29 June 2007
The Scottish National Party has won MSPs' backing for the principle of introducing a local income tax.
The prospect of pushing through the party's flagship policy was in doubt because the minority government needs the support of other parties.
However, MSPs gave the plans a significant boost after agreeing, by a majority of two votes, that a local income tax, based on ability to pay, was a fairer system of local taxation than the 'discredited and unfair council tax'.
The Liberal Democrats, who also back a local income tax, and the Independent MSP Margo MacDonald, supported the SNP. The party also received help from the Greens, who refrained from voting.
The decision now means that the required legislation on local income tax has a better chance of succeeding. First Minister Alex Salmond said the vote gave the administration real encouragement as there was now a clear expression of parliamentary will in favour of the tax.
He added: 'We would urge Jack McConnell [leader of the Scottish Labour Party] to respect the will of Parliament in its clear support for the scrapping of the unfair council tax in favour of a fair local income tax.'
But the expected loss of £400m currently paid in rebates to Scottish council tax payers could be a serious blow to the SNP plans. The party's financial calculations for local income tax are based on the money being retained.
A Scotland Office minister, David Cairns, said this week that Westminster would not agree to the SNP's demand. Cairns said: 'The council tax benefit is a benefit paid in relation to the council tax, full stop. If there isn't any council tax, then there isn't any council tax benefit.
'The reality is the Executive has thousands of millions of pounds to spend. They can live within their means and they should.'
A survey of council tax over the past decade has shown that bills in Scotland are 9% lower than the British average of £1,078.
According to research by the Bank of Scotland, average council tax bills between 1997/98 and 2007/08 rose by 111% in Wales, 95% in England and 51% in Scotland.
PFjun2007
