By signalling tax rises the First Minister has shown her true colours as a politician of the left writes Tom Peterkin
When the history of Holyrood is written, it could well be that this week’s Programme for Government is seen as a moment of some significance.
Nicola Sturgeon’s attempt to reset her government may have lacked the white-knuckle drama of the independence referendum, the pathos of Donald Dewar’s death or the chutzpah of Alex Salmond’s helicopter ride to Prestonfield House to seize power in 2007.
Nevertheless the series of initiatives announced by Ms Sturgeon is likely to go down as the point when she finally made a serious attempt to put her own stamp on her leadership.
It may have taken a while, but by signalling income tax rises to pay for her wide-ranging programme, Ms Sturgeon has finally lived up to her reputation as a left-winger.
Until now – and particularly under Alex Salmond’s leadership – the SNP thrived by embracing a chameleon-like quality when it came to its position on the left/right political spectrum.
To the left-leaning voters in Labour heartlands on the west, it presented itself as a party of radical socialism taking on the Tories at Westminster.
In the Tartan Tory strongholds of Angus, Perthshire and the North-east, the SNP portrayed itself as a business friendly, responsible party of government that would stand up for Scotland’s interests.
For many years, the SNP managed to straddle these two incongruous positions with notable electoral success. It was a balancing act at which Mr Salmond proved particularly adept and which explained the SNP’s reluctance to rock the boat when it came to using Holyrood’s tax-raising powers. As a former Royal Bank of Scotland economist, Mr Salmond was fond of referring to the Laffer Curve – the economic model which states that increasing taxes above a certain level reduces revenue – to explain the small “c” conservatism of his economic policies.
More recently, however, the SNP has suffered in the shires at the hands of the Scottish Conservative revival inspired by Ruth Davidson and her opposition to a second referendum. The Tories’ new lease of life has been accompanied by a Labour-bounce attributed to the Jeremy Corbyn effect and his party’s lurch to the left. With many left-wing voters, who had transferred their loyalties to the SNP, coming back to Labour, Ms Sturgeon’s move leftwards was an attempt to stave off the Corbyn threat.
That’s not to say there weren’t other pressures on the SNP leader. After a decade of SNP power, Ms Sturgeon’s administration was looking tired. The backlash that greeted her plans for a second referendum has forced independence on to the back-burner for some time at least.
Therefore the First Minister was in desperate need of some eye-catching announcements. Promises to investigate the introduction of a citizen’s wage and confirmation of plans to lift the 1 per cent public sector pay gap underlined Ms Sturgeon’s rediscovered left wing credentials. As did her pledge that there would be a public sector bid for the ScotRail franchise.
But for Joe public the big question remains: what form will Ms Sturgeon’s tax plans take and who will they affect? Ms Sturgeon promised to produce a paper ahead of the Scottish Government budget which would look at income tax options including those proposed by opposing parties. As the leader of a minority government, she acknowledged that she had to build alliances across the parliament to bring her plans to fruition.
But with Labour, the Greens, and the Lib Dems all calling for some form of tax rises, achieving a parliamentary majority for tax rises should not be a problem come December when the budget is expected to come before MSPs.
Those seeking clues about the form these tax changes will take should look at previous statements made by Ms Sturgeon in which she has said she would consider increasing the rate of tax for the highest earners with salaries of £150,000 plus from 45p to 50p – despite warnings that doing so would cost the public purse £30 million as the very wealthy move south of the Border. And with Labour and the Lib Dems advocating a penny on income tax across the bands, there are a variety of options open for Ms Sturgeon.
Behind the scenes, Scottish Government sources have suggested they would be happy to look at changing bands as well as rates – an approach that has been suggested by the Scottish Greens, who themselves want to see the 40p rate increased to 43p for those receiving more than £43,000 as a well as a 60p rate for the highest earners.
While four of Scotland’s five main political parties seek common ground on tax rises, the shift of the SNP from the centre ground presents a big opportunity for Ms Davidson and the Scottish Conservatives. Ms Davidson will try and occupy the vacuum left by Ms Sturgeon’s retreat from the centre, standing as a lone voice against tax rises.
It may be a lonely outpost in the Scottish Parliament, but it will prove highly attractive to many in the Scottish middle classes, who are reluctant to hand more of their hard-earned cash over to the state. The Tories’ stance will also be attractive to the wealth creators, who believe a high tax economy will discourage businesses from investing north of the Border.
Ms Sturgeon’s efforts to shore up support on the left leaves her vulnerable to attacks from the right.