The next item of business is a debate on motion S4M-12344, in the name of John Swinney, on the Community Charge Debt (Scotland) Bill.
I call on Marco Biagi to speak to and move the motion in the name of John Swinney. Minister, you have 10 minutes.
16:01
Thank you, Presiding Officer. On 2 October last year—
Wait one second, Mr Biagi. I must ask members who are leaving the chamber to do so quickly and quietly, please, as a mark of respect to the minister.
On 2 October last year, the former First Minister announced the Government’s intention to introduce legislation to ensure that councils could take no further action to recover ancient debts that arose under the community charge, which we have all come to know as the poll tax. We are here not because we need to abolish the poll tax—strictly speaking, that took place 22 years ago—but because we must deal with what it left behind. Today we vote on legislation that will draw a line under the last remnants of that tax and, most important, put one of its last bitter legacies behind us once and for all and ensure that all can come forward and register to vote without fear.
The register is nothing less than the foundation that we lay under our democracy; it is that on which everything else rests. All that we do here is built on what has to be an authoritative and comprehensive account of those eligible to vote on the future of our country. It has to be so, because, if we are to be faithful to the principles of democracy, all those who have the right to vote should be free, and feel free, to exercise it in practice.
A fortnight ago at First Minister’s questions, concerns were rightly raised about reports that many hundreds of thousands of people might not yet have transferred to the new register under individual electoral registration. Any loss of voters from the register is a concern, but any growth as a result of genuine democratic spirit should be welcomed. We can be proud of the democratic spirit that our country showed in last year’s referendum. There was an 85 per cent turnout and an all-time high total of 4.3 million people on the electoral register. That has been noted, that has been praised and that has been celebrated in this chamber time after time as an example of democratic engagement that is second to none.
Yes, I know that many of the new names on the register were 16 and 17-year-olds for whom this was a democratic awakening of their own, but there were still significant numbers of people who had registered again for the first time in decades or who had never registered at all before. All of us probably know them, or we have knocked on their doors and spoken to them. Many were signed up to vote at makeshift stalls on high streets or, in one campaign, outside jobcentres. It was clear to us all that people were invigorated by that choice as by nothing before. In a democracy, that sort of awakening is precious. It must be cherished, and it must be nurtured.
It was because of the high level of registration that, after the referendum, the responses of some councils—just some—gave us concern. For example, Aberdeenshire Council was quoted in the media as saying that it was looking at the register to track down people who owed poll tax debt. On 30 September 2014, it said:
“If they don’t pay, we will go after them for that money.”
Defending their proposed approach, those councils referred to the statutory duty on local authorities to collect local taxes. They have that duty, as they should; when I spoke to Gavin Brown’s amendment, I reinforced the point that collecting taxes is important. The Abolition of Domestic Rates etc (Scotland) Act 1987 and the Local Government Finance Act 1992 make it the duty of every local authority to collect the taxes that it is owed. I therefore understand the councils that genuinely felt that they had to do something—they felt that it was their responsibility. As a result, although some councils had already ceased the collection of poll tax debt, there was space for legitimate doubt.
With the bill, we wanted to make it crystal clear that local authorities were absolved of their obligations to pursue and collect poll tax debt. We are not talking simply about a voluntary arrangement to cease collection; our aim is to deal with this debt—and this doubt—once and for all. Therefore, we wanted to ensure that the legislation was simple, straightforward and unambiguous, and it has to be said that this is one of the shorter and more-to-the-point bills that the Parliament has considered. We must put the issue beyond doubt by extinguishing the liability for the poll tax entirely.
Is it okay for councils to look at the expanded electoral registers to track down council tax debt of, say, 18 years’ duration?
The issues that we face with the poll tax were created by very particular historical circumstances, in which there were high levels of protest, disruption, deliberate non-payment and deliberate non-registration. That is what we are trying to address. I will come to the issue of council tax debt, because it is important that councils collect council tax and do so in a responsible way.
Had we taken a different approach in the bill, by, for example, making it illegal for local authorities to collect poll tax debt, it would have caused all kinds of difficulties. For example, if debtors had not been able to cancel repayment arrangements in time, councils could have found themselves breaking the law simply by receiving money. Alternatively, what if a civic-minded individual simply wanted to make a gratis payment out of the blue? We did not want to replace one uncertainty with another.
It is not only the basic poll tax debt that is being extinguished, but all the associated liabilities, including the interest charges and penalties that were imposed as part of the process of collecting the poll tax. With many such debts, as many money advisers will be aware, penalty can be heaped upon penalty and leave money still being repaid long after the principal has expired. Those paying off community charge debt up to 1 February include some of the poorest and most vulnerable people in society, who were unable to pay at the time and were paying small sums towards arrears every week.
