To increase tax or not increase tax?

10 Feb 2016

 

After the UK Tory Government cut a further £371 million from Scotland’s Budget from March this year that is the question.

 

It came out of the blue; Labour's proposal to put up income tax.

 

Last summer the Scottish Parliament’s Finance Committee, comprising three SNP, two Labour, one Conservative and one Independent MSP, sought evidence on what the new Scottish Rate of Income Tax (SRIT) devolved under the 2012 Scotland Act.

 

Under SRIT, the UK Government deducts 10p in the £ across each rate of income tax. The Scottish Parliament can then set a Scottish rate that applies across each tax band. Power to alter tax bands or thresholds is not devolved, so any increase is paid by all taxpayers.

 

The Committee heard arguments for setting a different rate of income tax to the rest of the UK but the overwhelming view of witnesses, from the Federation of Small Businesses to the Scottish Trades Union Congress (STUC) was that SRIT should be set at 10p in its first year. In the words of Stephen Boyd, STUC Assistant General Secretary to Committee:

 

“Having been through an historically unprecedented collapse in real wages over the past five years, 2016-17 is not the moment on which to increase taxes on the lower paid.” 

 

Jackie Baillie MSP, Labour’s Finance Spokesperson and Committee member added:

 

“The yield that we would get from 1p on the Scottish rate of income tax is actually quite small. Is there not a better argument to be had about shifting spend within the overall budget”? 

 

On 29 January the Committee unanimously agreed to support SNP Government proposals to set SRIT at the same rate of income tax as paid by other UK taxpayers. 

 

In a cynical manoeuvre seemingly born of a desperate need to say something different, having suggested not a single amendment to the budget last year, ONLY THREE DAYS LATER Labour abandoned its position and called for 1p tax rise across the board, discovering only later that this would not only hit the low paid but tax-paying pensioners too!

 

Labour suggested a £100 rebate for low paid workers but has consistently failed to explain how it would work and cost amidst concerns that it was even legal. When pressed on Saturday for details their spokesman said he was too busy “watching the rugby!”‘ 

 

The Tories are picking our pockets and Labour wants us to pay for it.
 
Despite the challenges of UK imposed austerity, the  SNP Government’s Scottish Budget will protect household incomes and delivers a pay rise for 51,400 low paid workers, ensuring all social care workers, mainly women, are paid at least the Living Wage of £8.25 an hour, rather than the £6.70 hourly minimum wage many receive at present.

 

The Council Tax freeze will continue, with key pledges including a £444 million rise above inflation in the NHS budget, including a 5.3% rise of £34.5 million for NHS Ayrshire & Arran, protection of teacher numbers and the police budget. £250 million is also being provided for the integration of health and social care.

 

Whilst Labour wants to shift the burden of Tory austerity onto people across the country, such as all newly-qualified nurses, teachers and police officers to effectively take a pay cut, the SNP will continue to do all we can to fight the impact of Tory austerity and will not impose greater tax burdens on people.
 

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