Scottish independence: How council tax reform could boost support

Before social media gave people a platform to trade verbal abuse, the antipathy between dog walkers and other park users was legendary. However, this was as nothing compared with the anger of parents fearful of damage to their children’s education.

Local authority finance is in the same category. With this year’s elections over, and the SNP and Sinn Fein doing well enough for even the BBC to start discussing how the Union might be in peril, we can reflect on what the SNP’s continuing reluctance to implement their long-standing pledge to reform council tax tells us about it as a governing party.

Any substantial reform of taxation is undoubtedly politically difficult. With any proposal, there will always be winners and losers. While the winners may be apathetic, and possibly disengaged from the process, it is likely that many of the losers will be enraged.

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The structure of council tax means that reform would almost certainly make it more progressive. That will affect swathes of middle-class voters, especially elderly ones – exactly the people who are most capable of organising public campaigns, of putting pressure on elected representatives so that they water down, or abandon proposals, and ultimately the most likely to turn up at polling stations to cast their votes as the ultimate expression of displeasure with change.

Despite wanting to find ways to make local taxation more effective, both the Scottish and UK governments have embraced the short-term safety of pacifying the population by restricting the capability of local governments to increase taxes.

Forming the government in 2007, the SNP were elected on pledges to reform council tax, and to freeze it. The freeze only ended this year, but we are still waiting on meaningful reform.

To make it clear that Scotland will be different after independence, the SNP, in government, must behave differently from the UK Government. That underpins tinkering with the structure of income tax and the strategy of making social benefits more generous so that they meet people’s needs more fully. Such reforms feed into the narrative of the Scottish Government being able to mitigate UK Government policies but not to set out the range of changes that will come with independence.

Yet, when it comes to relations with local government, the current Scottish Government seems to be treating local authorities rather like the UK Government treats it, keeping the Scottish Government on a short leash.

Think about it this way. To feed the narrative that Scotland needs independence, being a little more effective than the UK Government is good for the SNP, especially if it can claim that with the full powers which would come with independence, it could do so much more. Act as if we are in the early years of a better nation, by taking on very large problems, and there is at least a risk of ungrateful voters turning round, and saying that everything is fine, and they don’t want independence.

Control of local taxation is devolved to the Scottish Government, whereas national taxation has been largely reserved by the UK Government. Allowing councils to raise more revenue could lead to increased total public spending, since the local taxes would not be set off against the block grant.

Of course, it is easy to imagine Douglas Ross or Ruth Davidson – and their allies in the right-wing media – complaining bitterly about Scotland becoming a high-tax country, and that these taxes will simply drive people out of Scotland.

They have, so far, been much more coy about the fact that apart from in a few flagship Tory-controlled councils – Wandsworth, for example – Scottish council tax is much lower than in most English councils. Establishing parity with England would mean raising council tax by about £500.

Strip out that difference, and Scotland does not look like the highest-taxed part of the UK unless you are living in a household with an income of more than £100,000.

As the old saying has it, tax is the price we pay to live in a civilised society. In the UK, we seem to have forgotten that. Tax is instead a burden, restraining enterprise and creativity and imposing the dead hand of government.

Government sets out to collect one-third of income. Look across the North Sea, where the Danish government receives 47% of income. Which country has the higher national income, the higher life expectancy, and the lower infant mortality rate? In surveys, in which country do people say that they are happier, or that they have greater life satisfaction? And in which country do we expect to see exceptionally high measure of trust?

Readers of Lesley Riddoch’s articles will cheerfully call out the answer to every question: Denmark. They will probably also be ready to point out that the high levels of social trust are consistent with a social contract in which people pay their taxes in return for exceptional public services.

In this context, the SNP’s pledge to reform council tax seems like a missed opportunity to set out what independence will mean for Scotland and a way of shaping the conversation needed to win a referendum.