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Commission on Local Taxation in Scotland

December 14, 2015 6:10 PM
By Jhonti Bird


ALTER MEMBER Jhonti Bird reports...

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Botanical Gardens, Glasgow


General Situation in Scotland:

  • In January 2015 the First Minister, Nicola Sturgeon, announced her intention to establish a cross-party Commission on Local Taxation.
  • (Link here: http://localtaxcommission.scot/)
  • The Scottish Conservatives chose not to engage and established their own Commission which is yet to report.
  • All other political parties are represented alongside various other NGOs and interest groups such as the Joseph Rowntree Foundation and the Citizen's Advice Bureau.
  • The Commission had its first meeting in February and has conducted a number of both sessions, both public and private, throughout Scotland throughout 2015.
  • The Commission was due to report in November but has delayed its publication date until December (likely to be the 8th or 15th).
  • There has been some consensus over the need to reform Council Tax in particular (Non-domestic (business) rates were sadly removed from the Commissions remit at an early stage).
  • There has been no real agreement on the mechanism for reform.
  • The Commission is, therefore, only going to provide a comprehensive range of policy options rather than one clear conclusion.
  • In this respect can be considered less far reaching than the Burt Review of 2006 which covered broadly similar territory.
  • Andy Wightman is a member of the Commission representing the Scottish Greens and has been a strong advocate of a form of Land or Site Value Taxation.
  • The report is therefore likely to make recommendations about the future benefits of LVT but fall short of endorsing the policy directly.
  • Having seen some of the early drafts I would anticipate that it will recommend that more research be done into the separation of building and land prices in Scotland before the introduction of any form of LVT.

Opportunities for ALTER:

  • Whatever the conclusions of the report are, there will almost certainly be some positive wording with regards LVT. This can certainly be used for lobbying purposes.
  • The Commission will almost certainly argue for revaluation of property for domestic council tax purposes. This would be an ideal time to generate the necessary data on the value of residential land, as distinct from property. This will be the necessary next step towards LVT.
  • The Scottish Liberal Democrats are likely to debate local taxation at their Spring Conference in 2016. It is unlikely that LVT will have enough support, particularly given the party's current commitment to Local Income Tax. It may, however, be worth lobbying the party to commit to a policy of legislating for mandatory revaluations in property every 5 years, which could include land valuations as well.
  • ALTER can also continue to lobby for local authorities to be empowered within Scotland, and indeed the rest of the UK, to have complete control over Non-domestic (business) rates; both with regards income and structure. As such local authorities would be encouraged and empowered to take risks on how they structure their local business taxes and could be more likely to develop their own forms of Non-domestic (business) rates based on site values rather than property values. This would encourage businesses to be more productive and could potentially provide a boost to local industries.