ALEX Salmond's plans for a local income tax suffered a fresh blow yesterday when it emerged that a number of new organisations were opposed to the idea.
The First Minister has made the abolition of council tax and its replacement with a local income tax (LIT) a flagship policy for the SNP government.
But the plans have come in for intense criticism from business leaders, opposition politicians and
trade unions, with warnings the tax would deter business and lead to cuts in local services.
Yesterday, the Scottish Government published the results of an official consultation process, which showed that a number of new organisations, including the Ministry of Defence and Help the Aged, have now raised serious concerns about the tax.
Defence officials warned LIT would mean a massive escalation in costs for a range of different ranks, while Help the Aged said there was a real risk services for the elderly would be cut to pay for the new tax.
A total of 86 organisations responded to the consultation. Seventy of them simply studied the merits or drawbacks of each form of taxation, with some raising new criticisms that had not been made public before.
Only 16 gave direct responses to the new tax. Of these, ten favoured LIT and five supported the council tax.
John Swinney, the finance secretary, focused on 430 responses from individual members of the public who contributed to the consultation, a majority of whom backed LIT, rather than the organisations.
He said 55 per cent of those individuals thought LIT was the fairest form of tax. "The council tax has to go. The Scottish Parliament agrees and now this is welcome evidence that Scots up and down the country agree," he said.
Opposition parties, however, concentrated on the more critical responses from organisations. These included:
• Citizens Advice Scotland, which said some on low incomes would be worse off under LIT because they would not qualify for the same amount they received now in council tax benefit.
• The Chartered Institute of Public Finance and Accountability, which said LIT would have to be set at 4.5p in the pound, not 3p as the SNP wants, to maintain funding and service levels.
• CBI Scotland, which said there was not a "serious" assessment of the estimated costs to business of implementing the LIT.
• The Ministry of Defence said: "Privates in single living accommodation would see their charges rise from £33 a year to £600 under LIT, an increase of over 1,700 per cent. Experienced personnel would be hit hard, too. An army warrant officer could see their charge rise from £84 a year to £1,570 in LIT, an increase of over 1,700."
The Tories' Derek Brownlee said LIT was the SNP's "very own tartan tax bombshell", adding: "The more detail on local income tax people see, the less they like it. Real questions have been raised by groups across Scotland that we need answers to."
Labour's Andy Kerr said: "The SNP's new tax is an attack on jobs, which will drive high-earners out of Scotland and ensure we are unable to attract corporate headquarters."
The Liberal Democrats said the consultation process was flawed because it offered only the option of a nationally-set tax, rather than leaving it to councils to decide the rate. Jeremy Purvis, for the Lib Dems, said: "A local income tax that is genuinely local would be fairer."
BACKGROUNDMINISTERS were accused of deliberately burying "bad news" when they published the details of the local income tax consultation yesterday.
With politicians' eyes on the Chancellor's Pre-Budget Report, there were claims by opposition parties that the SNP government had deliberately put out the consultation on the same day to avoid forensic media scrutiny.
Andy Kerr, Labour's finance spokesman, said: "It just shows how much the SNP have to hide from their discredited policy to release the consultation in such a manner. (It] shows their lack of confidence in their own policy."
Derek Brownlee, for the Conservatives, said: "It's not clear if Alex Salmond thinks that today is a good day to 'bury bad news' or if he feels the need to compete with Gordon Brown with his very own tax con."
