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SNP’s £100m gift to the UK Government « taxing scotland

Today the SNP announced their plans to freeze council tax for five years.

As I’ve already pointed out in a previous post the council tax freeze hands money back to the UK government in lost council tax benefit revenue.

Assuming an inflation rate of 3%, a five year council tax freeze will save the UK Government £100 million, that’s £11m this year, and £22 million a year in each of the next 4 years.

This is because the savings compound from this year to next, but in 2013 the UK Government have stated that they will devolve council tax benefit (CTB) to Scotland, locking in the £22m shortfall permanently.

If the UK Government back down from their plans to devolve CTB, then the compounding effect of the freeze will hand back, £11m, £22m,£ 33m, £44,m and £55m.

That’s £165m to be handed back to the UK Government over the next five years?

Is that the SNP’s idea of sticking up for Scotland?

Yet another reason why the council tax freeze is just weird.