Swinney vows to press ahead with local income tax plan

Published on Friday 18 July 2008 13:27

FINANCE secretary John Swinney today pledged to press ahead with plans to scrap the council tax.

Scottish Government plans to replace it with a local income tax have met with resistance from business leaders and political opponents.

The deadline for submissions to a consultation on the local income tax closed today and Mr Swinney said he expects a Bill to come before Parliament in 2009/2010.

The tax would then come into force in 2011 – if passed at Holyrood.

"The public were frustrated by the fact that there was no change under the last administration for eight years," Mr Swinney told BBC Radio Scotland today.

"An unfair council tax was allowed to carry on – this administration is doing something about it."

The SNP administration has already frozen council tax throughout Scotland this year.

Four out of five households will be better off under the local income tax plans, according to the finance secretary, who said the Government will reflect on the "points of detail" raised by organisations in the consultation.

"We will look at all the information that's come forward and bring forward a proposal to Parliament in the Autumn.

"But in all of this we have to bear in mind where the public is in this question.

"The council tax has increased by 60% since 1997 – its punished hard working families in Scotland."

The Government will set out its response to the consultation in the Autumn, with a Bill expected to come before Parliament in 2009/10.

The local income tax met with resistence from the CBI, the Institute of Directors and the Institute of Chartered Accountants of Scotland.

The Federation of Small Businesses this week said it made "bad business sense" and could harm Scotland's competitive edge against England.

The plans were also criticised by the STUC, Unison and the National Union of Students.

And Labour finance spokesman Iain Gray said today: "It is absolutely clear from those organisations that have published their submissions or commented publicly that this consultation exercise is a damning indictment of the SNP's proposals."

He added: "If the word 'consultation' means anything at all then Alex Salmond should listen to what he is being told and dump his unpopular plan to make Scotland the highest taxed part of the UK."

The local income tax does have support in principle from the Lib Dems, but they want to see councils given the power to vary the rate they charge.

The SNP want it set nationally at three pence in the pound.

Liberal Democrat finance spokesman and leadership candidate Tavish Scott said: "Liberal Democrats believe that the discredited council tax should be replaced with a fair local income tax based on ability to pay."

The Tories say there should be a 50% cut in council tax for pensioners across the board.

Tory enterprise spokesman Gavin Brown told BBC Radio Scotland today: "The current system is certainly not perfect, but I think it is better than the option we have on the table from the Government."

He said the Tories want to see the local income tax plans "put to bed" before a debate on reform of the system can get under way.