Harvie demands more radical tax rises

Patrick Harvie believes fiscal policy must be more responsive to events. Picture: John Devlin

Green co-convener Patrick Harvie has called for a new era of progressive politics that would see higher earners pay even more tax in the future.

After his party negotiated a budget deal that makes Scotland the highest taxed part of the UK, Harvie said he would seek to persuade the SNP to go further when it comes to tax rises.

Last week the minority SNP administration required the support of the Greens’ six MSPs to get Finance Secretary Derek Mackay’s budget through Holyrood.

Pressure from the Greens saw Mackay impose a more punitive tax regime on the middle classes than he originally proposed.

Speaking to Scotland on Sunday, Harvie called for a new “mindset” when it came to Scotland’s finances. Although tied into Mackay’s deal for 2017-18, Harvie said he wanted to embrace a more radical left wing approach in years to come. He said: “We are now in a parliament which sets fiscal policy in Scotland to a significant extent and that’s got to be responsive to events. I think we have got to move away from this notion of governments elected on a manifesto that sets tax policy for five years in advance.

“I don’t think any government that was serious about responding to what are pretty turbulent times should be thinking that way. I think we need to advance a much more interesting debate about how tax policy works in Scotland.

“For the SNP it is about moving away from the mindset that says we are in government, our manifesto is what will happen and there is no room for flexibility. After the year we have had, since the 2016 manifestos were written, any government would reasonably be able to say so much has changed we need to be responsive in how we set economic policy.

“There is a very deep debate to be had about how the new powers should change the mindset of economic policy in Scotland. I regret that we haven’t got further than we have in this first budget. I think it is good enough at the moment, but it is not perfect. Clearly the rest of this parliament is going to have to see a change in direction.”

Harvie added: “My view and the Green priorities would be a change in direction to a more progressive rate of tax. ”

Last week Mackay refused to implement a UK government tax break that will raise the 40p threshold from £43,000 to £45,000 south of the border. To meet Green demands he also abandoned his original plan to raise the Scottish threshold in line with inflation to £43,430. Freezing the Scottish 40p threshold at £43,000 in Scotland will see around 372,000 Scottish taxpayers pay £400 more per year than elsewhere in the UK.

Murdo Fraser, Scottish Conservative finance spokesman, said: “This is exactly what those of us on the Scottish Conservative benches have been warning about. Derek Mackay has got into bed with the Greens in order to squeeze through his budget, but the SNP now risks being dragged ever further to the left.”

A government spokesman said: “We have published a budget for growth and public services, which will deliver increased investment in education, the NHS and protects low income households. At a time of challenges to our economy, not least the threat of a hard Brexit, this is a budget which will support jobs and lay the foundations for future growth.”