(Following on from James’ post yesterday and the fine debate that followed…)

With Michael Moore’s perfectly fair announcement that, back in 2007, the SNP let lapse the option to vary tax powers, the Scottish Greens’ policy of ‘revenue raising’ through said powers has been well and truly torpedoed. However, has the SNP shot itself in the foot by hampering its own 2011 policy of ushering in a Local Income Tax?

There are not expected to be too many big issues in the coming election campaign which makes the debate around what to replace the Council Tax with (if anything) all the more important. Labour and the Conservatives appear to be in favour of a variant of the status quo, the Greens are championing Land Value Tax and the SNP and Liberal Democrats prefer a Local Income Tax.

However, in order for Scotland to implement a Local Income Tax, we would need HM Revenues & Customs to collect different levels of tax rates from Scots to English and Welsh workers, an exercise that would be remarkably similar to receiving the income from use of the tax varying powers.

How can the Scottish Government bring in a Local Income Tax if it no longer has the option “to fund the upkeep of the Scottish Variable Rate (SVR), which allows MSPs to increase or lower income tax by 3p in the pound”?

The SNP has made similar short-sighted mistakes like this on big policy issues before:

The Scottish Futures Trust was stopped in its tracks upon the SNP learning that it couldn’t issue bonds to raise the necessary funds, a bodycheck that the policy has still not fully recovered from, particularly given the news that the Scottish Government is to dabble in the implementation of the much-maligned PPP

The reduction of class sizes to 18 was deemed illegal because parents had a right to put their child in a classroom as long as the class size was still below 30 and an embarrassing change of approach and shift in emphasis soon followed

It can’t be easy running a country, particularly when you want to simultaneously lead a devolved nation competently while convincing your electorate that it should choose independence. You only get to make so many mistakes though and this may be the one that decides the next election. After all, if this wasn’t a mistake, then why has it been brushed under the carpet for 3 years?

Labour may be arguing for an increase in Council Tax but set against a Local Income Tax that can’t be implemented for another three years (a policy we’ve already waited four years for) Labour’s offering might end up being accepted as the least worst option. Or, even better, Land Value Tax may come through the middle and be seen as an idea whose time has come.

Bottom line – I just can’t see how the SNP can campaign for varying our tax rates via LIT when it opens the party up to such easy, and deserving, criticism.