Scottish Labour leader Kezia Dugdale has accused Nicola Sturgeon of abandoning her progressive roots and embracing the “old establishment” politics of handing tax breaks to the rich and courting millionaires.
Ms Dugdale said the Panama Papers, which have exposed offshore tax havens, reinforce public anger against “the establishment” and its attitude to tax avoidance, and said Ms Sturgeon now “risks becoming that establishment”.
She dismissed claims that her proposal to raise the top rate of income tax in Scotland could see high-earners relocate to England as Tory-style “scare tactics”.
She also attacked Conservative leader Ruth Davidson’s claim to be the low-tax candidate, insisting she backs stealth taxes on ill-health, education and the disabled.
Ms Dugdale said Holyrood should “risk upsetting the millionaires and risk asking the wealthiest to pay a bit more”, at a Scottish Parliamentary Journalists Association event in Edinburgh.
“The Panama Papers speak to a wider sense of public anger that we haven’t seen since the MPs’ expenses’ crisis, in the sense that there is the establishment for which there is a different set of rules from everybody else,” she said.
“I’m fed-up with politicians - particularly in the SNP and the Tory party - making excuses and accepting that rich people do not pay their tax while the rest of us have to suck it up.
“I utterly refute the argument about the rich in Scotland being able to avoid their tax simply by allocating their residency in Berwick.
“HMRC are making it harder for people to move their tax liability.
“Look at the types of people in Scotland who earn over £150,000 a year.
“Take, for example, the leader of a social work department in a big council authority that earns over that amount, that person could go live in Berwick but there is still a £150,000 job sitting at Glasgow City Council. Some of these jobs physically can’t move.”
She added: “Nicola’s weakest point in this election is using Tory arguments to make excuses for why rich people shouldn’t pay their taxes, given a year ago she supported a 50p tax rate.
“The SNP are using the same type of scare tactics that they have accused others of in the past.
“It’s the type of old politics that Nicola Sturgeon used to rally against. At last year’s general election, the people of Scotland gave the establishment a kicking. That is clear and my party is learning the lessons of that.
“Now, I think Nicola Sturgeon risks becoming that establishment. She represents that old establishment politics that takes money from the likes of Brian Souter and doesn’t ask them to pay a penny more in tax.
“It makes Tory arguments against levying a 50p tax rate on the richest people.
“That old establishment politics that makes false claims about the impact of our plans on pensioners and low income families when it comes to the use of the basic rate.”
The Conservatives have made a concerted effort to beat Labour into third place at the Scottish election but Ms Dugdale said they are standing on a false prospectus.
“Ruth Davidson is trying to occupy the ground in this election which says that she opposes tax rises and that ‘somebody has got to stand up for the middle classes’,” she said.
“But she represents three policies which are inherently stealth taxes: prescriptions charges which is a tax on ill health, tuition fees which is a tax on aspiration, and the bedroom tax which is a tax on disabled people.”