Scottish Election 2011: Local tax plan 'less credible by the day'

Published on Friday 1 April 2011 19:06

Controversial plans to revive a local income tax are growing "less credible by the day" opposition parties warned yesterday.

The SNP and Liberal Democrats want to introduce the measure, to replace the council tax, alongside sweeping reforms of the tax-raising powers of Holyrood as part of the Scotland Bill.

That would mean an overhaul of the tax system in 2016 in Scotland when income tax is effectively cut by 10p and MSPs are given the power to raise it back, in line with what is needed.

The local income tax has dominated the Holyrood election campaign in recent days. Labour yesterday called on the UK's top civil servant to intervene in a row over a court bid by the SNP to prevent the disclosure of advice it received from civil servants on the issue.

Mr Salmond has insisted that such advice must remain private, but is facing growing calls from political rivals to outline the potential costs associated with a local income tax.

Labour finance spokesman Andy Kerr said: "We already know that Alex Salmond's plans for a local income tax will cost hard-working families well over 500 per year, but the extraordinary lengths the SNP are going to conceal the true cost of his tax hike suggests it is even more than previously thought.

"It is high time Alex Salmond comes clean and tells voters exactly how much his unfair, unwanted, secret tax bomb- shell will cost hard-working families.

"Alex Salmond seems determined to make Scotland the highest taxed part of the UK, but Scottish Labour understands that families are feeling the squeeze and that's why we will freeze the council tax for the next two years."

The SNP pledged to introduce a local income tax in the last oparliament but withdrew this, claiming it could not win the support of MSPs at Holyrood and that the height of recession was the wrong time.

Tory leader Annabel Goldie said: "The SNP and Liberal Democrat plans to hammer hard-working Scottish families with an unsustainable, uncosted and unfair local income tax are in disarray. They were barely credible the first time they tried to introduce them and they are growing less credible by the day.

"If they want any chance of convincing anyone about these plans, then they need to bring some credible costings to the table for the public to see."

The Lib Dems were unable to reach an agreement with the government last time round because the SNP wanted to set the rate of the tax centrally at 3p. The Lib Dems said councils themselves should be free to set their own level.

Finance spokesman Jeremy Purvis said yesterday: "Council tax benefit will also be devolved at that stage and we will be taking that into consideration when we propose to replace the council tax."

The Lib Dems set out plans last week to scrap council tax for pensioners with an income of 10,000 or less.

Mr Purvis had discussions with finance secretary John Swinney in the last parliament in an effort to reach a deal between the nationalist and Lib Dems to introduce local income tax, but these broke down without any proposals coming forward.

"Unless the SNP change their position to make [local income tax] more localised then all they are proposing is a Scottish income tax supplement and I'm not sure that is the best way forward given that we need local accountability," he said.

The First Minister insisted at The Scotsman leaders debate this week that two-thirds of Scots would better off under local income tax but that it was not appropriate to introduce the new tax during the "biggest recession since the 1930s".

The court bid emerged on Thursday after Freedom of Information requests for details of the financial implications of the new tax were refused.

Scotland's information commissioner, Kevin Dunion, ordered that some of the information should be released, prompting the Scottish Government to appeal to the Court of Session, which further delayed the release.

Labour has written to Sir Gus O'Donnell, saying the latest court bid breaches "purdah", a term covering conventions on government policy in the pre-election period.