SNP economic ‘credibility at risk’ as it stalls on tax pledge

The Scottish Government is under increasing pressure to reveal when it will raise the tax threshold.

Scottish Liberal Democrat leader Willie Rennie said the SNP government needed to declare if it was abandoning its commitment to raise the personal allowance, after Finance Secretary Derek Mackay failed to spell out when the change would be made.

Three years ago Nicola Sturgeon said the government would raise the personal allowance level – the point from which tax is applied to earnings – to £12,750 by the financial year 2021/22. The current rate stands at £12,500, with earnings up to £14,549 taxed at 19 per cent.

However in response to a parliamentary question from Mr Rennie asking if the commitment still stood, Mr Mackay would not confirm it was still government policy, stating only that: “Decisions on income tax rates and bands for each fiscal year will be announced at the Budget and associated Scottish Rate Resolution.”

Mr Rennie said that with no apparent plan on raising the threshold, the SNP’s “credibility was at risk” over failures to deliver on economic promises.

He added: “Their deal with the Greens threatens to saddle workers with a big tax rise, while the economy bounces along the bottom and now the Finance Secretary seems to be in two minds as to whether the First Minister’s promises are still government policy. This is a complete mess. The Scottish Government need to be clear about whether they are abandoning their commitment to raise the personal allowance.”

A spokesman for the Scottish Conservatives said the lack of action “sounds like the SNP is trying to sneak another stealth tax rise upon hardworking Scots. Its refusal to increase the personal allowance unfair on people, and risks driving more growth away from our economy.”

And James Kelly, Scottish Labour’s finance spokesman, said: “Derek Mackay is turning into ‘the quiet man’ of Scottish politics with his refusal to provide answers on how the SNP will deal with the ongoing fiscal challenges. He needs to spell out how a fair set of tax rates will ensure that public services are properly funded.”

A spokesperson for Mr Mackay said; “It takes some brass neck for Willie Rennie to criticise anyone for not delivering a manifesto commitment.

“The fact is that Scotland is already the fairest taxed part of the UK thanks to the actions of the SNP in government, with 55 per cent of taxpayers paying less than they would if the lived elsewhere in the UK.”