SNP must back down on top rate tax rises

THE SNP’s direction of travel at Holyrood on income tax seems to be toward rises tomorrow when Finance Secretary Derek Mackay delivers his Budget.

‘The rich’ – apparently those on a very modest £43,000 – already pay more than in England and are braced for yet more pain.

There was further bad news for hardpressed family incomes – inflation rose to 3.1 per cent in November, the highest rate in almost six years.

Our money is going less far – and that’s even before increases in fuel bills caused by problems with the Forties oil pipe, which feeds the Grangemouth refinery, kick in.

Amid this grim picture, up steps the Scottish Government’s chief economist Gary Gillespie. He warns divergence in the tax rates north and south of the Border could bring about ‘a revenue and policy risk’.

Behind the flat economist’s language is a terrifying picture. Increased differences for Scots make the country a less attractive proposition for the brightest and best.

Well-off workers tend to be in a global marketplace with high mobility. Shipping out of Scotland to save money becomes an issue the more the North/South divide grows.

Mr Gillespie looked very specifically at the 50p tax rate (once an SNP manifesto pledge) for those earning more than £150,000.

His figures paint a picture of a country living on the economic edge.

Some 20,000 taxpayers, fewer than 1 per cent of Scottish adults, are expected to account for about 19 per cent of the total tax take in 2018-19. If many of them decided to leave to avoid a 50p rate, it may mean the loss of £24million in revenue.

But we are lumbered with Mr Mackay, once touted as a rising star but a man whose great future already looks to be behind him.

The notion that cutting taxes actually generates more revenue – the Laffer Curve – had to be explained to him in short-syllable words.

So a 50p rate is likely to be foregone and big play will be made of having ‘listened to the experts’ and ‘staying our hands’.

But that may not spare those of us on a more modest £43,000 and above – ‘the rich’ according to Mr Mackay – despite £2billion extra accruing to Edinburgh from Chancellor Philip Hammond.