Scottish Government Council Tax hikes would make 33,000 Highland households 'poorer' under 'bombshell' plans
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More than 33,000 households in the Highlands will be “poorer” if the Scottish Government pushes through “bombshell” Council Tax hikes that will add anything from £140.64 to £786.73 a year to bills.
The TaxPayers Alliance who have already called for proposals that were put out to consultation yesterday to be scrapped, saying: “Rises on this scale would be a kick in the teeth for taxpayers across Scotland.”
The news follows hot on the heels of the Bank of England confirming that around two million people with mortgages will be worse off by the end of 2026 to the tune of between £200 and £499 and almost one million by at least £500 each month.
The government together with the Convention of Scottish Local Authorities (Cosla) – the umbrella organisation for councils – has issued its plans for consultation which it describes as “fairer” than the current system.
‘The last thing taxpayers need’
The changes would increasing Council Tax for people in homes in bands E by 7.5 per cent; F by 12.5 per cent; G by 17.5 per cent; and H by 22.5 per cent.
Figures from the TaxPayers Alliance illustrate just what that means for 31,333 households affected in the Highlands:
- Band E: Current – £1,875.16; Increase – £140.64; New Total – £2,015.79
- Band F: Current – £2,319.17; Increase – £289.90; New Total: – £2,609.06
- Band G: Current – £2,794.89; Increase – £489.11; New Total – £3,284.00
- Band H: Current – £3,496.59; Increase – £786.73; New Total – £4,283.32
Council tax for Band E households will breach £2000 for the first time in 15 of Scotland’s local authority areas: Aberdeen, Argyll & Bute, Edinburgh, Dundee, East Ayrshire, East Lothian, Glasgow, Highland, Inverclyde, Midlothian, Moray, North Ayrshire, Renfrewshire, South Ayrshire and Stirling.
Benjamin Elks, operations manager of the TaxPayers’ Alliance, said: “Council tax rises on this scale would be a kick in the teeth for taxpayers across Scotland.
"While households are grappling with a cost of living crisis, colossal rate rises are the last thing they need.”
He added: “Ministers should scrap these plans which will make Scots poorer.”
System to be made fairer?
The government claims that will redress how those in the lower bands pay a higher proportion of the value of their property than those in the higher bands and the council tax reduction scheme will ensure people do not pay what they cannot afford.
But many households already seriously struggling with chronic inflation, soaring mortgage prices, and sky high energy costs are unlikely to welcome any new increases nor find comfort in the council tax reduction scheme.
Public finance minister Tom Arthur said: “We have listened to calls for the council tax system to be made fairer, as presently more of the burden falls on those in the lower bands when considered as a proportion of the value of their property.
“We know that many people are struggling with their finances and our Council Tax Reduction scheme is there to ensure nobody has to pay a Council Tax bill they cannot be expected to afford, regardless of what band they are in.
“I would encourage anyone who has views on these proposals to complete our consultation before it closes on 20 September 2023, to help us determine if they should be taken forward.”
This is bad, bad policy
Opposition parties disagreed bitterly with what Scottish Conservative local government spokeswoman Liz Smith labelled "bombshell proposals" that would "terrify people struggling to cope with the global cost of living crisis".
"Rather than even considering these eye-watering hikes, SNP-Green ministers should finally give our councils the fair funding deal they deserve,” she said.
Scottish Labour housing and local government spokesman Mark Griffin also used the word “bombshell” to describe the plans, saying: "Once again the SNP is asking ordinary Scots to foot the bill for its own economic failure.
"There is no need to consult on it – this bombshell will mean even more financial sacrifice for people already facing impossible decisions."
And former Greens MSP who stood as an independent at the last Holyrood election Andy Wightman wrote online: "It's mad to tinker with tax rates when the tax base has not been revalued for 32 years.
"Imagine hiking income tax rates based in what you earned in 1991. This is bad, bad policy & results in Council Tax still being a regressive tax after proposed changes."
Householders to pay their ‘fair share’
Councils will get to keep the Council Tax revenues so unsurprisingly Cosla, which has been demanding more and more cash from the government, appears to support the plan.
Cosla resources spokesperson Councillor Katie Hagmann said: “For many years there have been calls to make the council tax system fairer,” she said.
“We are pleased to be working jointly with the Scottish Government to explore ways that we can achieve this. A fairer and more progressive Council Tax is what the proposals in this consultation aim to do.
“This is a consultation about ways to make Council Tax more proportionate for everyone, so that householders pay their fair share towards the delivery of essential local services, including looking at those higher value properties.”
The consultation will run for 10 weeks from 12 July to 20 September 2023. Any changes would come into effect at the start of the 2024-25 financial year.