Extinguishing this historical debt will let local authorities concentrate on breaking the cycle of debt, as some of them explained in their evidence to the Finance Committee. As we know, many councils gave up pursuing historical poll tax debt years ago. There are 10 councils that will not receive any money from the settlement, having indicated that they did not intend to undertake any further collection. I should point out that the council tax collection rate in every one of those councils is at or higher than the Scottish average for in-year council tax collection. Each of those councils made a choice for their locality that today we are making for the nation as a whole.
In the stage 1 debate, I reminded the Parliament of the singular unfairness of the poll tax, the history of which goes back for more than 1,000 years. Members might be disappointed to hear that I do not intend to go over that detail again. However—and I know that I should not have to say this—I repeat that this Government believes that people should pay the tax for which they are liable under the laws of the land. Even after the bill is passed, as I hope it will be, it will remain for each local authority to determine the most appropriate means of recovering council tax debts. The bill leaves people’s liability to pay council tax and local authorities’ duty to collect it unaffected, although the Government will, as always, expect local authorities to pursue debts in a way that is sympathetic to the debtor’s needs and circumstances.
The bill also leaves unaffected the long-standing law that debts can expire, as indeed most of the outstanding poll tax debt now almost certainly has. In 2013-14, the authorities that still collected community charge debt collected only £327,000, which was down from a total of £1.3 million just a few years before in 2009-10. Clearly the total collected has been declining every year. Moreover, I note that the collection rate for the community charge over its lifetime was 88.4 per cent, whereas the in-year collection rate for the council tax is 95.2 per cent, with, as I have said, the expectation that more than 97 per cent of council tax will be collected once follow-up measures are taken.
Over the past week, we have read reports of one council after another setting its budget. Let us be honest: that has not been done without controversy, debate and extensive discussion. For the first time, however, councils need not take any element of the community charge into account in setting their budgets. That is the case not only for the authorities that had willingly already stopped collecting the community charge, but for all authorities.
I thank everybody who, in partnership with local authorities, has been involved in making sure that this will happen and in dealing with the bill’s expedited timetable. With the co-operation of the parliamentary authorities and the local authorities, we have been able to expedite the bill to ensure that it can be in force for the start of the next financial year.
I move,
That the Parliament agrees that the Community Charge Debt (Scotland) Bill be passed.
16:10
I begin with something that I forgot to do at stage 1, which is thanking the Finance Committee. It should be put on the record that it did a good piece of work on the bill and took really useful evidence on it. However, I did say at stage 1 that the Labour Party would support the passing of the bill as speedily as possible because it is right to draw a line under the poll tax.
It is also right to point out that the success of the referendum in terms of the number of people who registered to vote should not have resulted in some of the statements that were made about poll tax debt. The then First Minister was absolutely correct at the time to say that he would legislate on the issue. We are certainly happy to be here today to support the passing of the bill. We have had many passionate speeches in the chamber about how bad and unfair the poll tax was and about the misery that it caused to individuals and communities up and down Scotland. It was a bad tax—the wrong tax—and it needed to go.
I think that it is important for me to make again a couple of points that I made at stage 1. As part of the Finance Committee’s evidence taking on the bill, East Ayrshire Council said that it had taken evidence from people who had struggled to pay the poll tax but had paid it even though they objected to it in principle. It is important that, when we draw a line under the poll tax today, we recognise equally that many people throughout what was a difficult period paid the poll tax. Some of those people struggled to pay it, but they did so because they valued local government services.
I was a member of Fife Regional Council at that time, so I know that the poll tax caused turmoil for local government finance and uncertainty for council services. To all those people who struggled to pay but did pay the poll tax, we should therefore say thank you and that we recognise that they made a sacrifice during that time.
It is right to move on. As the Deputy First Minister pointed out in one of his speeches on the poll tax, by 2013-14 the amount of money that was being collected for poll tax debt was down to £327,000.
A deal has now been agreed with the Convention of Scottish Local Authorities. We need to take on board the fact that we were getting to the stage at which it would cost councils more money to collect than they would be able to collect. As the minister said, and as we have seen from the evidence, many councils have already stopped collecting and others are at the point at which it is becoming difficult to collect much more. Therefore, although we are taking steps today to formalise the matter, we are already at the point at which very little of the money is being collected, so it is right to draw a line under it.
In evidence to the Finance Committee, Perth and Kinross Council said that having to pursue the poll tax interfered with its collection of council tax. The council said that some of the families who had poll tax debt 20 years ago also have agreements in place to pay back council tax debt. That shows us that, 20 years on, in some communities the same families and individuals are still struggling with deprivation and social inequality. That surely tells us that we need to do more to tackle inequality and poverty.
In the stage 1 debate, the Deputy First Minister said:
“Those paying off community charge debt include some of the poorest and most vulnerable who were unable to pay at the time and are now paying ... towards arrears ... or having them deducted from social security benefits”.—[Official Report, 29 January 2015; c 73.]
That should reconcile us to the fact that, whatever poverty strategies have been put in place, they are still not working for many communities and many people and families. It is a generational thing. We have not been able to break the cycle of deprivation and poverty, which should shame us all in the Parliament. We need to highlight that and consider how we are going to tackle it.
