 good afternoon, everyone. Following the morning's events and the curtailment of general question time, the next item is consideration of business motion 1.629 in the name of Joe Fitzpatrick on behalf of the parliamentary bureau, setting out a business programme. A chael'r ei anghof am leoupa mor hariad yn jechwch, esgwch i ddysgu gyrgynogiadu am Edylishwyr Ie', dybedodd Castellan Jennis夜 breeze platformen lettog. Does the motion move in Goodbye? Ie ddidd comes general quick to con précogramu i sefydfer ddych Slow Heraction asked me that motion number 1, 629, in the name of oedd? Maen nhw'n gwybod. Gwynffrwyr maen nhw'n ddiddordeb iawn, a ddiddordeb am y cyfnodau genner y cyfnodd gweithio yn 450 p.m. yn y ddechrau. Y dyn nhw'n eithaf y cyfnodd yn y ddiddordeb iawn, gwneud o'r cyfnodd 150 i ddiddordeb iawn o Derick McHie i ddiddorol rydw i gydag yn ddiddordeb iawn. Felly, rydw i'n gweithio i ddiddordeb iawn i ddiddordeb iawn, rydw i'n ddiddordeb iawn i ddiddordeb their request to speak-butons now. I call on Derek Mackay to speak to and move the motion. Up to 13 minutes please. Thank you, Presiding Officer. I welcome today's debate on reforming local taxation. The timing means that we have had ample opportunity to digest the findings of the Commission on Local Tax Reforms report from last December and reflect upon the various alternative reforms that exist I would also like to thank all commissioners, especially those from beyond the world of politics and government, for the dedication and commitment to the report. The report Just Change, a new approach to local taxation, is an excellent piece of work that sets out the fundamental concepts very clearly alongside some ground-breaking research. While it is inevitable that any report would not satisfy all shades of opinion, the work is authoritative, robust and insightful. The commission's remit was to examine, in considerable detail, alternative systems of taxation rather than make a recommendation for a particular tax. Perhaps the best articulation of why that remit was right, and especially so for a cross-party and cross-government commission, it was by the commission itself when it concluded that, we recognise that political parties in Scotland will attach different weights to the considerations that we have set out and will therefore draw different conclusions about the best way forward. I am sure that recognition of different and perfectly valid views will be reflected in today's debate. In doing so, we are implicitly acknowledging the achievement of the commission and the work by the previous local government and regeneration committee in creating the space for change, as evidenced by the different alternative forms of local taxation that were advanced in manifestos for the elections this year. It is therefore important to recognise that the report and indeed the reforms that this Government is undertaking are not the end of the story, but let me be very clear that they are the beginning. The remaining range of views was nine years ago, with the SNP manifesto for the 2007 election, which said that it would abolish the fundamentally unfair council tax. Nine years later, you say that this is the beginning. Derek Mackay I am sure that Mike Rumbles has reflected repeatedly on the fact that the SNP put a proposition to the people through the 2016 manifesto, and we were handsomely rewarded by the electorate of Scotland. That is why we are in the position to be in government, embarking on further legislation. What I am saying from our proposition on local taxation, however, is that we genuinely want to engage with other parties in wider Scottish society to take forward the next steps, but we are absolutely secured. I would like to make just some more progress and then take a further intervention. It is the case that we have a mandate to progress with what we proposed, but there remains a range of views on what our next steps should be. There remain real differences among and between the parties in the chamber, but the one point that I hope we can all unite is that the journey to a fairer and more sustainable local taxation system has only just begun. However, the next steps should absolutely be about progressivity and the progressive nature that can be delivered—something absent from the Tory amendment, I would add. We should all welcome today's debate in terms of that journey to be able to critically examine all the different proposals in a constructive spirit. The task before us will not be simple or straightforward. The present council tax was created by the 1992 Local Government Finance Act 1998 and has been largely unchanged ever since. The commission puts its finger on it when it noted that, among all the taxes that we pay, council tax is especially visible in that every household gets a bill. That is in contrast to other taxes. VAT and a number of other taxes are part of the cost of goods and services, and they are not always visible unlike the council tax. It is a realisation of that that sets just change apart. It recognises the political challenges around— Rona Mackay. I thank the cabinet secretary for giving way. I welcome the cabinet secretary's openness, but can he address some concerns of my constituents in Strathkelvin and Bearsden that the council tax raised in the councils will stay in the council tax area? I can categorically assure every local authority area that every penny raised in council tax will stay in that local authority area. How we are proposing to allocate revenues towards education, as was proposed in the manifesto, is through the revenue support grant. What is fairly illustrative about that? It is similar to business rates in terms of how that mechanism works. I do not hear the complaint that that mechanism has not worked to the satisfaction of local government. The principle is there, but I am very clear that it is raised at a local level through council tax and will stay with those local authorities. Council tax is certainly complex. It is not the only difficulty to change. Just change did note the complexity of the current council tax reduction scheme. I want to be clear on that. There are a huge number of regulations that define the scheme—the amount to around 200 pages—and part of that is because it needs to work for a vast range of people in real-world situations. Those can range from people receiving income from multiple sources that could never be captured by a P60 to ensuring that those with specific difficult circumstances—for example, carers—get the relief that we think that they need. Council tax reduction is not universal, but it is targeted to ensure that those who will do so will do so. The Cabinet Secretary for Education and Skills is aware that, last week, the Delegated Powers Committee ruled the council tax reduction scheme ultra-virus. I just want to ask the Cabinet Secretary's view on that. I am familiar with previous challenges to the competent nature of the council tax reduction scheme. Jackie Baillie used to propagate the argument that it was ultra-virus outwith the powers of the Parliament, arguably before the transfer of social security powers. I have checked the record, Jackie, in terms of the competency of the council tax reduction scheme. However, what we were able to do in partnership with local government at the time that the UK Government had abolished council tax benefit is to design a scheme through change liabilities to support the most vulnerable in our society. Therefore, I absolutely believe that it is within the competency of the Scottish Parliament. We want to enhance and improve that welfare nature of the council tax reduction scheme through households tax liabilities. I think that that will be welcome use as part of the reforms to hard-press households in some very difficult circumstances at this particular time. I have touched upon the complexity of the council tax benefit, the council tax reduction scheme and the necessity of that complexity to ensure that we are protecting people now and into the future. It presently applies reductions amounting to around £340 million to just under half a million households, approximately one in five. Without it, those on low incomes or even for whatever reason, no income would be exposed to the full extent of the present council tax system. They would be liable for their full council tax liability, even though they would not have the means to pay. A telling thought given in the commission heard much evidence pointing to the futility of taxing those who simply cannot pay, but the council tax reduction scheme offers some support in that respect and, in fact, more progressive for the lowest income households. I accept the commission's criticism of the scheme's complexity, but I also emphasise its importance to achieve the aim of support. It just changed looks at a number of alternatives, including a land value tax, which, of course, would require further work. Although economic principles are undoubtedly appealing, we must recognise the difficulties in determining land values within urban areas. I am sure that that debate will continue. We are also embarking on work, on securing agreement and consultation around a potential levy on tax and development from vacant and derelict land. To reduce land banking, I would increase the supply of homes, which will take forward in a stakeholder round table, imminently. Just Change considers income as an important potential source of local tax, including drawing on HMRC's experiences of identifying Scottish taxpayers in readiness for the introduction of the Scottish rate of income tax earlier this year. Willie Rennie? I am keen to understand whether what he is proposing on this front is the assignment of local taxes for that local community, or is it just a share of national taxation across Scotland? Is it local or is it national? Derek Mackay What we have proposed is a share of the national element of income tax through that formula, but that engagement is still to be had with local government. That is an area that we want to explore with local government. There is certainly an attraction to the assignment of elements of income tax to local areas, because I believe that that will incentivise growth and interest in local economies, and wider interests give greater financial accountability and less dependency on central government grants. That is certainly in the spirit of what many people are trying to achieve. We are keen to explore the alternative of tax assignment that the commission has identified, and we will formally consult on that before taking it forward. It could improve public understanding of how local services are funded, especially desirable, given the preconceptions that are reported and just changed, and thus enhance the financial accountability of local government, giving local government a material stake in the economy. We would also make overall taxation to fund local government more progressive and linked to income. Earlier this month, I laid regulations. Jackie Baillie People would regard the assignation of taxes as creating instability and uncertainty for local government. Taxes, while they may rise, might also fall. In the event that the yield fell, what would local government do? Would they just have to make cuts? I have said to the chamber and I have said to Jackie Baillie that we want to have that discussion with local government around how that could work. We are not putting forward the concluded proposition. I think that that is an engagement that is worth having to understand the benefits and the risks of any such proposition. The council tax regulations that I have laid have set out changes both to council tax and the council tax reduction scheme. If the Parliament agrees, those can be delivered from as early as council tax bills next year from April 2017. The changes to council tax will increase the charges on properties and bands E, FG and H by 7.5 per cent, 12.5 per cent, 17.5 per cent and 22.5 per cent respectively. I really need to now move to the end of my speech with about 30 seconds to go. I believe that those regulations will unlock finance for education that is delivered as expressed in the SNP manifesto pledge. There will be protection in terms of the council tax reduction scheme changes as well. Those initial reforms can be delivered at low administrative cost and achieve their purpose. Longer-term change will need more discussion, consensus and engagement. I am certainly committed to that through the motion and through the engagement with political parties as we go forward. I am committed to that in a very positive, constructive and collegiate way, recognising that we have an embarked on a journey in local taxation. We want to make it more progressive, deliver the steps that we have the support for at the elections and then engage further on what can be delivered next in view of the report just change. I now call Murdo Fraser to speak to and move amendment 158, 0.1. Thank you, Presiding Officer. I start by welcoming the opportunity to have in this extended debate a discussion about local tax reform. At the start, and I should acknowledge, my own party is something of a checkered history when it comes to local taxation, the commission on local tax reform states, and this is a direct quote, history shows that reforms to local taxation are politically challenging. That might be something of an understatement. It was back in the 1980s, Presiding Officer, in the midst of time that a rate payers revolt against a rating evaluation led to the then Conservative Government agreeing for that form of local taxation to be scrapped. Its replacement was, of course, the immensely popular community charge. We all remember thousands taking to