Changes on the way for Scottish income tax bands

The Scottish National Party (SNP) conference held in Glasgow on Monday 9 October announced that serious changes are being considered surrounding Scottish tax bands for the 2018/19 budget.

The Herald summarised their current policy by saying that “Scots are currently taxed at 20p in the pound above the £11,500 allowance, then at 40p for earnings above £43,000, with top earners paying 45p for any salary above £150,000.”

Although this announcement has raised some controversy, the practical explanation behind the tax band adjustments has been clearly stated by the SNP. The Herald wrote: “The party has tabled a motion stating ‘income tax should be increased to allow greater investment in public services’”.

The SNP has maintained clarity about these services as well, with First Minister Nicola Sturgeon fighting for free childcare for all under-fives by 2020 (The Scotsman) and a new not-for-profit, publicly owned energy company (BBC).

Sturgeon has urged other parties to come forward with their suggestions on tax policies in order to facilitate discussion and debate.

MSP Derek Mackay, Cabinet Secretary for Finance and the Constitution, added at the SNP conference, that thus far only the Liberal Democrats and the Scottish Greens (both parties who favour tax rises) have submitted plans. Nothing yet has been submitted by the Conservative and Labour Parties.

Brian Taylor of the BBC said that Sturgeon described in an interview a more “moderate” approach to tax changes. He paraphrases Sturgeon’s perspective as follows:  “Public spending had to be financed…but tax increases had to be constrained, especially for those who were already struggling”, an unusually central perspective for the SNP to back.

It seems that in the midst of both global and domestic political extremism, the SNP might be playing it safe and staying moderate, especially as the party’s main claim to fame – the call for Scottish independence – has become much less well received by Scots that feel tired out both by talk of a referendum and the controversies and complications raised by Brexit.

In a speech during the SNP conference, Mackay explained some of the SNP’s uncertain and inconclusive statements on tax policy.

Largely placing the blame on outside powers, he addressed the competing parties, stating, “While the Tories play their games, and the Labour Party tears itself apart, we will get on with the business of running the country.”

Mackay emphasised the Scottish Parliament faces in tax policy: “We can set rates and bands, but Westminster remains responsible for the tax base, what is considered to be income, and how it is measured.”

He also argued that the reason why public sector workers would not receive a significant pay rise was the lack of financial support provided by the UK. Mackay concluded by saying “[on income tax] we have one hand tied behind our back.”

According to The Guardian, some Scottish trade union leaders are irritated by what they see as Mackay “shifting the blame for a poor pay deal onto the UK government.”

In reality, both constituents and the SNP seem dissatisfied and restless with the stagnant state of budget development. Constituents see the standstill as the fault of new moderate policies. The SNP is faulting austerity and the control the UK still has over the Scottish budget.

Mackay’s description of the SNP’s feeling of having “one hand tied behind [their] back” is a succinct description of the current political atmosphere in Scotland.

People are dissatisfied, angry, and afraid, but in the face of the massive upcoming socioeconomic and political changes that will be brought by Brexit, going forward and pushing progressive policy seems like taking a leap into the unknown.

Still, the SNP seems determined to move forward with talks on the tax bands regardless of the slack it has received.

 

Image: Keegan Mullen

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