MORAY COUNCIL ADMINISTRATION leaders have admitted that there can be no increase in Council Tax this year – as Scottish Labour are set to propose an income tax increase as a means of solving the national crisis faced by local authorities.
Having been the first local authority to declare a desire to break the Scottish Government freeze on local tax increases, Moray Council’s leader Stewart Cree has been forced into admitting that his minority Administration group has been backed into a corner and must now abandon these plans.
His admission came on the eve of Scottish Labour leader Kezia Dugdale’s proposal that new a 1p rise on income tax should be put in place to avoid an inevitable cut to local services.
Last night Councillor Cree, who had previously said he would resign if his Administration were unable to force through their Council Tax plans, admitted that the policy was now in tatters, saying: “It is fair to say that we are not going to impose a Council Tax increase in circumstances which would give the people of Moray no benefit.
“Unless the sanctions against raising the tax are removed then we will not be able to pursue that option.”
His comments came after Scotland’s Finance Secretary John Swinney had made it clear that around £5million would be withheld from Moray’s financial support should they defy the Council Tax freeze agreement which has now been in place for nine years.
“It is extremely frustrating – this has been done with a gun to our head and an arm up our back,” Councillor Cree said.
Now the Administration group are pouring over alternatives to their plans, which had assumed an income of £5million from a council tax increase and a further £5million taken from council reserves.
“We do not feel it is fair to make Moray residents the victims of Mr Swinney,” Councillor Cree said, adding: “I don’t think that they should suffer by losing services so we are examining other ways to fund the deficit.”
He continued that a means would be sought to avoid cuts to frontline services in Moray – and that may mean “deferring spending on certain projects until next year” as well as drawing more from the reserves – currently over £20million.
Scottish Labour Tax Call
The abandonment of Moray’s plans came as Scottish Labour leader Kezia Dugdale is expected to say in a speech in Edinburgh this morning that using new taxation powers in Scotland would be the way her party will deal with the funding crisis being faced in town halls around the country.
Subject to any last-minute changes, Ms Dugdale is expected to say: “Given the choice between using our powers or making cuts to our children’s future, we choose to use our powers.
“We will tear up this SNP budget that simply manages Tory cuts and instead use the power we have to set the Scottish rate of income tax one pence higher than the rate set by George Osborne. This will provide an extra half a billion pounds a year to invest in the future.
“We don’t do this because we want to use the powers for their own sake – we do it because there is no other alternative to cutting into our nation’s future. It enables us to stop cuts to schools and other vital services and to guarantee that spending on education will be protected in real terms in the next five years.”
Ms Dugdale will say that 10% of revenue from a new Scottish rate of income tax would also be used to provide a £100 rebate for the lowest earners, issued through local councils.