the streets to celebrate its universal acceptance and success. Despite its undoubted popularity, the community charge was short-lived and was replaced in the 1990s by the council tax, which was intended to be a hybrid system between a property tax and a personal tax. It was not a pure property tax, such as the rates had been, and the properties were valued in bands. The proportion between the highest property and the lowest was set at three, so reflecting the fact that there was a personal element involved. The council tax has its advantages. It is an efficient tax, it is well understood and generally accepted, and it is relatively easy to collect. It does, of course, have its disadvantages. There is no direct link between the size or value of somebody's property and their ability to pay their tax bills. Single people living in larger properties will pay much more towards local services than a family of working people living next door in a smaller property but consuming many more council services. Because there has been no revaluation since the council tax was introduced, many properties today find themselves in the wrong band. That can lead to frustration with constituents who cannot understand why they are paying more council tax than the identical property further along the street. It is not surprising that, over the years, they are having a number of attempts to try to find a replacement for the council tax. Famously, we remember the SNP being elected in 2007 on a manifesto pledge to replace council tax with a local income tax. That was not something that my party supported, but I accept that the SNP's success in that election was down in some way to that particular pledge, which capitalised on the concerns that many people had, particularly retired people, about the way that their council tax bills were rising at that time. Of course, the SNP was not successful in that Parliament in taking those plans forward. It is curious, though, that when they became a majority Government in 2011, they did not pursue the idea of a local income tax, even though they had a parliamentary majority at that time. Indeed, they now seem to have abandoned that notion altogether. Instead, what we have seen is a nine-year council tax freeze, something that we in this party have supported. The freeze has given council tax payers relief from what were often painfully fast-rising bills. It is noticeable that council tax bills, which I remember in previous sessions of this Parliament in the early days of this Parliament, were very often raised with me by constituents as a serious issue and are now very rarely raised with me as a constituent issue. I am sure that that is the case for other members. The latest attempt by the Scottish Government to find a replacement for the council tax was to establish its commission on local tax reform to look at all the options that were published in December last year. It is a very thorough report and it considers a number of possible ways forward. The Scottish Conservatives did not participate in that discussion, preferring instead our own separate commission on competitive and fair taxation, chaired by Sir Ian McMillan. At that time, we were criticised by the Government and other parties for not taking part in the Government commission. Our feeling was that it would have been duplication to have had two separate reports being worked on at the same time. The Government's commission came to a very clear conclusion. The present council tax system must end. Unfortunately, if members were then unable to agree beyond that, what should replace the council tax? In contrast, our commission proposed that the council tax structure should remain largely as existing but reformed to be a fairer and more progressive local tax with an increased multiplier for those at the upper end and additional protections for low-income households. It was therefore somewhat flattering to us to see that when the Scottish Government finally announced their plans for the council tax, it ignored more or less completely what their own commission had recommended and decided to adopt something very similar to what we had proposed in our commission. We welcome that endorsement of all the hard work done on the Government's behalf. Winston Churchill famously said of democracy that it was the worst system of government in the world until you considered all the alternatives. The council tax is a bit like that. Everybody knows that there are problems with the council tax, but we are yet to hear a better plan proposed by anyone in order to replace it. We can continue, of course, to have that conversation. Can he explain to me that, even if we were to accept that the unhappy reality that he paints that we have to say that the council tax is the least bad option, is there a reason in principle why, if it is going to continue, it ought to be based on antique property values rather than current ones? Mr Harvie makes a fair argument for a revaluation. I accept that, in logic, there is a very sound logical reason for a revaluation. However, on the counter to that, it would be an expensive and bureaucratic exercise, and I can guarantee that we would all have huge queues at our doors from constituents who are very unhappy if their properties had been revalued and their bills were going up as a result. There is a political judgment to be made about that, however logical that might seem. In our party, we support proposals to end the council tax freeze, allowing councils the freedom to increase council tax annually up to 3 per cent. We support additional protections for low-income households, and we support those in properties, bands G and H, paying a bit extra. Where we depart from the Scottish Government is in two respects. Firstly, we oppose the increases for those living in properties in bands E and F. Those can be relatively modest properties and we do not think that it can be justifiable for all those who live in those properties to see a hike in their council tax. Just as seriously, we oppose the approach that ministers are taking in relation to how the increase in council tax will be dealt with. Ministers want to create a school attainment fund, with money going direct to schools. That is an ambition that we agree, but they want to fund that by clawing back from councils that additional money, £100 million that will be raised by those council tax revenues and take that centrally to pay directly to schools. What does the minister think of the minister's statement just earlier, that all the money raised will be kept by local authorities? Would he agree with me that what he did not say was that the Government is actually going to take money away from those councils, so that council tax pay is a charge? Mr Rumbles makes his point perfectly well. It is not surprising that this proposal from the Government has been faced with outrage in local government circles. COSLA has made clear its opposition to those plans as breaking the link between the taxes raised from local householders being spent on local services. There is absolutely no precedent for what is currently being proposed, which undermines both local democracy and local accountability. Presiding Officer, I know that our concerns in this regard are shared not just by many of those in local government but by other Opposition parties in this chamber. Our amendment today highlights our concern about the SNP's centralising proposal. I hope that it is something that will have the support of other Opposition parties. Presiding Officer, just to close, our plans would be to raise funding from those and properties and bands G&H. Only that would raise an extra £30 million to put into local government on anio basis. That is new money for local government when they face another punishing round of cuts, as the Fraser Allander Institute warned just last week. It is money that could defend and support vital local services. Crucially, we will defend the principle of local democracy and local accountability and resist the centralising tendency, which is all too typical of this SNP Government. I have pleasure in moving the amendment in my name. I now call on Jackie Baillie to speak to and move amendment 1580.2 up to seven minutes, please, Ms Baillie. Thank you very much, Presiding Officer. They do say that you can learn much from history. Let me delve into the recent past to set a little context for the debate this afternoon, because it is truly instructive. Unlike others, let me take you back to 2007. In the SNP's manifesto, they said that local taxes can be fairer. The SNP will scrap the council tax and introduce a fairer system based on ability to pay. That was the first of many broken promises to follow. Then came 2011 and the SNP manifesto again. Over the period of the next Parliament, we will consult with others to produce a fairer system based on the ability to pay to replace the council tax. That went well, didn't it? The SNP promised to replace the council tax, but instead have merely tinkered with it, so the broken promises continue. Roll forward to the 2016 manifesto and I ask, Presiding Officer, where is that promise to scrap the council tax? I couldn't find it. In fact, it's completely disappeared. That perhaps is the biggest broken promise of them all. What we have instead is a set of proposals that are so timid, so lacking in ambition, that one wonders where that emanated from. I can't imagine a scenario where Alex Neil, who was responsible for local government, is anything but timid. How would he, somebody like him, sign off something like this? Was it the First Minister or was it the Deputy First Minister? I think that we should be told. No, the cabinet secretary is not going to enlighten us. After all, our history is littered, absolutely littered, with quotes from John Swinney and Nicola Sturgeon. Remember the discredited council tax or the unfair regressive council tax, or my personal favourite, Presiding Officer, Labour's hated council tax is totally unfair and any tinkering with bans would not make the system any fairer. Nicola Sturgeon, April 2007. You know what a delicious irony. Here are the SNP simply tinkering with the bans and keeping, in their words, a hated and unfair council tax. Exactly what the SNP said they were against. They say, Presiding Officer, that actions speak louder than words. The SNP's actions, in this case, are a mere whimper. Well, why not? You are not the quietest of them. Kevin Stewart. I most certainly am not. In just change itself, the commission talked about not only property taxation but land taxation and income taxation. As the cabinet secretary has rightly said, this is the beginning. We are also talking about vacant and derelict land tax, consulting on that and assignation of income tax. Can I support that? Is that more progressive? I think that that was a speech, Presiding Officer, but I will let that stick. Let me just enlighten the minister. The first recommendation of the commission was to end the council tax. Your motion before us today doesn't even give a commitment to do that. So, frankly, I am not going to take any lessons from the Scottish Government on this point. However, it is an irony. It is absolutely an irony that the SNP can sit here today without embarrassment and tell us that they are about change when all they have done is simply tinkered at the margins. A decade on, the SNP has not scrapped the council tax. Their proposals for reform are disappointing. They are lacking in ambition. The council tax is regressive, so the very poorest shoulder is proportionately the larger burden. The SNP has merely tinkered around the edges with that, but they had an opportunity to do it differently. In one second, I served on the commission for local tax reform, together with Andy Wightman. I gathered in the room where experts, practitioners and elected members from local government and from this Parliament. We heard from professionals and directly from communities themselves about what they wanted to see. The officers serving the commission brought together data and modelling to help the members in their work, and we are grateful to them for doing so. Everything that they needed to know about local government finance and the options available were in the commission's report. 