HC Deb 20 February 1986 vol 92 c346W
Mr. Dewar

asked the Secretary of State for Scotland if he will give the range of local income tax rates that would apply in Scotland, assuming that average rate bills are converted into average local income tax rates.

Mr. Rifkind

Applying the same method used to produce the local income tax rates for England which are illustrated in paragraph 3.26 of "Paying for Local Government" (Cmnd 9714), present Scottish average domestic rate bills would convert into local income tax rates ranging from approximately 2½p to 6½p. The following assumptions about central Government grants to local authorities are used in this calculation:

  1. (a) there is resource equalisation making the yield per adult of a 1p-in-the-pound local income tax the same in all areas;
  2. (b) the present grant total is augmented by the present cost of rate rebates.

While very approximate illustrative figures such as the above can be derived, these totally ignore the practical difficulties associated with the assumptions, notably in calculating the tax base of each district for the purposes of equalisation.