Hike tax 2p ‘or budget will be slashed’
SCOTLAND’S budget for day-to-day spending could be slashed by £700million a year in just two years’ time without a 2p hike in basic rate income tax, a think tank have warned.
IPPR Scotland said that without any rise in tax, areas other than police and the NHS could see budgets fall by 10 per cent between 2017-18 and 2019-20.
Cuts to those “non-protected departments” could fall by £1.3billion a year, the think tank stated – an amount which would require the basic rate of income tax to go up by 4p to mitigate the spending reductions.
They published their analysis of public spending ahead of the Scottish Budget tomorrow. Finance Secretary Derek Mackay is widely expected to set out tax rises for higher earners, when he reveals his tax and spending plans.
Research by polling company Survation earlier this month found 60 per cent of Scots would “be willing to pay more tax” if the cash raised went on improving public services or tackling inequality.
But Russell Gunson, the director of IPPR Scotland, has warned that tax rises alone are unlikely to be enough to bring an end to spending cuts, and may only help in the short term.
He said: “We’ve looked at the UK projections for Scotland’s taxes, and, if correct, it shows that cuts to day-to-day spending could reach £700million per year by 2019.”