Sean Bell: The Scottish people cannot afford to ignore council tax, so why can our politicians?

“Whatever replaces the council tax should not insult either the intelligence or the sense of justice of those required to pay it. It should not be levied against those who have no means of paying it. It should not support an industry of debt collection that turns despair into the background noise of its victims’ lives.”

MANY of you will not need reminding – and will probably not thank me for doing so – that after next month, a new council tax bill will be on its way. Then again, a new council tax bill is always on its way. To borrow a phrase, it can’t be reasoned with, it can’t be bargained with… and it absolutely will not stop.

Depending on whether you pay the levy in ten or twelve instalments across the year, you may be enjoying a brief respite from council tax across February and March, but after that, your local authority will issue a fresh bill for the financial year ahead – a bill that will arrive, provided the Covid-19 does not require a postponement, mere days before the 2021 Scottish parliamentary election. Council tax may therefore be fresh in voters’ minds when they make their choice, much as certain politicians might wish otherwise.

The complacency with which Scotland’s political class has treated the issue of council tax is a true multi-party enterprise; its reform is no one’s first priority, and even those who raise the matter do so only fitfully – usually during those brief spasms of media interest when it can generate some headlines.

So it was with last month’s Scottish Budget, which saw Finance Secretary Kate Forbes announce that councils across the country would receive funding equivalent to a three per cent council tax increase if they opted to freeze council tax across 2021-22. This was predictably met with grumbling by a number of a local authorities – particularly in Edinburgh, where the council had been planning to raise council tax by 4.79 per cent. Reasonably enough, people like Edinburgh City Council depute leader Cammy Day have argued that if the Scottish Government wishes to instruct authorities to freeze council tax, they should also fully fund it.

We can only speculate, but the Scottish Government may be gun-shy over such a commitment, given the loud and disingenuous criticism they received over the last time such a policy was pursued nationwide. If there’s one thing you can count on from Scotland’s pundit class, it’s that their outrage over a council tax freeze will invariably outstrip any objections they might have to the tax itself.

The argument is vintage at this point: a council tax freeze is, we are told, nothing but a subsidy for the nation’s wealthiest (oddly enough, this condemnation can be most loudly heard from people who would not otherwise be mistaken for redistributionist class warriors). Generally unaddressed is the obvious follow-up: if council tax in its current form is increased, who will it disproportionately hurt? Not the rich who could easily afford such an increase, but all those for whom council tax is already an impossible burden upon their precarious finances.

These people are not few in number, and no one can claim we were not warned about their plight. In early January, Citizens Advice Scotland warned of a potential “explosion” of council tax debt in 2021, due to arrears built up over the course of the pandemic. Over 2019/20, 2,257 people help from the charity with complex debt issues involving council tax, owing a cumulative £6.8 million, with an average of over £3000 in council tax debt owed. As CAS financial health spokesperson Myles Fitt noted, “The figures before the pandemic are bad enough, but the real fear is that Covid-19 is going to make matters much worse.”

Fitt advocated that aid be provided to those who “have fallen into council tax debt solely because of an economic consequence of Covid-19”, either through the government writing this debt off, establishing a council tax hardship fund, or some other long-term support from local authorities. However, none of these are long-term solutions to the perpetual challenge that council tax debt represents to Scotland’s poorest, which CAS and others have been highlighting long before the advent of the novel Coronavirus.

Despite some of them offering payment breaks last year – which only delayed the debt, thus allowing it to accumulate further – Scottish councils are generally loath to abandon or even tweak the revenue stream the council tax represents. Shortly before the Scottish Budget was unveiled, their umbrella organisation Cosla argued that there should be “no cap on council tax” in light of £1.5 billion budgetary shortfall – a grim prospect, given that Cosla last year suggested that the only two viable options for addressing Covid’s financial toll were allowing local authorities a minimum of 20 years to pay back deficits, or increasing council tax in excess of 50 per cent.

Analysis from the Accounts Commission, released two days before the last Budget, estimated that the financial cost of Covid-19 on Scottish councils in the current financial year “is estimated to be £767 million”, gives some insight into one of the most baffling questions in Scottish politics: who defends the council tax?

The obvious but only partial answer is the local authorities who cannot survive without it. None of them are so stupid as to try as paint it as anything other than farcically regressive, but neither is there any hurry to revisit the valuations upon which property tax is based, conducted as they were over a quarter-century and several property crashes ago. There are many who prefer to pretend the 1990s never ended, but demanding cash based on that delusion is arguably taking things too far.

It is no secret that Scottish councils are underfunded and that the services they provide are vital, but your sympathies may nevertheless be limited. “We know it’s not fair, but we need the money,” is the rationale for a mugging, not a system of taxation.

That said, if councils are unwilling to consider the wider questions raised by the injustice of council tax, then neither have many denizens of Holyrood shown much enthusiasm towards reviving stalled efforts towards abolition or reform.

The last time hopes were raised was almost exactly two years ago, following a Budget deal between the SNP and the Scottish Greens; in exchange for the latter’s support, the Scottish Government agreed to convene cross-party talks on replacing the council tax, stating that it would publish legislation before the end of the current parliament in 2021 if agreement could be reached.  

