Alex Salmond's plans for a local income tax in Scotland has suffered a severe setback after Yvette Cooper, chief secretary to the Treasury, issued an unprecedented formal warning of a £750m black hole in the Scottish Government's plans.
The chief secretary has written to John Swinney, Scotland's finance secretary, stating Treasury officials believe there is a £750m gap between what is raised now by council tax and what would be raised by the local income tax, The Scotsman reports.
‘Although you don't say what you expect a local income tax of 3p to raise, I understand that it is around £1.35bn, which compares to around £2.1bn currently raised by council tax, and that makes an annual shortfall in the region of £750m,’ Cooper states. ‘This loss would have a serious impact on local council services across Scotland."
Cooper is scheduled to meet Swinney in London today.
Further reading:
SNP courts Lib Dems in bid to secure local tax
