Johnson’s ‘ill thought out’ plan widens tax divide north of Border
Scots will subsidise a tax cut for higher earners announced by Tor y leadership frontrunner Boris Johnson, critics have said.
Mr Johnson pledged to shift the threshold for the 40p tax r a t e i n E n g l a n d a n d Wal e s from £50,000 to £80,000 in a move that would cost £9.6 billion. The plan will be funded by using up £26bn of ‘ headroom’ in the UK’S borrowing to prepare for a no deal Brexit, as well as raising National Insurance contributions.
However, because tax rates a r e d e v o l v e d b u t N a t i o n - al Insurance is not, S cottish w o r k e r s w o u l d p a y m o r e without seeing any cut to their tax bill. Unless tax rates are changed in Scotland, someone earning £80,000 in the rest of the UK would be nearly £8,000 better off than a worker north of the Border.
T h e F r a s e r o f A l l a n d e r Institute warned that while t h e s t r u c t u r e o f S c o t l a n d ’s devolved tax powers should p r o t e c t t h e S c o t t i s h b u d g - et from cuts as a result of tax changes in the rest of the UK, the economy could b e hit if higher earners move south.
“Such a substantial tax cut a c r o s s t h e U K may l e a d t o pressure on the Scottish government to at lea st par tially follow-suit,” a spokesman said.
Scottish Tory MP Paul Master ton, who is backing Matt Hancock for the leadership, p o s t e d o n t w i t t e r t h a t M r Johnson’s plan was “a go o d reminder that getting some - one to write the right things i n y o u r s p e e c h e s a n d o p - e d s a b o u t u n d e r s t a n d i n g the Union and devolution is one thing, demonstrating it through your policy platform is quite another”.
Fellow S cottish Tor y John Lamont, who supports Jeremy Hunt, said the “ill thought out plan to hike taxes in Scotland lo oks more like some - thing Nicola Sturgeon would plan rather than something a Conservative should go near”.
And Ms Sturgeon posted on social media: “What a horror show the Tory leadership election is. Tax cuts for the richest, a t t a c k s o n a b o r t i o n r i g h t s , hypocrisy on drugs, continued Brexit delusion. True colours well and truly on show.”
Mr Johnson’s rivals attacked the plan, with Dominic Raab saying it would be seen as “the caricature that you’re the party of privilege and you are only in it to help the wealthy”.
A spokesman for Mr Johnson said: “It’s up to the SNP whether they follow B oris’s leadership or continue with their policy of holding S cotland back as the highest-tax part of the UK.” Yesterday Mr Johnson won his first S cottish endorsement, with Colin Clark saying he would “defy convention” as leader.