For Immediate Release, 15 December 2016
Powers with purpose?
Throughout the Smith Commission and the passing of the Scotland Act, there was much talk of ‘powers with purpose’. The Poverty Alliance argued that this purpose should be tackling poverty and inequality. It is disappointing then that the Scottish Government have chosen not to make full use of new tax powers in order to make a bigger impact on inequality.
Local authority services are vital to tackling poverty and it is therefore essential that they are adequately resourced. For too long this has not been the case and rather than putting further pressure on these services we need to find more resources in order to help those on low incomes. While we welcome the commitment to money raised locally being kept locally, the proposed changes to council tax do not go far enough and it is clear that there is a need for a radical overhaul of local taxation.
The budget follows the news that the number of unemployed people in Scotland has risen by 40,000 in the past three months.
Peter Kelly, director of the Poverty Alliance, said:
“It is disappointing that the Scottish Government have decided not to make full use of the tax powers at their disposal.
“We are pleased that the Scottish Government has decided not to embrace the tax cutting agenda that has been adopted by the UK Government. With almost 20 per cent of the lowest earning adults currently pay no tax, there was little to be gained from changes to the personal allowance. However, we need to look at how we can use our tax powers to make a real impact on inequality. In this respect, the budget is a missed opportunity.
“Research by David Eiser calculated that for an individual earning £300,000, a 5p rise in the Additional Rate would cost around £7,500. This shows how we can raise taxes to address inequality without the threat of creating Scottish tax exiles.
“The Scottish Government should also give serious consideration as to how we fund local authorities, and this includes looking again at council tax.
“The current system of council tax is regressive, particularly for those on a low income, and this must be looked at again if we are to build a fairer Scotland.
“Reducing Air Passenger Tax while announcing cuts to local authority budgets brings no benefits to those on the lowest incomes.
“With almost one million people in Scotland living in poverty, and unemployment rising, there has never been more need for strong action from the Scottish Government.”
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