MSPs to make history as Holyrood uses new tax powers
MSPs will set the rate and thresholds for income tax in Scotland for the first time today, using new powers devolved in the wake of the independence referendum.
Under a deal struck between the Scottish Government and the Greens, Holyrood will approve the Scottish Rate Resolution for 2017-18, meaning higherearning people north of the Border pay more income tax than those to the south of it.
The threshold for the 40p rate of income tax will stay at £43,000 in Scotland, while the Westminister Government raises it to £45,000 for the rest of the UK.
The plan, which should raise about £108million, will affect about 10 per cent of taxpayers in Scotland and see them paying up to £400 more than English counterparts.
The SNP-Greens deal also means an extra £160m for councils, although local authorities still face cuts of about £170m next year.
Finance Secretary Derek Mackay said: “Our Scottish social contract is the best deal on tax and public services anywhere in the UK.
“It means increased investment in the NHS and protection of public services that are free at the point of use – including free prescriptions, free personal care for the elderly, mitigation of the Bedroom Tax, free higher education, no business rates for 100,000 small businesses, additional investment in reducing the attainment gap and the doubling of free childcare.”
However, Labour’s Alex Rowley said the Greens had “sold out” the poor with a deal that imposed £170m of cuts on schools and care for the elderly, without asking the richest to pay a 50p top rate.
He said: “Today the Scottish Parliament will make history by setting income tax rates and bands for the first time. But the SNP is refusing to use the new powers of the Scottish Parliament to invest in our valued public services.
“Propped-up by the Greens, the SNP will plough on with cuts to local services such as local schools and community care.”