19 separate recommendations, the very first of which, as I referred to earlier, was that the present council tax system must end. I think that you should listen to this. Seven words. The shortest recommendation, but the most powerful, and the SNP cannot bring themselves to implement the unanimous view of the commission by scrapping the council tax. I give way to the cabinet secretary. Derek Mackay Jackie Baillie mentioned embarrassment with policy. Does Jackie Baillie not recollect during the course of the election? It was a Labour party that abandoned the welfare element of their local taxation policy, and she is not further embarrassed that she is proposing to replace a property tax with another Labour property tax. Jackie Baillie I am not remotely embarrassed that, under Labour's proposals, 2 million households would be better off. 80 per cent of people would pay less under our proposals, which are far more progressive than the SNP's ever are. I say to the cabinet secretary that this was a cross-party approach. He spent probably about 12 out of the 13 minutes telling us how good the report was. I have to say that there should not have been any surprises there. It was chaired by a member of his own Government, so I do not understand why there is the need for delay. Unlike the SNP, Scottish Labour used the commission's work to design our policy. We believe that the unfair council tax should be scrapped, and, as I said to him, nearly 2 million households would be better off under our proposals and pay 80 per cent less than they do today. In addition to that, we would provide local government with a basket of taxes, a land value tax on vacant economically inactive land, a tourist tax and devolve the surplus from the Crown Estate. A range of measures are designed to transform local government funding. Let me turn to local government funding in closing, because it funds important things like teachers, schools and care workers for our older people. Last year, the SNP cut £500 million from the local government budget for 2016-17. We discovered from the accounts commission report published today that the cuts are not just 5 per cent—it is not just 5 per cent passed down from the UK Government in the block grant—but a staggering 11 per cent that the SNP decided to land on local government. It is a deliberate choice to cut local services. It is a clear case of continuing austerity, but we have our very own brand of SNP austerity, which is austerity on stilts. The SNP has a choice—a choice to properly reform the funding of local government—a choice that it has not yet made because it is too timid. All it will do, Presiding Officer, is to continue to centralise control in Edinburgh and I therefore fear for local services and local democracy. I am happy to move the amendment in my name. I now call on Andy Wightman to speak to and move amendment 1580.3 up to seven minutes, please, Mr Wightman. Thank you, Presiding Officer. I am delighted that we are having this debate in these precious two hours on local taxation to discuss the report of the commission on local tax reform. A cross-party commission that is established by the Scottish Government, in which I had the privilege of sitting. We undertook our work in good faith, and I want to thank my fellow commissioners and the members of staff who provided very diligent hard work in getting us to where we did, I think that two of them joined us today in the chamber. We agreed that, and I quote, there is now a real prospect of beginning a programme to make local taxation fairer, more progressive, more stable, more efficient and more locally empowering. We entrusted those charged with taking this work forward to respect the spirit in which the commission was established and had discharged its obligations. We agreed, as our first recommendation, that the present council tax system must end—that took us two nanoseconds. We agreed, importantly, that this is an opportunity that must not be missed. That was our closing recommendation. That, in my view, is the central question before Parliament—an opportunity that must not be missed. We have five years, but we do not yet have agreement on some fundamental principles that are taken for granted in other European countries in terms of the constitutional architecture for local government. Many of those principles were enshrined in international law by the Council of Europe in 1985 in the European Charter of Local Self-Government. An international treaty, which is the former minister and co-chair of the commission, confirmed in this chamber on 17 June 2015, is an international treaty to which we are bound. It commits, as he said, to applying basic rules that guarantee the political, administrative and financial independence of local authorities. However, those rules are, as I outlined earlier this week, being breached by the Scottish Government's proposals, most notably in the regard by the proposal to appropriate £100 million from council tax-owned resources and to reintroduce rate capping not by statute as the Tories to their credit—although I did not agree with it, but at least they had the courage to do it by statute under the Rates Act 1984, but by the back door by stealth. If Angela Merkel were to do this in Germany, it would be illegal under article 28 of the German constitution. Indeed, Kozla pointed out in evidence to the local government committee this week that this is the first time in the history of local taxation, since the introduction of the poor law in 1579, that local taxation has been appropriated for national spending priorities. None of the important detail is being addressed, either. I have a constituent who lives in a band E property, which is now worth quite a bit less—20,000 pounds less, in fact—than nearby flats that are in band B. Yesterday, Joan Hutan, Lothian Assessor and President of the Institute of Revenue, Ratings and Valuations Scotland said that she expected many appeals next year, and that virtually all of those appeals would fail because the current statute insists on 1991 values being used. The commission found 57 per cent of properties in the wrong band. If we organised income tax on this basis, the First Minister and perhaps the finance secretary would be paying no tax today since she was a student in 1991. I do not know if Mr Mackay was perhaps still in school then or not. I have another constituent who had problems paying his council tax. Yesterday, he had the sheriff officers knocking at his door. Council tax of rears is now the most common debt that clients of Citizens Advice Scotland seek advice on, according to its evidence to the commission. As in the words of one money advice worker at East Sutherland, often the straw that breaks the camel's back. Those are just two aspects of the council tax system that we looked at and took evidence of that are crying out for reform and to which the Government has yet said nothing because it has not even formally responded to the commission's report. I urge ministers to read the citizens advice evidence and the testimonies of people who tragically would be better off if their wages were arrested. Please appreciate how the work that we undertook in the commission was about sorting out so many problems that have been lying unattended for far, far too long. Problems that are in the gift of this Parliament to sort out. Since the commission reported, a growing number of influential voices have appealed for the kind of ambitious transformation that we sought to initiate. The chair of the commission on housing and wellbeing, the former auditor Robert Black, set in his report one year on, one recommendation was to reform the current system of property taxation, the council tax. That would seek to put an end to a system that disproportionately affects the poorest households. Regrettably, he continued, there has been no sign that the Scottish Government will revalue property values, nor adjust how the tax is calculated despite many properties sitting in the wrong band. While acknowledging the Government's proposals, he argued that those changes mean very little to those paying an unfair level of tax. Naomi Eisenstadt, the First Minister's independent adviser on poverty and inequality, urged ministers to be bold on local tax reform. We have heard from the First Minister that she will accept all the recommendations of Professor Eisenstadt. Further, she noted that this is a central moment of political decision, an opportunity to introduce a much more progressive system, one that will have important implications, particularly for working households at or just above the poverty line. The proposals of the Scottish Government are an embarrassment. For a Government whose finance ministers stand here and tell us that progressivity lies at the heart of their tax plans to perpetuate probably the most regressive tax in the UK is shameful. The thing is that we can change. There is, I think, a progressive majority in this Parliament to do so. We can, for example, do a revaluation. That is not a complex matter, that is a simple and straightforward matter with modern techniques. The member clarified how much a wholesale revaluation would cost and how long it might take. Andy Wightman We took evidence on this and the figures that are in the commission's report, I do not recall the specific figure. The point that I would make is that countries such as Denmark not only do regular revaluations through mass appraisal and computer techniques, they split the land values into the site value and the improvements for every property in the country, as does Estonia, which has the most competitive tax system in the OECD and levies tax only on the land in urban and rural areas. Those things are done very, very straightforwardly. The land regit has got 70 per cent of properties on it. There is information feeding in every single day on property values. We can accommodate new liabilities through transition reliefs and tapers, as in Wales. Elderly households can be given deferral options as legislated for in Northern Ireland. That is the rates deferment regulations in Northern Ireland that did it. None of that is terribly difficult. Today, we published an alternative statutory instrument using the powers of the 92 act that could be tabled next week by ministers to achieve much of that. I urge parties across the Parliament to rise to this occasion, to seize the moment and implement the many lessons and recommendations of the commission's report, and we will work constructively with all to do that. I urge ministers to have the decency to formally respond to the report. I move the amendment in my name. We now move to the open speeches and time is really tight, so please would everyone keep to below five minutes. I first of all call Kate Forbes, to be followed by John Scott. Thank you, Presiding Officer. I stand here as an unashamed advocate of devolution, devolving power, responsibility and autonomy as close to the people whose lives are affected. The Gaelic for Devolution is Fain really, which literally means self-governing. With new and old powers over taxation, all of us in this chamber have enjoyed a recent campaign offering the electorate different proposals on tax, including council tax. Whilst it was this Government's party whose manifesto won a majority, I personally enjoyed the exchange of ideas on how tax is a means of and an illustration of self-government. I continue to appreciate speaking to members on all sides of this chamber about how our taxes can be built on a solid foundation of accountability, fairness and localism. Today's debate is the start of reform. As the cabinet secretary quoted from the commission on local tax reform, of all taxes, it is council tax that is especially visible and seems to attract most debate about devolution, about localism and about accountability. In our 2016 manifesto, which I promoted throughout my local campaign in the largest council area of the Highlands, where perhaps we can feel the furthest from Edinburgh and which I was still elected off the back of, we outlined our intentions to start the reform of council tax bans in a fair, balanced and progressive way. Alongside our proposals for raising tax, we very importantly identified the specific uses for the extra funds raised to make sure that our society is fairer and more prosperous. Those principles are not new, but how we apply them is that this Government has a proud record on delivering for our local communities and mitigating the toll of the last recession on families up and down the country. I have seen that first hand in the Highlands. In freezing the council tax for nine years and still providing the extra funds to councils for basic public services, the Government ensured that council tax was affordable for hard-pressed families across Scotland. However, we recognise that the time has come to lift the freeze in order to give councils greater freedom while simultaneously ensuring that any increases are capped at 3 per cent in recognition of the continuing economic challenges facing many. Mike Rumbles. It is hard to reconcile what the member has just said. In Aberdeenshire, for instance, those Government proposals will take millions of pounds away from local authority because they are going to cut the grant. It is opposite of what you are saying. There are two points that I would say in response to that. We have made clear that every penny raised will be spent in that council tax area. Our plans are progressive because it is those with the broadest shoulders that will take the burden of the increases. As I have said, we recognise that the time has changed and it is time to lift the freeze. By changing the property bans for those who reside in E to H-listed properties, council tax is more progressive because, as I have just said, those with the broadest shoulders will pay a fairer share. In practical terms, that means that three quarters of Scots will pay no more council tax, which is 1.8 million Scots in real terms. As an accountant, I recognise that tax is a lever. I want to see council tax being used to protect family incomes, support local services and deliver a vision of a fairer and more equal society where children will never be discriminated against in our education system because of poverty. In terms of levers, I would also like to put on record my support for this Government's plan to give councils the option of offering no discount for second homes as a method for tackling rising house prices for full-time residents. As I highlighted in my rural housing speech last week, this is an issue of vital importance for those in rural constituencies and this action is a very, very positive step. To briefly sum up, I do believe that this Government's plans on local taxation are ambitious but also fair. I also recognise that this is the start and not the end. John Scott, to be followed by Willie Rennie. By common consent, no system of local government finance is perfect and it is certainly the case that no system is universally popular. In view of the history of local government finance in Scotland and across the UK, it is a measure of its resilience that the council