Page last updated at 15:08 GMT, Monday, 24 November 2008

'Majority' backing for local tax

Council tax letter
Ministers said it was time to ditch council tax

"A majority of Scots" back plans to replace council tax with a local income tax, Scottish ministers have said.

The claim was made after the Scottish Government said 55% of people who responded to a consultation believed a local income tax was the fairest tax.

But its own analysis warned that, on the basis of 516 responses, no overall conclusions about the popularity of the policy could be drawn.

Holyrood ministers have said the council tax is unfair.

They have said their 3p-in-the-pound local income tax was a better option because it was based on ability to pay.

The plan, which still lacks enough party support to be passed by the Scottish Parliament, was last week criticised by business leaders at the Scottish Chambers of Commerce - who said the impact of such a tax would be "spine-chilling".

Abolishing the council tax in favour of a fair, 3p local income tax will be the biggest tax cut in a generation
John Swinney
Finance Secretary

According to the Scottish Government's consultation exercise, 25% of respondents were in favour of council tax.

Finance Secretary John Swinney used the results to urge all MSPs to scrap council tax.

"Abolishing the discredited and unpopular council tax in favour of a fair, 3p local income tax will be the biggest tax cut in a generation and put money in people's pockets," he said.

"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."

The Scottish Government's published analysis of the consultation said there had been 430 responses from individuals and 86 from organisations.

It also warned: "Given the primarily self-selecting nature of any consultation exercise, it should be noted that the statistics quoted in this report cannot be extrapolated to a wider population outwith the consultation population."

Labour and the Tories questioned whether the Scottish Government had chosen to "sneak out" the results of the consultation on the same day that Chancellor Alistair Darling was unveiling his pre-Budget report.

'Flawed' consultation

Labour's Andy Kerr said: "This was one of the worst consultations undertaken.

"It was quite frankly designed not to embarrass the government. Due to the lack of detail, most organisations could not even comment on most of the questions."

Derek Brownlee, the Conservative finance spokesman, said groups, including the Federation of Small Businesses and Held the Aged, had raised "real questions" which needed answers.

Liberal Democrat finance spokesman Jeremy Purvis - whose party supports scrapping council tax - said the consultation was flawed.

"Many respondents agreed with the Liberal Democrats that students and pensioners should be protected," he claimed.

"Many also agreed that unearned income, such as significant interest on dividends, should also be subject to new local taxation."

Holyrood ministers, who have already agreed a council tax freeze with local authorities, plan to bring forward a bill in the current parliamentary year to abolish the tax.

The government said it was currently looking into concerns about full-time students, second homeowners and how local income tax might apply to people whose income comes from share dividends.

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