Last Friday, 8th November, The Herald published an article headlined: ‘Rich minority benefits most from council tax’.
This was followed by a strapline ‘Owners of largest homes save over £1500 a year’ – a staggering figure.
The article argued that people living in the largest homes in Scotland saved six times more per annum from the freeze in council tax than did those in ‘modest homes’.
It offered figures ‘released in response to a request from The Herald’ showing that those living in houses charged in Band H would have saved a total of £1,500 over the 7 year period from 2007-8 to the end of 2013-14 – amounting to a saving of £214 per annum. [Ed: the emphasis above is ours, to underline the grievous error in the strapline of the article'.]
The article showed that, in contrast to the Band H households, those living in homes in Band A, the lowest, would have seen a saving of £258 over the 7 years in question, averaging at £37 per annum.
Those in the middle, in Band D homes, would have saved a total of £678 over the 7 years, an average of £97 per annum.
In percentage terms, the total 7 year saving set against a single year’s average council tax band charge, would mean that a Band A household would have saved over 7 years an amount equal to 34% of its average annual council tax bill.
In contrast, a Band H household would have saved over the 7 years the equivalent of almost double – 67.5% of its average annual council tax bill.
The Scottish Government has responded by putting the case that when you take average incomes per Band of council tax into account – which is a genuine part of the equation, the poorest 10% in Scotland have saved 1% of their income in 2013, where the richest have saved 0.4%.
They say too that pensioner households see the greatest gains as a proportion of their income.
The figures they used for the average incomes per council tax Band were not given and would need to be checked. But, in theory, the government position indicates that unfreezing the council tax would hit the poorest hardest in real terms.
Raw figures never tell the correct story. They have to be set in a variety of contexts – as here, against the average income per home per council tax band – to get an accurate sense of the individual impact.
Shifting opinion on council tax freeze
However, there is a marked shift in opinion on maintaining the council tax freeze and we are indebted to independent Councillor George Freeman of Argyll and Bute Council for drawing some very interesting recent evidence on this to our attention.
Last Thursday and Friday, 7th and 8th November, Councillor Freeman and his colleague Councillor Robin Currie, were, with around 90 fellow delegates, attending the Scottish Rural and Islands Housing (RIHAF) Conference at Cameron House on Loch Lomond.
On the Friday, there was a ‘Political Question Time Session’ attended by the following MSPs:
- Rob Gibson MSP [SNP]
- Jim Hume MSP [Lib Dem]
- Alex Johnstone MSP [Conservative]
- Margaret McDougall MSP [Labour]
- Councillor Martha Wardrop [Scottish Greens ]
Ross Martin, Director of the Centre for Scottish Public Policy, chaired this session.
As part of these proceedings, Ross Martin asked those in the room who supported the ongoing freeze in the Council Tax to raise their hands.
Councillor Freeman reports that, although there were approximately 80 people in the room, only 6 raised their hands.
He says that there was pretty widespread surprise at this response which he sees as a ‘low level of support for this Scottish Government / SNP policy’, especially in the context of the Scotland-wide audience.
Delegates attending included representatives from all the Housing Associations in Argyll & Bute – one of whom was Councillor Currie.
This is certainly interesting evidence of shifting opinions on this matter.
Is their political management here?
We wonder about the coincidence of the issue being raised by The Herald, a demonstrably pro-SNP paper, with the cover of information from the government described curiously as ‘statistics released in response to a request from The Herald’ rather than the usual ‘in response to a Freedom of Information request’.
We therefore wonder if the Scottish Government has it in mind to remove the freeze from council tax and is using a complicit paper to soften up the public in readiness for such a move.
The aggressively bold headline putting first the words ‘Rich minority’ in a single line, followed by ‘benefits most from freeze in council tax’ – with a strapline whose glaring inaccuracy is denied in the text of the article:’Owners of largest homes save over £1500 a year‘. [Ed: the emphasis here - and below - is again ours, for the same reason as before.]
As the article itself makes clear, those in Band H homes will have saved £1500 in total over 7 years – and not as in its inflammatory strapline, £1500 a year.
The inflammation is helpful in distracting attention from the very quiet reporting of the fact that Band A households save a much greater proportion of their income – over double – from the council tax freeze, as compared with Band H households; and would suffer more were it to be removed.
Then the article was supported by a leader in the same edition of the paper headlined ‘Iniquities in the council tax freeze’ which ran a series of unfocused concerns together into a generally incoherent editorial.
If our conjecture above is near the mark – that political management of public perspectives on the council tax freeze is going on, the attempt to rouse hostility to the better off would also support the Scottish Government’s unavoidable need to raise taxes substantially to pay for the promises to be delivered in the eventuality of an Scotland choosing independence. There have been a range of leaks asserting that the government plan is to hit the middle sector of society with tax hikes.
Deputy First Minister, Nicola Sturgeon, is to present the Scottish Government’s White Paper on Independence on 26th November, which she has promised will provide ‘all the answers’ to how independence will work – and has made specific reference to detailing a new approach to taxation.
There is not much longer to wait now until we all have those answers and perhaps to some raised here.
Another issue around the council tax freeze
For Argyll raised the issue of the council tax freeze about a month ago, highlighting the fact that the sweetener offered by the Scottish Government to local authorities in 2007 could be argued to be have had a highly retrogressive impact.
To get the acceptance of local authorities to this constraint on their spending, the Scottish Government offer them a key easement which also gave them additional power to manage their revenue funding in response to the local picture.
Grant Aided Expenditure [GAE] is the famous formula by which local authorities apply for their annual revenue grant, line by line, had previously ring fenced certain elements – like roads [or rural schools], for example – where the money awarded to, say, Argyll and Bute for roads had to be spent on roads.
In exchange for acceptance of the council tax freeze the government removed the imperative to spend the allocated money on the purposes for which it had been given.
This gave council administrations the licence to vire money from one budget head to another, with, on occasion, their own take on the meaning of freedom to fine tune spending to their knowledge of the local picture.
Out came the pork barrell and into the long grass went roads maintenance – with a sudden flurry of activity – too late -on roads maintenance in the run up to the 2012 local elections.
Who can say that this freeing of councils to ignore the need to spend specific allocated amounts on specific basic necessities produced an improvement in Argyl’s situation?
This is simply one example of the argument that can be made that the council tax freeze did not come without severe penalties to local authority residents.
No one else has taken up this specific failure of the council tax freeze but, as we have seen above, others have begun increasingly to query the value of continuing the freeze itself.
