Why SNP 3p income tax proposals are an attack on local decision-making

I certainly don’t normally agree with Simon Jenkins, but his article in today’s Guardian on the SNP’s 3p income tax plans is required reading – especially if you are Scottish Labour.

In attacking the SNP’s populist plans for the replacement of council tax with a 3p local income tax, Jenkins does so from a localist angle – the SNP is, in effect, nationalising local revenue-raising powers, taking power away from people rather than devolving power down.

If this measure were to pass, at a stroke the Scottish Executive, not boroughs or councils, will have control over all locally raises taxes bar fees and charges.

He argues:

“The property tax fixed by individual councils will be abolished and all sub-national accountability with it. Scotland's 32 area authorities will be allotted their total revenue by Edinburgh, a degree of fiscal centralism unknown in any other country in Europe. It is ironic beyond belief that the first part of Great Britain to enjoy serious democratic devolution should use it to kill off democratic devolution within its borders.”

Jenkins also raises social justice aspects of a local income tax (LIT), similar to the one historically and naively proposed by the Liberal Democrats:

“With the starting threshold at £5,435, Salmond will find himself taxing 55,000 working students, yet excusing the rich on unearned incomes. He will find it hard to tax second-homers and non-residents with a charge unrelated to property. English owners of Scottish estates will get off scot free. Meanwhile, a property tax register must remain in place for water rates, so there will be minimal saving on collection.”

While the current system of council tax involves a high level of central control, it is not an absolutely in the hands of central government – meaning there is a link between council tax and local councillors:

“At present local councillors work out what they need within agreed spending targets, but have some discretion in fixing council tax levels thereafter. If voters do not like it, they can vote them out of office, and often do. Now all revenue will come from the centre.”

No – the SNP plan is to pick a fight with Westminster and nothing to do with fairness.

Worse still it undermines local democracy and local governance. The authority of democratically elected councillors will further diminish – aided and abetted by the Scottish Liberal Democrats, it seems, unless there is a cogent localist rebuttal from the left.

Scottish Labour should build on the argument that the plans are unworkable, and employ an argument which focuses on defending local decision-making.