Reviews could signal end for 'unfair' council tax

THE council tax could be scrapped north and south of the Border under plans being considered by ministers, it emerged yesterday.

Nick Raynsford, the local government minister for England, is expected to suggest ditching the tax in a speech in the next few weeks.

And Scottish ministers are about to commission a wide-ranging review of local government finance which will also involve discussions on replacing the current system north of the Border with something that is fairer to the poor and pensioners.

Scottish ministers know that, if the Westminster government does decide to replace the council tax, it would be very difficult for the Executive to keep the existing system in place.

The details of the Scottish review have not been announced, but it will examine all aspects of the council tax and the way local government is financed.

A spokesman for the Executive confirmed that nothing would be ruled out and alternatives to the council tax would be considered.

There has been rising anger throughout the United Kingdom over council tax bills, particularly from pensioners who feel they are being unfairly penalised by such a blunt tax system which does not vary according to income.

A TNS System Three survey for the Sunday Mail yesterday found that nearly eight out of ten Scots believe the council tax is unfair and should be scrapped.

Under the plans being considered by the Westminster government, the council tax would be replaced by a combination of a property levy and income tax.

One un-named minister was quoted in the Sunday Telegraph yesterday claiming that Tony Blair, the Prime Minister, "fears that the council tax could become another fuel-tax protest unless something radical is done".

"It would be madness to go into the (general) election with council tax as it is. It is already unsustainable," the minister said.

Until now, Andy Kerr, the Scottish finance minister, has backed a housing revaluation and a rebanding of council taxes in Scotland to make the system more fair to those on lower incomes.

And, at the moment, that appears to be the likeliest option for the Executive.

But if the Westminster government scraps the council tax, the pressure on the Scottish Executive to follow the same route would become virtually unstoppable.

The details of the Scottish review of local government finance will be announced after the Executive has consulted with the Convention of Scottish Local Authorities about the best approach.

The Scottish Socialist Party and the SNP have led the campaign against the council tax, but they have support within the Executive where the Liberal Democrats support the introduction of a local income tax.

Many Labour back-benchers would probably back such a scheme as well, if it was brought before the chamber.