Liberal Democrat leader Scott calls on Nationalists to cut 2p from income tax

Published on Sunday 14 September 2008 00:17

ALL Scots should receive an immediate 2p income tax cut, according to the new leader of the Scottish Liberal Democrats, Tavish Scott.

Speaking at his party's conference, Scott will call on the SNP Government to use the existing powers of the Scottish Parliament, which allows MSPs to vary the tax rate by 3p in the pound.

The 2p cut would represent an annual saving of 330 to the average Scottish taxpayer; money which, Scott says, families need as the credit crunch begins to bite this winter.

He is now calling on the other parties in the parliament to back his plan, insisting funds can be found through cutbacks and savings within the Scottish Government's budget.

Scott's call is the first time since devolution that a leader of one of the major parties has supported using the tax-varying powers. The SNP backed an increase in the rate prior to the 1999 election – the so-called penny for Scotland – but none of the parties has ever proposed a tax cut.

A spokesman for Scott said: "Families across Scotland are having to make savings to help their family budgets because of the economic situation. If that is what families have to do then the Government should do the same."

As to how the plan would be funded, the spokesman said: "The challenge to other parties is to work with Tavish in order to find savings so that they can make a 2p cut using the Scottish Parliament's current powers."

Scott was elected leader of the Lib Dems in Scotland two weeks ago. His radical call for an income tax cut comes amid warnings that the Lib Dems have been crowded out in Scottish politics, after they decided to reject a coalition with the SNP last year.

The Lib Dems estimate that a 2p income tax cut would cost in the region of 400m a year. The Scottish Government's budget is 30bn a year.

But the SNP Government gave a cool response to Scott's proposal. A source close Alex Salmond said: "It's only a couple of years since the Liberal Democrats were calling for an increase in income tax when the standard rate was higher. Now they are calling for an income tax cut.

"The biggest items of Scottish Government expenditure are health and education and the hard question for Tavish Scott is to answer is where the cuts will be. The Scottish Government has already frozen the council tax and cut business rates."

Meanwhile, the UK party leader, Nick Clegg, said yesterday that the Liberal Democrats are the only alternative to a Labour Government in its "death throes" and Conservative "cowboys".

Clegg kicked off his first annual conference as leader with a stinging assault on the major parties.

He faces a fight in Bournemouth this week to win the support of left-leaning activists for a pledge to slash public spending by 20bn and for 'big' tax cuts.

But he will tell them his "blueprint for a freer, fairer Britain" is the only way to show the Lib Dems understand voters' concerns during the present economic slowdown.

Talking to reporters as another Labour MP called for Prime Minister Gordon Brown to face a challenge, Clegg said: "We are watching the death throes of the Labour Party."