Families more afraid for the future as SNP tax rises loom

SCOTS families are becoming increasingly worried about their finances while facing the threat of SNP tax rises, a government survey reveals.

There are also growing concerns about the state of the economy, research shows.

Figures from the Scottish Consumer Sentiment Indicator reveal a growing number of families expect their cash situation to get worse this year, when the SNP will introduce proposals to increase tax rates from April.

The data has sparked calls for ministers to scrap the plans – and it is feared any further tightening of family purse strings could cause more economic turmoil and threaten high street jobs.

Scottish Retail Consortium director David Lonsdale said: ‘Family finances are under strain and disposable incomes do not stretch as far as they used to as inflation continues to outstrip wage growth.

‘Household finances will be tested further in the months ahead, with rises in income tax and council tax in the pipeline.

‘With the Scottish Government’s Budget set to be finalised over the next few weeks, any notions about increasing income tax even further than that already planned should be knocked on the head – it could cast a pall over consumer spending, which is a mainstay of our economy.’

Under SNP plans, most workers earning more than £33,000 a year will see tax bills soar, while 1.1million people earning more than £26,000 will pay more than those elsewhere in the Uk.

The figures were published by the Scottish Government following a survey of 2,000 adults between October and December.

When asked how Scotland’s economy is performing compared with 12 months earlier, 11.4 per cent of respondents felt it had improved and 23.3 per cent felt it had worsened. This gave a balance of -11.9 percentage points, compared with -5.9 the previous quarter.

Looking ahead to the next 12 months, 17.6 per cent expect the economy to improve and 28.6 per cent fear it will worsen – the -11 per cent balance is a slight rise on the previous -11.7.

Regarding household finances, 15 per cent expect an improvement in the next 12 months, while 10.4 per cent expect them to worsen.

The +4.6 per cent balance is lower than the +6.2 per cent the previous quarter.

Scottish Tory finance spokesman Murdo Fraser said: ‘With the SNP’s attack on people’s pay packets, it’s no wonder people are less confident.’

The Scottish Government published the findings on its website yesterday. The report states: ‘The composite Consumer Sentiment Indictor decreased by 1.2 points over the quarter to -4.3... consumer sentiment weakened compared to Q3 [third quarter] 2017 and remains negative.’

When he unveiled his tax plans last month, Finance Secretary Derek Mackay said basic rate taxpayers on over £24,000 will pay a new 21p rate of income tax. The higher rate will go from 40p to 41p on earnings above £44,272, with the top rate up from 45p to 46p above £150,000.

The Scottish Government said: ‘Our income tax policy will protect the 70 per cent of taxpayers who earn less than £33,000 a year and ensure they pay less tax next year.

‘Our Budget plans will see hard-working public sector workers receive a pay increase of as much as 3 per cent.’

‘Attack on pay packets’