LABOUR’S TAX BILL CRANKS UP £500 MORE WITH SON-OF-COUNCIL-TAX

For Immediate Release - Sunday 7 November 2010



Attn: NEWSDESKS


POLITICAL CORRESPONDENTS



OVER 64% OF HOMES IN GLASGOW FACE HIGHER BILLS




LABOUR SPOKESPERSON DESCRIBES IT AS “DESIRABLE”



The SNP has warned that Labour’s plans for a new property tax – on top of their plan to increase the council tax – would leave families facing a bill of up to £500 more than they pay now and over 64% of properties in Glasgow would move up a band just like those Wales’ largest city Cardiff did in 2005 when Labour revalued the Council Tax.



Labour’s tax plans now include:



* Letting council tax increase again – which increased by 60% last time they were in power –a possible £172 over the 4 years of an Ian Gray administration if it went up by the same rate


* £3000 per family to pay for the spending black hole wishlist Labour published at their conference



* And now up to £500 extra in increases for nearly half of Scottish households if their scheme for a new property tax sees the light of day

The £500 property tax bombshell arises from Labour's firm commitment to introduce a new property tax - as announced by Michael McMahon at the Labour conference – which will dramatically impact on at least 750,000 households in Scotland as it would require a revaluation of current properties.



When this happened in Wales in 2005 under Labour only 8% of homes went down a band and in Cardiff – the largest city in Wales – saw over 64% of properties go up at least one band.




If revaluation took place in Scotland those moving from band D to E would pay on average £250 more, and those going from band D to F paying on average £500 more.



According to Labour's Michael McMahon such a new tax is 'desirable'. SNP MSP Joe FitzPatrick - a member of the Scottish Parliament's Finance Committee - said that any new property tax, as part of Labour's 'basket of taxes' would cause misery based on what happened

in Wales and branded their plans a son-of-council-tax.


Commenting Mr FitzPatrick said:


"Labour have already said they will make Scots pay for the mess they created by ratcheting up the Council Tax. It went up 60% - or £430 – the last time they were in power and if they gain power again it could go up by £172 over the four year term of an Iain Gray administration.



“This already comes on top of their ‘basket of taxes’ which would require £3000 more in taxation to pay for their £1.7 billion of new and extra spending promises. And that’s even before the cuts to our budget by the Tory/LibDem government are taken into account.



“Now they want to ratchet up the taxes on ordinary hard working Scots even more by committing to continue with an unfair tax system that takes no account of income. Some ordinary families presently in Band D could see their tax bills increase by as much as £500!



“Michael McMahon's firm commitment to a new property tax will require a revaluation which will only exacerbate the problems Scots are facing as we face the cuts Labour caused and the Tory/LibDem government are imposing. He wants ordinary Scots to pay for the mess Labour created.


"In Labour's 2005 council tax revaluation in Wales, four times as many homes moved up one or more bands as down and if that were replicated in Scotland 750,000 households would be hit by this son-of-council-tax.


“And it could be worse in Glasgow – Scotland’s largest city. In the largest city of Wales, Cardiff, over 64% of Council Tax payers faced increased bills because they went up by at least one band.


“This news will horrify hard pressed households across Scotland and puts council tax at the heart of next year’s election. That Michael McMahon thinks such a situation is 'desirable is appalling!”


ENDS


Notes:


1. The section of Michael McMahon's speech where he announces Labour's firm commitment to a new property tax.


http://www.scottishlabour.org.uk/speech-to-scottish-conference-by-michael-mcmahon




The Domestic Taxation Working Group I have been chairing is finalising its report.


It will take account of the proposals announced in the recent Westminster Spending Review, it will take account of the 10% cut in Council Tax Benefit the ConDems have imposed and we are now waiting for the Scottish Government to publish the Scottish budget to see the full extent of the government cuts.


We will come forward with our proposals when we know that we can deliver them - unlike the SNP, who can’t seem to make a promise without breaking it.


Let me also be clear, though, that Scottish Labour remains committed to the principle of a property based tax.


Property based taxation works and is desirable, as it provides stability, predictable yield and is easy to collect.



Furthermore, ability to pay should relate to overall wealth, not just income and a property based tax is a reasonable indicator of wealth.



2. A report on Labour's revaluation in Wales:



http://news.bbc.co.uk/1/hi/wales/3136302.stm


3. In Cardiff the following proportions of households went up by one band or more:



50% went up 1 band


13.3% went up 2 bands


0.8% went up 3 bands or more



4. Under Labour Council Tax increased from £708 to £1,138 – a £430 over 10 years.



As Labour has said they will let Council Tax increase again this equates to £172 over a four year Scottish administration.