Lib Dem president calls for taxation revamp

Published on Sunday 2 March 2008 21:18

COUNCILS and health boards should get much more of their income from taxes raised in their areas, Liberal Democrats were told yesterday.

The idea was floated by Lib Dem MP Malcolm Bruce as "a radical stage further" in devolving power downwards.

Mr Bruce, president of the Scottish Liberal Democrats, made the call in a speech to the party's spring conference in Aviemore, where Lib Dems yesterday challenged Alex Salmond to talk to them with the aim of securing a deal on local income tax.

Mr Bruce made clear, however, that his idea did not cut across this but was to be seen as part of wider reforms that would give more tax powers to Holyrood. He told the conference: "Instead of all taxes, bar the discredited council tax, going to the Treasury to be top-sliced, wasted and lost, let us keep more of the taxes where they are collected.

"What councils and health boards need is their share of taxes paid in their locality, raising their access to income from local sources from 75 per cent or 80 per cent of their total budget, leaving the grant from Holyrood for new services and to adjust for income inequalities around the country," he said.

"This would offer us a new cause for campaigning – local taxes for local services. That is the opposite of the SNP's 'one Scotland' approach."

Under this scenario, however, extra money would not be raised directly by councils or health boards, Mr Bruce made clear later. It would still be collected in the normal way, but a far greater proportion would be automatically allocated to local areas, instead of the present system under which most of their funding comes in the form of central government grants. Nor would it mean higher rates or more forms of taxation, he said.

"I'm not suggesting you are going to have lots of different taxes," he told reporters. "What I'm suggesting is that the taxes you pay, instead of going direct the Treasury, a proportion of them would go direct to your local council or health board."

In his conference speech Mr Bruce took a swipe at the leader of the SNP, saying independence would "enable Alex Salmond to strut and swagger on the world stage like a tartan peacock".

He also mocked Prime Minister Gordon Brown's "confusion" over greater powers for Holyrood, and urged Mr Brown to consider UK-wide initiatives.

"Why not have the vision of the French and build high speed trains to all parts of Great Britain, bringing us all closer together?" he said.

"Paris to Marseilles is approximately the same distance as London to Aberdeen yet the journey time of the former is three hours six minutes compared with seven and a half hours."