That links to local government finance. The minister talks about council tax, which in its current form is causing major difficulties in communities because it is not a sustainable way forward for financing local government. We need to find a way forward, because the type of budgets and cuts that local authorities have announced this week are biting into local government services across Scotland. We need to find a way of properly funding local government. Some 22 years on from the poll tax being scrapped, we still do not have in place a proper mechanism for funding local government.
That brings me right back to my point about poverty. I believe that we will not be able to tackle poverty and inequality in Scotland unless we have a national poverty strategy that links into a local poverty strategy. At the heart of delivering that locally are the community planning partners, and key among them is local government. Local government is the body that can tackle inequality and poverty at local level and actually change things. If it is not financed properly and if local government finance is broken, that will not work.
It is with pleasure that we will see the bill go through today, as we can draw a line under the poll tax. However, the message is that we have to sort out local government finance.
16:18
We have been against the bill from the beginning. We have been critical of the way in which it was announced and the lack of consultation. We are against the bill in principle and we are concerned about the pragmatic aspects that could flow from it.
I will first deal with the point that I tried to make in an intervention on the minister. The Government tries to paint the bill as some kind of high-minded safety measure that it has to bring in to protect democracy and the electoral roll. It says that people should feel free to register without the fear of being chased for tax. However, what the Government does not say is that that applies only to the community charge. If councils want to use the expanded electoral roll to chase up council tax debts that have existed for 17, 18 or 19 years, that apparently is okay with the Government. Indeed, the finance secretary is enthusiastic about councils using their powers and the expanded electoral roll to chase up old council tax debts.
The narrative behind the bill of it being about protecting democracy falls somewhat short when it applies only to one tax debt but not to another tax debt that could be decades old. In years gone by, the Scottish National Party in particular has been pretty aggressive about the council tax and has said some pretty unpleasant things about it, which are pretty close to what it has said about the community charge. It was all very different, of course, a couple of weeks ago, when the finance secretary was praising the council tax and said on the record that it
“is linked to ability to pay”.—[Official Report, 29 January 2015; c 73.]
That is in stark contrast to what many SNP members said in the last parliamentary session, where we can find a whole plethora of quotations about how awful they felt the council tax was.
I said that we are against the bill on principle, and the principle is fairly straightforward. It is a principle that has been espoused many times by John Swinney himself: people should properly pay the taxes for which they are liable. On the Conservative side of the chamber, we do not deviate from that principle in relation to the community charge. We think that that is how it ought to be.
We also think that there should be a principle of equality between those who paid the tax and those who did not pay. We now have the situation where some people paid that community charge, even if they were against it—as I know the majority of members in the chamber were—and made great sacrifices in order to do so, but those who did not pay it, some of whom probably could have paid it quite reasonably, are let off. There is an inequality between those two situations.
I looked through the Official Report of the relevant Finance Committee meeting and that is a live issue that has been raised with many MSPs. The convener of the Finance Committee said:
“I imagine that most—if not all—MSPs have, like me, received a number of communications from constituents who have said, in effect, ‘What about those who paid at the time?’”
The convener went on to say:
“We are all getting correspondence about it. I have not had anyone tell me what a great idea the bill is, but I have had plenty of folk writing to me in the terms I have just described.”—[Official Report, Finance Committee, 14 January 2015; c 24-25.]
Those are not the words of a Conservative MSP; that is a direct quote from the convener of the Finance Committee, who did far more consultation on the issue than the entire Scottish Government.
We are against the bill for reasons of principle but we are also against it for reasons of pragmatism. That is what the amendment that we lodged earlier was about. In written submissions to the committee and in giving evidence to the committee, even the councils that were supportive of the bill, such as Dundee City Council, were concerned about the impact that the bill could have on the collection of council tax.
Does the member not think that a worse example is the big companies and the rich individuals who hide their money overseas, creating a huge tax gap? Are they not the ones that should be pursued?
We are happy to debate tax evasion and tax avoidance of any nature in this chamber at any time, but today we are debating stage 3 of the specific bill in front of us, which I am sure that Mr Mason acknowledges. We are confined to talking about the contents and the impact of that particular bill. If Mr Mason wishes to use his debating time to debate other stuff, so be it—we are happy to debate at any time—but currently our remarks have to be confined to the bill in front of us.
As I said at the start, we are against the bill in principle; we are against it for practical reasons too. The Scottish Government carried out no consultation on it whatsoever, and there could be some unforeseen consequences. For those reasons, we will not support the bill and we will vote against it at 5 o’clock.
16:23
The debate is not about the principle of paying taxation; it is about the final burying of the poll tax. Like many members in the chamber, I have recently filed my income tax return and have paid my income tax. Although I was not ecstatic, I was happy to do so because the tax took cognisance of the ability to pay, it was banded, and it went towards the protection of necessary public services.
