Growing fear of basic rate tax rise

● Sturgeon refuses to rule out move ● Honest debate needed over cuts

Nicola Sturgeon has refused to rule out the prospect of a rise in the basic rate of income tax when her civil servants bring forward radical proposals for a shake-up of the tax system.

Opposition parties warned the SNP is “coming after the paypackets” of Scots workers despite a pledge in the party’s Holyrood election manifesto not to put up the basic rate.

The First Minister told MSPS this week that her officials are to draw up a paper setting out a range of scenarios examining the prospect of raising tax to offset austerity and the likely economic impact, as she unveiled her Programme for Government.

And yesterday she refused to rule out a rise in the basic rate as she clashed with Tory leader Ruth Davidson at First Minister’s Questions.

Ms Davidson said: “I think anyone earning less than £43,000 a year in Scotland heard the First Minister’s message loud and clear – she’s coming for your paycheck.”

The Tory leader cited The Scottish Retail Consortium and Scottish Chambers of

0 Nicola Sturgeon: ‘We owe ourselves a genuine debate about what kind of society and economy we want to be’ Commerce, who have raised concerns over the impact of possible tax hikes on firms and workers.

“Jacking up taxes on working families and businesses in Scotland will damage the Government’s stated objective of getting the economy growing faster and of bringing in more revenue,” Ms Davidson added.

“The biggest concern here is over the message that tax rises send out about Scotland’s reputation as a place which values ambition, that welcomes busi- ness and that wants to grow.”

But Ms Sturgeon said she would enter the issue with an “open mind” and said it was time to examine ways to tackle austerity.

“We owe ourselves a genuine debate about what kind of society and economy we want to be,” Ms Sturgeon said.

“We know that we face further Westminster austerity imposed by Ruth Davidson’s party, we know that we face the implications of Brexit – implications that Ruth Davidson thinks the country might never recover from.

“If we want this country to have the highest quality of public services, well paid public servants, the support and infrastructure that our businesses need to thrive and if we want to have effective policies to tackle poverty then I think we need to have an honest, mature debate about how best to deliver that.”

A spokesman for the First Minister later said the SNP had lost its majority in the Holyrood election and was now operating as a “minority administration”.

He added: “Votes have to be won, budgets have to be passed on a consensual basis.”