Retailers warn SNP tax hikes ‘burden’ will put jobs at risk

SCOTS retailers yesterday warned against income tax rises amid fears they could damage businesses and force firms to lay off staff.

Concerns have been raised that the Scottish Government is planning to hammer middle earners in this year’s Budget – with Scotland remaining the highest taxed part of the UK.

Nicola Sturgeon has said her ministers will work with opposition parties at Holyrood to find a ‘progressive’ new policy on tax, with three out of four backing rises.

The First Minister has been urged to target hard-working families and ignore the rich, after concerns it would not raise enough to fund services and SNP pledges.

The Government will outline its proposals for tax this week, with the release of a ‘discussion paper’ on the country’s finances.

Ahead of this, the Scottish Retail Consortium (SRC) urged Miss Sturgeon to have a ‘more rounded debate’ on tax changes.

SRC director David Lonsdale said: ‘Just looking at the options for flexing income tax and what it might mean for public finances is too narrow a way to look at this.

‘There needs to be a far more rounded debate about the impact on the economy and on consumers of any potential changes to income tax, informed by a proper economic impact assessment.

‘After all, a quarter of a million Scots rely on retail for their employment, with many more in other consumer-facing sectors.

‘MSPs should be wary about heaping extra burdens on Scottish consumers given rising inflation, moderate wage growth, higher council tax and changes being brought in next spring which will see employees increase their statutory minimum contributions to pensions.’

The SNP has warned more resources will be needed to fund stretched public services such as the NHS, but also to ‘pay for all of our commitments’, including Frank’s Law and the extension of free childcare.

Labour, the Lib Dems and Greens agree income tax rates and bands should be changed, but the Tories have argued against this, warning that pushing up taxes could damage the economy.

Scottish Conservative finance spokesman Murdo Fraser said: ‘If it takes more money from workers, people will have less to spend. That clearly impacts the economy and leads to less revenue for businesses. The SNP may think it can ignore our warnings in relation to hiking tax, but it would be foolish to dismiss these fears.’

Proposals from other parties include Scottish Labour leadership hopeful Anas Sarwar’s plan to hammer middle earners in a bid to raise £700million.

The Scottish Government said: ‘Where the Scottish Government has had the power to do so, we have helped protect family budgets and ensured that the people of Scotland benefit from a wide provision of quality public services.

‘As set out in the Programme for Government, we will publish a discussion paper that sets out tax options and considers the impacts ... including on household incomes and economic activity.’

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