The poll tax was an entirely different entity. It was a political tax that was brought in by the Conservatives and was brought in a year earlier in Scotland, with Scotland being used as a guinea pig for the taxation despite the best endeavours to advise better and wiser counsel on Margaret Thatcher, even including some efforts from within her own party. The tax ultimately bit the dust and she finally fell with it.
I was proud to take part in the can’t pay, won’t pay campaign, which was about ensuring that those who could not pay would never have to pay. We defeated this iniquitous tax, and this bill finally puts to bed the issue of the last few individuals who are being pursued for it.
The tax was certainly iniquitous. It was a tax on the poor and the vulnerable, and it did not take into account people’s ability to pay. It was all about marginalising people in society. The attitude was, “I don’t have a child at school, so why should I pay for education? I am fortunate in being healthy, so why should I worry about those who are afflicted?” It was about dividing and divvying up, and it was about the privatisation of our society, which, I am sad to say, has been continued by more recent Governments.
It was also about undermining local government services. The points that Alex Rowley made in that respect were appropriate, but we should, as I mentioned in the stage 1 debate, remember the gearing effect. Councils had either to ratchet up the poll tax to an unaffordable level or to privatise or simply dispose of services. That is why the tax had to go.
Will a few individuals who probably should have paid escape? Sadly, there are probably a few, but the overwhelming majority will be people who, for 20 years, have not been able to afford to pay. How do we know that? There were expedited powers associated with this tax; I know that Her Majesty’s Revenue and Customs has expedited powers to deal with those, whether they be MSPs or others, who do not pay their taxes. That is only right but, as John Mason has correctly pointed out, accountants, tax avoidance and, sadly, tax evasion kick in with income tax and other more complicated forms of taxation.
The system of expedited powers was imposed by local authorities on the ordinary man and woman in the street who had to struggle to pay their community charge. We should remember, for example, the summary warrant process, which was an expedited procedure that did not require the council to raise any particular action. The warrant was simply printed off on a computer and passed to sheriff officers, who, at one stage, could use the threat of a warrant sale to intimidate people and get money.
For the overwhelming majority of people, however, the situation was dealt with through a bank or earnings arrestment. As a result, those who have still not been able to pay and are being pursued for the tax are those who simply cannot pay. Councils have tried to pursue them, but they have not been able to get anything from them, because, in the main, those people do not have the wherewithal to pay. To seek to pursue them would be fundamentally wrong.
This bill is not only about protecting the poor but about dealing with those councils that, shamefully, wish to intimidate people and put them off going on the electoral register. After the outstanding sign-up campaign and politicisation of people during the referendum, there was a brazen political attempt by Tories, in particular, to do to people what has been done in other jurisdictions and dissuade them from exercising their democratic mandate.
You must close, please.
On that point, Presiding Officer, I will end.
16:28
I was very happy to support this bill soon after it was published, because it is the right thing to do. However, we have to respond to the points that Gavin Brown has raised, given that the Conservatives are the only people who are opposing the bill.
With regard to Mr Brown’s fears about the council tax, I remind him that Perth and Kinross Council told the Finance Committee
“further attempts to collect ... would be expensive and”
could
“come at a cost to Council Tax collection”.
I therefore invite Mr Brown to consider this bill as the put all our energy into collecting the council tax bill. If we look at it from that point of view, even he might find it very positive.
I note that Perth and Kinross Council, which Malcolm Chisholm mentioned, also said:
“Beyond this issue we also have further concerns about the potential impact on ongoing collection of Council Tax.”
Well, that seems to contradict the quote that I highlighted.
In any case, the more fundamental point is that Gavin Brown does not regard the poll tax as being different from other taxes, whereas most of us in the chamber do. Indeed, that is the fundamental dividing line between the Conservatives and other people in the chamber, and it is also the reason why I do not think that it will lead to the effects on the council tax that have been suggested.
There has never been a mass non-payment campaign about the council tax, because even those who are concerned about it recognise that, with its relation to people’s ability to pay, it is a fundamentally different tax. The collection rates show that. We have high rates for the council tax and we had much lower rates when the poll tax existed.
I believe that Mr Brown’s fears are unfounded and I believe that, in principle, we have to regard the poll tax as a fundamentally different tax from other taxes. It is certainly different from any tax that I have known in my lifetime. It is the most unfair and inequitable tax. Of course, large sections of Gavin Brown’s party recognised that at the time, as the issue split his party just as it united the rest of the country against it.
This is a historic day, when we can put the final nail in the coffin of the poll tax. For those of us with long political memories, it reminds us of the campaigns that we were involved in against the poll tax in the late 1980s and early 1990s. It was fundamentally different from any tax that we have ever seen.
