SNP in Lib Dem talks to abolish council tax

Published on Saturday 8 March 2008 18:39

THE scrapping of the council tax will move a step closer this week as ministers publish plans to replace it with a new local income tax (LIT).

First Minister Alex Salmond will hold talks with Lib Dem leader Nicol Stephen tomorrow over the plans, as they seek to find a deal to get the tax through Parliament.

Instead of paying a tax on property, anyone earning an income would pay 3p in the pound on top of the income tax they already pay.

Ministers claim 90% of the population will be better off, but opponents last night warned that the SNP's sums wouldn't add up.

It comes after Work and Pensions Secretary James Purnell told this newspaper last week that the Government would refuse to "subsidise" the new tax.

SNP ministers need to find agreement with Whitehall over 400m of benefits cash which will be required to fund the LIT.

A spokesman for Finance Secretary John Swinney said: "The Scottish Election Study last year showed that 88% of Scots favour a local income tax, and only 12% back the discredited council tax. The task now is to turn that overwhelming public support into a parliamentary majority."

However, Labour local government spokesman Andy Kerr said: "The SNP and Lib Dems are like the two ends of a pantomime horse, each pulling in a different direction and neither knowing which way to go next."

Conservative finance spokesman Derek Brownlee said of the SNP-Lib Dem talks: "All the effort that is going into talking about versions of local or national income tax hikes would be much better spent on reforming the council tax."