tax has lasted although not without criticism and not without flaws for the past 23 years. Of course, strong criticism has in the past been levelled against the council tax. Many will remember the words of Alex Salmond when he said, there will be no misunderstanding. We are determined to abolish the unfair council tax. Change days indeed, and Jackie Baillie has already drawn attention to that. Perhaps I can set out where I agree with the Scottish Government's approach. After years of debate and abortive proposals from a range of alternatives, including local income taxes and land value taxes, ministers have settled on reform of the existing council tax system. I welcome their acknowledgement, belatedly, that the council tax is essentially a sound system of local taxation. It is hard to avoid, transparent, comparatively cheap to administer, has a high collection rate and, insofar as is possible, accepted by taxpayers. We on the side of the chamber also endorse the ending of the council tax freeze. However, that is not, of course, an endorsement of rising council tax bills. As Conservatives, we look to councils to keep a lid on spending to curb taxpayers' bills. However, it is right and proper that those elected to serve as councillors should take the ultimate decisions over local taxes and bear responsibility for those decisions. It is at this point that I must depart from the Scottish Government's plans. It is hard to see the logic of, on one hand, restoring local accountability through ending the council tax freeze, while, on the other hand, ministers claw back a proportion of local tax revenues to distribute as they decide. The accration of an attainment fund is a welcome step. Ministers' proposed method of funding it is not. As COSLA President David O'Neill last week said, there is a clear and honourable link between taxes raised from local householders being spent on local services and this has been a Scottish tradition for generations. The Scottish Government will destroy that link with their plans to use council tax money for a national policy. I would really rather not because you will know we are very short of time already. Forgive me. The attainment fund is a policy of the Scottish Government and it is the responsibility of the Government ministers to identify the funding for it from their own budgets rather than saddle local councils with the bill. Those in band E houses will see a £105 rise, band F houses will see a £207 increase and band G a £335 increase, while at the very top band H householders will see their bills increased by £517. Those reforms will affect 674,793 households across Scotland. While, of course, we welcome the proposed exemptions, if not the council tax reduction scheme, which we believe is not within the gift of the Scottish Government, this nonetheless is a significant additional burden on rate payers in Scotland and will give further credence to the growing view that Scotland is an expensive place to live and work. In my constituency of air, many higher rate tax payers in the aerospace industry, for example, have transferable skills, much sought after, in demand worldwide. That will do little to encourage them to remain in Ayrshire and Scotland. As the Government knows, it is difficult enough not just to retain existing businesses and jobs in Scotland, but that additional layer of taxation is just one more obstacle to overcoming terms of encouraging further investment at this time. Of course, we all want to see the attainment gap close, and of course it needs to be funded, but nonetheless we feel that this is robbing Peter to pay Paul. Local authorities are constantly seeing their roles reduced by Government-centralising agenda as functions and responsibilities that used to be theirs are removed and taken back to the centre and put under the ever-tightening grip of Scottish ministers. In the long run, this is bad for local democracy and accountability and discouraging for local councillors and council staff who are wondering what their role will be in five years' time as they approach next year's election. Does David Neal again point it out? This is a universal solution to a very targeted issue. While we know that the money will certainly be spent—an additional £100 million per year for a laudable aim that of closing the attainment gap—I just hope that the gap does indeed get closed by this measure. Mr Swinney, Mr Mackay, we will be watching you very closely. If the money is spent and the gap does not close, the people of Scotland will pass their judgment on you at the next election. Willie Rennie, to be followed by Bob Doris. I swear I saw a shiver running down the guy's spine there when John Scott threatened to watch him. This debate has been mired, I would say, in rhetoric from the very beginning, all the way back to the poll tax days to the very present day today. If you look back to what Nicola Sturgeon said in 2007, she regarded the council taxes hated. She said that—and this is very interesting—tinkering with the bans would not make the system any fairer but would require damaging revaluation. It is an interesting perspective from even back in 2007, where she said tinkering was insufficient, but that is exactly what we have got today. What is interesting, despite all the other high rhetoric in between times back in 2010, where it was regarded as regressive and unfair, is that it was going to have a cross-party review in 2011 and 2014 for that to happen, but even Marko Biaisie, when he launched the commission, regarded the council tax as an unfair measure. Andy Wightman rightly pointed out that the commission report itself continued to say that the council tax should end. Even up to the present day, the rhetoric has remained strong, but now we have a different policy, which is to retain the exact thing that was regarded as hated and regressive before, but the rhetoric has been ramped up again. We just heard earlier on from Kate Forbes that now the council tax is progressive. I do not know what Nicola Sturgeon was thinking back in 2007 why she did not hear Kate Forbes in the future saying that it was going to be progressive, and she even cited in the manifesto that Adam Smith principles would be adopted with the implementation of the changes. Adam Smith talked about being fair and balanced, reasonable and balanced. It was going to promote fairness. Those are all the principles at the heart of the hated and regressive council tax, so I find that it is quite dispiriting that the rhetoric remains high, but the principles have changed. Yes, absolutely. Derek Mackay Willie Rennie is providing a critique of others, if that is fair enough, but can Willie Rennie expand on the detailed position on council tax from the Liberal Democrats because it seems pretty vague on this matter in the manifesto? Willie Rennie has been studying the manifesto. He is obviously worried about what John Scott is going to think next. We have been in favour of a local income tax. We were prepared to join the commission in a spirit of cross-party consensus to seek a long-standing solution for the future. We thought that that was the right thing to do because local taxes have been the subject of heated political debates over the year. We were prepared to put our lot in with the commission, but we are desperately disappointed when 16 out of 19 recommendations from the commission were rejected by the Government within months of the report to be published, not just now. We were in favour of ending the council tax. We were now in favour of looking at a land value taxation. We believe that it has some merits that are worthy of consideration. In fact, the commission itself considered that. It would look at derelict land, bringing it back into use, particularly in urban areas. It works in other countries. We would be able to make sure that we were able to adapt the system to perhaps not just now working in partnership with the business taxation system, perhaps simplifying the process. You would not be also penalised for improvements to your property, not just now. Those are the benefits of a local land value taxation system. I think that bringing that into a wider reform programme would have significant benefits. That is why we welcome the proposal that we should continue working on an enduring system for the future and what the Government is proposing is inadequate. We are also in favour, as members will know, of introducing a real progressive increase in taxation, which is a penny on income tax, not just the timid amounts that the Scottish Government is proposing for education, but £500 million for education with a proper, progressive tax, which the Scottish National Party seems to regard. That has not been progressive, but the council tax has been progressive. The world has just turned upside down. I do not know what the ministers think in these days. All those proposals are part of a wider package that are required to make sure that we can invest in public services, have a proper local system of taxation for the future, not just taken from one part of the country to another in an arbitrary fashion, but a proper taxation that can invest in public services and can deliver a progressive system for the future. I welcome the opportunity to contribute to this afternoon's debate on reforming local taxation and, in doing so, I consider the debate to be timely. I hope that a constructive opportunity for the Parliament to come together and take forward on-going reforms to local taxation. For me, that is actually the key point. The current Scottish Government reforms are not the last word in reform. That has already been made clear by the cabinet secretary in his opening speech. As convener of this session's local government and community committee, I am keen to support that approach and that debate. I would take issue with those who claim that the current suite of reforms are too timid. Following several years of a council tax freeze, local taxpayers will see their council tax rise again by up to 3 per cent. That is not timid. That is sensible. We will remember the massive hikes in council tax in the years gone by that impacted on many of our communities. That was certainly true for many of my constituents in Glasgow at one moment. A 3 per cent ceiling therefore provides my constituents with a welcome degree of protection. I am very grateful that Bob Doris may feel that 3 per cent is the right limit, but why should it be decided nationally and imposed locally rather than giving local councils control of their own rights? I think that Patrick Harvie makes a reasonable point. We are not quite sure yet the procedures that will underpin the 3 per cent ceiling and the on-going dialogue that has to take place in relation to that. Those discussions will be on-going, Mr Harvie. Let me turn now to the proposed reform of the multipliers, which sets council tax levels for those staying in properties and bands E through to H. For those in band E properties with incomes above £25,000, they will see their bills on average increased by £106. In the wealthiest properties in band H, that will be an average of £517 each and every year. Place that, in the context, also of that additional 3 per cent increase. It is no surprise then that the Scottish Government is bringing in an enhanced council tax reduction scheme to benefit 54,000 households on incomes below £25,000 and with plans for tapered support for certain households above that income threshold. The local government committee is scrutinising the statutory instruments that underpin those changes and we actually got consensus that the change system is fairer. I have to, for the record, say the terminology of whether it is less regressive or more progressive. That perhaps becomes a debating point, but there was consensus that the reform system is fairer and we should all, everyone in this chamber, should welcome that. I want to turn briefly in a moment to revaluation, but if we were to revalue and we go for a proportionate system of council tax bandings and a rebanding system, that would mean that band H properties would not see their council tax rise by £500, they would see it rise by 250 per cent. You have to remember that some of those properties in band H would no longer be in band H and other ones would move up to band H. That is a huge tax increase for any constituent at any band level. I have to say that it is not that I am unwilling to do that, but an important principle of taxation is that you have to try your best to get a degree of consensus with your local taxation base as you move towards more progressive forms of taxation. Just to be clear, the local taxation base is all the constituents that we represent. I do not think that I am going to have time, I apologise. Of course we should have eventually moved towards a revaluation, but at the same time as a 3 per cent increase in council tax and at the same time as additional increases to bands E to H, ranging depending on which local authorities stay in from £95 to £554, then no, not at this time, but yes. Of course plans at some point have to be prepared with consensus, I hope, but how we move, I would say, in the medium term towards a revaluation. I want to say finally, as I draw to a close of my contribution, that the money will be spent on educational attainment. That will be redistributive, but just for clarity, it is not necessarily redistributive. Mr Rumbles might learn something here. What will actually happen is that it will take money from wealthier families and it will actually invest that money for children who are living in deprivation, including children in middle-class and upper-class areas that are afflicted by poverty and whose educational attainment