Of course, there are people outside the chamber who have concerns about the proposal and I would make to them some of the points that I have made to Gavin Brown. However, it is important to put the issue in perspective when speaking to people who have concerns. One thing that I say to them is, “You know, this is just a Scottish issue. They haven’t been collecting poll tax in England for 10 years.” I realise that there are legislative reasons for that, but it helps to put things into perspective. Of course, the other point that is helpful in that regard is that, as other members have said, there is not much left to collect anyway. We should remind people that 10 local authorities already do not collect poll tax debt, and that only £327,000 was collected last year. I understand that some people feel intensely about this issue, but I think that giving that perspective helps to take a little bit of the heat out of the argument.
I am glad that most people in the chamber are united behind the bill. I accept that the Conservatives, perhaps because they introduced the poll tax, have a certain affection for it still and do not wish to separate it from the other taxes that succeeded it. However, I think that most people in Scotland will be pleased that, today, we are finally drawing a line under that era of unfair taxation. Of course, as Alex Rowley said, the important matter now is to fix local government finance. We have not yet come up with the best solution, but I think that everyone is agreed that the council tax was a big improvement on the poll tax, so we should ensure that all our energies are devoted to collecting the council tax—because, my goodness, local government needs it—but we should also cast into the history books and the dustbin of history the unfair and unwanted poll tax.
16:32
I speak not so much as the member of the Scottish Parliament for Aberdeenshire East but as Alex from Strichen, who was moved to call the “Call Kaye” phone-in programme on the very subject that we are debating. What moved me to do that was the enthusiasm that was being displayed by Councillor Jim Gifford, the leader of Aberdeenshire Council, who seemed to want to use the magnificently enlarged electoral register as a means of hounding people for debts that were 20 years old and more.
I found three particular difficulties with Councillor Gifford’s argument. One was the fact that he seemed entirely oblivious to the fact that the pittance that was being collected by Aberdeenshire Council most certainly meant that it was in the position that Alex Rowley outlined, in which it was costing more to collect the money than was being collected. The second was the fact that he seemed unaware that much of the outstanding debt was an illusion, in that it was owed by people who either had never existed in the first place or had died in the past 23 years. It was a mythical debt, in terms of its total. The third was the fact that he seemed to be unaware that, as the minister indicated, because of the cumulative charges, people who were having the debt collected from them had probably paid it many times over, and, with regard to people who had not been paying the debt, by definition, if it was new debt, it was outlawed by the 20-year rule because—again, by definition—poll tax debt is more than 20 years old. Councillor Gifford was unaware of all of those things, hence I was moved to enter the debate on the “Call Kaye” programme.
However, that touches on the importance of the connection between non-payment and voting. It has been widely reported in the press that the Liberal Democrats owe £800,000 to the Police Service of Scotland—an £800,000 debt that they are refusing to pay. The Labour Party, the Scottish National Party, the Green Party and—for all I know—the Scottish Socialist Party pay for the security at their party conferences, and there are no debts outstanding. However, it has been widely reported that the Liberal Democrats owe £800,000. It has even been reported that the Conservative Party has an outstanding debt to the Police Service of Scotland.
I do not know whether that is a non-payment campaign. The Liberal Democrats might be short of money, but the Conservatives cannot be short of money, as their tax-evading donors ensure that they are not. However, even given those circumstances, I would never draw the conclusion that they should be stopped from voting in the Parliament because they are engaged in a non-payment campaign, deliberately or otherwise, against the Police Service of Scotland—mind you, the Liberal Democrats look like they have beaten me to it by not turning up to vote or debate in the first place. It is a very dangerous connection to make.
It is interesting that Alex Salmond criticises others for not being in the chamber to vote or debate, but let us move past that. If it is so iniquitous, why is he so enthusiastic for the Scottish Government to use the electoral roll to chase up a 19-year-old council tax debt?
Because of the three reasons that I outlined. First, the poll tax cost more to collect in many circumstances than could be collected. Secondly, the debt is mythical because many of the people never existed or no longer exist. Thirdly, there is the important point that I made that the small amount that was being paid was from people who had already paid many times over and, by definition, if it is new debt, it is caught by the 20-year rule on the poll tax. It is all of that and more. The poll tax was the most iniquitous tax of recent times. If I were the Conservative Party, I would be trying to forget it, not trying to make everyone remember it.
I notice that Mr Brown did not take the opportunity to deny that the Conservative Party might have an outstanding debt to the Police Service of Scotland. If that is not the case, I am sure that he will want to explain to the Parliament why that bill does not seem to have been paid. However, I would never draw the conclusion that Mr Brown or his colleagues should not be allowed to vote in the Parliament because of it.
Democracy is precious. We have 98 per cent registration on the voters register and we had an 85 per cent turnout in the referendum. That is much more precious than any of the normal political arguments that take place in the chamber. We should defend it at every available opportunity because that is embracing a huge democratic experience.
If I have one criticism, it is not of the minister but of myself as First Minister: I should have introduced the bill years ago. I wish that I had. Now that we have, let us put it through and bury that iniquitous tax for good.
16:37
I am pleased that the bill has got to stage 3 and that it has the widespread support that it obviously has. The community charge was a bad tax, and my colleague Kenny MacAskill put that eloquently, as others will.
