Thursday, 4 September 2008

Local Income Tax and the Scotsman

I'm surprised to be honest that the Scotsman can only find gripes from 25 people about LIT. As any Tax system that you'd want to introduce is far from perfect and what we must strive for is the best possible, fairest and most comprehensively inclusive system that we can. Some of the Nats Jeff and Richard Thompson have given some pretty clear rebuttal on most of the points so I'll not haver on to much. Some I don't agree with 100% and I may get around to some of them later, but by and large many of the gripes can be applied to more or less any change in the tax system, a few are specific to LIT but are things that can be ironed out if looked at properly.

However, Jeff makes one claringly obvious Nat mistake by dismissing article 9 of European charter of local self-government too glibbly. Councils have the right to raise the large part of their own finances, therefore the Scottish plan for LIT is not all fine and dandy. The EU covers all manner of styles and divisions of Government Federal systems to countries like Luxembourg small enough to have all government controlled at one level. But each branch, level etc have their own responsibilities for the money they collect at whatever level but only two National and the local level are presumed to have direct responsibility in every nation.

The Nats are currently proposing a local authority tax raising power. They are centralising one of the fundamental powers of you local authorities. If even Sarah Palin can claim to have power of the budget of 7000 inhabitants of Wallisa surely you local councillors have the same right, whether they are Lib Dems, Tory, Labour, Nats or whomever. They have to spend to meet local requirements and Holyrood is not going to be able to know the minutiae of every plan, need or emergency that may arise when the rate needs to be set for the forthcoming year. And yeah if the council get it wrong you can vote them out, not everyone in Scotland can do the same for the Finance or Local Government minister at Holyrood.


  1. "Jeff makes one claringly obvious Nat mistake by dismissing article 9 of European charter of local self-government too glibbly. "

    I'll be honest, I've never heard of article 9 before today but I wouldn't say I dismissed it glibly at all.

    Infact, my saying "so be it" in my own post meant that if the SNP's plans fall foul of the EU law/directive/whatever then there'll be no option but to go for the Lib Dem plan.

    I suspect, with cross party support required, the SNP would have had to go for the genuinely local option anyway, EU rules or no EU rules.

  2. To be fair Jeff you post does accuse the EU of illegality if any existed. If I missed any more subtle inflection I'm sorry but I was rushing to do two posts over lunch.

    Although I have to say that as my real speciality in my degree was Europe I'm a bit of a nerd when it comes that economics in relation to the EU.

    Although to be honest I think the issue of who sets the rate is the biggest obstacle to getting Lib Dem support on this issue as was apparent on Newsnight Scotland last night. As I said most of the other counter-arguments you put across I'm largely in agreement with.

  3. Hi Stephen,

    What I wrote was:

    "I guess it would be the EU that would be more at fault than LIT if there was some sort of supposed illegality at play"

    So yes, you read it wrong. I wouldn't say it was "subtle inflection", you just read it wrong.

    The "illegality" would of course lie at the door of the SNP's LIT plans but the fault of that illegality, I would argue, is with the EU.

    That said, you don't get to cherry-pick which rules apply and which don't so, again, the SNP approach would have to be "so be it" and the Lib Dem version of LIT would probably go forward.

    Maybe you should just do one post at lunchtime to avoid future sloppiness... ;)

  4. Eek next you be getting me to take another sabatical ;)

  5. How does Ireland get round this then?

  6. Sorry Indy which Ireland are you asking me about.

    In the North they still have Rates set by the local authority.

    In the republic there is still commercial rates in operation. Water charges and waste taxes are also paid locally and the Motor fund does some into local authority coffers on distrubution. However, since local taxation on individuals was scraped before Article 9 came into being I take it they fall outwith this stipulation as a smaller country with at the time only one level of taxation.

  7. Stephen

    I posted a reply - on similar lines - at Jeff's original post, before I was aware of your post. It replicates some of the points and makes one or two others.