Magazine article Public Finance

Scots LibDems Outline Local Income Tax Plans

Magazine article Public Finance

Scots LibDems Outline Local Income Tax Plans

Article excerpt

The future of local government finance moved up the election agenda in Scotland this week as the Liberal Democrats announced their plans for a local income tax.

According to the party, which shared power with Labour in the outgoing Holyrood administration, the average tax rate would be 3.625%.

The calculation is based on financial modelling carried out by the Butt review committee and updated by recent work by the Institute for Fiscal Studies.

The Scottish LibDems said the rate would be set locally within a range of 3.5%-3.75%. This compares with the Scottish National Party's local income tax proposals which would set a national level of 3%.

LibDem finance spokesman George Lyon stressed that his party's proposals were fair, fully costed and would benefit 70% of households.

Based on the ability to pay, the average family would be £439 better off, and half a million pensioners would pay nothing, he claimed. Young people starting in careers or setting up a business would also benefit.

Lyon added: 'Labour's [council tax] rebanding proposal would result in over half of households paying more. …

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