SNP preparing for new tax powers

Nicola Sturgeon confirms SNP would put a higher tax burden on Scotland’s highest earners than anywhere else in the UK

Nicola Sturgeon has confirmed the SNP would place a greater tax burden on Scotland’s higher earners than those in the rest of the UK.

The First Minister said she would not follow George Osborne’s decision to give the better off a tax break when Holyrood gets control of income tax.

Mr Osborne announced in his Budget on Wednesday that he will raise the threshold at which people start paying the higher rate from £43,000 to £45,000 in April 2017.

That will see those Scots earning more than £45,000 paying £400 more in tax than those south of the border.

Scottish Labour leader Kezia Dugdale called on the SNP leader at First Minister’s Questions to reveal her income tax plans.

And she urged the First Minister to put on record whether she will reverse Mr Osborne’s tax break for the richest, which Ms Dugdale said was granted amid spending cuts for everyone else.

“This Parliament should not be a conveyor belt for Tory austerity,” she said.

“The First Minister has spent her entire career arguing that more powers mean fewer cuts. People deserve a clear answer.”

Ms Sturgeon said she believed a “tax cut to the 10% of the population at the highest end of the income spectrum is the wrong choice”.

“Clearly if I think that it is the wrong choice, it is not a choice that I am going to make myself.”

She added the tax cut for the richest 10% would not be right when “support for the disabled is being cut and our public services are under pressure”.

Ruth Davidson, the leader of the Scottish Conservatives, warned against putting Scotland out of sync with the rest of the UK by imposing higher taxes.

“I do not want to see a sign at the border that says ‘higher taxes here’. I think that that is the wrong choice for Scotland,” she said.

Experts have worked out that if Scotland froze the higher rate threshold in cash terms it would raise an extra £300 million in tax revenue – thanks to wage rises dragging more people into the higher band.

The Institute for Public Policy Research thinktank in Scotland also found a 1p rise across all bands would raise £500m, which Labour and the Lib Dems have both committed to do in April.

A penny increase for higher ratepayers only, which can only be done from April next year, would bring in £100m, the IPPR added.

Ms Sturgeon delivered a speech in St Andrews last night that dubbed Mr Osborne’s spending cuts “selfdefeating”. She instead advocated investment in infrastructure, skills and education to boost productivity.

“The Chancellor’s excuse for these needless and ideological cuts is because he will once again miss his growth and deficit reduction targets for the years ahead – targets he is missing because of those cuts,” she said.