Scots to publish LIT Bill

27 Nov 08
The Scottish Government is to press ahead with its controversial plans for a local income tax following support from a majority of Scots who responded to a consultation

28 November 2008

By David Scott

The Scottish Government is to press ahead with its controversial plans for a local income tax following support from a majority of Scots who responded to a consultation.

Finance Secretary John Swinney said he would publish a Bill to replace the council tax in the current parliamentary year. This would suggest that it could be on the statute book by 2011. However, it does have many obstacles to overcome as the Scottish National Party is a minority government and opposition parties are against the proposals.

Speaking on November 24, he said that 55% of the 430 individual Scots who responded thought the LIT was the fairest form of taxation, with just 25% favouring retention of council tax. A total of 57% supported the SNP's plans for a nationally-set LIT.

The SNP has proposed a tax rate of 3p in the pound, though Swinney confirmed he is considering the option of councils being able to vary it 'in a downward direction'.

Critics pointed out that the minister's statement concentrated on the responses from individuals. Many business leaders and public finance experts have serious reservations about the plan.

CIPFA in Scotland criticised the government's response. Policy manager Don Peebles told Public Finance that CIPFA had been awaiting the Scottish government's 'detailed route map towards a local income tax'.

He added: 'This document does not shed any further light on how critical issues raised by CIPFA, such as the loss of local financial autonomy and accountability, would be tackled.' He cited the estimated annual shortfall of £750m in tax as an unresolved issue.

Opposition parties accused the SNP of deliberately publishing the consultation results on the day of the Pre-Budget Report. They claimed this showed how much the SNP had to hide from its 'discredited' policy.

PFnov2008

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