Humza Yousaf hints at tax rises for wealthy to pay for anti-poverty policies

Humza Yousaf was speaking at an ‘anti-poverty summit’ in Edinburgh

Higher earners are set to be hit by increased taxes as part of plans from Humza Yousaf to raise more money to pay for anti-poverty measures.

The First Minister, speaking at his cross-party ‘anti-poverty summit’ in Edinburgh, said he would be looking closely at proposals around the introduction of a new tax band or wealth taxes ahead of the budget in December.

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This, he said, would be part of a process to examine whether such an intervention could be used to fund higher spending on key poverty reducing measures.

First Minister Humza Yousaf speaks during an anti-poverty summit at Dovecot Studios, EdinburghFirst Minister Humza Yousaf speaks during an anti-poverty summit at Dovecot Studios, Edinburgh
First Minister Humza Yousaf speaks during an anti-poverty summit at Dovecot Studios, Edinburgh

He also hinted his Government may oversee a bonfire of planned policies if they fail to meaningfully move the dial on poverty, stating any proposal that did not move the Government closer to statutory anti-poverty targets would be “looked at again”.

The SNP leader specifically highlighted the “good” suggestions made by the Scottish Trade Unions Congress, which include a new tax band of 44 per cent between £75,000 and £125,140 of earnings.

The First Minister refused to be drawn on specific proposals, stating “robust analysis” was under way, but admitted that he as a minister was “wealthy” when he was earning around £95,000, raising the prospects of such a tax band.

He said: "People quite rightly expect robust analysis before there’s any decision made on taxation. But I’ve been unapologetic on the fact that progressive taxation is required given the financial constraints on our own budget.

"It’s not the only solution. That’s why I’ve talked about targeting investment, that’s why I’ve talked about taking tough decisions, but taxation and progressive taxation absolutely has to be a part of that.

"Let’s have a really honest conversation with the public around those tough decisions, around targeted, around tax and what we can do more on taxation.”

One early casualty as part of the drive to target benefits more effectively and cut costs may be the expansion of free school meals to those in P6 and P7 – a policy that had already been delayed – and a proposed pilot of universal free school meals in secondary schools.

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The First Minister had earlier indicated the policy of expanding free school meals to all pupils may be under review.

Mr Yousaf told the Daily Record: “I’ve got a 14-year-old now. Should people be paying for her free school meals when I earn a First Minister’s salary? I don’t think that’s the right way to use that money. A better way is to target those that need it absolutely the most.”

He later said he was committed to “an expansion” of free school meals, but stopped short of specifying exactly what that would entail.

Mr Yousaf said: "We stood on a manifesto commitment of expanding free school meals for P6 and P7. Things have changed in relation to the UK’s mini-budget, which has wreaked havoc on the UK economy and put food prices up by over 15 per cent.

"But we committed to that manifesto and I think it is really important that we now provide an evidential basis, look at every single policy commitment that we are making at the future and ask ourselves the question is it being targeted in the right way, so that the money we spend goes to those that need it the most.

"We are committed to the expansion of free school meals as per our manifesto. If there are changes in that policy, of course we’ll make sure Parliament is updated in the appropriate way.”

The Educational Institute of Scotland hit out at the suggestion the policy of universal free school meals could be abandoned.

General secretary Andrea Bradley said: “Reneging on a commitment to free school meals would be a massive and profoundly damaging mistake, which would betray young people living in poverty across Scotland, and would be a particularly hard blow to families with school-aged children as they continue the hard struggle with the cost-of-living crisis.”

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Labour MSP Monica Lennon said education secretary Jenny Gilruth had given a “welcome commitment on the further rollout of universal free school meals” to Holyrood last week.

Ms Lennon tweeted: “Poverty doesn’t end at the primary school gates; Humza needs to hold his nerve and continue the rollout.”

Unite the union labelled the potential cancellation of a roll-out as a “screeching hand brake turn”. Senior organiser Joe Rollin said: “We are calling on the First Minister to honour his commitment and remove means-testing for all primary school children for school meals.

“Workers across Scotland are suffering from real-terms pay cuts. Rising food prices are making the situation worse. Families need more support from this Government. And they need it now.”

Mr Yousaf said all of his Cabinet secretaries had been asked to look at any future policy plans and examine whether they would deliver a genuine shift in the rate of poverty in Scotland.

This could see planned universal benefits or policies be targeted more tightly to those worse off, reducing the bonuses for the middle classes and cutting costs in the process.

He said: “What we’re asking is effectively doing that poverty impact assessment. Is it going to help us to shift the dial when it comes to poverty? Will it help us to reduce poverty, when we look at those interim targets, we look at the longer-term targets that are statute in law, is it going to help us to get there?

"Each and every individual policy, will it help us to make progress on that journey and if it doesn’t, let’s look at it again.”

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The planned National Care Service (NCS), highly controversial among parliamentarians due to its £1 billion cost, does not appear to be part of the potential policy bonfire.

Mr Yousaf said the NCS was “an example of having good levels of consistent care, right across the country and can actually help us in relation to those that suffer poverty”.

He added: “For example, if we get them the care package they need at home they won’t have to end up in hospital, delayed discharge, potentially catch an infection in hospital and stay in hospital longer – that’s not good for them, it’s bad for their conditioning too.”

The SNP leader also rejected the suggestion he was attempting to claw back money from portfolios to help meet poverty targets despite saying he was looking at places the Government could “make savings” and make “tough decisions”.

"There’s no raid on budgets,” he said. “I’ve not talked about a raid on budgets.

"What I’ve said is we need to make sure that we are looking at taxation, of course making tough decisions where they are necessary, and we’re looking at targeting our spending as we have done with, for example, the Scottish Child Payment, and other benefits that we’re looking at, but there’s no talk of raiding budgets.

“For every future policy that we’ve not yet implemented, I think it is right that we do the analysis on it and make sure every penny we’re spending is targeted towards households that need it the most.”

Scottish Tory leader Douglas Ross, who attended the summit, said it was “very worthwhile”, but stressed actions would be what Mr Yousaf was judged on.

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He said: “Humza Yousaf was right to accept criticism of the SNP’s record in government, and say it made him feel uncomfortable, because on so many issues their record is woeful.”

Scottish Liberal Democrat leader Alex Cole-Hamilton said he sensed a “degree of cynicism” among those present at the summit. He said the “platitudes we were offered by ministers were all too familiar”.

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