Page last updated at 14:44 GMT, Thursday, 25 September 2008 15:44 UK

Calls to ditch local income tax

Scottish Labour leader Iain Gray
Iain Gray quizzed the first minister on his tax plans

Holyrood ministers should dump their local income tax plans to help make the case for the headquarters of HBOS to be kept in Scotland, Labour has said.

Scottish Labour leader Iain Gray made the demand amid the take over bid for the bank, by Lloyds TSB.

Speaking during question time in parliament, First Minister Alex Salmond said most would benefit from scrapping council tax.

Scottish Lib Dem leader Tavish Scott urged Mr Salmond to cut tax.

And the Tories urged him to ditch single seller surveys, due to come into force in December, to save the under-threat property market.

People don't understand why government won't tighten their spending belt
Tavish Scott
Scottish Liberal Democrat leader

Mr Gray said Scotland had to be as attractive as possible to ensure HBOS headquarters functions remained there.

"There is a consensus that his Scottish national income tax plan will do the opposite," he said.

"Will the first minister strengthen Scotland's case for the HBOS HQ right here, right now, by committing today to ditch his damaging local income tax plans?"

Mr Salmond said plans for the 3p local tax would benefit the "vast majority" of financial sector workers.

"Iain Gray should join the consensus of the Scottish people, who think that the days of the council tax should be over and local income tax should come in," he added.

Mr Scott again called on the Scottish Government to support a 2p income tax cut, to help families being hit by the credit crunch.

"Families and individuals face big challenges now and through this winter," he said.

"People don't understand why government won't tighten their spending belt, when families have to every day."

'Fragile market'

Mr Salmond said the tax cut would cost 800m and help was already being offered, adding: "We have of course frozen the council tax in Scotland to help people with their household bills, and we have substantially reduced the business rates burden to help employment and the economy."

Conservative leader Annabel Goldie said home reports could "destroy our already fragile Scottish property market" and called on them to be at least postponed.

"The housing industry is crying out for help, house owners are desperate and what they need is help, certainly not the hindrance of a costly and unwanted home report," she said.

"Why at this critical time is the first minister insisting on saddling every house seller in Scotland with a levy of more than 800?"

Mr Salmond argued the new home reports would help buyers, adding: "There are no shortage of sellers of houses at the present moment.

There is a distinct shortage of buyers of houses, not because of wish, but because of the availability of mortgages."


SEE ALSO
Scots economy 'grinding to halt'
25 Sep 08 |  Scotland
Salmond spiv attack 'exaggerated'
24 Sep 08 |  Scotland

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