Alastair Murdoch: Local tax's time has come at last

Following Scottish Labour's defeat by the SNP in 2007, Tom McCabe, a former Labour finance minister at Holyrood, wrote an article in a Sunday newspaper calling for the abolition of council tax.

Several years later, it was reported that back-bench Labour MSPs were warning their leader, Iain Gray, that their party risked losing again to the SNP if it went into the Scottish election of 2011 without a coherent policy on replacing or reforming council tax.

However, Scottish Labour still persists in trying to devise a fair, property-based tax – which we believe is a contradiction in terms. Clearly, they haven't learned by now that tinkering with the existing council tax can never make it fairer, as regards ability to pay.

The Local Government Finance Review Committee, chaired by Sir Peter Burt, came to this conclusion in 2006, after calling on the University of Stirling to carry out modelling work. This research concluded that introducing additional council tax bands had virtually no effect on the burden of council tax.

They also investigated the effect of increasing the multiplier, the ratio of the band H to the band A charges. This time they concluded that any banded system could not be improved sufficiently to overcome its inherent shortcomings.

This may explain why Scottish Labour has never come up with any coherent policy on council tax. Perhaps they should consult the Layfield Report of 1976, which is looked upon as the most comprehensive review of local government ever produced. Layfield regarded Local Income Tax as the only serious candidate for a new source of "local revenue".

Since council tax is heavily weighted against the poor and the "squeezed middle", its replacement by a Local Income Tax is long overdue.

This replacement tax would reflect one's ability to pay, guarantee much improved collection levels through PAYE, be much cheaper to collect, embrace local accountability and ensure that all users of local services make at least some contribution.

• Alastair Murdoch is joint treasurer of Scottish Action Against Council Tax.