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Analysis: LIT could be the biggest gamble yet



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Published Date: 04 September 2008
WHEN a government brings forward a piece of legislation, particularly a flagship bill, the public has the right to expect that ministers want to carry that through to the statute book.
But there was a theory gaining ground at Holyrood last night – strongly denied by the Nationalists – that the First Minister would prefer to see his local income tax proposals fall.

If that was to happen, he could go into the next election blaming
his political opponents for the continuation of the council tax and reap the rewards at the ballot box.

This theory relies on either the Scottish Government failing to reach agreement with the Liberal Democrats or failing to bring the Greens on board.

The opposite theory is that Mr Salmond and the Nationalists actually believe the local income tax will work and be popular with the Scottish people.

Either way, what is clear is that, by deciding to introduce legislation on this issue, the Scottish Government is facing its most difficult parliamentary test since taking office last May.

The local income tax plans have been pilloried inside Holyrood and castigated outside.

The Scottish Government held a consultation process which managed to bring together a range of disparate groups into one coherent body of opinion, which was against the local income tax.

By pushing ahead with his plans, Mr Salmond is striking a very dangerous balance. He is gambling that support for local income tax in the country as a whole outweighs the formal opposition to the plans from "civic Scotland", as evidenced by the consultation process.

However, in doing so, Mr Salmond is risking the wrath of a swathe of different groups, from business to unions, none of which he can afford to lose.

The SNP came to power last May after a six-year campaign to woo business leaders and opinion formers.

The Nationalists managed to persuade some very influential people that they could be trusted in government. If Mr Salmond ostracises the very people he took so long to cultivate by pursuing this one controversial policy against their advice, he could end up losing the election too.

And, as he well knows, credibility in politics is everything.

The other big problem for the SNP government is the disputed £400 million in annual council tax benefit payments.

The Scottish Government claims these should continue to come to Scotland, even if council tax is abolished. However, the UK Treasury says no.

Bruce Crawford, the SNP's business manager, said yesterday he was confident the Scottish Government would get this money.

But his only hope for securing it appears to be the election of a Tory government at Westminster in 2010 and a sizeable and influential SNP group at Westminster to lobby the case.

Without that, or the £400 million, the local income tax policy will be dead.

The First Minister is used to taking gambles – it is how he conducts much of his politics, but this is high-risk stuff.

Would it really have been so bad to take on board the criticism from the consultation paper and back down, blaming Treasury intransigence for the policy's failure?

That way, the Scottish Government could have escaped a mess it will now be tangled in for the next three years at least and which could overshadow everything it is trying to do, including its referendum on independence.



The full article contains 565 words and appears in The Scotsman newspaper.
Page 1 of 1

 
1

danielrober,

04/09/2008 00:27:07
Political gambling, arguing and puritan drinking laws. Oh dear - so much effort wasted.
2

Daily user,

Queensferry 04/09/2008 00:32:29
"But there was a theory gaining ground at Holyrood last night – strongly denied by the Nationalists – that the First Minister would prefer to see his local income tax proposals fall".

How about some sources? Or, is this merely a journalistic theory to create yet another non-story in the Unionist rag ill named 'The Scotsman'?
3

Tynietiger,

04/09/2008 00:58:48
The £400 million belongs to Scotland and should be treated like any other benefit.

The fact that so much Council Tax benefit has to be paid shows how unfair the current system is.
4

Royster,

04/09/2008 05:32:14
#3. No it belongs to the UK, of which Scotland is a part. Scotland can get the money by keeping a UK wide tax. If it invents its own tax, how can it get a rebate?
5

Rev. S. Campbell,

Bath 04/09/2008 07:50:42
It has been clearly established that it's part of the Scottish block grant, and any legal challenge will see Labour's opposition crushed. Simple as that.
6

BIG EYE,

Paisley 04/09/2008 07:58:08
Dear oh Dear. Unionists in a corner.

Back LIT and it becomes obvious yet again that all the scaremongering is lies as it proves much more popular than the dicredited and unfair council tax.

