Support for Local Income Tax

SNP MSP Joe FitzPatrick  and Cabinet Secretary for Finance and Sustainable Growth John Swinney today welcomed the results of the Scottish Government’s consultation to scrap the unfair council tax with over half of all individual respondents supporting the SNP’s proposals for a Local Income Tax as fairer than the Council Tax.

The consultation responses also support the retention of council tax benefit monies in Scotland, and show the failure of Labour to put forward any suggestions on one of the dominant issues in Scottish politics.

Dundee West MSP and member of the Scottish Parliament’s finance committee Joe Fitzpatrick said:

“The SNP is committed to scrapping the unfair council tax – a position which carries majority support in the Scottish Parliament – and replacing it with a fair local income tax based on the ability to pay.

“This consultation shows people and organisations across Scotland support the SNP’s plans to make local taxation fairer.

“The SNP’s proposals have won strong backing with the majority agreeing that council tax benefit money should be retained in Scotland not put back in the pocket of the treasury.

“The astonishing thing about this consultation is the absolute failure of the Labour Party to offer up an alternative.  Only yesterday, Andy Kerr attacked the Tories for failing to offer any ideas to the Calman Commission on tax powers for the Scottish Parliament.  He said that it was ‘not credible not to submit any view whatsoever on what is one of the biggest questions in Scottish politics’ (Sunday Times, 23 November).  Yet on the major issue of local taxation to fund local services, Labour have no idea, no policy, no credibility, and made no submission.

“As a leadership candidate Andy Kerr said he would immediately signal a desire to replace the council tax whilst Iain Gray said he would “replace or reform” council tax - three months on Labour’s leader and Labour’s finance spokesperson have offered nothing.

“Labour’s credibility on the council tax abolition is in tatters.  Their new leader has admitted their old proposals were made “on the back of a fag packet”.  Now they don’t even have that.

“The Council tax is unfair and unpopular.  This consultation shows there is real support for scrapping the council tax and introducing a local income tax based on ability to pay.  It is now for parties across Parliament to see sense and support scrapping the council tax.”

Cabinet Secretary for Finance and Sustainable Growth John Swinney said:

"The council tax has to go. The Scottish Parliament agrees and now this is welcome evidence that Scots up and down the country agree.

"Abolishing the discredited and unpopular council tax in favour of a fair, 3 pence local income tax will be the biggest tax cut in a generation and put money in people's pockets. In the current economic climate, that will be widely welcomed, giving between £300 and £480 a year back to low and middle income households. A local income tax would lift 90,000 people in Scotland, including 10,000 children, out of relative poverty.

"With this Government's plans, four out of five households will be better or no worse off. I am pleased that the majority of respondents to the consultation agree that a local income tax, based on ability to pay, is a fair tax.

"We are determined to introduce a system of local taxation to share the cost of public services more fairly. The Scottish Parliament has twice agreed that council tax is now discredited, and there is now a clear momentum behind our plans.

"We will publish a Bill to abolish council tax in this Parliamentary year. We are currently analysing a further number of issues, including the position of full time students, second homes, possibly applying the tax to dividend income and options for local variability of the tax rate in a downward direction.

"Prior to introducing a Bill, we will outline further proposals in these areas and publish a financial memorandum and regulatory impact assessment.

"I now call on every member of the Scottish Parliament to benefit millions of Scots by working with us to scrap the unfair council tax and make Scotland the lowest locally taxed part of the UK.

"Until local income tax is introduced, we will continue to work with local government to freeze the council tax to offer hard pressed individuals and families some respite from rising bills."