Salmond tax 'might be scuppered' by benefit shortfall

11/09/2008

First minister Alex Salmond's plan to scrap council tax in Scotland is meeting with strong resistance from the UK government, insiders have said.

Even supporters of the plan have admitted that the reform would mean that £800 million less is raised from the tax - which replaces the council charge with an extra 3 per cent on income tax.

Mr Salmond has said that £400 million of this total would be raised through "efficiency savings", while the remaining £400 million would come from Westminster, in money previously paid to Scotland to cover council tax benefit.

Speaking to the MJ, an anonymous insider at the Scottish Executive commented: "The extent of the possible benefit income shortfall could scupper any local income tax."

Despite claims that the average Scottish family would be saved up to £535 per year, the plan has also been strongly criticised by Labour for adding to the tax burden for others.

Young professionals living in a shared house, for example, are likely to see steep tax increases.

Tags; Current UK Economy, Recent Graduate Debt,

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