Dramatic change in SNP's stance on taxation is urged

A BLUNT challenge to the SNP to end the "politics of the pork barrel" has prompted dramatic moves inside the party to drop its traditional "tax and spend" stance in favour of advocating lower income tax. The call for the party to promise to use the powers of the Scottish parliament to cut the ‘tartan tax’ comes today from Michael Russell, a former SNP MSP.

Writing in The Scotsman, Mr Russell warns the Nationalists that they have to "eschew the traditional opposition solution of throwing cash at any problem".

He says: "The Scottish Socialist Party should be left to advocate squeezing the rich until the pips squeak. The real gap in the electoral market lies with the vast bulk of the voting public who are tired of seeing more and more of their money deliver fewer and fewer results." And he adds: "For the SNP it is not enough to argue that independence will solve everything."

Mr Russell, who came third in the fight to succeed John Swinney as leader, says that the SNP should follow the example of the Tories at Westminster in setting up an independent commission to identify waste and inefficiency in the Scottish Executive’s 23 billion budget.

But his most dramatic proposal - which runs contrary to the views of Alex Salmond, the party leader - is for the party’s advocacy of lower corporation taxes to be matched with a similar pledge on income tax.

Mr Russell writes: "The most radical change of all would be for the SNP to willingly accept that low taxes - personal as well as business - produce most growth, something that is now very obvious in the differing performance of the new EU accession states.

"Even within the present settlement, being willing to use the tartan tax to reduce the tax burden and stimulate economic activity would create a new set of opportunities with which Westminster would find it hard to cope."

Last night Mr Russell’s bold move, which would allow the SNP to outflank the Tories on tax in the 2007 Holyrood elections, won broad support from senior Nationalists.

Kenny MacAskill, the party’s justice spokesman, said the comments were "a very welcome part of the debate". He added: "We have just launched our economic strategy which is about making Scotland competitive by cutting corporate taxation. Michael has gone into the realms of personal taxation and that will have to be looked at. Arguing against the idea that simply spending money is the answer to all our problems is quite valid. There has to be an outcome in terms of service as well as input in terms of spending."

Alex Neil, seen as a firebrand of the left, said: "We should consider this very carefully as there could be an issue of Westminster clawing back the 800 million to 900 million cut in taxes, but I do not have any ideological objection to this."

The only voice of caution raised publicly came from Christine Grahame, a Borders MSP. She said: "I believe in direct taxation and redistribution of wealth but not stealth taxes like VAT and the council tax. We need to switch to direct taxation through income tax."

And despite the SNP leader ruling out lowering income tax in the same way as he has prosed to cut corporation tax, his spokesman said last night that Mr Russell’s ideas were a "positive and constructive" contribution to the debate.

Mr Russell’s views are bound to be debated on the fringes of the party’s spring conference in Dundee today. The SNP yesterday announced that a quarter of a million households will receive a telephone call from Sir Sean Connery as part of a sophisticated new telephone election campaign.