gap is suffering. I am proud of those reforms, but it is only the first stage, Presiding Officer. Thank you very much. Paul Richard Leonard will follow by John Mason. Mr Leonard, please. Thank you, Presiding Officer. I am pleased to contribute this afternoon to this important debate, which I hope will be a reminder to the Cabinet Secretary that the principal purpose of this Parliament is not for ministers to transmit the will of the Scottish Government to MSPs and to the people. It is for MSPs in this Parliament to transmit the will of the people to the Scottish Government. People are looking to this Parliament this afternoon to show a lead, to be bold, to make progress from the Scottish Government's nine years of frozen initiative, annual budgets, short-term programmes, missed opportunities and lack of imagination. Let me say this as well. In the 2015 general election, the SNP claimed that it would form a progressive anti-osterity alliance, and yet its flagship policy of the council tax freeze was, and is not, progressive but regressive, benefiting most the richest people in the biggest houses. Of course, it has not counted austerity either, it has deepened austerity. People are complaining that local authorities are introducing and putting up charges, but what do you expect when the council tax has been frozen for nine years? The Labour Party's stance in this debate is straightforward. We should be using a universal and progressive system of taxation on property to invest in the collective provision of public services to lift the whole of society, not using local charges to raise revenue for local Government, but using fair taxation on the basis of the old socialist idea of from each according to their means to each according to their need. I do not doubt that we have to change the mood of the country to open people up to the possibility that it can be better than this. That good democratic accountable public services demand good democratic accountable public investment, because the question before us is not whether we should raise the money or not, but how we should raise it. To the Conservative Party, I say that we reject on this side of the Parliament the view that the wellbeing of others and the public interest is only achieved when pursuing personal self-interest. We stand for need before greed and people before profit. Of course, when the SNP first formed the Government in 2007, they did it on the basis, as we have heard, of scrapping the council tax. They even hailed it as, I quote, the biggest tax cut for Scots in a generation, which could only have been a reverential nod to the infamous Lawson budget of 1988, which saw the abolition of all but one of the highest rates of taxation, bountiful tax cuts for the better off, the biggest tax redistribution from the rich to the poor in the whole of the last century. Of course, the SNP's proposed local income tax idea was neither local nor, in fact, a tax on income. The tax was to be set nationally by the nationalists and it was not a tax on income, it was a tax on earnings. Income from interest payments, income from shared dividend payments were excluded. The Labour Party stands this clear. We need to ensure that our tax on property remains, property plays a central role in both wealth accumulation and wealth inequality. According to Shelter, the wealthiest tenth of households possess five times the housing wealth of the poorest tenth. Wealth inequality is twice as big as income inequality in this country. In fact, a report called No Your Place produced by Shelter said that housing is the single greatest repository for wealth held by individuals in the United Kingdom. If we are to seriously tackle inequality, we need to concentrate not just on income inequality but wealth inequality too. Finally, Deputy Presiding Officer, let's win the battle of ideas that local government can be an agent of change a vehicle for investment, a generator of jobs, a provider of publicly run public services who knows a bit of municipal socialism too. We need new horizons. We should be according our old people the dignity they have worked for, according our young people, the chance of a job fair work and a decent home, according our children, good education. These are things that we have in our gift to create if only we have the will, the courage and the determination. That does not depend on independence. We can use the powers of this Parliament to do it now, so let's seize this chance to make this change and have the courage of our convictions. One of the big successes of the SNP in government has been to enduring ffencing of funds for local government. When I was a councillor in Glasgow under the Labour-Lib Dem administration between 1999 and 2007, there was constant complaint cross-party that money was ring-fenced. Glasgow might have invested well in libraries, for example, but then a pot of money would arrive from the centre that was ring-fenced for libraries. So I am very pleased that local authority control has been increased under the SNP. However, the next question is how we can reform local taxation. Firstly, I believe that we should be trying to give councils as much control as possible, as we have done with expenditure, but also the fact that council tax is not fair and the rich are paying too little. One of the main conclusions from the commission last December was that there is not an easy solution to this challenge, and probably there is not one single tax that meets all the requirements. Property tax usually does not take full account of income, while income tax can miss out the wealthy who have a low income. My key personal targets in any reform would be that, firstly, those with wealth pay a fairer share, and secondly, those with a higher income pay a fairer share. Clearly, we face certain practical constraints along the way. For example, with land valuation tax, I have had that explained to me a number of times, and it seems very attractive in principle. However, I would struggle to explain it, and I suspect that other colleagues would also struggle to explain it to constituents, and the challenge of getting a wide public understanding is huge. If you do not mind, because I have quite a lot that I want to cover, I am not yet a minister, and probably never. Local income tax is also attractive, at least for part of the tax base, but under the present system whereby HMRC has a monopoly on collecting income tax, I think that it may well be impracticable. The broad conclusion of the commission to have property and income as the main basis for local taxation seems good to me. As it also suggests, allowing local taxation to add smaller taxes, like environmental, resource, sales or tourist taxes, would give additional freedom and accountability at a local level. I was extremely disappointed at the decision to leave the EU, but obviously we need to grasp any opportunities that come along. One of those might be to vary the rates of VAT within the UK, something that has not been allowed under EU rules, and that is why VAT is being partly assigned to this Parliament. Potentially Scotland could have a different VAT rate from the rest of the UK, and local authorities could set a different VAT rate from the rest of Scotland. I would like to make some remarks on property valuation. Assuming that there is to be a local property tax of some kind, I think that we need to get closer to the real valuations of people's houses and accept Bob Doris's point in the medium term. The current very broad bands of council tax mean that people get incredibly upset if they slip into a higher band. For example, from D to E in Glasgow means an extra £360 per year, and the fact that new properties of which I have many in my constituency are assessed in 1991 valuations strikes everyone, including myself, as difficult to understand and unsustainable. Another reason I believe that we need to look at revaluation is that no account is taken of relative changes in property prices since 1991. I asked one of my staff to look at relative property price changes in the east and the west of Glasgow since 1991, and I have to say I found the results pretty staggering. In 1991, the average price of a sandstone flat in Shetleston Road was £27,000 in the east end, and the Highndland Road in the west end was £60,000. Shetleston Road has gone up from that £27,000 to roughly £63,000. That is about a two and a half times increase. Highndland Road has gone up from £60,000 to £326,000, more than five times. That says to me that the poorer parts of Glasgow, like the east end, are paying more than their fair share of council tax, so if there is no revaluation, that favours the richer people in the richer areas and disadvantages the ordinary people in the poorer areas. The commission report itself talks about houses worth 15 times another house, but council tax is only three times more. That would change to 3.7 times under the changes proposed to bands E to H, but I still wonder if 3.7 is really fair enough. I accept that a revaluation of properties has problems. There is administrative cost, there are serious increases for some house owners, but it is 25 years now, and the longer we wait, the worse it gets. If we are sticking with a variation of council tax, I think that we need to consider this. I accept not this year but in the not-too-distant future. If we are moving to a different property tax, then I think that we need to look at closer values right from the word go. Thank you very much. Deputy Presiding Officer, I am delighted today to make a contribution towards a debate on a subject that has, over many years generated much heat, exercised the minds of members of various commissions set up to look into the matter and yet remains such a live issue. For over 400 years, two things have largely been accepted as central to the acceptance of local taxation. Firstly, that the usual method of tax collection has been through a tax on property, and secondly, that local taxation raised locally is spent locally, and I shall return to that later in my speech, although I note with interest what the cabinet secretary said earlier. Over the years, a number of attempts have been made to bring forward reforms to how money is raised to contribute towards the cost of local services. In 2006, the proposals of the Burt commission to charge a percentage of the capital value of properties was dropped like a hot potato by the Government of the day. The first SNP Government was elected with plans to introduce local income tax, and another plan dropped when the many flaws of such a scheme were brought home. The commission for local tax reform was next to have an attempt at resolving the issue, but, while calling for an end to the council tax, it did not produce a specific new system to replace it. Then, largely ignoring the work of that commission, the SNP Government sought to move forward by supporting the recommendations of the commission for competitive and fair taxation, set up by the Scottish Conservatives. Myself and colleagues normally do not mind the adoption of many sound conservative ideas by the SNP, but—this is a very big but—the SNP certainly has put a sting in the tail. Although my party only supports increasing the multiplier in the two top bands, the Government intends to increase the tax burden on the 535,000 families living in homes in the E and F bands, thus penalising many hardworking people on middle incomes who might not benefit from any reduction scheme. I am sorry that I have too much to say. 535,000 households are being asked to pay more than they need, thanks to the SNP Government. I am not content with asking people on middle incomes to pay more. Proposals are made to break a central point to the acceptance of—I am sorry, I am too much to say—the system, but I am not content with asking people on the middle incomes to pay more. Proposals are made to break a central point to the acceptance of the system for hundreds of years, that local taxation is raised locally and spent locally. Deputy Presiding Officer, it is my belief that national taxation is the vehicle to iron out disparities between communities, not sending money raised as local taxation in one area to other areas. No, I am sorry. Local taxation is to meet the specific needs of the local community from which it has raised. In that, I am happy to agree with the Labour president of COSLA, David O'Neill, who, as John Scott said earlier in his speech, has already mentioned this with plans relating to tax. If the Scottish Government is determined to press ahead with those proposals and force middle Scotland to pay more, the least many people will expect is to see that the extra tax is going to contribute to maintaining local services in their community, not be sifoned off for a policy. No matter how worthy that policy is, it should be funded nationally. Council tax now accounts for the raising of only around 12 per cent of town hall expenditure, having fallen dramatically over recent decades from an approximate 50-50 split being raised locally and grants from central government. That has meant that the discretion of councils to raise money has been so much reduced and now, with the ending of the council tax freeze, the SNP again stepped in with its centralising agenda over the heads of elected local councillors to attempt to take local money to fund a national policy. Thus continuing the process of reducing the discretion that councils have to meet the aspirations of local residents. I believe that we must take opportunities of restoring that discretion, not continuing to remove it. The Government must abandon the constant centralising of power to itself at the expense of local councillors. Councils have a