Sturgeon facing a historic choice on tax

First Minister attacked over ‘Dickensian’ living conditions, then warned over anti-austerity tax rises

Nicola Sturgeon may have felt like she was between a rock and a hard place yesterday. First, Richard Leonard warned the First Minister that some Scots were living in “Dickensian” conditions because of council cuts and policies of austerity.

The Victorian author may have begged to differ, given some of the real-life conditions he fictionalised, but behind the rhetoric lies the reality that flat-lining wages and rising living costs are causing real problems for many people.

The resulting dissatisfaction has already helped create the conditions for the rise of left-wing politicians like Jeremy Corbyn and Mr Leonard himself. The Brexit referendum vote was also influenced by the arguably misplaced hope that leaving the EU would lead to a brighter future. So politicians who ignore the harm caused by austerity do so at their peril.

In a strikingly bold move, Ms Sturgeon has laid out proposals to increase income tax in Scotland. These could see tax cuts for those earning up to £15,000 but increases for people earning more than £24,000. She has spoken about the need to ask “tough questions” about how much tax people pay given our ageing population, a decade of austerity and the prospect of Brexit. But, after being attacked from the left by Mr Leonard, Ms Sturgeon found no peace as she sat down to have her dinner last night.

Instead Tim Allan, president of the Scottish Chambers of Commerce, told an audience of business people in Glasgow’s Hilton Hotel that increasing taxes above those south of the Border would risk making Scotland uncompetitive at a time of “sluggish growth and faltering business investment”. While he did suggest higher taxes might be acceptable if they were “ring-fenced to drive growth and job creation”, the overall message was clear.

When the Scottish Budget is revealed next week, we should have a better idea of where Ms Sturgeon stands amid these two competing pressures.

Raising taxes is always politically dangerous and it has the potential to adversely affect the economy, so if the SNP decides to do so they will need to be careful. Failure could lead to the fall of the government and the end of the independence movement for a generation. But if the SNP can restore our public services, ensure our economy thrives and put an end to the need for charity food banks, that would be a considerable achievement.