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The truths they don't want you to read....

Friday, June 27, 2008

Local Income Tax - the numbers

Whilst LIT is A Good Thing, I have always pointed out the incompleteness of the argument and how it was essential to understand the full funding picture before committing to supporting LIT.

Whilst many have hurled abuse at my numbers, no-one has questioned the accuracy of the detailed numbers I provided.

Now, almost a year later, others are starting to understand the implications.

But let's start with the nonsense, and get it out of the way.
Glasgow SNP MSP Bob Doris said the Labour council had shown that 72% of Glaswegians would be better off under the local income tax proposals.
Abolishing the Council Tax will result in 100% of the people benefiting, but is he seriously advocating that? The question is not about who pays, but how the shortfall is made up. The purblind lobby-fodder support a policy they do not understand whilst believing that the loss of money to Councils will somehow mysterious appear - without any political pain.

The simple equation - that seems to elude SNP MSPs - is that if Councils get around £2,500m from Council Tax to deliver services and Local Income Tax at 3p is going to yield £1,400m then where is the missing £1,100m going to come from?

Are you really better off if £1,100m less comes out of your left pocket whilst £1,100m extra comes out of your right pocket? Of course not.

The estimate of the LIT rate required for the Western Isles is 6.1p, which I think is probably around the mark, although my gut says it is possibly a little on the low side.

If the Government are really prepared to fully underwrite the shortfall, all I want to know is "Which services are going to be cut to pay for it?"


Anonymous said...

Numbers aside, will the administration of this tax be the remit of local authorities? If so, then in the case of the Western Isles we can expect a shambles greater than that of last year's elections and much worse than that. Do we really want the likes of CNES delving into our personal financial information? From first hand experience, if they can't organise a p*$$ up in a brewery,then why should they be allowed to find out what's in my piggy bank....and then steal it from me. And all for getting my bin emptied once a fortnight.

Anonymous said...

The Comhairle also deliver education and social work etc. you numpty!

Anonymous said...

Mad Biker says

So, apart from, emptying our bins (once a fortnight), Ppoviding Social Care and Education, what do the council do for us?

(Apologies to Monty Python and the Life of Brian) {:-)

On a more serious note, The Scottish Parliament has a tax vaying power of 3p in the £. Would the LIT be part of that and if so how do the SNP plan to fund the gap?

Anonymous said...

To 6.31am

How about from the £300 million being withheld by Westminster for starters? How about from the oil tax windfall currently being enjoyed by Broon and Darling for seconds? Away and fill yer own gap!

Anonymous said...

Mad Biker says

That's the whole point. The treasury are withholding some of the "pocket money" that they give Scotland, much in the same way a parent would withhold part of their child's allowance if it misbehaved.

The £300M is, I believe, for Housing Benefit, which is to help with the council tax. No Council Tax, no Housing Benefit. The logic is clear and brutal. The SNP should have thought this one through and got agreement with the Treasury before they started pushing ahead with it.

The same applies to the oil money. It's controlled by the treasury. The only way that Scotland will get it is when full independence is achieved.
Shetland and Orkney would (probably) vote against independence (on the basis that they distrust Westminster less than they distrust Edinburgh). If they did vote against it most of "Scotland's" oil would disappear.

All in all, it isn’t going to be released. TBH If I was in the Treasury, I would do the same.