City business leaders hail U-turn on local income tax

CITY business leaders today welcomed the Scottish Government's U-turn on its plans for a local income tax.

Edinburgh Chamber of Commerce hailed the announcement by Finance Secretary John Swinney that the SNP has ditched its plans to scrap the council tax as a "decent and sensible" move.

Chamber chief executive Ron Hewitt said: "John Swinney is to be congratulated for taking a pragmatic approach. As he is well aware, this proposal has had the strongest possible opposition from the business community.

"Given the difficulties facing so many businesses through the economic downturn, it was just the wrong time to add to the costs of local authority ratings. By kicking the proposal into the long grass until after the next election Mr Swinney is taking the decent and sensible route of letting the electorate reconsider the matter."

Scrapping the council tax in favour of a local income tax (LIT) was a key pledge in the manifesto on which the SNP won the 2007 Holyrood election.

Mr Swinney told MSPs yesterday afternoon it had become clear the SNP could not put together a majority to get the necessary legislation through parliament. But he insisted the SNP would fight the next Holyrood elections in 2011 campaigning once more for a local income tax.

City council leader Jenny Dawe said she and her fellow Liberal Democrats believed a "true" local income tax was fairer than the council tax. "However, the SNP version was not truly local, in that it was to be set centrally initially. Given the difficulty the SNP would have had in getting this through, it is probably sensible not to take up parliamentary time," she said.

Scottish Labour leader Iain Gray said: "The SNP Government wasted two years promoting an unworkable tax that would have simultaneously damaged services and made Scotland the highest taxed part of the UK."

Scottish Tory lead Annabel Goldie said: "If the SNP had really believed in this policy it would have fought for it tooth and nail."

But Lothians SNP MSP Shirley-Anne Somerville claimed an "unholy alliance" of Labour and the Tories had conspired to keep council tax. She said: "We will take the case for fair local tax to the people in 2011."