Mundell: Tax rise will drive away immigration from Scotland

Plans to make Scotland the highest taxed part of the UK could drive away future immigration, the Scottish Secretary has claimed.

David Mundell attacked Holyroods use of its new tax powers to change the higher rate threshold. Picture: Andrew Cowan/Scottish Parliament

David Mundell said yesterday the measures backed by MSPs this week could discourage doctors and other key workers from coming north of the Border.

But the SNP has pointed towards new research which shows the overall tax burden facing people in Scotland is down because council tax is lower.

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The SNP has demanded control of immigration following the Brexit vote. This has been ruled out by the UK government, but Mr Mundell said parts of Scotland and other areas of the UK could get some kind of special arrangement to counter issues such as de-population.

But he attacked measures passed by MSPs this week, using Holyrood’s new tax powers, which will freeze the threshold for the higher rate of 40p at £43,000. South of the Border, this threshold is rising to £45,000. It means about 374,000 Scots – one in seven workers – will pay more than their counterparts in the rest of the UK.

Mr Mundell said: “Of the people who come into the United Kingdom at this moment, only 4 per cent end up in Scotland.

“Making Scotland the highest taxed part of the United Kingdom is not necessarily the way to attract medical professionals to come to Scotland. There are a lot of other things they could do.”

However, his views came as analysis by the Scottish Parliament’s Information Centre showed that overall council tax bills are cheaper in Scotland by £300-£400 a year, which the SNP’s Ivan McKee said effectively cancels out the tax change.

He said: “The SNP’s tax plans are balanced, progressive and support investment in public services.”