming local taxation.

He told MSPs: "The minister will need to forgive me for being a bit sceptical about new promises now."

But Mr Mackay defended the changes, saying: "The steps we have taken today pave the way for additional investment in schools right across Scotland to help close the attainment gap and are the first step in a journey of reform to make local taxation fairer.

"Our changes also make council tax more progressive and ensure that three-quarters of households will see no rise in their bills as a result of these reforms.

"In fact our reforms ensure that while those who can afford to pay more will rightly see a moderate increase in their bills, all households will pay less on average than under council tax regimes in England, and less than they would have done if the Scottish Government's council tax freeze had not been in place."

The Finance Secretary added: "This is a significant step for Parliament and will enable us to significantly increase investment in Scotland's schools."

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