Council Tax Reform
After maintaining the Council Tax freeze for eight years, the SNP Scottish Government has now announced reform of the tax to make it fairer and to release an additional £100 million a year for schools.
The Council Tax freeze has been fully funded, throughout, by the SNP Scottish Government with local authorities receiving £70 million year on year. The Scottish Parliament’s independent research department, SPICe, has found that this funding added up to more than Councils would have generated if they had increased the Council Tax every year in line with the Retail Price Index.
The Council Tax freeze will continue until April 2017. From April 2017, the freeze will be replaced with discretion for local authorities to increase council tax by a maximum of 3 per cent per year. This could generate up to £70 million for council services across the country.
Building on the recommendations of the Commission on Local Tax Reform and to make the system fairer, from April 2017 the rates paid by those in the four highest council tax bands (E,F,G and H) will be adjusted in a move that will generate £100 million a year which will be invested in schools through future local government settlements. The average band E household will pay around £2 per week more and the average household in the highest band will pay around £10 a week more.
The 75 per cent of Scottish households that live in bands A to D will be unaffected by this change to the council tax band system and a further 54,000 households living in bands E to H on low incomes – more than one third of which are pensioner households – will be entitled to an exemption from the changes through the council tax reduction scheme.
The relief available to households with children will also be increased across all bands, benefiting some 77,000 low income families.
Commenting, the First Minister, Nicola Sturgeon MSP said:
“These reforms to council tax bands will mean no change for three out of every four Scottish households, with those in lower banded properties paying no more than they do now.
“Households will also still, on average, pay less than those on equivalent bands in England and less than they would be paying had the council tax freeze not been in place.”
A Scottish Welfare System
Following agreement with the UK Government on the fiscal framework, the Scotland Bill will give the Scottish Government new powers over some welfare benefits and a new benefits agency for Scotland will be established.
Alex Neil, Social Justice Secretary, has emphasised that that the new social security powers will be founded on treating people with dignity and respect and that this ethos will be at the heart of the new benefits agency which will aim to give a rounded assessment of people’s needs and streamline the administrative process. Mr Neil confirmed the Scottish Government’s commitment to continue to work with stakeholders and with those receiving benefits to identify the best ways of administering and paying benefits and to identify priorities for reform.
Through the Scotland Bill the Scottish Government will receive powers over 11 existing disability and caring benefits including Disability Living Allowance, Personal Independence Payment, Carers Allowance as well as control over funeral payments, Sure Start Maternity grants and cold weather and winter fuel payments.
It will also receive the power to top-up and create new benefits through the Scotland Bill and will have several flexibilities to alter the way in which Universal Credit is paid by the Department for Work and Pensions.
The Scottish Government has already confirmed it will use its new powers to:
- Increase Carer’s Allowance to the same rate as Jobseeker’s Allowance
• Abolish the bedroom tax
• Introduce flexibilities around how Universal Credit is paid including giving people choice to be paid twice monthly, and direct payments to social landlords
• Scrap the 84 day rule which removes income from the families of disabled children.
Mr Neil said he is keen to “ease some of the stress of applying for benefits” and to “make the system easier and simpler to navigate.”
The benefits being devolved do not include out-of-work benefits. Indeed, the new powers give the Scottish Government power over only 15.3% of welfare benefit expenditure in Scotland. The Scottish Government is, however, committed to working positively to develop the powers that have been devolved. These powers also include power over the Work Programme and Work Choice .Numerous agencies and individuals have expressed deep concerns about the way these currently operate. They have also noted that the Tory Government’s 87% cut to the employability fund will also hamper the Scottish Government’s ability to help people into work.
Overall, however, Alex Neil has underlined the commitment to use the powers to help tackle inequalities and poverty, in line with the core purpose of the Scottish Government.
Steel debate at Westminster
SNP MPs were to the fore at Westminster in an opposition debate on the UK steel industry on 29th February. Marion Fellows MP led for SNP ably supported by Margaret Ferrier MP and Hannah Bardell MP. All three highlighted the strenuous efforts being made by the SNP Scottish Government to preserve a future for the steel industry in Scotland with the lacklustre approach of the present Conservative administration at Westminster.
Marion Fellows MP said:
“Each time there have been job losses in the steel industry, the Government have moved in to help. The help has been to find people other employment; there have been few timely direct measures to help keep steel plants open. The UK Government have been challenged numerous times to come up with a UK manufacturing strategy and to employ joined-up thinking to help foundation industries, including steel. That is what other European countries do.
The comparison between what the Scottish Government and the UK Government have done is stark. Within days of the announcement of the mothballing of the Scottish plants, the Scottish Government set up a Scottish steel taskforce, with a remit to find a buyer for the plants and to do everything possible to retrain and upskill the workforce to make sure they would be ready when a buyer was found. Skills Development Scotland has created the steel industry advanced manufacturing upskilling programme to provide an incentive to retain key and essential staff. That will enable a knowledgeable and skilled team to be assembled quickly when an alternative operator is found.
The Scottish Government have shown what is severely lacking here at Westminster: a strong political will to help the steel sector and other manufacturing industries boost inclusive growth and exports.
“I ask the Government to look seriously at the mixed messages they are sending out, to get behind the scrapping of the lesser duty rule, to steer away from giving China market economy status and to start investing in foundation industries in the UK. We need to spend more on industry and less on bailing out bankers.“
Margaret Ferrier :
“First Minister Nicola Sturgeon moved swiftly to establish the Scottish steel taskforce. As a member, I have been impressed by how much that multi-agency body has achieved. Its approach has resulted in real interest from alternative operators, with the possibility remaining that both mills can be kept operational by a new owner. If that is the case—I hope it is—the new operator will be able to resume production swiftly due to the Scottish Government’s steelworkers retention plan.
Action has been taken on business rates, in addition to new public procurement guidance on steel. A new action plan, “A Manufacturing Future for Scotland”, specifically singles out the steel industry as a vital strategic asset in the Scottish economy, while acknowledging the particular pressures it faces. It also details further specific measures to help steel and other energy-intensive industries, such as a new expert advice and support service, which will work with operators to develop feasible and cost-effective business plans to implement energy saving opportunities.
The measures taken by the Scottish Government are bold and forward-thinking. We need to see some of that from the UK Government.“
“The strategic importance of the plants to Scotland and the UK cannot be overstated. It is apparent in the specialist skills and knowledge and the innovative approach that are inherent in Clydebridge and Dalzell. According to UK Steel, the Dalzell plant is the only plant in the UK capable of rolling and processing the steel that is used in the Ministry of Defence’s special armour plate and for certain requirements of the offshore oil and gas industry. The Clydebridge plant specialises in producing difficult-to-make high-strength steels that are used in some of the most challenging environments in the world. We truly have a world-class industry that we in Scotland believe is worth fighting for.
However, when the UK Government are faced with an opportunity to fix the issues, they are flat-footed and seem to shy away. A case in point is the issue of tariffs, which has been discussed extensively this evening.“
The Scottish Steel Task Force continues to meet and to work to save Scotland’s steel industry. The Scottish Government is also committed to one year relief on business rates at the Tata Steel plants at Clydebridge and Dalzell in the quest to secure an alternative commercial operator for the sites.