Andrew McFadyen urges Scottish Labour to look beyond Council Tax and be bold in empowering local authorities to raise new revenues to fund vital services.
Cautious. Careful. Conservative.
These are all words that could be used to describe the SNP’s budget. The SNP’s rhetoric has always been far more left-wing than their actual record.
Faced with real terms cuts in the block grant from Westminster, Finance Minister John Swinney had a choice to accept austerity or offer an alternative based on more adventurous use of tax powers.
His budget does provide cash for some progressive policies, such as a reversal of the “bedroom tax” on social housing. Flagship achievements such as free university tuition, free prescriptions and free bus travel for pensioners also stay untouched.
Instead, the hardest cuts are being passed onto local government. COSLA calculates that Scotland’s 32 local councils will lose out on £350 million, which could result in 15,000 job losses.
COSLA President David O’Neill warned that the impact would be “catastrophic”. He said:
“This is a budget that hits the council workforce in terms of job losses, it hits the child in care, it hits the elderly struggling with dementia and the vulnerable adults, all of whom solely rely on the support that only a council can provide.”
It isn’t enough to criticise. Labour needs to explain what it would do differently.
Writing in Labour Hame, Fife councillor Gavin Yates made a strong argument for an end to the Council Tax freeze, which has been in place for almost a decade.
“The hollowing-out effect of the Council Tax freeze, unwisely backed by Labour late on in the run up to the 2011 election, has diminished local government to the point where it is emerging as nothing more than a cuts quango for the SNP.”
The council tax freeze has disproportionately benefitted those who are already well-off. According to Unison, the average annual saving for people in the most expensive Band H homes has reached £441, while those in the cheapest homes saved £147.
It would be far more progressive, and much less expensive, to fund councils and housing associations to freeze rents.
But why stop at that? If MSPs use their imaginations there are any number of ways in which local authorities can be empowered to raise more revenue.
Edinburgh is the most popular destination in the UK for international visitors after London. 1.3 million people visited Scotland’s capital in 2013. If each of them paid a £10 surcharge on their hotel booking it would raise over £10 million a year to help fund services in Edinburgh.
A ‘bed tax’ on foreign visitors obviously has more potential for tourist hot-spots like Edinburgh and St Andrews than, say, a former steel town like Motherwell, but surely it should be part of the mix?
And how about a social responsibility levy on alcohol sales? Scotland has the eighth highest alcohol consumption level in the world and one of the fastest growing rates of liver disease.
The Scottish Government estimates that alcohol misuse in Scotland costs the nation £2.25 billion every year in extra services and lost productivity. A ‘social responsibility levy’ on all retailers who sell alcohol, with the rate based on sales, could help recoup some of that cost.
At current rates of consumption, a levy of 3p per unit on alcohol would put 9p on the price of a pint and less than £1 on a bottle of wine, but it would raise £150 million a year.
The Scottish Parliament has legislative responsibility for local taxation, so provided that the proceeds go to local authorities, a levy on alcohol sales would be perfectly legal.
If the principle is extended to other unhealthy products, a sugar or fast food tax could help pay for children to have free access to swimming pools, 5-a-side pitches and tennis courts.
It would be a bold move for any political party to go into May’s election calling for tax rises, but if Scottish Labour wants to get a hearing it needs to win back its reputation as the party that stands up for working people, and it needs to be a bit adventurous.
There is more than one way of funding local services.
Follow Andrew McFadyen on Twitter: @apmcfadyen
16 thoughts on “Time for Labour to be adventurous”
FFS will you people get it into your head that there are no new taxes available! We are already taxed to the hilt and beyond!
Only the rich and super rich can afford to pay more because they are the only ones who are paying relatively nothing at all in comparison to the rest of us.
How about instead concentrating on lowering peoples bills? Especially our utility bills. And I don’t mean the wishy washy playtime rubbish about freezing the utility bills for a couple of years for it only to go up again in a manner which claws back the losses taken over the 2 years I mean an actual forced reduction in utility bills and strict freezing of any further increases. Better still a full renationalisation program.
That would be a vote winner especially if you couple it with tax freezes.
You want more revenue? Then give people money to spend don’t go taking away what little they have left that would be moronic and self defeating unless of course your actual intent is ideologically right wing Tory!
Exactly Mike, what is it with the labour party and their obsession with spending other peoples’ money? Income tax at 20% which rises to 40% if you earn 40k. (There used to be a 10% rate (for the poorest) but the chancellor with the moral compass abolished that). Add to that 20% VAT means a wage earner trying to raise a family on say 20K has to pay 20% income tax and 20% VAT on any purchase. Taxation levels that are endured at present are already crippling and Labour are proposing to raise Council Tax further. Hard to believe that a political party can be so out of touch. It is little wonder that they are no longer trusted by the electorate.
I said it yesterday on this site regarding the same subject and I will repeat it now; if Labour in Scotland feel so strongly about this let Labour put ‘abolition of the SNPs Council Tax freeze’ in their manifesto and let the voters decide.
