Treasury Documents Reveal Council Tax Benefit Belongs to Scotland
Commenting on a report in the Sunday Herald which reveals that Treasury documents show that £400 million of council tax benefit belongs to Scotland, and which UK Work and Pensions Secretary James Purnell threatened to withdraw if Scotland opted to scrap the Council Tax, SNP MSP Alex Neil said London now had no case to withhold Scotland's money.
The Treasury's "Statement of Funding Policy" which is dated October 2007 reveals that council tax benefit comes under the heading of "Spending programmes forming part of the Scottish Block". This is in line with a Parliamentary Answer given by Alistair Darling over ten years ago in 1997.
Commenting Mr Neil said:
"James Purnell stumbled into this debate - at the obvious instigation of the Scotland Office - with no knowledge of the issue or its history.
"In light of this information, there can now be no case for London to remove £400 million from Scotland's funding simply because we want to scrap the Council Tax and move to a fair system of local finance based on ability to pay.
"The Council tax benefit money is Scotland's money plain and simple.
"The Scottish Parliament has already accepted the principle of local income tax.
"So the UK Government must now accept its own advice, as it does with Northern Ireland, that even under a different system of taxation the benefits money belongs in Scotland.
"It is not for Westminster to penalise Scotland for the policy choices made by our democratically elected Parliament.
"If England changed their local tax system they would keep the benefits money so why shouldn't Scotland?
"Unwittingly, James Purnell's outburst only adds to the increasing calls for Scotland to have our own tax and benefits system and will strengthen the already strong desire for Scotland to scrap the Council Tax and introduce a fair system based on ability to pay."
ENDS
Notes:
1. The Treasury document "Funding the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly: Statement of Funding Policy" (dated October 2007) states the following:
The Government intends that this population-based formula will apply to changes in almost all the expenditure under the control of the Scottish Parliament and National Assembly for Wales. It will not apply to changes in agriculture programmes 100 per cent funded by the EU. The Government will also want to consider whether this approach or another formula is appropriate in relation to provision for Council Tax Benefit and Housing Benefit which will both come within the Scottish Block for the first time after devolution; Housing Benefit is already within the Welsh Block, but, as in Scotland, Council Tax Benefit will come within the Block for the first time.
Spending programmes forming part of the Scottish Block
Domestic agriculture, fisheries and food (after devolution)
Forestry (after devolution)
Industry, enterprise and training
Roads and transport
Housing
Other environmental services
Law, order and protective services
Education
Arts and libraries
Health
Social work services
Other public services
ESF
ERDF
Nationalised Industries (after devolution)
Council Tax Benefit (after devolution)
Local authority expenditure
2. In a Parliamentary Answer of December 1997 Alistair Darling said:
Mr. Darling: The Government will also want to consider whether this approach or another formula is appropriate in relation to provision for Council Tax Benefit and Housing Benefit which will both come within the Scottish Block for the first time after devolution; Housing Benefit is already within the Welsh Block, but, as in Scotland, Council Tax Benefit will come within the Block for the first time.
Hansard 9th December 1997 : Column: 511
3. A survey by YouGov, undertaken on behalf of the Economic and Social Research Council (ESRC) and conducted during the election, revealed that 88% would prefer a system of local revenue raising based on income tax, while only 12% preferred it to be based on the value of property.
YouGov poll, 17-23 April, sample 1,872
