First Minister Nicola Sturgeon is set to deliver her clearest signal yet that “better paid” Scots face higher taxes than elsewhere in the UK as she ups the ante in the Holyrood election campaign with a pledge to “invest in public services”.
But those on lower salaries who pay the basic rate will have no tax hikes for five years, the SNP leader will tell delegates at her party’s conference in Glasgow today.
Ms Sturgeon was last night accused of being part of a “bidding war” to impose higher taxes on Scots and urged to instead focus on economic growth.
Chancellor George Osborne is expected to use next week’s budget to increase the current £42,385 earning threshold before workers pay the higher 40p tax rate. It is expected to go up to £43,000, effectively a tax cut. He is also expected to set out plans to “accelerate” progress on proposals to push up this same higher tax rate threshold by 2020 to those making more than £50,000.
The Chancellor is also considering cutting the higher rate for those making more than £150,000 from 45p to 40p.
As Holyrood’s prepares to take control over income tax rates and bands next year, Mr Sturgeon will today say that the basic rate will be frozen for the duration of the next parliament until 2020.
She will add: “Given the circumstances we face right now, I also think it would be wrong – deeply wrong – to give big tax cuts to the better paid as George Osborne is planning to do.
“We will not do that. Our choice will be to invest more in our public services instead.”
Ms Sturgeon will say the Scottish government will set out its plans for income tax after Mr Osborne sets out his own spending plans next week. The SNP is riding high in the polls and Ms Sturgeon looks poised to win another majority government at Holyrood in May’s election with Labour and the Tories having accepted they are in a battle for second place.
MSPs will take control over setting income tax rates and bands as the new powers agreed in the post-referendum Smith Commission powers come into force next year. Ms Sturgeon will today set out the “key principles” of her approach to taxation as SNP delegates gather over the next two days at the Scottish Exhibition and Conference Centre.
“We will never forget that every decision we take on tax has to be paid for by you, the hardworking people of this country,” Ms Sturgeon will say.
“We will not raise the basic rate of income tax in the next parliament. I don’t think there’s anything left wing about a competition over who can tax ordinary people the most.
“Taxing the lowest paid doesn’t tackle austerity, it simply passes the burden of Tory austerity to the shoulders of those who can least afford it and that is not fair. So I think it would be wrong at this time to raise taxes on the lower paid.”
Labour and the Liberal Democrats have both set out plans for 1p tax rates, although Labour say low earners would get a full rebate to ensure they do not lose out.
But Ms Sturgeon has played down Labour’s call to increase the rate for the highest earners – on more than £150,000 – from 45p to 50p.
The First Minister said fewer than 20,000 Scots earn this amount. She added: “These are some of the most mobile people in the country and it wouldn’t take very many of them to shift their outcome out of Scotland for us not to raise money through that but to lose revenue.”
The Conservatives have pledged not to raise taxes higher then elsewhere in the UK.
“The SNP, Labour and the Lib Dems need to end their bidding war on higher taxes and instead think about a plan that supports Scottish jobs and grows our economy,” a Tory spokesman said.
Labour education spokesman Iain Gray said the SNP has cut training and education by 10 per cent since coming to office.
He added: “Nicola Sturgeon poses as a radical politician but she has voted against using fairer taxes in the Scottish Parliament to cut the gap between the richest and the rest at each and every opportunity. She is leading a managerial government rather than a radical one.”
The First Minister will also unveil plans to expand free school meals to toddlers in nursery from the ages of two to four when plans for full-time childcare of 30 hours a week are introduced by 2020. This will benefit about 135,000 Scots youngsters without the “stigma of means testing” she will say.
The move was welcomed by childcare campaign group Free Funding for our Kids. But a spokeswoman said: “There are still big questions about how exactly the Scottish Government will double free nursery hours when one in five children are unable to use their existing entitlement, because of inflexible and inconsistent service provision.”