Parties unite against the SNP's Swim Tax

Parties unite against the SNP's Swim Tax

by Murdo Fraser
article from Friday 17, November, 2017

OPPOSITION PARTIES across the Scottish Parliament – the Greens, Labour, and Liberal Democrats – joined with the Conservatives this week to oppose proposals for a “swim tax” on leisure facilities. The debate at Holyrood, held in the name of my Conservative colleague Gordon Lindhurst MSP, focussed on the recommendation of the Barclay Review of Non-Domestic Rates that arms-length external organisations (ALEOs), set up by local authorities to run sports and leisure facilities, should have their charitable exemption from rates removed.

Speaker after speaker throughout the debate highlighted the negative impact that this change would have. The Barclay Review characterised ALEOs as tax-avoidance structures, putting them in the same boat as the high profile celebrities, from Dermot Desmond to Lewis Hamilton, who have been blasted in the Press for having offshore accounts to avoid paying UK tax. As I pointed out in the debate, this comparison is absolute nonsense.

In my own area, Perth and Kinross Council have Live Active running the region’s sport and leisure facilities. This trust is one if the longest serving in the UK, having been set up more than 50 years ago to provide and develop sporting and leisure facilities in the area. 

The model is a simple one: the trust is non-profit making, and therefore any surplus from gyms and swimming pools is channelled back into loss-making social programmes. Live Active offers free swimming lessons for vulnerable children, teaches disabled kids to cycle, provides walking groups for the elderly, respite for carers, free access to sporting activities for disadvantaged families, and bonding classes for new parents. It seems extraordinary that such an organisation should be viewed as ripe for additional taxation.

The threat to Live Active’s future activities was made clear in a letter sent by the Trust’s Chairman, Mike Robinson, to the Finance Secretary Derek Mackay. Mike Robinson makes clear in his letter that if the current exemption for ALEOs was to be removed, the potential additional cost in Perth and Kinross would be in the region of £1 million per year, which would have a very significant negative impact on the range of opportunities, social programmes and venues that could be sustained across the area, and would have a consequential impact on Live Active’s record of attracting partnership funding and projects.

This potentially damaging measure comes on the top of renewed cuts and wider economic pressures, and would result in significant closures and a decrease in provision, which would seriously undermine Live Active’s operations.

So the consequences of removing charitable relief from ALEOs would be increased admission charges, reduced social programming, and the potential closure of loss-making facilities. At a time when the Scottish Government is keen to see a more active population, and tells us it is serious about tackling the obesity time bomb, hiking taxes on sports facilities is surely not the way to achieve these outcomes.

A similar situation exists in Stirling, where the ALEO Stirling Leisure estimates additional costs at £600,000 per annum. The Chief Executive Andrew Bain told me this week that “the local consequences could be catastrophic”.

Across the Chamber MSPs who spoke in the debate made clear that the proposed Swim Tax had to be avoided at all costs. If Scotland is to reduce obesity, encourage activity, and salvage any kind of legacy from Andy Murray and the Commonwealth Games, the SNP needs to axe this tax.

To be fair, the Finance Secretary Derek Mackay seemed to be in listening mode, being anxious to stress that no decisions had yet been taken, and that he was prepared to listen to views expressed.

What this debate achieved is demonstrating that there is no parliamentary majority for the introduction of the Swim Tax. If the SNP decide to proceed, then it will have to form part of budget negotiations, and it seems it might be too much even for the Greens to have to swallow. As ever, it is the Scottish Conservatives leading the charge against the SNP’s high tax agenda, and on this occasion one that would have particularly damaging consequences.



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