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Home arrow Holyrood news arrow News categories arrow Business, Industry & Economy (HCL04) arrow Council tax freeze good, local income tax bad, says CBI
Council tax freeze good, local income tax bad, says CBI Print E-mail
Tuesday, 11 March 2008

CBI Scotland has welcomed the SNP Government’s decision to freeze council tax but simultaneously warned that any attempt to introduce a local income tax will damage Scotland’s reputation as a good place to do business. 

The director of CBI Scotland, Iain McMillan, made the comments ahead of the Government’s launch of its consultation on the replacement of the council tax with a local income tax, an idea that has the provisional support of the Lib Dems.

McMillan said:

“I warmly welcome the Scottish Government’s decision to freeze the council tax over the course of the next few years.  When introduced, the council tax did not attract the current levels of criticism for being unfair because it was set originally at a fair and reasonable level.  Since its introduction, the council tax has been increased across Scotland at rates much higher than inflation and it is hardly surprising that public opposition to this tax has grown.  The Scottish Government’s decision to freeze the council tax for the next three years is the right policy response.

“But, the Scottish Government’s second phase of reform, replacing the council tax with a local income tax, is the wrong policy response.  I warned the SNP back in 1999 that their “Penny for Scotland” income tax policy would torpedo their “good ship enterprise” below the waterline and I am warning them, and the Scottish Liberal Democrats, today that their local income tax plans for Scotland will have exactly the same effect.  Higher levels of income tax in Scotland will send the wrong message to people in England and overseas about Scotland’s tax regime because Scotland’s effective basic and higher rates of tax will be the highest in the UK.”

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