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Scotland Council Tax Freeze £427m Lost Tax

Wednesday, December 16, 2015

GMB Scotland Say That Budget Continues Erosion Of Scotland’s Tax Base With Services To Less Fortunate Under Threat

Compensation for council tax freeze costs £427m per year and perpetuates a "Rob Peter to pay Paul" for funding Scottish councils and should be replaced with fair taxes to pay for services says GMB Scotland.

GMB Scotland commented on the budget statement from the Scottish Government delivered on 16th December 2015. See notes to editors for copy of report in Press Association.

Alex Mc Luckie, Regional officer GMB Scotland, said “GMB Scotland find this Budget predictable. It is the same recipe as previous budgets which have seen local government take the brunt of the cuts to budgets.  Yet again services to the less fortunate within society will be under real threat.  Despite the statement from the Scottish Government about health, education and social work being protected every area will be affected by this budget.

Whether the is the loss of school support staff, the privatisation of homecare services, the closure of wards in the NHS everyone in Scotland will feel the impact of the decision taken by the Scottish Government today.

Yet the opportunity to set a very different budget today one that saw the Scottish Government using revenue raising powers to increase investment in public services has been missed. The Government has failed to be bold so as to grasp that opportunity.

One good example of this is the decision to continue with the eight year freeze of the council tax.   If council tax had kept pace with inflation Scottish councils would be raising an additional £427m in 2016/17. There would be no need to raid Scottish Government central funds to compensate for these lost taxes thus increasing to amount available for the block grants to councils by £427m.

Freezing council tax is eroding Scotland's tax base. The compensation mechanism perpetuates a "Rob Peter to pay Paul" approach to funding Scotland's councils and should stop.

One penny on income tax in Scotland could raise an additional £514m per annum.

GMB Scotland will work to build a consensus for a tax base to be broadened in a fair way to pay for essential public services."

End

Contact: Alex Mc Luckie 07885 348269 or Benny Rankin, GMB Scotland Regional Officer on 07912 560808 or 0141 332 8641 or GMB press office 07921 289880.

Notes to editors

Copy of report on Press Association

Scottish rate of income tax being set at 10p UK level, John Swinney tells MSPs

16 Dec 2015 - 15:06

By Katrine Bussey, Political Editor, Press Association Scotland

Scots will continue to pay the same rate of income tax as the rest of the UK when Holyrood gets new powers over the levy in April.

Deputy First Minister John Swinney announced the Scottish rate of income tax will be set at 10p, meaning tax rates will stay the same as they currently are.

For the first time, the budget for 2016-17 requires ministers at Holyrood to play a part in setting income tax levels, a change which has been brought in as part of the Scotland Act of 2012.

The new Scottish rate of income tax comes into effect on April 6 and will be paid by UK taxpayers who live in Scotland, regardless of where they work.

Income tax will be reduced by 10p in the pound for Scottish taxpayers but they will then have to pay a new Scottish rate.

Mr Swinney said the powers - which will be superseded in 2017 by proposals in the latest Scotland Bill - did not allow him to tailor the tax system to help lower income Scots.

He then told MSPs: "There will be no change in the income tax rate next year.

"I propose that the Scottish rate of income tax will be set at 10p in the pound. The rate people pay next year will be the same rate they paid this year."

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