NICOLA Sturgeon has ruled out following the Chancellor’s lead and giving a tax break to tens of thousands of middle-class Scots, calling the idea “shameful”.
The First Minister said the SNP budget for 2019/20 would be in “stark contrast” to Philip Hammond's, which raised the threshold for the 40p rate of income tax to £50,000 south of the border.
In Scotland, the upper rate threshold is £43,430 and the rate is 41p in the pound.
The Chancellor’s decision to bring forward a Tory manifesto pledge to lift the threshold to £50,000 in England has put pressure on the SNP to do likewise.
Even if the Scottish threshold went up by inflation next year, Scots earning £50,000 would still pay around £1000 more in income tax than their English counterparts.
But a new analysis from independent Holyrood researchers found closing the cross-border tax gap would also mean at least £410m less for public services in Scotland.
At First Minister’s Questions, acting Tory leader Jackson Carlaw asked Ms Sturgeon to give “hope of tax relief” to Scots senior teachers, nurses and police officers who could end up paying £1,000 extra compared to those “doing exactly the same job elsewhere in the UK”.
Ms Sturgeon attacked the fundamental principle of giving a tax break to the better off instead of putting more money into services.
She said: “When we set our budget on 12 December, the decisions that we take will be driven by our determination to protect our NHS and our other public services, to tackle poverty and low pay, and to ensure that those who earn the most in our society make a fair and reasonable contribution to our public services.
“It will be a balanced, progressive and fair budget, and it will stand in stark contrast to the one that we had on Monday.”
She cited research by the Resolution Foundation think tank found 84% of the benefit of the tax cut would go to the top half of earners, and 37% of the benefit would go to the top 10%.
She said Tory tax and benefit policies mean that, since 2015, richer households were £390 a year better off on average, while poorer households were £400 a year worse off.
“That is absolutely damning and shameful,” she said.
She later said “a situation in which the richest in society will end up better off and the poorest in society will end up worse off… is literally indefensible, and I hope that the Parliament continues to stand up against it.”
The Scottish Greens, who helped the SNP pass their last two budgets, have said they would not back one that gave tax cuts to the wealthy.
Mr Carlaw contrasted the package announced by Mr Hammond, with annual public spending set to grow by 1.4% in real terms to 2023/24, with the SNP Growth Commission, its blueprint for independence, which envisaged 0.5% growth in the first decade after a Yes vote.
“Which plan proposes to increase spending in Scotland by more - the UK Government’s bold proposals or the SNP’s miserable growth commission?,” he said.
Ms Sturgeon replied: “Through independence and having control over our own resources, we can ensure a real-terms increase in public spending. That is the prize of independence.”
Ms Sturgeon also said Tory austerity measures had reduced the Scottish budget by £2bn since 2010, and complained the Scottish NHS would get “only £550m” in Barnett formula consequentials, not the £600m promised, leading to Tory jeers.
Mr Carlaw called the First Minister’s view of the Budget “miserably predictable”.
He said: “Despite demanding more money from the UK Government, and getting it, the SNP appears reluctant to pass on the same tax cuts.
“This was a chance for Nicola Sturgeon to offer a glimmer of hope to middle-earners across the country, including senior nurses, teachers and police officers, that she is on their side.
“But they’ll have seen her reaction, and will be bracing themselves for more misery. The SNP’s response to the Budget has been an all-too-predictable whinge.
“The dismal reaction since is evidence that this is a grudge-and-grievance SNP government, led by a grudge-and-grievance First Minister.”
Labour MSP Kezia Dugdale, who obtained the new Holyrood analysis, said:
Scottish Labour MSP for Edinburgh and the Lothians, Kezia Dugdale, said: "This shows how much the Tory tax cuts for the richest in society would cost if Philip Hammond’s policy was replicated in Scotland.
“Tory MSPs want these tax cuts introduced here, so they must now explain which public services they would cut up to £410m from. Hospitals, schools or care services?
“Tax cuts for the richest Scots should not be a priority when our public services are struggling.”
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