Tories put pressure on SNP ahead of Budget over potential income tax increase

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SNP ministers have “absolutely no mandate” to increase the basic rate of income tax, the Tories have said.

The party’s finance spokesman Murdo Fraser MSP challenged the Scottish Government to stick to its 2016 manifesto promise to implement a freeze “to help low and middle income earners”.

He pointed out that 65% of Scots voted for parties opposing any increase in the basic rate at the Holyrood election.

Mr Fraser used a parliamentary debate to pressure Finance Secretary Derek Mackay ahead of Thursday’s budget, which is widely expected to include tax rises to fund public services, saying it was about ” whether politicians can be trusted to keep their promises”.

He pointed to the 53 times senior SNP figures – including First Minister Nicola Sturgeon, Deputy First Minister John Swinney and Mr Mackay – had said the basic rate of income tax should not go up.

“It couldn’t have been clearer, the last thing the SNP were going to do was put up taxes for those on the basic rate and yet, if all the press speculation is to be believed, that is exactly what they are considering for tomorrow’s budget,” he said.

“In the Scottish Parliament election last year, the whole question of tax was right at the centre of the debate. Of the parties who stood for election, there were two, ourselves and the SNP, who pledged no increase in the basic rate of tax.

“Between us, our two parties, the tax payers’ alliance of the Scottish Parliament, between us we achieved some 65% of the regional list vote. So 65% of Scots – nearly two-thirds – voted for parties opposing any increase in the basic rate of income tax.

“Let’s remember the First Minister is fond of describing the 62% of Scots who voted to remain in the EU referendum last year as ‘an overwhelming majority’.

“On that basis, the 65% who voted against basic rate income tax rises must be an even more overwhelming majority.

“So let us be quite clear, there is absolutely no mandate from the Scottish people for any increase in the basic rate of income tax, however that is brought about.”

Highlighting warnings from the Federation of Small Businesses, Scottish Chambers of Commerce and the Scottish Retail Consortium, Mr Fraser said the SNP under Ms Sturgeon was “losing the trust of the business community”.

He argued there was ” no necessity” for tax increases, citing analysis from the Fraser of Allander Institute, that “the Scottish government’s total block grant (resource and capital but excluding financial transactions) is on track to increase by around 1% between 2016-17 and 2019-20”.

“This is a government which has more money to spend, and yet is threatening to raid the pockets of hard-working families across the country,” he said.

Mr Fraser said the government should instead focus on growing the economy, eliminating government waste, and cutting out “vanity projects and unnecessary programs”, citing the examples of a pilot on the citizens’ income, the named person policy and the baby box scheme.

Mr Mackay urged Mr Fraser to “grow up a wee bit” describing him as like an “impatient child”.

He said: ” Murdo Fraser knows only too well that the resources that we have to spend on day-to-day front line services have gone down, will go down, as a consequence of the UK budget, of £200 million next year and £500 million over the two year period.

“Now that’s the resource figure, the resources to be spent on front-line day-to-day services. Murdo Fraser also knows that when talking about the capital figure a large chunk of that is financial transactions which are loans that have to be paid back to Treasury.”

The finance secretary said the austerity delivered by the UK Government had resulted in a £2.6 billion reduction in real terms to the Scottish Government’s resource spend adding: “That wasn’t supported by a majority of people in Scotland.

“If you want to talk about reflecting the choices of the people of Scotland, they haven’t supported your in principle austerity over a number of years.”

Mr Mackay said the Budget would “be set within that challenging context of a reduction of half a billion over two years, a figure verified by the Fraser of Allander Institute”.

He added: “With the UK Government we have continued austerity, we have sluggish UK wide economic growth, we have the unpredictability of Brexit and the impact that will have on the UK and the Scottish economy and issues around productivity as well.

“It’s clear from all of that that the priority of the C onservatives isn’t actually to grow our economy. The Tories are the biggest threat to the economy in Scotland but at the same time the Tories talk about taxes the only tax cuts they want are for the richest in society.”

He concluded: “We will put forward a proposition that delivers fairness and progressivity in our tax system . I’ve engaged constructively and this is an important time for the parliament to act maturely and constructively

“All I hear from the Conservatives is they want raise less and spend more. It just doesn’t add up. Whereas we will put forward a credible proposition that inspires the people of Scotland .”

Scottish Labour leader Richard Leonard said: “It’s a bit rich for the Tories to come here this afternoon claiming to be the guardians of working people on low and middle incomes.”

He added: “They claim to be the party of low tax for all when in practice they connive to redistribute income and wealth from the already worse off to the already better off.”

He criticised the Conservatives for a lack of action on tax evasion and tax avoidance.

Mr Leonard called on the SNP to use the Budget to tackle austerity measures imposed by the UK Government and urged the Holyrood to take a different path on tax and spending than Westminster.

He added: “I say to the SNP – you can’t denounce austerity today and do nothing about it tomorrow.”

Scottish Green Party co-convener Patrick Harvie also called on the Scottish Government to take decisive action.

He said: “I urge the government to be bold, to raise the revenue that we need for our local services, for public pay and for low carbon investment and to do so in a fair way, so that people like us here in this chamber – high earners – make a fair contribution to the services that everyone in Scotland depends upon.”

He said Green policy to change tax rates and bands while protecting low earners is “leading the change that Scotland needs” and warned that the Conservatives want tax cuts for high earners.

Scottish Liberal Democrat leader Willie Rennie said: “The Conservatives come here today pretending to be a party of the economy but the reality is it is their policies that are driving us to this position where we’re needing to have that modest increase in taxation, in order to invest in public services, to boost the economy, to make sure we’ve got an education system that is the best in the world again.”

He claimed the Tories are taking the “opportunity to try and bash the possibility of this Parliament trying to make a real change” and accused the SNP of a “lack of frankness” for failing to commit to a modest tax rise during last year’s Holyrood election campaign.