In the spirit of positivity here is a piece of advice which would be a real vote winner for The Labour Party. Propose an income tax flat rate of 10% on all earnings above the average wage. (why should the government take tax from those that earn less than the average wage?) In other words on earnings up to 27K you don’t pay income tax. Also abolish VAT because it is wrong; and it is wrong because, if somebody wants to sell something and another person wants to buy it then why should the government take a cut?
“A ‘social responsibility levy’ on all retailers who sell alcohol, with the rate based on sales, could help recoup some of that cost.”
Published in the full knowledge that any imposed levies on goods is passed directly onto the consumer. you might as well forget the middle man and simply impose a further consumption of goods taxation on everybody.
The vast majority of us in the UK are taxed beyond endurance already! Think along those lines and maybe just maybe you will have a chance to save a couple of constituency seats next year as well as a couple of councils.
Don’t heed the tip and watch your further much deserved decline to nowhere.
Time is way past where you stop being the Red Tories we all despise.
Um… yes… you pay a bit more for a bottle of vodka. The council uses the money to help pay for things like community policing, extra help for people who struggle with addiction or free access to 5-a-side pitches for kids. Is that so bad?
How much revenue will you raise from paying a bit more for a bottle of vodka once you’ve priced it out of the range of most people?
You think folk cant recognise meaningless rhetoric when they see it? No thought to reducing peoples bills? Too anti Tory for you?
Here’s a suggestion for a Labour policy, although the Blairites who’re terrified of upsetting the media barons & party doners would never allow it.
Instead of devising ever more devious ways to screw more taxes from the bottom 90% why not target the top 10%, (you know the ones who pay little or no taxes & expect everyone else to pick up the tab for them).
Start from scratch with taxation laws, abolish all the loopholes & get out clauses, every person or company for that matter, that earns money in the UK pays money back into the UK.
“These are all words that could be used to describe the SNP’s budget. The SNP’s rhetoric has always been far more left-wing than their actual record.”
Andrew you cannot profess that the Labour Paty UK and the Scottish Labour section are a left wing party when you support the Tories over Trident and that is contradictory over your rhetoric of being anti austerity and anyway the SNP is a left of centre, social democratic and progressive party who have a proven track record of being anti austerity and for scrapping Trident.
“It would be a bold move for any political party to go into May’s election calling for tax rises, but if Scottish Labour wants to get a hearing it needs to win back its reputation as the party that stands up for working people, and it needs to be a bit adventurous.”
Andrew let’s face it the polls predicts a wipeout of Scottish Labour section at the next Scottish elections so whatever you do will be irrelevant however the raising of taxes should play into the hand of the Tories so I expect you to be beaten into 3rd place in the elections.
Will – the article recognises that the SNP have found money for some progressive policies, most notably mitigating the impact of the Bedroom Tax. And yes, Labour’s position on Trident currently lacks clarity (although the overwhelming vote against nuclear weapons at Scottish Conference is a good indication of what members think on the issue). But the point still stands – local government is getting hammered. Labour, like the SNP, can either accept austerity or do something different.
Independence of Westminster is different. Progressive too. The world is full of small Independent from Westminster Nations some smaller than Scotland who don’t promote or advocate targeted austerity measures at their poorest and most vulnerable and are not only coping but prospering as a result and none of them have anywhere near the overall tax burden of your average UK Tax payer.
There are better ways and they already exist around the world.
I’m interested Mike. Can you give me an example of a successful social democratic state with a lower tax burden than the UK?
Yes. Every existing Social Democratic state on the planet has a lower tax burden than the UK.
The UK has a higher overall tax burden than every State on the planet irrespective of its political status.
“And yes, Labour’s position on Trident currently lacks clarity”
Andrew here is the nub of the matter there is only one Labour Party UK and the Scottish Labour section is as it says on the tin it is a section of that party and anything it says is irelavant as it does not make the party policy and will stand on the one manifesto of the Labour Party UK.
Andrew on another matter regarding the Scottish elections is the Scottish Labours sections Elephant in the room is Independence, the SNP have a clear policy of wanting Independence, the Tories have a clear policy of wanting to remain part of the Union therefore the electorate have a choice between either of these 2 parties on Independence at the election, as for the Scottish Labour section there is no position whatsoever taken on Independence either for against or neural so any votes that may be gained by taking a position one way ot the other will be lost at election.
Mike – that’s nonsense. Taxes in the UK are lower than most other European countries. See for yourself:
That’s a measure of taxation relative to GDP not relative to individual tax burden. And its worthless because no 2 Nations have the same taxation relationship ratio to their GDPs nor do they have the same size of populations therefore the ratios will be unrepresentative of the actual measurement per head of population per Nation.
Typical Labour deceit. Trying to promote irrelevance as evidence.
How about the fact that the UK has the highest level of overall property taxation in the world than anybody else and its that measure when coupled with the other forms of taxation which puts the UK to the top of the taxation league?
Capital Gains Tax.
National Insurance Contributions.
Insurance Premium Tax.
Petroleum Revenue Tax.
Stamp Duty Land Tax.
Stamp Duty Reserve Tax.
Council tax (Domestic rates in N. Ireland)
Air passenger duty
Climate change levy
Vehicle excise duty
I’m sure there are more but can anybody find an equivalent or larger list for any other State in the world?
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