vital role to pay in our democracy, but without giving them discretion and indeed responsibility, interest in council local councils and turnout at local elections will diminish. In conclusion, I remind the chamber of part of the remit given by the Government when it established the commission for local tax reform. The requirement to consider the impact of alternative local tax systems on supporting local democracy, including on financial accountability and autonomy of local government. I urge them to look again at their centralising and penalising proposals, remove the increased tax burden from middle-income families and maintain the principle that local taxes are raised and are spent locally. I remind members that it is a tight five minutes, so it means air on the other side. George Adam, to be followed by Neil Bibby, Mr Adam, please. Thank you for hinting at the fact that I should make haste with my speech here today. I am aware, as a former councillor, that I understand how local government is important and how we make the decisions that can work as a former local councillor in the area to make those differences in the local communities. I am also aware that local taxation has always been a very hot topic. It is because it is one part of taxation that the member of the public could actually tell you how much they are actually paying to the exact amount, because they know that it comes out unlike others, it does not come off the source of their salary, it comes directly they pay it themselves. That is what makes it so controversial with members of the public, because then they look at the local authority and they ask, what am I getting from the local authority with regards to what I am paying. When you look at the fact that some of the Government's ideas and beliefs and proposals are talking about giving local government the opportunity to be more flexible and more open in their finances, it shows that we are moving towards that position of showing that we can make local government accessible to the members of the public. I am also aware of one of the things that the debate has mentioned as well, is that every one of us in here believes that we have to do something to bridge the educational attainment gap. We all agree on that part of the debate. The fact that the Government has said that £100 million that will be raised for it will be used for the educational attainment gap is part of something that we have all bought into, whether it be local authority or whether it be actual Scottish Government. When you hear other parties talking about the fact that you know that that is an issue, I feel uncomfortable with that, because it is something—yes, I will, Mr Harvie. I will ask the member to reflect on what he has just said. Of course, we all support action to close the attainment gap and to improve educational outcomes for all young people, but it is untrue to suggest that the political parties across the chamber have bought into the idea of effectively hypothesising local revenues to pay for a national policy. I think that it is about delivering in the real world and ensuring that we can make sure that that attainment gap is actually bridged. If we have to find a way to make that happen, working in tandem with local authorities, Mr Harvie, I see that as a way forward. One of the most important aspects that we have to look at is that I am aware that Scottish Government proposals are protecting households' incomes in Scotland. 2.4 million households in Scotland will be protected from any undue rises in council tax in 2017 by the capping of increases by 3 per cent. That ensures that our communities, our families, our friends do not return to the sky high annual tax increase that they received on years gone by, because it was before this Government came into place that a lot of individuals in communities were actually paying up to 60 per cent risen over a period of 60 per cent tax rise in council tax. That is important that the public are protected from that and make sure that we have the flexibility and the ability that they can actually see value in local government as well, because I am a great believer in local government, and I have to make sure that it is working as partners. Yes, I will, because the way that you hold your hips just can't make me stop there. I know that you like it, George. I do not think that you should read anything into that, Mr Kerr. Given that point, George, how would you respond to the press and journal talking about— Please use the member's full name. How would George Adam respond to the press and journal talking about families in Aberdeen and Shire handing over £47 million pumped into educating youngsters in other parts of the country? Mr Adam, my belief in education is the fact that this is a— bridging the education attainment gap is a responsibility for every single one of us in this chamber. It is something in Scotland that we should all desire to make sure that every child born, regardless of where you are born, you get the opportunity. If you want to play politics and say that you want to keep certain things and just look after your own wee patch, you carry on, but I want to look after the people of Scotland and ensure that they get that opportunity in the future for themselves. One of the things that I would say is that many of us know what local government delivers and what they do, but for me, as I said as a former councillor, I think that we have to make sure that the scrutinisation of local government makes sure that the local government is open and transparent. I always appreciate the fact that the Scottish Government and the cabinet secretary see this as a starting point, because the commission itself actually seen only saw this as a starting point. I am very tight for time, but if you do very quickly, I will— Mr Wightman. I have an email here that I received earlier. I stay in Paisley and have a house in band E. The house next door is worth £50,000 more, yet it is in band C. An SNP member says that I have emailed my local and regional parties to support a full review, but the reply that they sent was fluff. Is that a fair description of the Government's policies? I do not remember what I was saying to anybody. If anyone came to me with that actual case, I would take it very seriously. I do not believe that I would call it fluff in any shape or form, and I think that we have to deal with that issue as well. However, I would like to say that I think that this is a way forward. I see this as a start. I do believe that others talked about land tax and other ideas, but we are delivering for the here and now and giving us the opportunity to make sure that we can get the money and make sure that local government can actually build on things, but let us look to the future and let us see what we can actually deliver further down the line. Thank you. I call Neil Bibby, to follow by Ruth Maguire with the last speaker of the open debate. Mr Bibby. Thank you, Presiding Officer. The question of how we properly fund our local authorities is crucial to the public services that we all rely on. It is crucial to our schools, it is crucial to our local economies and it is crucial, particularly to the most vulnerable people in our communities. It is those vulnerable families who are being hit the hardest by this Government's continued underfunding of local government. Those least able to cope with service cuts are bearing the brunt of the SNP Government's 11 per cent cut to our local authorities. As Kezia Dugdale said at First Minister's Questions earlier today, that is more than double the rate of the Tories' cut to the block grant. On this side of the chamber, as Jackie Baillie pointed out, we recognise the need for fundamental reform of local taxation. We are committed to abolishing the unfair council tax once and for all. We support the introduction of a fairer system based on the value of our property so that nearly 2 million households will be better off. Our calculations are based on modelled evidence that is provided to the commission on local tax reform and on which all four parties are now relying. We would also broaden the tax base and empower local government, as Jackie Baillie mentioned, by devolving new tax-raising powers such as a tourist tax and a land value tax. That type of devolution of power to local authorities is long overdue and would allow them to raise revenue from previously untapped streams. It would also allow our local authorities to ensure that everyone who benefits from local services contributes to them, with the richest paying their fair share. A number of local authorities have called for those powers, including Remfisher Council, which the cabinet secretary and I represent. It is important to note that Scottish Labour has said that we would raise additional revenues through income tax by asking the richest in society to pay a 50p top rate of tax. We would generate additional money that we would use to invest in public services such as education. The crucial thing is that if we want first-class public services, we have to pay for them. Actions have to match the rhetoric that is so often heard in this chamber. We will not succeed in improving our education system and closing the attainment gap if we continue to slash the budgets of local authorities and limit the ability to invest in our young people's future. The report of the commission on local tax reform states that the present council tax has therefore rightly become discredited in the eyes of the public. It was made clear to us that people expect change. A decade on from their promise to scrap the council tax, the Scottish Government's proposals are not nearly bold enough. It is not just me saying that. As Andy Wightman said earlier, the SNP Government's own poverty adviser, Naomi Isas, is also calling for bold action. She said that local tax reform is a real opportunity to protect the incomes of both the working poor and those at risk of being in work poverty, but it will require boldness and vision. The cabinet secretary says that he wants to... Ms Martin. I am interested to know what you think of me, because I am from Aberdeenshire, and people work in oil and gas, and they work in public services as well, and they have a real issue there because our house price is now... Could you raise your microphone, please? Oh, apologies. I am from Aberdeenshire, and I am interested to know what the member thinks about people in that area. Where house prices are very high in inflation, if there was re-evaluation there, that would really impact on the sorts of people that do not have the high incomes, such as people who are teachers and work in public services, so I feel that there may be something missing from that. Can I just make a short intervention, if you can give me your point? A proposal will result in 80 per cent of people, two million households, being better off, and we are committed to ensuring the fairest possible new replacement tax. SPICE have described the Government's proposal as falling short of making the council tax a proportionate tax. The commission says that the present council tax system must end, and that local tax needs substantial reform. On his motion today, the finance minister talks about the opportunity for change. I hope that that is exactly what Mr Mackay's appointment as finance secretary will mean, not just for tax reform but for his constituents in Renfrewshire and Inverclyde. I hope that, when Mr Mackay announces his budget, he ensures that Renfrewshire and Inverclyde will see much-needed increases in their funding. It is quite simple, because a cut to the local authority budget is a cut to councils such as Renfrewshire and Inverclyde. It is quite simple, and it will be his constituents and those across Scotland who will be the ones who continue to suffer the consequences. Finally, the cabinet secretary faces a choice on local tax reform. He can work with Scottish Labour to abolish the council tax completely and replace it with a fairer property-based system that would see 80 per cent of households pay less, or he can continue with what Professor Kenneth Gibson described to the local government and communities committee as a political fudge that does not resolve the underlying problems. The cabinet secretary's constituents and people across Scotland deserve a lot better than that. I welcome the report of the commission on local tax reform as I do the opportunity to contribute to this afternoon's debate on reforming taxation. It is probably fair to say that some will consider the new council tax less regressive, as opposed to more progressive, and I recognise that much remains to be done as we work towards creating a fairer and more sustainable system of local taxation. What is proposed is an improvement. As has been made clear, the changes that will come into force from April of next year represent an important first step. I welcome that the government remains open to further change in discussion, though rightfully exercising necessary caution and gradualism and developing fuller understanding of the potential impacts and implications of any changes before their implementation. One example of that goodwill to further discussion and reform is the commitment to consult on enabling councils to levy a tax on development and vacant and derelict land to reduce land banking and increase the supply of homes. Although the current reforms may not go far enough for some, they will undoubtedly leave us in a better place than we were before, and I welcome the variety of contributions that we have heard across the chamber today. I am also a member of the local government and communities committee and can answer Kate Forbes' question that