SNP blasted for tartan tax surrender

THE SNP government was facing taunts that it had handed Scotland's one big tax power back to London last night, after it emerged that it had conceded the ability to use the tartan tax.

Scottish Secretary Michael Moore revealed that arrangements which allow Scottish ministers to raise or lower income tax by up to 3p in the pound were "allowed to lapse" in 2007, just after the SNP came to power.

SNP ministers had opted to do so because, under a deal with HM Revenue and Customs (HMRC), keeping the option of using the tax would have cost millions of pounds in administration fees. They decided that, as neither they nor any of the other major parties had plans to use the power, there was no point spending money on it.

The decision was met with astonishment by political opponents last night who asked how a Nationalist party whose very reason for existing is to obtain more financial powers for Scotland could opt to give away a key financial power.

There were question marks about whether the government had effectively over-ruled the will of the Scottish people, who voted in a referendum in 1997 so that the Scottish Parliament could have tax-raising powers.

There was also pressure on finance secretary John Swinney, who had told parliament on Wednesday that he would not be using the tartan tax next year, without informing MSPs that it was not available to him in the first place.

The row emerged yesterday afternoon after Mr Moore revealed that the tartan tax, officially the Scottish Variable Rate, was null and void. The revelation brought a storm of protest from all opponents.

Labour's finance spokesman, Andy Kerr, said: "The SNP are guilty of sabotaging devolution. Labour has no plans to increase income tax in Scotland, but the power was made available to the Scottish Parliament as part of the devolution settlement. The refusal of ministers to commit resources so that HMRC can collect the tax is unbelievably short-sighted and yet another example of the SNP's appalling

incompetence."

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Scottish Liberal Democrat leader Tavish Scott said: "The party that constantly demands more powers and a referendum has killed off the only tax power expressly voted for by Scottish people. The Scottish Government's decision doesn't just affect the SNP, but binds the hands of the next government."

Derek Brownlee, for the Scottish Tories, said: "The people of Scotland voted overwhelmingly in a referendum for the Scottish Parliament to have tax-varying powers.

"It is nothing short of astonishing that the last Labour Scottish government and the SNP government let these powers lapse without the public being told."

The government defended its position, saying that, in 2007, it had been asked to pay an administration fee in excess of the 12m and 50,000 annual cost paid by the previous Lib-Lab government.A spokesman for Mr Swinney said: "As recently as this summer, the HMRC wrote to the Scottish government asking us to pay at least 7 million to administer the 3p variable rate.

"Spending yet more millions on a limited tax power which none of the major parties wanted to use could not possibly be justified at a time when it was clear that public spending would be constrained."