Latest news from Scotland on attempts to abolish council tax and replace it with a local income tax:
Talks between the SNP and the Scottish Liberal Democrats over plans to replace the council tax in Scotland have broken up without immediate agreement.
But the Finance Secretary John Swinney and his Lib Dem counterpart, Tavish Scott, agreed to hold further talks.
The government will set out its ideas on the issue in a consultation paper to be published on Tuesday afternoon.
It favours a 3p income tax rate for all councils, but the Lib Dems want the levy to be set locally.
In principle, both parties agree that change is necessary and both believe a local income tax is the favoured option.
The talks, which took place on Monday evening and lasted 45 minutes, were described as “constructive”.
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11 Comments
yay, happy times for Scotland
I wish we’d get the terminology right: the SNP do not believe in local income tax, but instead in a nationally set 3p income tax levy for use by local council. The Lib Dems, in contrast, DO believe in local income tax, set by councils. I don’t think there’s any Lib Dem in Scotland who could accept the Nats’ plans as they are, as they would remove any local accountability for spending.
What a travesty for hard working families desperate for a foot on the housing ladder. This will add £20k to the price of an average home and be a double whammy for Scotland’s young workers. So much for our policy of switching tax off jobs! Can Vince have a word with them please?
We in the Scottish Party make our own policy on devolved matters so not only is asking Vince to have a word with “them” patronising and offensive it is also outwith his remit.
By which New Labour calculator have you come up with your spurious allegation that it will add £20k to the price of a house and please justify why you are deluded enough to believe that it will be a “double whammy” for Scotland’s young workers.
Total nonsense from Andrew Duffield.
I doubt he’s a member somehow, as this sort of comment would be expected from NuLabCon astroturfers, but not from a LibDem.
More revealing is the centralist approach taken by the SNP who want to deny Councils financial autonomy by setting a cap on LIT rates.
Just a shame that LVT isn’t yet our policy…
When Thatcher replaced domestic rates with the poll tax it led to a once off rise in house prices of around £8k (source: Lib Dem economist Tim Leunig on this site). Tim has further acknowledged that scrapping council tax without replacing it with a fair property tax would raise prices by around £15k. I believe £20k is more likely.
The point is that untaxing something WILL cause the price to rise. This is an economic fact which consistently eludes well-meaning party members north and south of the border. The clear double whammy for young workers is that not only will a home become less affordable for them, but their productive contribution to the Scottish economy will be even more heavily taxed as well.
Just as we have Lisbon Treaty rebels (a healthy thing according to another of today’s posts), so we have LIT rebels like me who hold to the long-established Liberal priciple that we should tax resouce use rather than labour or capital (see the “Fairer, Simpler, Greener” tax paper). LIT continues to be a pig in a poke and should be ditched.
That said, I unreservedly apologise for the offence caused by suggesting that Vince Cable might be able to offer some words of wisdom to my esteemed Scottish colleagues who are of course fully entitled to press ahead with unsustainable and economically damaging economics, as is their devolved right.
“The point is that untaxing something WILL cause the price to rise.”
I am a LVT fan but I’m intregued by your 15k price rise statements – I am admittadely only a starter economist but…
I can’t see how the council tax would affect house prices – do people really think about council tax bands when they buy? And wouldn’t the fact that the richer people were being taxed more fairly mean that they had less money to spend on houses (err, supply side, or something.) Apologies – i’m just a starter economist.
Regular readers can scarcely fail to appreciate that Andrew Duffield believes LVT to be a cure for cancer, the solution to the Arab-Israeli conflict and the source of world peace and harmony.
Andrew and his colleagues have singularly failed, however, to pursuade Vince Cable or successive tax commissions that LVT is the right answer for domestic local taxation.
It is therefore a little perplexing that he would like Vince to dissuade our Scottish colleagues from backing LIT, which is our (Federal) party policy, in favour of LVT, which isn’t.
Dominic – I don’t think I’ve ever listed curing cancer as a benefit of an equitable and sustainable tax regime, although I’m sure it would have a role in helping solve the other 2 you list. I’ve never claimed LVT as a panacea. It is however, as many more illustrious commentators than me have espoused, “the best tax we’ve never had.”
The Liberal answer for domestic local taxation is of course “choice in revenue raising” which remains (Federal) party policy though unfortunately we still totally lack any choice. I’d happily settle for LVT as a variable option for local authorities alongside taxes on people, productivity and profits. Best practice would do the rest – as already evidenced by the 2 rate “Smart Tax” in Philidelphia.
It is certainly easier for me and my ALTER colleagues to point out the shortcomings of our current policy from the relative comfort of the sidelines than it must be for our more enlightened Parliamentarians. However, Vince and Nick have both just agreed to be Vice Presidents of ALTER – so you may like to “watch this space”, as they say.
After many years supporting Liberals I have taken decision that should this idiotic idea of a Local Income Tax be passed by this SNP party I will be voting Tory.
Rgds William Brown