Defiant Salmond ignores barrage of flak over tax

A BULLISH Alex Salmond swept aside the objections of business, councils, unions and a majority of MSPs in the Scottish Parliament yesterday when he declared that he would drive ahead with his controversial local income tax plans.

The bill to scrap the council tax and replace it with a nationally-set local income tax was one of 15 unveiled in a "programme for government" by the First Minister in the Scottish Parliament.

But in doing so, Mr Salmond was effectively ignoring the results of his own government's consultation process, which has already revealed massive and widespread opposition to the tax plans.

Business organisations, council leaders and trade unionists have warned that the tax would result in cuts in services and leave some wealthy people untaxed, while making Scotland the highest-taxed part of the United Kingdom.

In the parliament, opposition politicians have warned of a £1 billion black hole in the plans, which rely on £400 million coming from Westminster every year – money the UK Treasury has consistently refused to give.

The First Minister was unswerving in his conviction, however, that the local income tax was fairer than the council tax, and he challenged MSPs, warning them that "Scotland will judge harshly any MSP who votes to keep the council tax in the face of the overwhelming benefit that would flow to millions of Scots".

Mr Salmond claimed that about four in every five households would either be better off or no worse off financially under his local income tax.

The decision to press ahead with it was just one of a series of measures announced by Mr Salmond yesterday that will test the strength of his government over the course of the next year.

A Criminal Justice Bill will ban under-21s from buying alcohol from off-licences – a proposal that has aroused fierce criticism from the licensed trade and students.

In a Climate Change Bill, Mr Salmond said his government would reduce emissions by 80 per cent by 2050, a significantly higher target than the 60 per cent UK target, but his plans immediately ran into opposition from environmentalists, who claimed that he had failed to include annual targets and was not bringing aviation emissions under control.

There will also be moves to crack down on tobacco displays in shops, to stop rural schools from closure and a key budget bill, which will have to be passed by March next year for the Scottish Government to fund any of its other priorities.

But it was the Council Tax Abolition Bill that drew most attention, mainly because it has drawn so much criticism already. Mr Salmond said he would forge ahead, regardless of the criticism directed at it in the consultation process, because it would help thousands of ordinary Scots.

The bill will be published before the parliament rises next June and will have to become law by April 2010 for Mr Salmond to stand any chance of getting it up and running before the elections of May 2011.

The First Minister said: "Abolition of council tax will lift 85,000 individuals from poverty and save the average Scottish family between £350 and £535 a year."

Cathy Jamieson, the acting leader of the Scottish Labour Party, said: "We know that the reality is that the local income tax proposals will cause misery for people who rely on local services and cut the legs from local government, making Scotland the highest-taxed part of the UK."

She said Mr Salmond should "stop gambling with people's local services to save his own political skin".

Annabel Goldie, leader of the Scottish Conservatives, said local income tax had been "comprehensively rubbished and ridiculed" in the consultation process, and asked Mr Salmond how he could possibly pursue it after that.

The First Minister responded by claiming that, in every test of public opinion, local income tax had been more popular than the council tax.

Scottish ministers will now enter into discussions with the Liberal Democrats to see if a deal can be reached. The Lib Dems also favour a local income tax but want councils to be able to set their own rates, rather than having them set centrally.

If the SNP government agrees to meet the Lib Dem demands, then the two parties will probably be able to forge a deal, but they would still not have enough votes to carry the parliament. For that, ministers will have to win over the Greens, who have opposed a local income tax but might be willing to compromise if ministers toughen up the Climate Change Bill.

There was some confusion over the Lib Dem position last night, however, when Ed Davey, the foreign affairs spokesman, suggested it might be hard to introduce local income tax in just one part of the UK.

This runs counter to the view of Tavish Scott, the party leader, who has insisted he wants to see a local income tax if possible.

Of the 15 bills unveiled yesterday, one on flood risk management was carried over from last year's programme. One other bill that was lost last year, to set up the Creative Scotland arts agency, is to be resurrected, but only as part of another bill on public service reform.