Scots income tax raise ‘would fight health inequality’

INCOME tax in Scotland should be increased to help tackle health inequalities between rich and poor, a health board has suggested.

There are particular concerns over what negative effects the benefit system changesc could have. Picture: John Devlin

NHS Health Scotland, which is charged with improving the health of the nation, has told MSPs it backs the introduction of a Scottish Rate of Income Tax (SRIT) at a rate greater than 10 per cent.

From April next year, the UK Treasury will deduct 10p from the rate of income tax in Scotland, with MSPs then deciding whether to keep the rate the same as the rest of the UK, raise it or lower it.

First Minister Nicola Sturgeon has already hinted that her administration will not use the powers, as changes would have to be made to all tax bands rather than being targeted at high earners.

That ability will not be transferred north until later, with the latest Scotland Bill which is going through Westminster proposing to give MSPs control over the rates and bands of income tax.

NHS Health Scotland accepted there were “limitations” with the income tax powers coming to Holyrood in the new financial year.

It said increasing SRIT by 1p could reduce inequalities but “would require the resultant increased revenue to be used for redistribution or to fund effective public services for it to generate a positive impact on mean population mortality”.

The health board added: “Given that this additional revenue is likely to be used for such purposes, we would therefore support the introduction of SRIT at a rate greater than 10 per cent.”

MSPs on Holyrood’s Finance Committee are looking at the new tax powers, with the submission from NHS Health Scotland arguing that using the money for universal services and to help fund preventative work would be “effective uses of the additional revenue”.

It added: “Particular consideration should be given to mitigating the impact of the reduced value, and increased conditionality, of the social security system as this is likely to reduce the incomes of the poorest and have multiple impacts on particular vulnerable groups (eg, lone parents and people whose benefits have been sanctioned), with consequent negative impacts on their health.”