New Leadership – But a New Start?

Craig DalzellThis week I and a couple of my colleagues represented Common Weal at the STUC Congress in Dundee where I spoke at a fringe hosted by the SNP Trade Union Group. Scottish politics is in a fraught time at the moment, all the more so for my friends within the SNP, and it’s natural to worry about the impact it will have on everything from the day-to-day running of Scotland through to the long term future of the independence movement itself. However, as I said during the fringe, I’m actually in an optimistic place. After years of calling for change to come, we’re at the moment where it is happening. To reverse a proverb, the mossy stone may be starting to roll. The challenge will be to guide that stone so that it rolls in the direction we would like it to go.Another point I raised during the fringe event was that there are three types of question that one could consider asking politicians. “What will you do?” - which they love to answer. “Why will you do it?” - which is harder, but more revealing of the nature of the politician and their political stance. And finally, “How will you do it?” - which they almost universally try to avoid answering because it’s a) hard and b) requires much more planning that a soundbite or a headline.Enter, the new First Minister’s first “mini Programme for Government” and the signs there that the stone still has a bit of pushing to go before it gathers momentum. What made the mini-PfG quite interesting is that it is almost entirely framed around the first type of question. FM Yousaf has asked each of his Cabinet Secretaries to produce a list of promises of what they will do before the next Scottish election scheduled for 2026. In effect, shoring up his leadership authority by nailing the Cabinet to the mast of those promises. There’s little of the “why?” and less of the “how?” throughout.And even the “what?” isn’t entirely the “new start” that the title of the document itself promises as many of the commitments are merely continuations of previous policy or pledges to maintain/accelerate/reverse existing trends. Instead of bright, shiny, new initiatives the policy headlines emanating the PfG were dominated by the announcements of policies being delayed such as the pause to the National Care Service Bill (a delay that we support, until we can run a proper co-design process) or the Deposit Return Scheme (a delay that we do not support, though the policy is in such a mess that there’s likely little alternative).The most headline grabbing positive change is the one I want to examine here – that from next year, Scottish Local Authorities will be allowed to charge up to 200% Council Tax on 2nd and vacant homes.This is a policy that I do, genuinely, support – by disincentivising the purchase of second homes until everyone has a first one and by encouraging the occupation of those homes either as a primary dwelling or at the most distant very, very, least by renting out as a home to someone else (not just for rotating short-term lets) this policy will take a step towards helping the housing crisis.However, the headlines aren’t quite as they seem. Digging into the details of the “how?” of this policy and we find that the Government is rather over-blowing the change. Local Authorities are already able to charge vacant homes up to 200% Council Tax so this change is merely bringing occupied 2nd homes in line with this. It’s also notable that Wales is already pushing even further ahead than Scotland is, from last month they allowed Local Authorities to charge up to 300% Council Tax on 2nd and vacant homes and are considering legislation to allow Councils to set a cap on the number of 2nd homes and short term lets allowed in a community. So even once Scotland takes this welcome step forward, we’ll still be standing behind Wales and wondering how we can catch up.To his credit, Yousaf did explain during the Parliamentary debate on Tuesday that moving beyond 200% would take actual primary legislation rather than the more streamlined and faster (although less democratically accountable) secondary legislation route but that he is open to considering such a path. However, this raises a very important questions: “If that’s the case, why do only this?”We all know that Council Tax is a fundamentally broken tax. Imagine if your income tax was not based on your current salary but on what your salary was in April 1991. Now imagine that if your salary was above about £212,000 in 1991 then the income tax you paid was capped at £3,200 a year and would never rise no matter that now you’re earning £1 million, or £10 million, or more. That’s essentially how Council Tax works and just saying “we’ll charge you double income tax on your 2nd job” doesn’t really fix that problem.I also see that the new proposals appear to have come at the cost of the dropping of the commitment to hold a Citizens' Assembly on local finance and Council Tax reform by the end of this Parliament. The promise of an Assembly has not been reiterated in the mini-PfG and the fact that the Assembly had been promised was used by the previous administration as an excuse to block discussion about Council Tax reform - I would welcome any clarification from the Government that the Assembly is still going ahead but if it has indeed been cancelled or is no longer being used as a barrier to reform of Council Tax then we can put forward our own ideas for what that reform should include.Common Weal has already published our preferred successor to Council Tax in the form of our Property Tax – a tax charged on the actual percentage value of a property regardless of when it was built or what it was worth more than thirty years ago. This tax would not have an upper limit thus would capture the value of massively over-priced mansions and would act as a break on the speculative bubble that has trapped so many people in unaffordable private rents or without a home at all (please do read Tommy Lusk’s article in the newsletter this week for the latest in a long line of problems facing tenants in Scotland).It would also correct the injustice of people being overtaxed on properties that were built in areas that have seen an economic downturn since the early 90s or undercharged on houses in now-gentrified communities. We set our tax at 0.63% of a properties value when we published our paper in 2021 as this would – across the whole of Scotland – bring in revenue equivalent to the Council Tax it replaced but we are clear that this should be a local tax – not one controlled by Holyrood – so it should be entirely up to Local Authorities to decide on the rates, any bands to allow for premiums or discounts or to add surcharges for 2nd or vacant homes. It should not be for Holyrood at all to tie the hands of Local Authorities to control their own taxes in the same way that Holyrood themselves complain when Westminster demands that we use our devolved income tax as they would want us to.This is a large change to the tax system and thus it’s one that would itself require the primary legislation route. And this is the point. Faced with two policies on Council Tax – radical reform or a minor tweak – that each have basically the same answer to the question “how do you do it?”, we need to consider which option to choose. For me, the answer is obvious. Pick the one that does the job better. The one that results in better outcomes for far more people, that allows for better local democracy, better housing policy, a greater impact on the desired outcome of shifting the priority on housing to those who need a first home and away from those with the privilege of owning many, and which actually takes Scotland not just a step behind other countries like Wales but puts us out in front where we can lead by example. Faced with a “how?” that they’ve already accepted, and a more compelling “what?” than their initial offer, my final question to the Scottish Government may be the hardest question of them all. “Why not?”