NIGHTMARE BEFORE CHRISTMAS

SNP hits 3/4 million Scots with higher tax Middle class hammered as party breaks election vow Council tax set to soar – amid warning over economy

(...and guess who’s playing the Grinch)

NICOLA Sturgeon was yesterday accused of ‘the biggest broken promise’ since devolution as she hammered more than 750,000 Scots with tax rises.

A bombshell Budget overhaul of Scotland’s entire tax system will shrink the pay packets of nearly one in three taxpayers, including nurses, teachers, social workers, police officers and paramedics.

Anyone earning more than £24,000 will have to pay an extra 1p in the pound.

The move, which will force 757,560 Scots earning more than £33,000 a year to pay more, comes despite a promise in last year’s SNP manifesto that the basic rate of tax would be frozen for the lifetime of this parliament.

Families also face the prospect of seeing their council tax soar after Finance Secretary Derek Mackay encouraged local authorities to raise bills by up to 3 per cent next year.

In other developments in yesterday’s Budget, just over a week before Christmas:

Calls to reform property tax were rejected, despite widespread claims it is damaging the middle to top end of the market.

The Scottish Government’s economic

forecasters warned growth will stay below 1 per cent for four years – which would be the lowest sustained period of output since 1963.

Public schools were told they will be stripped of business rates relief – which could push up fees and threaten bursary places.

Public sector workers will get a 3 per cent pay rise if they earn less than £30,000, while those above that will receive 2 per cent – at an overall cost of £140million.

The SNP opted against following Philip Hammond’s decision to allow first-time buyers to pay no tax on house purchases up to £400,000, setting the figure at £175,000.

The Budget will force 892,600 people on basic rate to pay a new ‘intermediate’ rate, despite the SNP’s manifesto at last year’s election promising the party would ‘freeze the basic rate of income tax throughout the next parliament’.

Some will be protected by UKwide increases in the tax-free personal allowance and increases to the higher rate threshold. But across the tax bands the changes will mean 757,560 Scots paying more.

In today’s Mail, Scottish Tory leader Ruth Davidson writes: ‘Mr Mackay’s Nat Tax yesterday represents the biggest broken promise from any government of the entire devolution era.

‘The political leader who promised us the SNP’s demand for an independence referendum would be “once in a generation” has done it again – ditching a key commitment at the drop of a hat.’

At Holyrood yesterday, Miss Sturgeon said: ‘I can tell members that 70 per cent of taxpayers in Scotland and 83 per cent of all adults will pay no more income tax after today’s Budget than they do now.’

Mr Mackay called it ‘the most challenging economic and fiscal environment for any Budget in the devolution era’.

There was some good news, with an extra £400million for the health service, as well as a commitment to spend £600million over the next four years on ensuring 100 per cent of properties have access to superfast broadband. There was also funding to help the expansion in free childcare.

Mr Mackay said ‘strong public services and a vibrant economy go hand in hand’, adding: ‘In the face of realterms cuts to our block grant, it has been possible to deliver for the NHS and to support those other investments only because of the decisions that I have taken on tax.’

But a wide range of business leaders attacked the SNP’s tax plans and warned they will cause economic chaos.

The Scottish Fiscal Commission’s decision to downgrade GDP forecasts – predicting growth of less than 1 per cent a year for the next four years and that the economy will lag behind the UK’s – added to the gloom.

CBI Scotland chairman Hugh Aitken said: ‘The prospect of income tax rises and added complexity in Scotland’s tax code will be a bitter pill to swallow.

‘At a time when our economy is in a cycle of weak growth

‘The biggest broken promise’

and we face unprecedented levels of uncertainty, the last thing we need is to make Scotland appear a less attractive place to do business.’

Lindsay Gardiner, chairman for accountant PwC in Scotland said: ‘Today and tomorrow may be about tax, but in the long run, economic growth should be the debating point. Everyone with an interest in the Scottish economy should aspire to improve it.’

Scottish Chambers of Commerce chief executive Liz Cameron said: ‘Our continuing concern is primarily with outside investors’ perception of even slight increases in tax rates on the overall costs of doing business here as against the rest of the UK.’

Andy Willox, the Federation of Small Businesses’ Scottish policy convener, said: ‘We wanted to see a Budget which offered firms a little ballast in choppy market and political conditions. Instead, the Scottish Government has chosen to steer us into uncharted economic waters.’

Scottish Secretary David Mundell said: ‘We have delivered on our commitment to make the Scottish parliament more powerful and more accountable to people in Scotland. It has extensive new powers which it must now use to tackle Scotland’s significant economic challenges.

‘It is for Holyrood to decide how to use its new income tax powers, but I am deeply disappointed the Scottish Government has decided to pursue tax hikes. By making Scotland the highest taxed part of the UK, the Scottish Government risks damaging, rather than growing, our economy.’

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