Tax U-Turn Will Raise Hackles at Grassroots Level

Article excerpt

Byline: CHRIS DEERIN

THE Liberal Democrats signalled a retreat yesterday from plans to increase income tax in the new Scottish parliament.

Treasury spokesman Malcolm Bruce indicated that the party's long held policy of adding 1p to the basic rate of income tax to increase spending on education would be scrapped.

The U-turn, which will anger many grassroots supporters, is a conscious effort by the party to win credibility for its economic policy.

At the party's Scottish conference in Inverness yesterday, Liberal leaders also mounted an attempt to win greater backing from the business community.

In an echo of Labour's pre-election moves to steal business support from the Tories, it was claimed the Liberals were 'the party of enterprise'.

Party leaders hope to exploit the collapse of the Conservatives in Scotland, as well as distancing themselves from their reputation as a 'tax-raising' party.

Speaking at a policy discussion yesterday, Mr Bruce said: 'It seems to me we should take as a proposition that although we fought for tax varying powers and we would be prepared to use them, we should make it clear we have no intention of putting up taxes before we have had a thorough review of patterns of expenditure in Scotland.' The devolved parliament will have the power to raise the basic rate of income tax by 3p. …