In the first place, it is not just any old debt that is being written off. There is a much stronger argument for writing off the poll tax debt than for writing off the debt for any other run-of-the-mill tax, because the poll tax was so unfair all along the line. However, the reality is that all debt needs to be evaluated at times. We must evaluate, for example, whether it can be collected at all, whether the cost of collecting it makes it worth while and whether chasing it is detrimental to other objectives.
I suggest that, on all three of those points, the tax write-off that the bill proposes passes the test. First, it is clear that the vast bulk of the debt cannot be collected, as people do not have the money, have died or are not traceable. Secondly, some councils have already decided that it would be throwing good money after bad to pursue the debt and have stopped trying to collect it. Thirdly, councils such as Glasgow City Council have decided to pursue council tax debt rather than diverting limited resources to the poll tax debt.
We should not think that writing off debt is unusual. Private and public sector debt is first provided for if there is doubt about its collectability. That often occurs by providing 25 per cent, 50 per cent and so on as the debt gets older without being collected. Once any debt has been provided for 100 per cent, it can still sit in the accounts but the net effect is nil, as the provision matches the asset. In effect, that is what has already happened with community charge debt, as I understand that all councils have provided 100 per cent of the outstanding debt. Therefore, writing it off merely reflects the reality that the debt is, to all intents and purposes, irrecoverable.
It is also not unusual that those who pay tax—or any cost, for that matter—cross-subsidise others who do not or cannot pay it. Anything that we buy in the shop includes the cost of shoplifting and, when we pay for gas or electricity, the payment includes the cost of those who default. The Conservatives may try and make a big song and dance out of the situation, but we are doing only what any business or utility—or whatever—does pretty regularly.
As has been mentioned, there is a tax gap. We gather that that is £34 billion for the UK. If we were starting off from scratch to close the gap, would we look for the few pounds here or there that we could get from people who were struggling or would we chase the big multinational companies that avoid tax through dodgy transfer pricing and the rich individuals who can afford clever tax experts and who move large parts of their assets to offshore tax havens?
There is a moral question here. Are we pursuing unpaid tax from the rich and powerful with the same enthusiasm as we are pursuing it from the poorer and the weaker? The SNP, Labour, the Greens and the independents are pretty clear on that point, but I fear that the Conservatives tend to side with the rich and powerful against the weaker and poorer. I have no idea where the Liberal Democrats are on the issue.
I am more than happy to support the bill and I am delighted that it has reached stage 3. It is not just about a few thousand pounds or even a few hundred thousand pounds. We are sending out a symbolic message that this Parliament does not approve of taxes such as the poll tax, that it will not introduce taxes like the poll tax and that it will do what it can to make our society fairer and help those most in need.
I congratulate the Government on introducing the bill. I look forward to it being passed today.
16:41
First, I apologise for speaking out of turn earlier. As they say on the radio programme, “I’m sorry, I’ll read that again.” I assure members that, from now on, I will be very nervous about pressing the wee green microphone button.
The Government seems to have little desire to listen to most people’s views on removing the liability to pay community charge debt. I have said before that there are many worrying questions; I am compelled to ask them again. How is the bill fair to the people who paid the charge? Will it stand up to a legal challenge from those who would—understandably—seek compensation? That question is important. Will the compensation that is being offered to local authorities be reviewed to match the policy’s true cost? What will be the total effect of the worrying precedent that the bill sets on tax avoidance? For example, what about the council tax? We have heard from members about paying council tax arrears, which the bill will definitely have an effect on. As ever, the Government will not give many answers.
The answer that the member seeks on why the Government is so passionate is simple. I think that Gavin Brown was 14 when the poll tax came in. Many members in the chamber fought against the poll tax as the most iniquitous tax ever seen in Scotland. That is the answer to Cameron Buchanan’s question.
I was not 14 at that time. This is a question of principle rather than anything else. The principle is about paying taxes and not about whether the tax is fair. I was not arguing about the latter issue.
The collection rate was around 88 per cent, which makes it clear that most people paid their contribution. I am still baffled by the Government’s position. I am aware that it wants to cover new ground, but legislating to make all taxpayers compensate for the tax evasion of others reaches new heights of irresponsibility.
The Government is stubbornly choosing to rush the bill through Parliament no matter the consequences. No responsible Government would trample over fairness for the honest majority, but that is what the Government is doing.
What does Cameron Buchanan say to his Westminster colleagues who have supported those who have been offshoring their accounts to avoid paying tax in the UK?
That is more the point that John Mason made. I will not say anything about that, because it is not what we are talking about. [Interruption.] No, it is not. We are talking about the principle of paying tax and the community charge in particular. [Interruption.]
Order.
Many of my constituents have contacted me to express their opposition to the bill. They are absolutely right—it is unfair. No matter the spin that is offered, it cannot in any way be fair for some people to be excused of their obligations while others are not. I have said before and I will say again that hard-working taxpayers should not be forced to subsidise other people’s tax avoidance and the SNP’s irresponsible rhetoric.
