Council Tax (Hansard, 2 December 1992)

§ Mr. Lang

The change in the system of local taxation in Scotland will result in a redistribution of the burden of local taxation between households. While many households should gain from the change or face only a small increase in the contribution which they have to make, some households will have to bear a significantly larger share of the tax burden than they do under the community charge. We have provided temporary assistance for households required to pay more under the community charge and I believe it is reasonable to provide such assistance in Scotland in the change to the council tax.

I therefore intend introducing a council tax transitional relief scheme in Scotland similar to the scheme already announced for England by my right hon. and learned Friend the Secretary of State for the Environment. Under this, households in the lowest council tax band, band A, would be required to pay only the first £1.75 per week of the increase in bills due to the change in tax system, and households in the bands above this would be required to pay an additional 25p per week in each successive band, so that households in the highest band, band H, would be required to pay the first £3.50 per week due to the change in the tax system. The extra amount households would be expected to pay for each band are as follows.

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Range of property values in band (at 1 April 1991)
	£ per week
Band A Up to £27,000	1.75
Band B Over £27,000 and up to £35,000	2.00
Band C Over £35,000 and up to £45,000	2.25
Band D Over £45,000 and up to £58,000	2.50
Band E Over £58,000 and up to £80,000	2.75
Band F Over £80,000 and up to £106,000	3.00
Band G Over £106,000 and up to £212,000	3.25
Band H Over £212,000	3.50

The calculation of reductions will be based on whichever is the lower of an authority's actual council tax for the valuation band concerned and its scheme council tax for that band. The cost of such a scheme next year is estimated to be up to £28 million and this cost will be reimbursed to local authorities under the scheme. I have asked my officials to consult with the Convention of Scottish Local Authorities on the details of the scheme. The scheme will then be implemented under regulations which I hope will be laid before the House shortly.

As a consequence of settling on the details of the council tax transitional relief scheme I am able to increase by £15 million the level of aggregate external finance for 1993–94 which I previously announced on 12 November. I can also announce today that I plan to add a further £2.8 million to both the Government-supported expenditure and AEF figures for next year in recognition of the additional responsibilities which local authorities will face from next April as a consequence of changes to the independent living fund which my right hon. Friend the Secretary of State for Social Security announced on 24 November. The result of these changes is that aggregate external finance next year will be £5,165.1 million, an increase of 3.5 per cent. on the equivalent figure for this year.