Council tax should be revaluated to meet child poverty targets – report

A council tax revaluation for homes in Scotland is needed soon in order to meet child poverty targets, an advisory commission has said.

The Poverty and Inequality Commission says it is one of a series of measures needed to improve the tax system.

The commission was set up in 2017 by the Child Poverty (Scotland) Act to advise the Government on measures to improve the lives of the worst off in the country and close the gap between the richest and poorest.

In a report released on Monday, it recommended bringing wealth as well as income into the scope of taxation, as part of a long-term solution to putting public finances on a sustainable footing.

Currently, council tax is based on property values from 1991 and critics say it has a regressive effect, leading to poorer people paying more.

The commission’s report praised the “progressive” Scottish income tax system, which has separate bands to the rest of the UK.

However, commissioner Alex Cobham said further action on tax is needed if ambitious targets on reducing poverty by 2030 are to be met.

Mr Cobham, an economist who is also chief executive of the Tax Justice Network, told the PA news agency: “There’s no question that this is technically the right thing to do.

“What’s been lacking is the political will.

“I think we’re at a point now where if the Scottish Government were to decide not to do this, because it is politically difficult, because it is sensitive, they’re effectively deciding to miss their own child poverty targets. It’s become that clear.”

He said it is important to start this process in the upcoming Scottish Budget, as well as ensuring those on lower incomes do not suffer as a result.

Mr Cobham said: “It is more than feasible, I think it’s necessary.

“If the Government is serious about getting back on track with its child poverty targets, there is no time to wait.”

The report says the Government should ensure all land and property is properly registered, and work on a replacement for council tax should start immediately.

Ahead of the next Scottish Budget, First Minister Humza Yousaf has said “difficult decisions” on tax will need to be made.

Responding to the commission’s recommendations, Deputy First Minister Shona Robison said: “I welcome this report, which recognises our progressive approach to taxation.

“This approach has protected lower earners while raising revenue to invest in our public services.

“It has also helped strengthen our social contract with every citizen in Scotland, including free prescriptions, free access to higher education and the Scottish Child Payment.

“A decade of austerity, economic mismanagement by the UK Government, and a hard Brexit have all contributed to one of the most challenging financial situations since devolution.

“The medium-term financial strategy set out our plans for managing these challenges, doing all we can within our limited powers to ensure public finances are on a sustainable path.

“We will respond fully to the commission’s recommendations in due course.”