John Swinney urged not to raise income tax

JOHN Swinney is being urged not to raise income tax when he becomes the first ever Scottish finance secretary to assume control over this in next week’s budget.

John Swinney's budget is his first chance to use augmented tax powers. Picture: Andrew Cowan
John Swinney's budget is his first chance to use augmented tax powers. Picture: Andrew Cowan

The Deputy First Minister will set out the new Scottish rate of Income Tax (SRIT) on Wednesday. This will see income tax effectively cut by 10 pence with Swinney then tasked with raising it back up to the required level in line with need.

But the Conservatives are urging Swinney not to raise the new “SRIT” above the UK rate.

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“This is a historic budget when the new powers we promised to deliver for the Scottish Parliament begin to come on stream,” said Tory enterprise spokesman Murdo Fraser.

“However, what taxpayers want to know is that the government is on their side. There is precious little evidence of that to date.

“The SNP’s record is that of a high tax party. They brought us the disastrous ‘penny for Scotland’ campaign. Last year, as soon as he got control over stamp duty, John Swinney whacked up taxes on housebuying. As new powers are devolved this year, the fear is that they will increase income tax.

“So John Swinney must make it clear this week that he is prepared to learn from the mistakes of his past and show he is on the side of working families and taxpayers.”

The SRIT is being introduced as part of the Calman Commission powers to mark the tenth anniversary of the Scottish Parliament.

Holyrood will get even more powers as part of the Smith Commission post-referendum package in the coming years.

The SNP has indicated it won’t raise taxes under SRIT as it would mean across the board increases for all taxpayers. The Smith Commission will allow the targeting of higher earners.

Swinney has warned that the Chancellor’s recent spending review will mean real-terms cuts of about £1.5 billion in the years ahead.

“Now Scotland has to deal with the reality of the Chancellor’s decision. We face tough choices in the coming days,” he said.

Labour has challenged Swinney to produce a genuine “anti-austerity budget”.

The party’s public services spokeswoman Jackie Baillie said: “Politics in Scotland is changing. The debate now isn’t about pretending we can’t change things, but instead talking about what we can do with the new powers coming to the Scottish Parliament.

“Ahead of the most important budget since devolution it’s time John Swinney backed up his anti-austerity posturing with something real. Telling us about pre-election giveaways now and cuts later isn’t good enough.”