TOWN HALL BID TO HIT US WITH ‘LIFESTYLE TAX’
Councils want to bring in a new local levy... and it may cover everything from a glass of wine to a minibreak
SCOTLAND’s councils are plotting to introduce an unprecedented set of new local taxes which could mean rocketing bills for hard-pressed householders.
Local authorities are set to demand new powers to introduce a whole range of additional levies, including taxes on alcohol, cigarettes, unhealthy foods, hotels and tourists.
The move would represent a form of ‘lifestyle tax’ that would see Scots – who have already been taxed on their income – paying
even more for a glass of wine, a sugary treat or even a minibreak.
Councils want to raise millions of pounds to pay for services – and fund pay rises for town hall staff.
At a meeting on Friday, council leaders formally agreed to pursue plans for ‘discretionary’ taxraising powers. The Scottish Government has signalled it will consider the proposals.
The local authority meeting, hosted by council umbrella body Cosla, also agreed it wanted to end the 3 per cent cap on rises to the existing system of council tax.
The cap was introduced in April by the SNP following a ten-year council tax freeze. But on Friday, councils demanded a free rein over council tax rates – but refused to say how high they may raise them.
Previous calls for discretionary taxes, such as a ‘tourist tax’ in Edinburgh, have been quashed for fear a £4-a-night surcharge would put off visitors. But the proposed tax rises could reopen that debate, with one City of Edinburgh Council member suggesting a tourist tax would be the most obvious use for new discretionary powers.
Such a move could generate up to £20 million a year.
But a Cosla insider said taxation powers could be extended, adding: ‘We’ve seen alcohol minimum pricing. In places where alcohol is a problem they could introduce a discretionary alcohol tax and that could then go into an alcohol rehabilitation service.
‘So there could be an alcohol tax, a cigarette tax or a sugar tax.
‘The discretionary tax would not be prescriptive across councils. What it was used for would be totally dependent on the individual council’s needs.
‘In the Highlands and Islands they have a lot of visitors and their roads suffer, so they might introduce a tourist tax or visitor tax to maintain their roads.’
But John O’Connell, of the TaxPayers’ Alliance, said: ‘Hardworking families are already being taxed on everything they earn and now councils want to impose a lifestyle tax on everything from a glass of wine to a Mars Bar to a minibreak.
‘Councils should focus on delivering reliable services, not telling people how to live.
‘What these local authorities are proposing is not only deeply concerning for residents – these taxes always hurt those on the lowest incomes the hardest – but could also be devastating for business.
‘If it’s drastically more expensive to buy goods in one part of the country, people may be tempted to go elsewhere or even move away.
‘Politicians, locally and nationally, should work with families to cope with the cost of living, not add to their burden with more taxes.’
Even with the ability to raise council rates by up to 3 per cent, local authorities have complained they still cannot afford frontline services. A Moray councillor at the meeting said: ‘It’s hellish. We don’t have any money.’
A Scottish Tory spokesman said more financial powers should be devolved to local authorities, but it should not be ‘a green light to whack up taxes across the board to make up for shortfalls’.
He added: ‘Any taxes introduced should be justified, supported by the people of that area and shown to be effective in tackling whatever matter it is they seek to address.’
A Scottish Government spokesman said: ‘We remain committed to making local taxation more progressive, while improving the financial accountability of local government. We are open to further dialogue on options for reform.’
Some tax powers, such as on alcohol and sugar, reside at Westminster and Scottish councils would also need UK Government backing for their plans.
The UK Treasury declined to comment.