SNP tax raid attacked as growth now half of UK’s

PHILIP Hammond yesterday attacked the SNP’s tax plans, as forecasts suggested the UK economy will grow at double the rate of Scotland’s this year.

The Chancellor accused the SNP of ‘depressing economic growth’ and said that more needs to be done to keep Scotland’s ailing economy afloat.

It came as the Office for Budget Responsibility (OBR) upgraded its growth forecast for the UK economy this year to 1.5 per cent, compared to 0.7 per cent for Scotland

And it also revealed projections indicating that 1.1million Scots will pay an average of £262 more income tax next year, while the 1.4million who receive a tax cut will benefit by an average of only £17.

SNP Westminster leader Ian Blackford said Scotland’s economy had been damaged by being ‘shackled to a sinking ship’ following the Brexit vote.

But Mr Hammond said: ‘Probably a matter of rather more immediate urgency for the people of Scotland is how their economy will withstand the highest rates of taxation in the United Kingdom – an economy that, under the SNP Government, is already growing more slowly than the economy of the United Kingdom.

‘It is not the Scottish people’s fault that they have a government who are adopting policies that are depressing economic growth in Scotland and will depress it further in the months and years ahead.

‘We will go on delivering policies that are designed to improve the economy across the whole of the United Kingdom, including the growth deals in Scotland.’

As he delivered his first Spring Statement in the House of Commons yesterday, Mr Hammond revealed the OBR has upgraded its estimated growth for the UK economy to 1.5 per cent this year, 1 per cent higher than its previous forecast in November. It forecast growth of 1.3 per cent next year.

In contrast, the Scottish Government’s own economic forecaster, the Scottish Fiscal Commission, estimates growth of 0.7 per cent this year and next year in Scotland.

Under the SNP’s tax changes, coming into force next month, anyone earning more than £26,000 a year will pay more income tax. The SNP claims that 70 per cent of Scottish taxpayers will not see their bills rise.

But figures published yesterday by the OBR estimated that the 1.1million people whose tax will rise next year will pay £262 more, while the 1.4million people who will pay less will save on average only £17.

At Westminster yesterday, Mr Blackford said: ‘A hard Brexit is going to hit the pockets of families, yet the Chancellor is silent on the risks to our economy when the stresses and strains of a near decade of austerity are hurting. The fact is that Scotland is shackled to a sinking ship.’

Murdo Fraser, finance spokesman for the Scottish Conservatives, said: ‘The projected rate of growth for the whole UK is now double that of Scotland. The SNP has no one to blame for that predicament but itself.

‘It’s embarrassing for Ian Blackford to say Scotland is tied to a sinking ship when these are the hard facts and figures.

‘This is what happens when an SNP government has an anti-business agenda, and is more worried about hiking people’s tax than generating jobs and growth.’

SNP Finance Secretary Derek Mackay said: ‘This statement has shown, once again, that the UK Government is intent on pursuing austerity by choice.’