For the policy to have any semblance of equal treatment, those who paid the tax would have to be reimbursed. That, too, is a fundamental point. The Government’s retort might be that such remuneration would be unaffordable—yet surely that only underlines the bill’s recklessness as a whole.
The only practical, affordable and fair thing to do is to scrap the bill altogether. That is obvious to many of my constituents and others throughout Scotland.
It is important that we fully understand the bill’s consequences for local authorities’ finances, because the compensation that is on offer—£869,000—is only 0.2 per cent of the total uncollected £425 million. Despite the Government’s protests about collection, the compensation is far from adequate. It still does not accommodate informal payments made to local authorities. As has been said, the taxes are still being collected, albeit slowly. The approach also ignores the potential knock-on effects on future tax payments to local authorities.
The risk of losing council tax as a result of people expecting their debt to be cancelled at a later date has been highlighted repeatedly, yet the Government has explicitly ruled out giving compensation to local authorities that suffer from a knock-on effect in council tax collection. With that in mind, Gavin Brown’s amendment to require reporting on the effect of the provisions on council tax revenues would have provided much-needed information.
At a time of significant financial difficulties, the last thing that councils need is a Government that removes debt that they are owed, however difficult collecting it is. The Government offers only a tiny settlement in compensation—that is an important point—and encourages tax avoidance. The people of Scotland deserve to be treated fairly, which means that the honest majority should not be discriminated against in favour of tax avoiders and made to cover the cost of compensation. The only fair thing to do is to scrap the bill. Accordingly, I will vote against it.
16:46
As other members have done, I thank the Finance Committee and the clerks to the committee for scrutinising the bill in the run-up to the stage 3 debate.
Aside from the Conservatives, there is little dissent from the intention behind the bill. Given how discredited the poll tax is, I am surprised that the Conservatives—the architects of the poll tax—remain intent on clutching on to it.
The question whether legislation is needed has been raised several times before. I absolutely agree that the increase in voter registration during the referendum is to be celebrated. If that increase had been used to pursue historical poll tax debt, that would have sent out the wrong message about democratic participation.
I will quote the former First Minister, which I am sure he has not often heard me do. However, this is clearly a case of absence making the heart grow fonder of Alex from Strichen. Even he noted—he repeated it today—that the bill, which was hurriedly introduced, has no practical effect, because there is already a legal bar on chasing debts that are more than 20 years old.
COSLA does not believe that the bill is necessary. I am pleased that the minister acknowledged that a substantial and welcome element of the increase in voter registration was among 16 to 18-year-olds, who were not born when the poll tax was introduced.
The member might care to clarify what she said. There is a 20-year bar on recovering debts rather than chasing them. Is that not kind of the point?
The member is right. There is a 20-year legal bar on recovering debts. However, I think that he will find that most local authorities said that, practically, it was too difficult to chase down those debts after such a significant period had elapsed.
Having decided to legislate, the Government wasted no time in introducing the bill. We support the bill. I understand the need for speed, given the circumstances, but it is clear that consultation was sacrificed as a consequence.
Since I am here, I will reciprocate. Jackie Baillie rightly touched on the fact—perhaps she should reflect on the point—that this is about the practical effect and the messages that were being sent out. I called the phone-in programme because of the messages that had been sent out by the Conservative leader of Aberdeenshire Council, which could have resulted in people being frightened to stay on the electoral roll. Does she accept that point?
I do. I happened to tune in to “Call Kaye” and I was very surprised to hear the former First Minister described as Alex from Strichen. By that time, Alex Salmond had announced that he was retiring to the back benches. I suspect that he enjoyed phoning in—something that he had not done previously, as First Minister.
A more detailed conversation with stakeholders would have been helpful, so I welcome the evidence taken by the Finance Committee.
I agree with the majority of members in the chamber that the poll tax is totally discredited. It has been overwhelmingly rejected by the people of Scotland and it has finally run its course. Tonight, we have the opportunity to consign it to the dustbin of history.
Members across the chamber have recognised that people who paid their poll tax, and in many cases struggled to do so, will believe that the Government’s decision is unfair. However, Malcolm Chisholm got it absolutely right: the amount that is actively being collected is small and, practically, it is hugely difficult to track down and collect the rest. Let us be clear that local government is rightly focused on ensuring that council tax collection rates are high, and we should applaud it for its efforts.
Alex Rowley hit the nail on the head in his concluding comments. The real debate is not about the bill—important though it is—but about how we finance local government, and not as some abstract thing. The debate is about how we properly fund schools and education, our home helps, our care homes and the maintenance and repair of something as basic as our roads—never mind the range of services that local authorities provide.
Members will have heard me say in the chamber before that local government has borne the brunt of the Scottish Government’s cuts. Strain has been placed on its ability to provide the range of services that our communities need. The cabinet secretary has been fond of pointing out that the cut from the UK Government to the Scottish Government is 10 per cent. That is to be regretted but, in some cases, he has passed on 20 to 22 per cent cuts to local government.