she posed to Andy Wightman. The information that we were given by SPICE said that a revaluation would cost between £5.5 million and £7 million and would take two to three years. There is no such thing as a perfect tax, and I do not think that anyone is claiming that those reforms solve all the problems, but they are by no means the end of the road. To move on and talk about some of the good things that are coming from those reforms, those changes to council tax work to redistribute wealth in our society from those who can most afford it to those who most need it. Ruth Maguire does not agree with me that those in bands E to H are not necessarily the rich, they are not necessarily the wealthy, they are middle-income families in areas of high-value properties such as Aberdeen and the North East. I think that it is fair to not make assumptions about people living in a particular type of property, but the cabinet secretary set out in quite detailed form what was being done to assist those families that would struggle to pay. Those in the four lowest bands E to D will experience no increase in council tax, meaning that there will be no increase for three out of four households and that the poorest households in particular, already suffering under Tory austerity, will not be hit by any increase in council tax. The Government's plans to extend the council tax reduction scheme further ensures that nobody is disproportionately affected by those increases. For example, those living in high-banded houses but with an income of less than 25,000 will be exempted from increases through the council tax reduction scheme. The child allowance within the scheme will also be increased by 25 per cent, a further boost to low-income families across Scotland and helping nearly 140,000 children. Figures released by Scotland's statistician in June 2016 showed that the council tax reduction scheme already supports half a million Scottish households and its extension will support tens of thousands more. More importantly still, the £100 million that will be raised from the increase in council tax on the four highest bands will be invested in our schools, supporting our wider progressive aims in government of closing the educational attainment gap between the most and least deprived children in Scotland. That cash raised for education is going to be spent by head teachers themselves, a concrete example of this Government's commitment to empowering schools and giving head teachers greater autonomy. Local government will also be empowered through the reform. Does the member think that it is acceptable to increase the autonomy of head teachers while decreasing the autonomy of our local authorities? I think that there is an argument to be made that head teachers and schools know how to best spend money on education and our best place to help us to close the attainment gap. We will be making local government more financially accountable to its local communities and give local authorities greater responsibility for their own finances, leading to less dependency on grants from central government. I conclude by saying that, as we go forward, I stress again that this is a first step and that I welcome the Government's openness to doing further work. I urge all parties, local government and wider society to focus on real positive changes in those reforms and to work constructively with us over the coming parliamentary term as we implement those first steps towards creating an even fairer and sustainable local taxation system. I am very glad that we have had the debate. Derek Mackay welcomed it and said that the timing was beneficial. I am sure that he is very grateful for the Greens having pushed for the debate to take place in the first place. We were very clear that a debate on the commission report should happen before the Scottish Government asks Parliament to vote on its modest adjustments to council tax, and it is very important that we have had that opportunity. Most members have placed the issue somewhat into historical context. A lot of people are obviously bringing up their favourite quotes and speeches from 2007. I will just pick on one that is totally at random, Bob Doris. Let's go with Bob Doris's speech from 2007. We all enjoy Bob Doris's passionate speeches. The detestation that society felt for the poll tax in the late 1980s and early 1990s still exists for the council tax, he said. He told us, I believe that there is a clear majority in Scotland in favour of scrapping the council tax. We must strive, he said, to find such a majority in this chamber too, a majority that cuts across traditional party lines. I think that that is still true, as true as it was when he said it. I have another speech here from as far back as just a year or so after devolution began from my party's first parliamentary incarnation, Robin Harper, setting out our position on land value tax. Andy Wightman reminded me a few minutes ago that even a Lloyd George is due some credit on this debate as well. That goes back a great long time in history, and yet Mr Mackay tells us that this is not the end of the story, but the beginning. The journey has only just begun. I am not sure that I can take that argument seriously. Mr Mackay also complains that the concept of progressivity is absent from Murdo Fraser's amendment. More to the point, though, it is absent from Government policy, and that is the issue that we are here to debate today. Not only the marginal changes that will happen with the multiplier, but the context of rate capping being reintroduced by policy announcement instead of by statute, the co-opting of resources from local taxes for national policies at the very time when we now have national tax powers to raise the revenue that we need for national priorities. Murdo Fraser gave us his unique take on the history of local taxation debates. While he argued for the simplicity and ease of collection of the current system, Murdo Fraser acknowledged its serious flaws. Critically, his amendment sets out the flaws in Scottish Government proposals for adjustment. Murdo Fraser also clearly cited and contrasted the conclusions of the commission report with his own party's proposals for adjustment that bear some similarity to current SNP policy. There was a little more history from Jackie Baillie as well. The co-opting of some of Nicola Sturgeon's speeches to attack today's SNP policy, tinkering around the edges, is not what the commission called for. It is worth recalling that, when the commission was first proposed, it was explicitly expected that political parties would offer their proposals for serious change to the people at the election. We are now being told that today is just the beginning of the journey. If real reform is to be achieved during this session, it will be without the opportunity for voters to have their say. My colleague Andy Wightman set out that this parliamentary session does offer an opportunity that should not be missed, and that was a central conclusion of the commission's report. He also set out some of the treaty obligations around local control of rates and of resources, and the Scottish Government's proposals fly in the face of those obligations. Andy Wightman cited the injustice that was experienced by some of his constituents, injustices that will not be addressed by Scottish Government proposals. Mr Adam at the back of the chamber said that we should deal with those cases. Yes, we should, but we will not be dealing with them by adopting the Scottish Government's current proposals. Andy Wightman cited the role call of opposition to the Scottish Government's minor marginal adjustments at the edges of council tax, and he challenged Parliament to rise to that opportunity. Greens have done so not only setting out an alternative statutory instrument that the Scottish Government could adopt, but also publishing our fair funding for local public services document that sets out a five-year transition to a better local taxation system, with more local control, local economic decision making for our councils, and most households paying less—indeed involving a £10,000 tax-free allowance, as well as a system of reliefs for those who need them. Session after session, this Parliament has failed to grasp the issue. The coalition parties didn't agree. The minority Government had no votes to get their proposals through. The majority Government didn't have the will to act. This session cannot fail again. As for assigning income tax, Mr Mackay already knows the problems that arise from a complex mechanism between one level of government and another. He's dealing with those problems right now in trying to construct his own budget. Let's not impose something even more chaotic on our local councils. In closing, can I just make one last appeal to the Government? At this very moment, with new tax powers coming to the Scottish Parliament, it's time that we stopped hoarding what should be local decision making powers to the national level. Let's empower local government and allow them to make the choices that they should be free to make, and in most European countries would be. Ruth Maguire in someone up for the Government said, this is the first step. If that were true, we might be able to try and build on what the Government has brought forward today, but it is not the first step. Even at this stage, I would say to the minister, to the cabinet secretary, to look again, work with the other parties in this Parliament to look again and bring forward something that will put local government on a sound financial footing. Would I like to now, Rowley, not reflect on the fact that that is actually what my motion says? I do want to work with the parliamentary colleagues to take forward the kind of issues that we have debated today. That is the offer that is made out in the motion, in contrast to the Conservatives' amendment that says, do that but don't worry about the progressive nature of taxation, but we did include that as a foundation of those discussions. The motion, while trying to reach out to other parties, simply does not go far enough. If, as I say, this was the first step, that would be the way to move forward. However, the fact is that, as Murdo Fraser, Jackie Baillie and others have pointed out in this very good debate that we had today, in 2007, the Scottish National Party came into government promising to replace the council tax. A council tax freeze, it said, would be introduced as a short-term measure to medium-term until they were able to bring forward an alternative. At the time, Nicola Sturgeon and I quote said, Labour's hated council tax is totally unfair and any tinkering with the bans would not make the system any fairer. Why, in 2007, was it so unfair and any tinkering bans would not make it fairer? However, today, the Scottish National Party seemed to be suggesting that, by tinkering with the bans, it is going to be fairer. I thank the member for taking an intervention. I was not here in 2007, but, as I understand it, the Government did not get enough support to scrap the council tax at the time and Labour was in opposition. Mr Rowley? The Government has been in term for two offices now and two terms office, and still we have the council tax. At the time in 2007, the SNP was absolutely clear, Nicola Sturgeon said, it is time to scrap the council tax. Some nine or ten years later, we are back here tinkering with the council tax. Over nine years, where many local services are now buckling under the financial pressure and yet again what we actually have is the SNP bottling it when it comes to bringing forward a replacement. Now I would suggest what they actually want to do is tinker again. As Bob Doris said in the debate, the reforms are not the end, they are the start. However, we have had ten years, we should be much further forward and local government cannot continue to take the level of cuts that are taking on the impact on communities. They set up a commission, they ignore what it says, they bring forward yet again a stick and plaster solution that will further damage local services while continuing to undermine democracy. The minister, Derek Mackay, in his speech said that it is difficult. This morning, I reread the submission to the commission from Unison Scotland, of which I am a member, and there was a sentence that I thought best describes where we are at. They said, in their submission, we must find a solution. The problems are not technical, they are political. It is time for some grown-up decisions to be taken across all political parties. Sadly, in this chamber today, it would seem that when it comes to funding local services, the only party that is not able to face up to making such decisions is the party of government, the SNP. Instead, they propose yet again another fudge that quite simply fails to address the issues at hand. Who will be the losers for that failure? For starters, it will be the people who need to access public services. As we have seen from the report published this morning by the Count's Commission on Social Work in Scotland, social care services cannot, quote, with the increasing levels of demand, and older people who need those services are being denied those services. That is predicted to get much worse unless something is done. On the subject of social work, I would also suggest that we need an urgent review of children and family services for the level of underfunding that is putting massive pressure on staff and their ability to meet the growing needs being placed upon them. It is also local communities up and down Scotland that are seeing the impact of the failure of the SNP Government to properly fund local government. Whether that is the local