£150 a year, the cost of Labour tax hikes forced on average OAP

LABOUR’S bid to hike income tax would force the average pensioner to hand over an extra £150 every year, it was warned last night.

During an angry debate in Holyrood, Nicola Sturgeon branded the opposition party an ‘utter disgrace’ and said Labour must ‘defend why low-paid workers in this country should pay Labour’s extra tax’.

Figures published last year show that the average pensioner in Scotland paid £2,855 in income tax in 2012-13. A tax rise for the 500,000 OAPs north of the Border, as proposed by Labour and the Lib Dems, would increase that to nearly £3,000 based on a basic rate of 21p in the pound.

Labour’s proposal includes a rebate of £100 for those earning less than £20,000 a year, which the party claims includes 245,000 pensioners.

But they would have to go to their council to get the cash back, while the remainder would be worse off.

An SNP spokesman said: ‘Labour’s regressive and unworkable plans would hurt the incomes of thousands of pensioners in Scotland, many of whom are already struggling to make ends meet.’

At First Minister’s Questions, Miss Sturgeon quoted former Labour Prime Minister Gordon Brown as having said: ‘There’s hardly a nurse, teacher, policeman or council worker who won’t be hit hard by an increase in the basic rate of tax.’

She added: ‘ Under Labour’s proposals the amount of tax I paid would go up by 2.7 per cent, the amount of tax a nurse, a teacher a care worker would pay would go up by 5 per cent.

‘In this chamber we have a Labour Party that wants to increase taxes for the low and middle income earners, we have a Tory Party that wants to cut taxes for high earners. They’re both wrong.’

But a spokesman for Scottish Labour said: ‘The powers we now have mean we can make fairer choices. A pensioner paying income tax on an income under £20,000 would benefit f rom our plan, whereas someone on Nicola Sturgeon’s salary would pay an extra £1,447 a year. That’s a fair plan that asks the wealthiest few to pay the most so we can invest in our vital public services.’

The party wants to use Holyrood’s interim powers to increase the basic rate from 20p to 21p, the higher rate from 40p to 41p and the top rate from 45p to 46p.

That idea was defeated in an initial Holyrood ‘stage one’ vote on Wednesday and will be killed off by the SNP in a third and final vote l ater this month. Labour will, however, still include the idea in its 2016 manifesto.

Scottish Labour leader Kezia Dugdale said: ‘The First Minister could stop the hundreds of millions of pounds worth of cuts and thousands of job losses, but faced with the choice between using the powers of this parliament and hundreds of millions of pounds of cuts she chose austerity.’

But Scottish Tory leader Ruth Davidson said: ‘We do not believe workers in Scotland should have to pay more than their counterparts across the UK. Indeed, when it is affordable, we’d actually like to see the burden eased.’