Nicola’s placed a reckless bet on tax hikes
( and it’s our cash she’s gambling )
YOU do not have to say anything but it may harm your defence if you do not mention when questioned something which you later rely on in court. Nicola Sturgeon is now in the dock on her plans to raise income tax – and she is relying on arguments she didn’t make when she made her original statement to the Scottish people at the last election. Worse than that – she is changing her story by the day.
Back then, with the whiff of ballot papers in the air, she unequivocally rejected the idea of raising the basic rate of income tax.
Indeed, taxing even the highest earners more she said was ‘reckless’ and ‘daft’. When the Labour Party and the Liberal Democrats argued for a rise in the basic rate she accused them of being in a ‘competition over who can tax ordinary people the most’.
Now it is a competition she wants to win – or perhaps cross the finishing line in a dead heat, hand in hand with political opponents so that they can all share the blame.
She doesn’t even offer an alibi. The First Minister cannot tell us of the dramatic change in circumstances that could possibly justify such a volte face.
The money is for our public services, she says, and here her evidence gets really confused. She asserts that Scotland has the ‘best’ public services in the UK. We ought to have – public spending per head is 16 per cent higher here than the UK average. But then, she claims that they are strapped for cash.
THE reality is that under her stewardship our public services have deteriorated despite having more money to spend than other parts of the country. Standards in our schools are going backwards to such an extent the Scottish government changed the rules and now refuses to participate in international comparisons. One in five Scottish school leavers are reported to be ‘functionally illiterate’ so wouldn’t be able to read them anyway.
In the NHS, Nicola Sturgeon has missed seven out of eight key targets she set for herself.
If money is the problem she has offered no evidence that she knows how to spend what she already has. One of the problems in our public services is staff shortages. Almost one in eight hospital consultant vacancies are unfilled. The BMA has described the lack of GPs as ‘critical’. Under the SNP we now have 4,000 fewer teachers. More than 200 headteachers are now in charge of more than one school.
You could argue we need more cash to hire more public servants. But will a consultant – who would have their bonuses cut if they come to Scotland – come here to pay more income tax than the rest of the UK? Or a GP or a teacher?
Indeed, Scottish based medical and teaching graduates will now ask themselves whether they want to stay at home or move south where the government takes less of their cash. Make no mistake, Nicola Sturgeon is not talking just about squeezing the filthy rich until their pips squeak.
Workers on as little as £24,001 a year may have to pay more. What she – a woman in a two person household that pulls in more than £200,000 a year – calls ‘modest’ tax increases can actually be the difference between getting by and going into debt. Being able to afford a car repair, a holiday or the Christmas we want to give our kids.
For a decade since the banking crash hardly any of us in either the public or private sectors has had a meaningful pay rise.
Living standards are going down. Inflation has risen. Mortgage rates have just gone up.
Nicola Sturgeon’s answer is to raise tax and strain the household budgets of ordinary Scots further.
Worse, she has no consistent message here – no philosophy to buy into. This is a woman whose response to spending cuts to local government was to freeze council tax. Now the solution is to raise income tax. Go figure.
She is trying to hide behind the idea that she has started a ‘debate’ about tax.
But you cannot have a ‘debate’ when you only want to speak to parties that agree with you and dismiss voices you disagree with out of hand.
Just three years ago in the referendum, she argued that corporate taxes in an independent Scotland would always be substantially lower than in the rest of the UK. Now she says that personal taxes should be higher but makes no explanation of why. Whatever advice she might give her younger self, the First Minister can’t agree with what she said yesterday.
Given our geography and economic relationship with the rest of the UK, there is logic to the argument she once made – that we should have lower taxes in Scotland.
WITH income tax, we have a very low tax base. Only around 350,000 Scots pay the higher rate of tax at 40 per cent. A measly 17,000 home-based Scots pay the additional rate for those on more than £150,000 a year – and account for almost 14 per cent of all the money raised.
Those with the most money can afford the best accountants. Those who have their own means can move home most easily. This policy could in fact shrink our tax base.
It is people on middle incomes with fewer options who will be hardest hit by the First Minister’s tax rises.
There are two ways of increasing the money you get from income tax to pay for public services. The short-term way is to increase the tax. The better, long term way is to increase incomes. The Scottish economy is growing at a third of the rate of the UK’s. Our notional deficit is three times the size of the UK’s.
The patient is sick. Nurse Sturgeon’s remedy seems to be to grab the patient firmly by the neck and squeeze.
During Scottish Labour’s Devolution Commission ahead of the independence referendum more than one Labour MSP and MP – Labour, mind you – argued privately that if we were to devolve income tax the logic suggested we should cut the rate for those on the basic and in particular the higher rate.
That might attract the consultants, GPs, teachers and headteachers we are now short of. It would also increase the tax base and probably overall revenues.
It was something even Alex Salmond used to argue for – frequently pointing to the ‘Laffer Curve’, an economist’s theory that cutting tax rates can actually increase tax revenues.
Despite Mr Salmond’s protests, it was something that the then Chancellor Nigel Lawson proved right when he cut the higher rate to 40 per cent in 1988. The measure increased revenues.
Recently our current SNP Finance Minister, Derek MacKay, told the Scottish parliament he had never heard of the Laffer Curve.
There is no logic to the First Minister’s argument. No empirical evidence that we should trust her with any more of our money.
FOR ordinary Scots who have already suffered a decade of decline in their finances, there is only the guarantee of pain. The only reason she can be doing this is not in the interests of Scots or Scotland but for the SNP.
The SNP have prospered in elections for a decade by ‘out-Labouring Labour’. Now under Jeremy Corbyn, Labour threatens to ‘outleft’ the SNP. The gains the Nationalists have made in traditional Labour heartlands are at risk and so the electoral rather than economic logic dictates Ms Sturgeon must respond. Put up taxes.
As for middle class Scots, the SNP cares little for their pain or whether they leave. After all, most voted to keep Scotland in the Union.
Whatever the First Minister is doing it is not nation building. Her vision appears only to be preserving her own career by keeping Labour in their place.
She does not believe that Ruth Davidson’s Tories could beat her and even if they did, they couldn’t get an overall majority. Since no one else will do business with them, she will retain the keys to Bute House. Nicola Sturgeon is putting a big bet on her own future.
The beauty for her is she doesn’t even need to put her own money on it. She’s using yours.