Have Labour committed electoral suicide over the council tax?

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It happened before in the nineties when the British Labour party seriously misjudged the electorate’s appetite for paying more taxes.  In 1992 the Labour party promised tax increases in an attempt at persuading the UK public to vote for them, however they underestimated the public’s aversion to handing over more cash and the party lost out to the Tories who ran their famous ‘double whammy’ campaign.

Well, following on from Iain Gray’s desire to see council tax bills rise in Scotland should he become the next First Minister, history could well be about to repeat itself for Labour’s Scottish branch at Holyrood 2011.  A double whammy of council tax increases and budget cuts caused by Labour’s deficit is now on the Labour menu.

The SNP’s announcement that they are planning to continue the freeze on council tax for a further two years has left Labour in Scotland looking like a party stuck in a tax-timewarp.  Adding insult to Iain Gray’s injury was a BBC poll from last week indicating Scots were only too aware which party was responsible for the UK’s economic ruin.  Poll respondents also made it clear that increasing council tax in order to pay for the mess would not be acceptable.

Labour in Scotland have now been left scrabbling about trying to limit the damage caused by this hopelessly timed council tax promise-cum-threat.  The big question though is why Labour’s leader at Holyrood felt it necessary to very publicly endorse the move at all?

Most contentious policy initiatives are usually left to a lone backbencher to suggest or are leaked to a ‘helpful’ journalist who runs the story to gauge reaction.  The fact that the BBC were actively carrying out a poll that would have alerted all parties to ‘untouchable’ proposals makes Iain Gray’s high profile endorsement of a tax rise all the more bizarre.

The SNP of course have decided to make hay whilst the sun shines and the council tax difference between the two bitter rivals has allowed them to place their marker in the minds of the electorate, vote for us and pay less.  At the same time they are starting to hammer home the message of ‘Labour’s deficit’.

The council tax is one of the most contentious taxes around, it is what is known as a ‘regressive’ tax meaning that it is not based on ability to pay and penalises those on low incomes.  All parties at Holyrood recognise this and alternatives include the SNP’s Local Income Tax (LIT) with a fixed 3p rate for all local authorities, the Lib Dems variation which allows local authorities to alter the rate and the Greens land tax.

It has posed a chronic problem for Labour who have yet to come up with any realistic alternative; it was the party’s albatross at the 2007 election.  The image of Jack McConnell hurriedly trying to cobble together an alternative to the SNP’s LIT only days before the 2007 polls is still one of the abiding memories of that campaign.

Labour has been caught cold by the SNP’s announcement and the party’s panic has seen Labour councillor Pat Watters step into the breach in an attempt to defuse (deflect?) this tax bomb.  Mr Watters, as well as being a South Lanarkshire Labour councillor, is also the head of local authority umbrella group Cosla.

Mr Watters has been one of the most mature politicians in Scotland these last few years and has worked with the SNP government since 2007 in an effort at ensuring a good working relationship between it and Scotland’s 32 local authorities.

However within hours of the SNP’s announcement and mindful of the huge amount of damage the issue could cause Labour, Mr Watters sent a letter to Scottish government Finance Secretary John Swinney attacking the announcement of the freeze.  The letter was also passed by an unknown source to the Scottish media who then quickly changed the focus of the story away from the tax freeze and onto Mr Watters claims that relationships with local authorities had now been damaged.

Mr Watters was quoted in the media as saying:
“It seems to me that the Cabinet could scarcely have done more to undermine any cross-party agreement from Cosla,

“I cannot overstate how personally aggrieved I feel about the actions of the Scottish Government since we met.”

Mr Watters’ decision to very publicly attack an SNP policy in this manner may well have politicised his role in Cosla, the ramifications of which remain to be seen.  His claim that by announcing to the Scottish public, funding for a continuation of the council tax freeze, the SNP have breached a confidence is ludicrous.  Parties are free to announce their own election pledges as and when they see fit; neither local authorities nor Mr Watters have the right to demand that an election pledge be announced to them first.

What is abundantly clear is that Labour have realised that they have a major problem with Iain Gray’s policy on council tax and it is a problem that will not go away.  The only way out, if there is one, is for the party to come up with an alternative to the regressive tax before May 2011 and pledge to implement it ASAP.

The election campaign is now off and running and the SNP have stolen a march by identifying a major Labour weakness.

However, the move by Mr Watters and the swiftness of the Scottish media’s response to Labour’s plight showed that the Labour party will remain a formidable beast as we near May 2011.

The SNP will do well not to underestimate the ability of Labour to influence the news narrative.  An influence that some claim stretches all the way to persuading the BBC at Pacific Quay not to transmit the SNP’s Perth conference, save for 1½ hours on Sunday …….. and a web feed or two.