Scotland politics

Scottish Labour pledges to scrap 'unfair' council tax

council services
Image caption Labour has based its proposals on the Commission on Local Tax Reform

Scottish Labour has pledged to scrap the council tax, saying the current system is "unfair".

The party unveiled plans for a new form of local government tax based on property value which it said would make 80% of households better off.

Announcing the policy in Edinburgh, party leader Kezia Dugdale also proposed a tourist tax and a tax on vacant, economically inactive land.

The SNP announced planned reforms of its own earlier in the month.

Its leader Nicola Sturgeon has pledged to end the council tax freeze from 2017 and raise the four highest bands to generate funds for services.

'Fix local services funding'

Opposition parties pointed out that the SNP had pledged to abolish the tax in its 2007 manifesto, leading Ms Sturgeon to challenge them to set out their own proposals.

Ms Dugdale said Labour would "make good on the SNP's broken promise and scrap the council tax", basing her plans on the Commission on Local Tax Reform.

She said: "We will fix the funding of local services for good. It's a fair plan which means millions will pay less and those who can afford to will pay a little more.

"The SNP commissioned a report into replacing council tax and then bottled it when it was time to be radical. We have taken that report, and its research, and voters can now choose a fairer alternative to council tax."

Image caption Labour said the current system of council tax was "unfair"

How will Labour's plan work?

Under the proposals, properties worth £180,000 or less would be taxed £450, plus 0.35% of the property value.

For properties worth more than this, the portion of the value above £180,000 would attract a rate of 0.9% of the property value.

The maximum charge would be capped at £3,000, with a cap on year-on-year increases at 3%.

Labour said this would leave nearly two million households better off, with 80% paying less than they currently do.

The party's plans involve carrying out a revaluation of properties in Scotland, costing £8.5m, which the SNP decided against in its proposals. The last valuation was carried out in 1991.

'Back to the 1970s'

Scottish Conservative leader Ruth Davidson said the plans would "tax Scotland back to the 1970s".

She said: "Scottish Labour has become the enemy of aspiration. Going into this election, we have a government promising to put up taxes and a main opposition party saying taxpayers should be hammered even harder.

"Only we are standing up for Scotland's workers."

The Scottish Greens, who are to publish their own council tax reform ideas next week, said Labour's proposals were "welcome", but questioned the £3,000 cap.

The SNP has also to set out its plans for income tax reform, proposing to freeze rates.

Labour and the Lib Dems have both proposed immediately raising the Scottish rate of income tax by 1p across all bands to raise money for education and other local services.

Labour has also proposed a freeze on the 40p threshold throughout the next term of parliament, and wants to restore a 50p rate of income tax for people earning more than £150,000.

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