The Burt Review - Scotland


In November 2006, Sir Peter Burt in Scotland published the Burt Review, an independent review of local government finance ordered by the Scottish Executive.

Although disappointing that despite the proposals of the Scottish Liberal Democrats a Local Income Tax is not being introduced, the Liberal Democrats welcome Sir Peter's damning condemnation of the Council Tax system and his conclusion that 'council tax has fundamental shortcomings.'

Upsettingly, the Burt Review concludes by reccommending that Council Tax be replaced, not with a Local income Tax based upon the ability to pay, but with a Local Property Tax.  The LPT suggested 'would be assessed as a proportion of the capital value of homes in Scotland.'

The Liberal Democrats will look at these proposals in detail, but we have serious concerns.  Those who benefit under LIT such as those on low incomes, and those whose house values have sky-rocketed - will suffer under the LPT proposals.  We are concerned that such a system would only create more anomalies.

In short, although we welcome the Report's findings that Council Tax has 'fundamental and inherhent' shortcomings, we have serious concerns regarding the Local Property Tax reccommended, and remain committed to a fair Local Income Tax based on the ability to pay.
Northern Ireland


Northern Ireland has also recently been looking at domestic rating reforms.  Before the assembly was devolved in 2000, the Assembly ordered a review which, after it was disbanded, was taken on by the Government.

The review is looking at reforming the tax system to a system of discrete capital value (no bands).  Property evaluations took place in June 2006, and the new discrete valuations will replace the old rental value system in April 2007.

Unfortuantely, property values in Northern Ireland have sky-rocketed in the past few years, and gone up an average 33% just in the last year.  This puts many in an extremely difficult position, especially the many who bought their home years ago, improved it over the years, and now retired and are living on a fixed income.

Although disabled persons will receive at least a 25% deuction, there is no relief scheme for pensioners or those on low incomes.

Although the Liberal Democrats recognize that almost anything to replace the rental value system would be a great improvement, we are vehemently opposed to this proposal and have voted against it in both the Commons and the Lords.  We believe that the any action taken should be put on hold until the Northern Ireland Assembly is reinstated (or a decision is made to the contrary) in March.

The onservatives have sided with the Government after tabling an ammendment for caps and reliefs.  However, these proposals will only be considered if Northern Ireland returns to a devolved, re-established assembly.  If not, all bets are off.

The Liberal Democrats



Both of these reviews above are examples where the Government has been forced to recognize the unweildy, incomprensability of its unjust Council Tax system.  However, neither the proposals made for Northern Ireland, nor those made in the Burt Review acheive the Liberal Democrat's goal of a fair replacement to the Council Tax, a Local Income Tax based upon the ability to pay, and with caps and reliefs to protect the vulnerable.

With the Lyons Review due out in a couple of months, the Liberal Democrats remain committed to a fair LIT replacement to the dreaded Council Tax, and we will continue to campiagn and push for just that.
 
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