Council Tax and Stamp Duty Alternatives

Kirsty Blackman Excerpts

Wednesday 17th May 2023 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you for your diligence in chairing the meeting this afternoon, Mrs Harris. It has been a busy debate, so it has not been the easiest job.

I congratulate the hon. Member for Barrow and Furness (Simon Fell) on securing this debate. It is important that we discuss and think about the future of tax policy. Too often, there are only seven of us in the Chamber when tax policy is being discussed, so it is nice to see such a full room talking and thinking about the future of tax.

The situation in Scotland is similar but different: we have council tax and we have stamp duty, but it is now called the land and buildings transaction tax and is structured slightly differently. We introduced the LBTT in 2015, and it has been in place since then. The charge we pay in Scotland is more proportionate to the property price than stamp duty is in England, and we have a slightly different system that means that 40% of people who buy houses—it is separate from the additional dwelling supplement—do not pay any LBTT. Also, if a property is under £175,000—the majority of first-time buyers buy at that level—the LBTT is not payable at all.

[Helen Morgan (North Shropshire) (LD)]

On the point about stamp duty and similar taxes, does the hon. Lady agree that there is an opportunity to graduate those taxes to reflect the energy performance of a building so that we might encourage people to retrofit buildings and use the tax regime in a way that would meet some of our carbon targets?

[Kirsty Blackman]

I had not considered that before. It is very novel, and a good idea that should definitely be considered.

We are looking at council tax reform in Scotland. We agree that the system is not currently as fair as it could be. The Scottish Greens, along with the SNP and the Convention of Scottish Local Authorities, are planning short-term reforms and looking at how to approach long-term reforms to council tax. We also have a more proportionate system in Scotland for council tax. The hon. Member for Westmorland and Lonsdale (Tim Farron) talked about the amount that the highest payers pay, compared with the lowest payers. It is different in Scotland, where it is higher for those at the top.

Council tax is significantly less in Scotland, as my hon. Friend the Member for Glenrothes (Peter Grant) mentioned. Our properties are £600 less for a band E property on average across Scotland compared with England. The Scottish Government have committed to abolishing council tax for anyone under the age of 22. That flies in the face of what the UK Government are doing, which involves paying young people less, giving them less in benefits and, basically, disadvantaging them at every opportunity.

We also have a situation whereby people who were looked-after children on their 16th birthday will be eligible for a council tax reduction to zero until their 26th birthday. We have put that in place because we recognise the hardship that young care leavers feel in many areas of life, so things are slightly different in Scotland. We still do not have as fair a system as we would like, and we are still looking to reform it, but we are committed to making those changes.