SNP Local Income Tax plans now in tatters

For immediate release 20 November 2010

Following the revelation that Scottish Ministers have unilaterally let the Parliament's tax-varying powers lapse and kept this information from Parliament, it now appears that the SNP's local income tax proposals have been affected too. The ability of HMRC to distinguish Scottish taxpayers is a key part of the now-lapsed mechanism, and that same ability is clearly essential to the SNP's local income tax plans. This means not only that the legislation they abandoned this session would have taken nearly three more years to implement, but also that any manifesto proposal by the SNP to revive these plans could now not be implemented before 2013 at the earliest.

The Scottish Green MSPs have backed a call for an emergency statement by Scottish Ministers to explain their decision to hand back powers to London, powers which were democratically approved by Scottish voters. In particular, John Swinney has twice this week failed to give Parliament accurate information about the status of these powers. These statements may have breached the Ministerial Code of Conduct, which states that "Ministers who knowingly mislead the Parliament will be expected to offer their resignation to the First Minister".

In a September poll commissioned by the BBC, 55% of the Scottish people backed the use of tax-varying powers with just 32% opposed.

Patrick Harvie MSP said:

"No previous Scottish administration has unravelled as spectacularly as the SNP have this week. First, they let Parliament's primary tax-raising power lapse, a power the public overwhelmingly backed in a referendum. Then it turns out they've effectively prevented the next Scottish Government from using that power for three years, just as the devolved budget is under the most stress ever.

"Next it becomes clear that the same power would have been essential to the operation of their now-abandoned Local Income Tax, and that even if Alex Salmond is re-elected in May he will be impotent to deliver it until 2013. This is a muddle of incompetence and counter-productive short term thinking, and means the SNP have undermined their own arguments for more powers while leaving themselves without a credible way to limit the impact of Tory cuts on Scotland.

"They have dismissed concerns about the rights of every Scottish voter who believes we should look at ways to raise revenue rather than simply handing on those cuts, and made decisions in private which have undermined the next Parliament's freedom of movement. Most seriously, they have spent three years hiding this information from Parliament, and when they were found out Salmond's only response was bluster and finger-pointing.

"John Swinney failed twice this week to tell Parliament the truth, the whole truth and nothing but the truth when I asked him about the use of these powers. An emergency statement from the SNP is now essential, and unless they have some very good explanation for this fiasco, then Ministerial resignations cannot be ruled out."

On two occasions this week the Cabinet Secretary dishonestly failed to disclose that the SNP administration have let the tax-varying powers lapse. On Wednesday, during the Budget debate, he said in response to a question from Patrick Harvie MSP:
"I do not think that there is a compelling argument in favour of using the tax-varying powers at this time."

During Ministerial Question Time on Thursday, he stated only that:
"it would, in our judgment, be inappropriate for the Government to recommend using the Scottish variable rate"

The Ministerial Code states that:
"It is of paramount importance that Ministers give accurate and truthful information to the Parliament, correcting any inadvertent error at the earliest opportunity. Ministers who knowingly mislead the Parliament will be expected to offer their resignation to the First Minister."