Poverty campaigners have urged Scottish ministers to use existing tax powers to prevent cuts to “lifeline” services.
Ahead of the Scottish budget statement on December 15, five campaign organisations and a leading think tank have told ministers to use council tax and their partial control of income tax to increase taxes for the highest earners.
Tax levers on investment income, capital gains, corporation and inheritance are all devolved to Westminster – but Holyrood can use their existing powers, campaigners say.
The calls come from the Poverty Alliance, the Child Poverty Action Group (CPAG) Scotland, Oxfam, the Scottish Women’s Budget Group, One Parent Families Scotland and the Institute for Public Policy Research (IPPR).
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The IPPR Scotland has warned families face a “ticking time bomb” of financial insecurity amid soaring inflation and rising energy costs.
The Scottish Government has said its budget for the 2023/23 financial year is fixed, with spending cuts and re-allocations to balance the books announced, campaigners have urged ministers to look ahead to the following years where it can use its tax levers to reduce and prevent poverty.
The organisations have said it will help minimise the damage caused to public services, those which vulnerable people rely on most.
Peter Kelly, director of the Poverty Alliance, said: “For too long, our tax system simply hasn’t kept pace with Scotland’s growing inequality of wealth and income.
“People in poverty and low incomes in Scotland need urgent support. It’s time for the Scottish Government to use our tax levers in a progressive way, to raise the investment we need for the just and compassionate society that people believe in.
“Failing to meet that will result in more cuts to the services that we all need, but that are an essential lifeline for those who need it most. We simply can’t allow that to happen.”
Jamie Livingstone, head of Oxfam Scotland, called for Deputy First Minister John Swinney’s budget announcement to be a “turning point”.
“Too many governments shy away from taxing high incomes and wealth, while making polluters pay, to reduce inequality and ensure a fair contribution by those who can most afford it: the Scottish Government cannot be one of them,” he said.
He urged Mr Swinney to make the “common sense” choice in using existing tax levers to alleviate the financial pressures.
It is hoped the use of existing taxes for poverty reduction will kickstart reform, including replacing council tax and to assess what new taxes can be introduced on wealth and carbon.
Philip Whyte, director of IPPR Scotland, said: “Given the ticking time bomb of financial insecurity facing households, the Scottish Government must use its powers to boost household incomes now, while setting the groundwork for more fundamental tax reform to deliver on its long term ambitions.”
A Scottish Government spokesperson said: “The Scottish Government has already delivered the fairest and most progressive tax system in the UK while raising extra revenue to invest in public services and Scotland’s economy.
“Proposals on tax policy for 2023-24 will be published as part of the Scottish Budget on December 15.”
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