environment, the cuts to local groups who are the backbone of community organisations, the cuts to youth services that are taking place, where they are able to deliver less and less services for young people in the community, the local libraries that are becoming less and less, and even where local services survive, we have seen increased and associated charges that mean that for many people trying to access local services, there is a barrier to doing so. I could talk not about just the cuts to local services without mentioning the state of our streets and our roads. The impact is right across. The next time you drive on a pothole, just remember that it was the SNP that done it. Right across Scotland, we have seen a complete lackey investment in public services, roads and infrastructure. Today, there is an opportunity. I hope that the Parliament will take that opportunity. Let's once and for all put local government finance on a sound footing. Thank you. I call Graeme Simmson, the Conservative Party. Mr Simmson, seven minutes please. Thank you, Presiding Officer. This has been an interesting and, I think, important debate to have. There have been some interesting contributions starting with Derek Mackay, who told us while keeping a straight face that the journey has only just begun. Of course, as Jackie Baillie and Patrick Harvie pointed out, that's far from being the case. The journey started a long time ago and has been going round in circles ever since. We'll also thank Modo Fraser for giving us a unique historical perspective and spelling out some of the issues. We come to this on the back of a report from a cross-party commission set up by the SNP, but which was largely ignored. The commission for local tax reform came up with some proposals, which are definitely worthy of consideration. Revaluation, for example, as Bob Dorris seems to agree with. On this side of the chamber, we don't see any merit in scrapping council tax, but reform is needed. We never agreed with Nicola Sturgeon when she described it as hated, and we welcomed the SNP's conversion to our way of thinking largely. However, we are vehemently against the double council tax whammy, which could be unleashed on more than half a million households in Scotland. Part one of the whammy is the automatic rise in tax for ordinary Scots that councils would have no choice over, and I'll be concentrating my remarks on this. Part two, the potential additional 3% rise in some bans has not been announced anywhere other than the SNP manifesto. Let's deal with part one. The Scottish Government's proposal to raise £100 million on the back of councils take us into uncharted waters. They're taking what should be a local tax, set locally and spent locally, and turning it into a national tax, set by the Scottish Government, I will in a sec, and spent by them, though collected by someone else. Was Graham Simpson not in the chamber earlier? I think that he was when I stated that every penny raised through council tax will stay with those local authorities. The adjustments that we make will be around the revenue support grant in a very similar fashion to business rates, which the Conservatives don't seem to object to not understand local government funding. Council tax will stay with local councils. How much clearer can I be? I thank Mr Mackay for setting me up for that one, because, as he well knows, there is no mechanism for the Scottish Government to take council tax from councils. What they'll do is grab it in another way. They'll cut the grant. They're getting the money in another way, Mr Mackay, as you well know. When I challenged John Swinney last week to explain why this is not more centralisation, he was unable or unwilling to answer the point, and that's because this is more centralisation. It is, in our view, a dangerous step towards goodness knows what form of local government reorganisation the Scottish Government has in mind. Their proposals breach a central tenet of our taxation system that, thus far, that the taxes you pay are set by the politicians elected to spend them. If it's council tax, then it should be set by councillors, a point apparently lost on George Adam. If national government wants to raise money, they should use the levers available to them. Income tax, for example. They should not get others to do their dirty work. The American politician James Otis said in the 1760s that taxation without representation is tyranny. While I don't put what is being proposed quite as strongly as Mr Otis, it's a very serious matter indeed. It's unheard of, in fact. We've had ring-fence money in the past, but that stole money passed to local government for them to spend. This is entirely different. You could call it the robbing Peter to pay Paul tax, or for the purposes of next year's council elections, the Nat tax. It really is quite outrageous for the Scottish Government to get someone else to raise money for them. People need to be under no illusions that when they receive their higher council tax bills next year, some or all of that increase, depending on where you live, will be down to Derek Mackay and John Swinney. Two political highwaymen riding off with their swag bags, shortling to themselves, but it will be councillors and not them who will get the blame. That's why the Scottish Government's motion has a brass neck about it for mentioning local accountability. It's precisely the opposite of what the SNP are proposing, and that's why we've tabled the amendment that we have. Let's look at some of the detail. There's a lot missing so far. We know, for instance, that there are disparities across the country between what increase people will pay. If you happen to live in a band-aid property in Aberdeen, you'll pay an extra £113 a year. If you're in a band-aid home, that will be £554— The Simpsons in his last minute. Sadly, or I've been glad to give way to you, Mr Stewart. On the other hand, if you're in the Western Isles, those figures will be £94.461. There are big questions still to be answered. Mr Swinney has not yet told us how the money is to be divided up, under what criteria and by who. Nor do we know what the mechanism will be for taking the money from councils as that's not spelled out in the legislation. We can guess at it. Legislation, which, as Andy Wightman has said, may even be illegal under European law. You couldn't make it up. Council tax does need reform. The way to do it, though, is not to turn it into a national tax. Thank you very much. Pauline Stewart to wide up the Government. Minister, till 4, please. Presiding Officer, I think that it would be fair to say that we've had an interesting debate this afternoon. Before I address some of the points made, I'd like to reflect a little on the wider policy context. First and foremost, we have all been able to draw up on the definitive work of the commission on local tax reform, which was chaired by not only Marco Biagi, but also David O'Neill, just to set the record straight for Jackie Baillie. I'd like to thank all of the commissioners who invested considerable time and effort to deliver a report that brings the issues alive, including setting out the impacts of change and how they might be administered. The thing about the commission itself is that it talks not only of property taxes but of income taxes and of land taxes. As the cabinet secretary has said, this is the beginning of a journey. We have put forward proposals to readjust the council tax. We will consult on vacant and direct land tax, and we will consult on the assignation of income tax, thus fulfilling all three of the areas covered by the commission. If the journey is just beginning, when on earth is it coming to an end? With co-operation from all parties, we can discuss the way forward, and then we can maybe see where we come to an end. However, what Mr Rennie suggested today, Presiding Officer, was a new land value tax that was not mentioned in his manifesto, and no one today has given an indication of how long their proposals will take, or in the Conservatives case, they have not given us any proposals at all. In developing the reforms now before the Parliament, the Scottish Government has maintained our adherence to the Adam Smith principles of taxation, which is efficiency, convenience, certainty and being proportionate to the ability to pay. The present council tax for all its flaws does in fact tick some of those boxes. It is efficient to administer. Administration only costs 1.9 per cent of the total taxes collected. Payment is not administratively burdensome, rather it is relatively convenient. Certainty for the taxpayer in these tough times is absolutely crucial. People need to be able to plan and to budget. Is the present council tax proportionate to the ability to pay? On its own, council tax is not just change highlights that are reform target, but there is a system of relief to council tax that takes account of need and income. I will give way to Mr Harvey. I am very grateful that the minister tells us that people need to be able to plan for their financial futures. So do our local authorities. How on earth does assigning a proportion of income tax and, I assume by implication, abolishing council tax, leaving them reliant on unpredictable income sources? How on earth does that give them the ability to plan for the future? We will consult, as we said, with local authorities to allow them to plan for the future. Let me move on to what the resolution foundation has said about the SNP proposals. They say that the SNP's tax increase would raise revenue in a progressive manner, with the tax rise falling harder on higher-income households. That is what the resolution foundation has said. Many seem to disagree with that today, but that is the reality—more progressive, where it seems that the Conservatives, in terms of their amendment, want to take progressivity right out of the equation. As the Cabinet Secretary for Finance and the Constitution described, the council tax reduction scheme means that net council tax liabilities are progressive for the lowest-income households. Our reforms to the council tax also reflect a pledge by the First Minister, a commitment repeated in our manifesto. That is for the additional revenues raised to contribute towards raising standards in schools and closing the attainment gap, delivering opportunities to our young people, no matter their family background. If he listened to some of the speeches today, he would think that the Government was going to take that £100 million and keep it all for itself. The reality is that this money is going down two local levels to support children and to raise attainment in this country. Surely that is an ambition that all parties in this chamber should welcome. I will take an intervention from Mr Simpson. Mr Simpson. I am grateful, Mr Stewart. Perhaps he could tell me who will be dividing up the £100 million. Will it be councils or will it be the Government? Mr Stewart. We will discuss those issues with local government. That has been made quite clear right from the very start. I do not see what is funny about that. That is the way that we normally conduct business. We consult with local government and come to agreement. One of the other things that seems to be lacking today is a basic understanding of how local government finance works when it comes to distribution methodology. No, I am not going to take an intervention. What we have is agreements with local government about needs-based distribution, which have been on the go for years. It happened under previous Tory administrations, it happened under previous Labour and Liberal Democrat administrations. I do not know what is much different now. Let me go on about distribution, because this is not about raising funds in one council area to distribute to another, even though the redistribution of public money based on need is that long-established fundamental principle of the funding that we provide to local government. That is about raising educational attainment. Any council choosing to increase council tax will keep all additional revenues from that tax rise, so local financial accountability is preserved. Councils will still retain all council tax raised in their area. No council will be financially worse off, but there will be an additional £100 million a year available to spend on schools and children and getting to grips with that attainment gap. Other parties have proposed changes to taxation in their manifestos of May this year with the receipts to go directly to schools. Our manifesto proposed additional funding raised by council tax reform to be allocated directly to those schools based on eligibility for free school meals from 2017-18. That is best for our kids. That is not about centralising power. That is about empowering schools to create the best possible opportunities for our young children. It seems to me that some folk in this chamber do not want that to happen at all. We have heard from some today about re-evaluation. Re-evaluation would cost £7 million or £8 million, according to the Scottish Assessors Association, and it would take two to three years. Beyond that, it would hit places such as Aberdeen and Edinburgh, where house price inflation has been highest, the hardest. Something that Mr Kerr seemed to miss out on in his contribution earlier. This debate has seen the fulfilment of the commission. Sorry, minister. We have to conclude the next debate that is already squeezed. In which case I would urge everyone to support the Government motion today. That concludes the debate on reforming taxation in Scotland. It is time to move on to the next. Item of business and allow a minute or so for the front benches to swap places.