Sturgeon defends Scottish government’s controversial changes to its policy
Local income tax U-turn would ‘still leave OAPs better off’
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Controversy over the Scottish Government’s local income tax plans continued last night as ministers claimed a proposed U-turn would still leave pensioners better off.
It emerged at the weekend that the government was considering allowing councils to set their own rate as long as it did not exceed 3p in the pound.
This is seen as a move to win the support of the Liberal Democrats because without them the tax has no chance of success in the Scottish Parliament.
Another change being considered is exempting students in the same fashion as the existing council tax.
Deputy First Minister Nicola Sturgeon defended the government’s changes in an interview yesterday.
She said: “I think it’s right that any government – particularly, possibly, a minority government – listens to what’s said in consultations.
“That’s what this government is doing. I think it’s right, it’s responsible and I think it’s what people would expect.”
Ms Sturgeon said pensioners were punished by the council tax because it did not take into account an individual’s ability to pay.
“The vast majority of pensioners, the overwhelming majority, would be better off under local income tax,” she said.
“We are looking at whether it’s fair to tax dividends.
“I think what matters to pensioners is we are absolutely clear that savings will not be taxed, but there is absolutely no doubt that the vast majority of pensioners will be far better off under local income tax that under the unfair, regressive council tax.”
Labour finance spokesman Andy Kerr said the government’s tax plans were in disarray and the policy and uncertainty around it was damaging economic confidence.
“The only way for the Nationalists to get this half-baked plan through the parliament is to enter into a pact with the Lib Dems that would not only make Scotland the highest-taxed part of the UK but also introduce a system with 32 rates of tax that would be a bureaucratic nightmare for both business and employees,” he said.
“The Scottish Government should be doing everything it can to protect jobs. Instead they are driving business away.”
Lib Dem finance spokesman Jeremy Purvis MSP wrote to Scottish Labour leader Iain Gray demanding Labour come forward with proposals to reform or replace the council tax.
“Your party has been vociferous in your opposition to the Lib Dem policy of a local income tax based on ability to pay, but has been less than forthcoming about how you plan to tackle the gross inequities of the current council tax system, which sees the poorest 10% pay over four times more of their income in council tax than the richest 10%,” he wrote.
“I hope you will agree that the time your party spends denigrating the Lib Dems’ constructive local income tax proposals could more usefully be spent working on your own plans to reform or replace the regressive council tax.”
