Murphy ‘won’t tax middle class to beat inequality’

Scottish Labour leader Jim Murphy. Picture: Hemedia

The politician described growing inequality as “the biggest moral, social and economic challenge” facing Scotland today, costing the economy billions over the past 25 years.

He set out a series of policies aimed at addressing the issue in his first major economic speech since becoming party leader.

“Disadvantage now cascades down the generations in Scotland,” he said as he gave a speech to the David Hume Institute in Edinburgh.

“It is simply wrong that in Scotland today opportunities for many young people are determined by their social background and family history.”

Labour, he said, would make “pre-tax”, “after tax” and economic growth interventions to increase spending in education and health, and boost job opportunities.

“We cannot have this sort of policy radicalism on the cheap,” he said.

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“Scots are tired of listening to politicians setting out a lofty vision of a more equal Scotland but failing to deliver because we aren’t prepared to make the difficult choices.”

Mr Murphy said he would use the so-called mansion tax - an annual tax on owners of properties worth more than £2 million - a 50p top rate of tax on incomes of £150,000 and a bankers’ bonus tax would be used to finance measures such as 1,000 extra nurses, doubling the number of classroom assistants in poorer schools and guaranteed job opportunities for young people.

He said: “The Labour Party is not willing to increase taxes on the mainstream middle classes and it is not going to increase council tax.”

Asked about how the middle class was defined, he continued: “Generally speaking it wouldn’t be someone living in a £2 million house.

“There will be some people in houses worth £2 million who don’t have significant monthly income - we know that.

“So we will consult on how to introduce this tax on £2 million houses across the UK.

“The starting point there is that would be an extra £250 per calendar month of payment... and we simply feel that a combination of that, and an increase in tax for those who earn over £150,000, of who there are 16,000 in Scotland we think, that is a fairer way of doing it than trying to increase the number of (council tax) bands or increase the council tax more generally.

“There is just a sense more generally that a lot of those people in the broad middle class are struggling.

They work hard and they already pay enough tax, so in government my instinct and approach would be not to increase their taxes either through income tax or through the bands of council tax.”