I welcome the commission on local government funding, which I believe will meet next week. It is essential, but we need to look at the wider issue of not just the council tax but how we fund local government in a much more sustainable way. If the Scottish Government is up for doing that, it will have Labour members’ support. In the meantime, I am pleased to support the bill and banish the poll tax from Scotland for ever.
16:52
I will begin by responding to some of the remarks made by Alex Rowley. He identified the important point at the outset of the debate that, as we take the final steps to abolish the outstanding debt that arose from the poll tax, we should remark on the fact—the Conservatives made this point as well—that many people in Scotland paid their poll tax, and many paid it through financial hardship.
Many of us, such as my friend and colleague Kenny MacAskill, took part in the non-payment campaign but fulfilled our obligations once the poll tax had been abolished in the early 1990s. People made genuine sacrifices to ensure that public services were properly funded. I have had correspondence from members of the public who paid their poll tax and are concerned about the fact that the Government is acting to abolish the last remnants of the poll tax today, and we appreciate, welcome and value the contribution that those individuals made to funding the public services of Scotland.
The point I advanced in the Finance Committee, which addresses many of the issues that have preoccupied the Conservatives, is that a false comparison has been made between the poll tax and the council tax and the issues of collection that may arise. The difference between the poll tax and the council tax is that the poll tax is a dead tax—it is no longer functioning—while the council tax is a currently operating tax and our local authorities have commendable and constantly improving success rates for collecting it. The average in-year collection rate for the council tax in Scotland is 95.2 per cent.
In his opening remarks, Marco Biagi, the minister, made the point that the local authorities in Scotland that voluntarily are no longer collecting the poll tax have a higher in-year collection rate for the council tax than the average rate in Scotland. That demonstrates that the belief that non-collection of outstanding poll tax arrears in any way affects council tax collection is a myth that is not substantiated by the evidence.
In that case, why did seven of the councils that gave written or oral evidence to the Finance Committee make that point?
That is a question that Mr Brown can ask the seven councils concerned. For me, the evidence demonstrates that, when councils that have outstanding arrears stopped collecting the poll tax, it did not in any way undermine their ability to collect the council tax. The poll tax is now uncollectable, as the data show, with a fall-off to a collection in 2013-14 of just £327,000.
One of the other issues that was raised in the debate was tax compliance and the importance of people paying their taxes. The Government has wrestled with many of those issues in the steps that we took on the land and buildings transaction tax and the landfill tax and during the Revenue Scotland and Tax Powers Bill. This point resonates with the point that Mr Mason made. In the cold light of day, we decided to set the highest possible standard that we could by applying a general anti-avoidance rule in the Revenue Scotland and Tax Powers Bill to send out a clear signal that we expect people to pay their taxes. Revenue Scotland will take that approach forward in future.
One of the interesting things about this final debate, which I hope leads to a vote in which the remnants of the poll tax are abolished, is that it has been graced by contributions from the two remaining members of the Scottish Parliament who took part in the parliamentary votes about the poll tax when it was conceived into legislation in the late 1980s—Malcolm Chisholm and Alex Salmond. For the record, I should point out that they both voted against the introduction of the poll tax.
Malcolm Chisholm made a fascinating point. After all these years, with the miserable impact that the poll tax had on the reputation of the Conservative Party in Scotland, in 2015 the Conservatives are desperately clinging on to the last discredited vestments of the poll tax. What does that say about the Conservative Party in Scotland? It says that it has not changed one iota since the late 1980s and the early 1990s.
It is also important that we heard the contribution of our former First Minister, the member for Aberdeenshire East, or, as he might affectionately be known, Alex from Strichen. The fact that we are considering this proposed legislation today is a direct result of Alex Salmond’s determination—as in so many other areas of policy—to ensure that the right thing is done to address an injustice in our society.
Alex Salmond showed tenacity and determination in bringing the issue to the fore in the circumstances that he recounted, of seeing the democratic enthusiasm of our country being challenged by an enthusiasm to go back to the late 1980s and early 1990s to collect historical debts on a discredited tax. It is to Alex Salmond’s credit that he has forced the pace of the issue and that, at 5 o’clock, we can take the decision to abolish the last elements of the poll tax.
I want to respond to the point that Jackie Baillie made about properly funding local authorities with a point to the Conservatives. We reached a financial agreement with Convention of Scottish Local Authorities of £869,000 as a final payment—we do not always manage to reach agreement with COSLA, but I am delighted that on this occasion we were able to do so. The Government remains committed to ensuring that local authorities are properly and fully funded to undertake the responsibilities that they are allocated. We know that the financial climate is difficult; we are also wrestling with the financial climate. At a time when the Government’s budget is under real strain, we have taken the decision to properly and fully fund local government in Scotland, and that is the way that it will stay under this Government.
Next
Decision Time