Nicola Sturgeon: Tax cut for high earners is '˜wrong choice'

Nicola Sturgeon says money should be invested in public services. Picture: Hemedia

The First Minister confirmed yesterday she will not go ahead with George Osborne’s proposal to take thousands of middle class taxpayers out of the higher 40p tax band and down to the basic 30p rate.

“It is not a choice I am going to make myself,” she told MSPs at Holyrood.

Labour has also pledged not to allow the tax cut for the wealthiest, but the Scottish Conservatives have warned that Scots are now poised  to pay the highest taxes across the UK.

Scotland’s system of free university education, compared with fees of up to £36,000 south of the Border, as well as free personal care for the elderly and free prescriptions all need taxes to pay for them, Ms Sturgeon said.

Under the post-referendum Scotland Bill the Scottish Parliament will be given the power to set income tax rates in April 2017, which is when the Chancellor’s tax cuts are due to be brought in.

The SNP says it will not implement George Osborne’s plans to push up the threshold to £45,000 for the higher rate. It is currently salaries of £42,385 and above which qualify for this 40p rate. It means about 400,000 high earners in Scotland will be paying up to £400 more than south of the Border.

The SNP is to formally outline its tax plans early next week, but Ms Sturgeon warned middle-class Scots cannot look forward to a similar tax break.

“Let me be absolutely clear today, a large tax cut for 10 per cent actually of the population, those on the highest incomes, at a time when support for the disabled is being cut and at a time when our public services are under pressure, is in my view the wrong choice,” she said at First Ministers Questions.

“I think that money should be invested in our public services and in protecting the vulnerable.”

Scottish Conservative leader Ruth Davidson raised fears that some people north of the Border could pay more tax than those earning the same amount in England.

But Ms Sturgeon added: “Unlike in England, if you’re a taxpayer in Scotland your children don’t have to pay for a university education.

“If you’re a taxpayer in Scotland, unlike in England you don’t pay for free personal care for your elderly parents. Of course, these are some of the benefits that taxpayers in Scotland get, unlike in England, that Ruth Davidson wants to take away.”

Ms Davidson asked what “detailed analysis” the Scottish Government has published, before going on to add that the issue of how to use the new powers has not been discussed by experts on the First Minister’s Council of Economic Advisers.

She said: “There has been no analysis or evidence base put forward, and you can run through the minutes of the First Minister’s Council of Economic Advisers at any point in the last year and incredibly the new tax powers don’t even merit discussion amongst them.”

Ms Davidson added: “I am clear I don’t want to see a sign at the border which says ‘higher taxes here’ because I think that is the wrong choice for Scotland.”

Ms Dugdale branded the Chancellor’s spending plans a “typical Tory Budget” in yesterday’s exchanges at Holyrood.

The Scottish Labour leader insisted: “When our schools are facing cuts and thousands of people are losing their jobs, tax cuts for high earners cannot be the priority. When the powers are devolved next year Scottish labour would reverse this tax cut.”