OR

Vote it down and face the SNP at the polls urging Scots to give them a MAJORITY government through the ballot box.

CATCH 22 anybody!
7

BIG EYE,

Paisley 04/09/2008 08:01:19
Amazed at all the countries who have overcome all these LIT problems and operate a local income tax system.

Even more amazed that unionists believe we don't have the intellect and organisational abilities to do the same.

These unionists just make me laugh these days!

8

Chewbanana,

Edinburgh 04/09/2008 08:30:22
At least its exciting, entertaining politics whether you agree with LIT or not. Big Eck and the gang heading towards a right rumble with Civic Scotland, The Opposition and Gordie Broon! Turf wars, brilliant!

Small point, it would be nice if the guy tasked with holding the jaekits on this one might be inspired to feed the rest of us the humble unwashed a few scraps of information on the facts and how LIT would be collected, administered, etc. After all the sound bites from the different tribes yesterday I had that sinking feeling rather like the European single currency debate that I was about to witness a stoatter of a stramash but would be left even more confused every time a so called expert opined!

Let us all play, chose a side, grab a weapon of choice!
9

donald,

glasgow 04/09/2008 10:20:22
It really has Hamish frightened. Will he have to pay more out of his Nortbritishperson salary?
10

The Federalist (the poster formerly know as NAUON),

04/09/2008 11:18:05
#2 Of course he wants them to fall - it will give him an excuse to attack the opposition and Westminster.
11

Stephen Cowley,

Edinburgh 04/09/2008 12:56:53
HM:
"The Nationalists managed to persuade some very influential people that they could be trusted in government. "

That's right - they're called the electorate!

Enough of this behind the scenes baloney. We have a parliament now.
12

Weegiewarbler,

Still Sailing 04/09/2008 14:00:39
Interesting article indeed.

Ignoring the supposition of the newspaper which appears to have an anti government slant.

The question which should be asked - but apparently isn't !!!
Why the opposition to what is after all a fair system.

Direct taxation is far superior to indirect.
Taxation at source is more efficient to administer.
Taxation by ability to pay is the fairest method.

Again - why the opposition?

Suggested reasons for the opposition.

Separate (and fairer) taxation in Scotland will create inequality in taxation systems between it and the remainder of Britain - we hesitate to say the UK as it may effectively (in a historical sense) end that also.

It would appear the opposition comes from two places - and is easily viewed by following the money or highlighting vested interest in keeping the UK.

Following the money - those that have it generally do not want to "give it away" and will fight to retain it. They are also among the most highly paid (top 20%?) and sit on various boards that have declared opposition.......
Interestingly the party in charge of government are also likely in this group - well done for proposing a hit to their own paychecks. The opposition, well, track history anyone?

Possibly shoddy journalism to not investigate and declare this either way.

As to the end of the union - it was actually legislated into the Scotland Act - seems no one looked at it properly - by having separate tax raising powers in Scotland.

In other countries how it works -
If you work OR live in the country, you are subject to the tax of the country - you may be able to claim a refund from the exchequer for taxes paid to another country.

Live in England, Work in Scotland - you will likely pay LIT - after all it was EARNED in Scotland.
So you pay both LIT and Council Tax. You will probably need to file a refund request with the English exchequer (there also might just need to be a Scottish exchequer to administer tax....) for you
13

Alex Salmond's Briefcase Carrier,

@dictation 04/09/2008 18:44:27
The boss says is a win-win situation, if it pass we win because the electors will be happy with us, if it doesn't we win because the electors will be very un-happy with the others.

We are not interested to lose, but is true that the loss will benefit us too.

And better else, IS ALL BROWN FAULT!
14

BobM,

Edinburgh 05/09/2008 00:06:35
The SNP says that a local income tax would be more fair than council tax because it would be based on ability to pay. But those who can pay more generally live in more expensive houses and the top rate of council tax is already 3 times the lowest! You might say that not a lot of people seem to know that, but really our leaders should push the numbers and not just pontificate.

 

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