Tories prepare to defy leader on tartan tax

SCOTTISH Tories appear set to go against the tax-cutting policies of Iain Duncan Smith by refusing to pledge reductions under the parliament’s "tartan tax" variation powers.

Annabel Goldie, the deputy leader of the Scottish Conservatives, said in a radio interview aired today that attempts to lower taxes immediately would be dangerous, premature and feckless.

The Scottish Tories could promise tax cuts for Scots by making use of the parliament’s tax-varying powers that allow an increase or a decrease in tax of up to 3p in the pound.

However, Ms Goldie made it clear in an interview with Radio Forth that it would be "dangerous to tamper with the tax-varying powers of the parliament".

Until now, the Scottish Tories have not made any commitment over the use of the so-called tartan tax, but Ms Goldie’s comments clearly suggest there will be no commitment to lower taxes in the party’s election manifesto for the May elections.

Her remarks will be seen as going against the view of Mr Duncan Smith. While there is apparent confusion in the UK Tory ranks about tax cuts, Mr Duncan Smith said last month that an incoming Conservative government would be a "lower tax, lower regulating party than the outgoing Labour Party".

The Scottish Tory policy on taxation would also mean the party would be unable to present an alternative to the policies of other parties on the key issue of taxation.

Jack McConnell has already ruled out the use of the varying power to increase taxes in the next parliament. The SNP and the Liberal Democrats have yet to make a final decision, but are expected to argue that increasing taxes would be unnecessary.

Ms Goldie, who is also the Tories’ economic spokesman and a list MSP for West of Scotland, said in the interview that, naturally, the Conservatives would always be interested in creating an environment for business which was as helpful as possible.

She went on: "What we have to consider is that, if we do contemplate in any way cutting taxes, we would have to look at public expenditure also and try to keep the economy stable.

"In our view it would be dangerous to tamper with the tax-varying powers of the parliament."

Ms Goldie said the Scottish National Party wanted to create a more attractive business tax environment, but she warned that an initiative that might appear more attractive in one sector could be offset by higher personal tax and higher insurance contributions in another.

The MSP acknowledged there were always options to be considered in relation to the economy. But she added: "What the Tory party in Scotland is very clear about is that it would be premature at this stage to talk about interfering with the tax-varying powers.

"We have got to make devolution work better - that is the overwhelming obligation - and we will have suggestions about how to make that happen.

"What we have to do is to retain economic stability and not be seen as being feckless and grabbing easy headlines."

In his comments last month, Mr Duncan Smith said a Tory government would run a lower tax regime than Labour by increasing the involvement of the private and voluntary sectors in public services. He stressed this would be his party’s policy.