By Keith Aitken in Edinburgh | 20 February 2015
The Scottish Parliament has agreed to write-off nearly £500m of unpaid poll tax debts, in spite of Conservative claims that the precedent it establishes amounts to a tax-dodgers’ charter.
MSPs passed the Community Charge Debt (Scotland) Bill by 98 votes to 15 yesterday, with Labour, the Greens and the Liberal Democrats all supporting the Scottish National Party government’s measure. Only the Conservatives maintained the opposition that they have voiced from the first.
‘It could encourage people who think they don’t have to pay the council tax because it will just be written off a few years down the line,’ Tory finance spokesman Gavin Brown said.
‘People should pay the taxes for which they are liable. There should be a principle of equality between those who paid the tax and those who didn’t pay.’
But local government minister Marco Biagi the legislation would ‘draw a line under the last remnants of that [poll] tax and, most importantly, put one of its last bitter legacies behind us once and for all, and ensure that all can come forward to register to vote without fear’.
A key element in the Scottish Government’s argument arose from reports that some Scottish councils planned to use the massively swollen electoral register for last year’s independence referendum to pursue poll tax defaulters with new vigour.
The legislation, Biagi said, would prevent this by both writing off the debt and absolving councils of their statutory duty to pursue it. Brown said that ministers appeared to be happy for the new registers to be used to pursue historic council tax defaults, but Biagi responded that the council tax collection was above 95%, compared with 88% for the poll tax across its lifetime.
Brown unsuccessfully moved an amendment to monitor any apparent impact on council tax collection rates after the poll tax debts were written off. Biagi said he had little doubt that councils would be quick to let ministers know of any fall-off in their revenues.
Labour’s Alex Rowley backed the Bill, though he also expressed gratitude to people who had struggled to pay their poll tax. ‘The poll tax threw local government finance into turmoil, with the possibility of throwing services into uncertainty,’ he said, adding that there was evidence that residual poll tax debt was making it hard for poorer families to pay their council tax.
The Community Charge, or Poll Tax, was introduced in Scotland in 1989 to replace domestic rates as a source of local authority revenue, provoking furious protests and a widespread campaign of non-payment. It was scrapped in 1993, and replaced by the council tax. Scottish ministers recently announced a cross-party commission to look for a replacement for the council tax.
Civil servants estimate that around £425m of poll tax arrears – including interest charges and penalties – are still outstanding.
Under Scots law, councils can continue to pursue unpaid taxes beyond the normal 20-year limit, provided they issued a warrant within that timescale, but in practice a growing number have given up on pursuing the debt, and collection last year totalled just £327,000 across Scotland.
Under an agreement with the Convention of Scottish Local Authorities, the Scottish Government has allocated £869,000 in the coming financial year to compensate authorities for the sum they could reasonably expect still to collect.
