On the Politics Show, Sunday 26 October 2008, Jon Sopel interviewed Scottish Labour Leader, Iain Gray
JON SOPEL: The Leader of the Opposition in Scotland is Labour's Iain Gray, I spoke to him, just before we came on air and I asked him what he made of the documents that we've discovered.
IAIN GRAY: Well, I think what they show is the desperate trouble that this discredited local income tax policy is in. Were they to try and levy the income tax on dividend income, that would be a huge U-turn from what's always been said before, although I have to say, it's not a U-turn we really need because it wouldn't address the fundamental flaws in this policy; that it's bad for working families because they'll pay more, it's bad for local services because it means income from local government will be around a billion pounds short and it's also bad for the Scottish economy because it will make Scotland the highest taxed part of the United Kingdom.
JON SOPEL: One thing I don't understand which as you, as a centre-left party, opposing a move from council tax to a tax which is based on ability to pay.
IAIN GRAY: Well, it's not really based on ability to pay, it's based on what you heard and what the figures, which the SNP have brought forward, really nobody believes and it's clear that for example, a couple, the example we often use is a fireman and a nurse, and a couple would pay more under this system than they do under the existing system. It's our view that a property tax ought to be one part of the broad range of taxation, that that is fair, it's just and it can be made to work very well.
JON SOPEL: But if the SNP were to look at using investment income, I don't know, like dividends, isn't that more consistent because at least then you are getting the people who may be have the most money, to pay more.
IAIN GRAY: Well it address one element of the unfairness of the system and similarly, the SNP have talked about exempting students from this system which was another element of unfairness, students don't pay at the moment and under local income tax they would. But it still waves some very significant difficulties, for example the fact that this policy would mean that local services in Scotland would be cut by around one billion pounds a year, which is a massive swingeing cut in public services in Scotland. But there is another problem.
Later this week, the First Minister of Scotland will meet with the Chairman of Lloyds TSB, to try and make an argument to him that when Lloyds TSB and HBOS merge, the headquarters should be in Scotland. And he will do that and Victor Blank the Chairman will know that in a couple of years, the SNP would like people in Scotland to be paying at least 15% more income tax actually everybody really believes it will be more like 25 or 30% more, what kind of an argument is that for the Scottish economy.
JON SOPEL: Iain Gray speaking a little earlier.
END OF INTERVIEW WITH IAIN GRAY
Please note BBC Politics Show must be credited if any part of these
transcripts are used.
NB:These transcripts were typed from a recording and not copied from original scripts.
Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for their accuracy.
Let us know what you think.
The Politics Show Sunday 26 October 2008 at 12:00 GMT on BBC One.
You can reach the programme by e-mail at the usual address or you can use the form below to e-mail the Politics Show.
You will be returned to the Politics Show website after submitting the form.
Disclaimer: The BBC may edit your comments and cannot guarantee that all emails will be published.