For those of us who wish to finally bury council tax at the crossroads with a stake through its heart, the prospect of further cross-party talks did not inspire much jubilation. A cross-party commission in 2015 had already recommended replacing council tax with a system based on both property values and income. Despite this, Nicola Sturgeon’s government once again lost its nerve and merely tinkered around the edges. What exactly were further talks supposed to achieve – and what kind of agreement? Did anyone seriously think MSPs were going to come up with a council tax replacement that would be acceptable to both the Greens and the Conservatives?  

Given the failure of any of Scotland’s major political parties to prioritise local tax reform – the Greens, to be fair, have been the most vocal on the issue, but have been repeatedly frustrated and sidelined by more immediate concerns – it is hard to avoid the conclusion that movement on replacing the council tax will require extra-parliamentary methods. Which raises the question: why hasn’t it already?

It may not be the greatest trick the devil ever pulled, but it certainly deserves some credit: how does one elicit tolerance of an illogical, regressive tax unfit for either purpose or any social democracy worth the name? Simple: precede it with the poll tax.

The poll tax, intentionally or otherwise, assumed the characteristics of the government that imposed it. It was economic violence applied through a perverse Thatcherite morality. The suffering it caused – for Scotland particularly – was entirely intentional. It could be argued that the outrage which followed was as much a reaction to the malicious self-satisfaction which lay behind the ‘Community Charge’ as the tax itself.

There are few accomplishments which can be attributed to the council tax, but it has largely avoided this fate. There are certainly those who might find it impossible to perceive no sadism in the nature of the levy and its brown envelopes of doom. Yet if there is sadism in the council tax, it is a quiet, official, unemotional sadism. Where Thatcher’s government exhibited grim relish in its imposition of the poll tax, those local authorities tasked with overseeing its replacement show no feeling at all.

Those in receipt of the council tax bill, on the other hand, may feel many things. Anger would be a good start; fear is more likely. The system doesn’t work without fear or its agents. Sheriff officers – profit-driven debt collectors with a fancier title – are one of those professions that make those on the sharp end of their services question how some people sleep at night. It continues to baffle me that seemingly no serious politician in Scotland can recognise the vast constituency of voters who would be enthused to see someone – anyone – stand up to their cruelty, their intimidation, and the fact that they exist with the silent consent of our governments, both local and national.  

Advocating an end to council tax necessitates some idea of what might replace it. On this, there are numerous options, the most recent of which was a proposal for a proportional property tax from the charity Fairer Share, consisting of a rate of 0.48 percent on the current value of the property. The suggestion quickly provoked terror and condemnation from the British right, which is how you know it’s probably a good idea.

“Such a tax would be powerfully anti-aspirational,” thundered Tory MP Anthony Browne in the Spectator, arguing that any government implementing it would be “effectively nationalising the revenue raising abilities of local authorities” and “introducing Corbyn’s class-envy mansion tax for him, alienating the Conservative base and convincing Labour supporters they are right.” Browne is, at least, honest about his priorities.

The proposal would, it’s safe to say, be fairer and more equitable than the current system; so would the Scottish Greens’ preferred alternative of a Residential Property Tax. That said, at various points, I have also been sympathetic to the SNP’s long-abandoned plans for a Local Income Tax – frustrated, as many in Scottish politics prefer to forget, when the UK Government threatened to withdraw £381 million from the block grant if Holyrood even glanced meaningfully in the direction of council tax abolition – and the Scottish Socialist Party’s ‘Scottish Service Tax’.

The final proposal (last notably seen in the manifesto of the quixotic left-wing coalition RISE) had and has, according to those more expert that I, considerable loopholes. Still, for me at least, it also held a wonderfully simple attraction: as a form of income tax, it would not require payment from those who lacked an income. If you’ve ever looked at your Universal Credit payment for the month and tried to figure out precisely how much heat, light or food you’re supposed to go without in order to keep the debt collectors at bay, the appeal of that idea was almost visceral.

Any potential replacement for the council tax will no doubt entail difficulties of implementation and provoke much debate amongst policy wonks over their respective merits. I will leave such discussion to the experts, though it is unlikely any advances will be made without some consensus – if not in a Holyrood cross-party talking shop, then at least amongst serious campaigners.

To that end, I will say this: whatever replaces the council tax should not, first of all, insult either the intelligence or the sense of justice of those required to pay it. It should not be levied against those who have no means of paying it. It should not support an industry of debt collection that turns despair into the background noise of its victims’ lives. It should be willing to, if not soak the rich, then at least get them somewhat damp. It must find a way of circumventing the cynical arguments which force financial impossibilities on either the poorest in our society, or the services upon which we rely.

In my view, ending council tax could be the silver bullet which facilitates a long-overdue wider reform of local government in Scotland. Councils, regardless of their political makeup, should ideally enjoy some level of support, or at least trust, from the people they are supposed to serve. These people take out our trash; many of us have known council workers, and know just how hard they work. And yet the present council tax system sets people against their own local authority from the outset. There are those who, when they think of the council, can think only of those brown envelopes of doom.

We can and should do better than that.