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Poker face

Brian Taylor | 12:23 UK time, Wednesday, 23 February 2011

It has become like a game of poker or, perhaps rather, bridge.

A bid here, a bluff there - but eventually all the political parties will have to show their cards, to play their hand.

I am talking about local authority finance or, more precisely, the council tax.

Scotland's parties are, to varying degrees, still involved in something of a slow shuffle over this.

This protracted debate has been sustained since a rash outburst of righteous indignation in the 1980s prompted the Tories to abandon the rates and to introduce the community charge of poll tax.

There was much talk then of pensioners living alone and in mortal fear of their rates bill.

Spooling forward, we now have an intriguing proposal from the Tories. (I almost wrote "a modest proposal" until I recalled its Swiftian connotations.)

Annabel Goldie, who leads the Scottish Conservatives, says that her party will enter the Holyrood election campaign with a promise to cut £200 annually from the local authority levy faced by pensioner households.

Universal freeze

It is designed to assist pensioners living in mortal fear of their council tax bills.
The Tories dismiss suggestions that this is a targeted bribe for a section of the electorate they hope will back them.

Rather they would argue that the Tories are perfectly entitled to seek to induce people to vote for them. (Indeed, some in the party might feel that it would be a useful innovation, a daring departure from tradition.)

But Miss Goldie insists that the measure is entirely legitimate.

She says it builds upon the universal freeze in council tax rates over the lifetime of the present Parliament, introduced by the SNP government but backed by the Tories.

She argues further that it is aimed at "people who have worked hard, paid their taxes, given to society".

Let us set aside the notion that it may be possible to have reached an advanced age following a lifetime of indolent self-indulgence.

Let us accept that Miss Goldie's definition characterises the majority.

Wider economy

She goes further, noting that it is an attempt to ameliorate conditions for people "for whom low interest rates are not a comfort but a constraint on their income."

In essence, then, she is offering to provide a compensatory Scottish counterpoint for one sector of the community to lessen the impact of spending cuts and low interest rates which are deemed, not least by Conservative ministers at Westminster, to be necessary in the interests of the wider UK economy.

Not an easy one, on the face of it, for Miss Goldie's rivals. Always difficult, politically, to appear to be against measures to assist the elderly.

But there are arguments - and they have been deployed with vigour.

How could it be afforded? Love to do it, says Labour, but the cost would be £492m over four years. Not credible, they say, especially at a time of spending cuts.

Ditto from the SNP and the Liberal Democrats.

The Nationalists say that their freeze has already helped households by trimming £300 from bills.

Poll tax

They plan to extend that during 2011/12 and 2012/13.
The LibDems argue, further, that the measure would subsidise "the richest pensioners in the biggest houses".

Shades, once more, of the arguments which attended the poll tax.

But what will the parties do? For decades, Scotland tolerated the rates, grumbling.

One legacy of the poll tax and its attendant protests is that Scots no longer regarded local authority taxation as immutable - or even mandatory.

We have grown accustomed to demanding change. What change will be on offer?
The SNP and the Liberal Democrats both say their ambition remains to replace the council tax with Local Income Tax.

If you recall, a government Bill to do just that was shelved in the face of opposition.

LIT, of course, has its critics. Does it load too much on one source of revenue?

Should there not be a levy on property? What would happen to council tax benefit?

'Fairer' tax

What about those with low cash incomes but evident wealth? What about collection?

In the interim, the SNP has promised that two year council tax freeze, hoping it will place them in contradistinction to the Labour Party.

The LibDems are philosophically unhappy with a freeze, preferring locally set rates. In practice, though, they did not thwart the freeze.

They say they will produce proposals to make the council tax fairer. Expect those to be, genuinely, modest.

And Labour? There was talk at the last election of reforming the council tax - but the party struggled then to define its plans.

Since then, they have studied options. They looked with interest at the situation in the Northern Ireland. They have "the rates".

Given the SNP position, they are electorally unlikely to favour a simple ending of the freeze - despite various comments deploring its impact on local government.

'Limited' proposals

Rather, they might well seek a negotiated deal with Cosla which would involve an agreed cap on any increases.

At the same time, I believe that any proposals for reform will be decidedly limited.

The argument may be that the economic times, troubled and vulnerable, are not propitious.

Right, whose deal is it?

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