Revaluation should be a zero sum game
Jim O’Neill says between the inconsistently applied business rates revaluation and the forcing of council tax rises through the imposition of central funding cuts, the SNP has thoroughly botched property taxes in Scotland.
It is in the very nature of a rates revaluation that the outcome should provide the same income as before. However, because the value of properties change, the amount paid towards that income by any single property owner must change. What should never happen is that the changes are so excessive that they put businesses at risk. Unfortunately this is the very outcome that the Scottish Government has achieved with its latest business rates revaluation.
The weasel words that “it wisnae us, it wis a big boy that ran away” or, to be factual, an independent revaluation by assessors, belies the fact that the rules on which the independent assessors revalued the properties are set by government. So it was John Swinney, long time Finance Minister, who was responsible for setting the rules and for failing to notice that different sectors seem to have been revalued on different bases. And so the stage was set for the hospitality industry, and indeed the NHS, to get hammered while some large office properties, such as the SNP headquarters, enjoyed large rates cuts.
But instead of standing firm on the rules they had set, as soon as Alex Salmond’s favourite hotelier squealed loudly enough about the unfairness of the revaluation, new Finance Minister Derek Mackay went running for the hills and spent £44m of money that he allegedly did not have (since he could not mitigate the cuts to local government any more) to further mitigate the effect of the revaluation. Where has this money come from? What programme has been cut further to give this handout to some 9,500 properties that have suffered from this botched revaluation? Do you think he will tell us? Maybe it just “felt right”.
Mind you, even this change has not satisfied Stuart Spence, the hotelier who tried to start a “can’t pay, won’t pay” campaign. So will we see the Scottish Government take him to court for non-payment? The world waits with bated breath.
This is the second botched job on property taxation from the Scottish Government. Who can forget the headlines attacking the abomination of the Council Tax and the misguided Council Tax freeze? That freeze was only to last one or two years until the brains of the SNP, John Swinney, could work out a local income tax. Ten years, thousands of jobs and lots of key council services lost later, what was the result? Let’s put higher tax costs on the higher bands.
These current bands are based on the valuation of homes made some 24 years ago and valuations have changed substantially since then, in particular the H band, which has extended massively upwards giving a very large tax benefit to the richest in our country. If the Council Tax, or any replacement such as a land value tax, is to be made fairer, the first job must be to conduct a total revaluation of properties in Scotland. Thereafter, the number of bands can be extended to take into account the current width of the H band. By adding I, J and K bands, the mid band becomes F, thus benefiting the poorest and more fairly taxing the richest. Remember, any revaluation should be a zero sum game.
As it is, many of us will be out during the upcoming council elections reminding people living in houses of E band and above that the big rise in their council tax has not been because of any local increase in spending, but due to the cuts imposed directly by the SNP government at Holyrood.
Meanwhile, many of us will remember the “legacy” promises from the outstanding Glasgow Commonwealth Games. Unfortunately, this does not seem to include the Sports Minister, Alison Campbell, who has just announced a “small reduction” of the funding for SportScotland of some 20%. How can we build a healthy sporty country when our Government is cutting the money spent on the promotion of sport by this amount? Whoops! Yet another promise broken by this independence obsessed government.