Prime Minister Rishi Sunak has challenged the Scottish Government to explain its “different approach” to tax, as speculation mounts that SNP ministers could use Tuesday’s Holyrood budget to increase levies on higher earners.
However Sunak insisted that in the midst of a cost-of-living crisis, cutting taxes was the “right approach”.
His comments came as deputy first minister and finance secretary Shona Robison complained that Sunak had “a bit of a cheek” to make such remarks.
She accused Westminster of putting electioneering ahead of public services in its recent autumn statement – but Sunak countered that by saying the Scottish Government would receive an additional £545m over the next two years as a result.
The autumn statement also included a cut to national insurance, which Sunak, speaking during a visit to RAF Lossiemouth in Moray, said were part of “the biggest set of tax cuts for people and for businesses … that we’ve seen in decades”.
Speaking about the reduction in national insurance, from 12% to 10% from January, the PM stated: “It will ease the cost of living for Scottish families because it will keep more money in their in their pockets, and that’s what I’m doing for the people of Scotland.
“I will continue to do that for people. I do think it’s the right approach because I think we should be cutting taxes, not raising them.”
But Sunak added: “Increasingly, the SNP government is making choices that are different from the rest of the UK.”
Higher earners north of the border already pay more in tax than their counterparts in the rest of the UK, with suggestions that Tuesday’s Scottish budget could see a new income tax band introduced for those earning £75,000 a year or more.
Challenging the Scottish Government on this, Sunak said: “It’s ultimately up to them to explain that to people here in Scotland.”
He continued: “I think Scotland is already the highest taxed part of the UK.
“My view is I want to cut taxes for people and that’s what we are doing, and we’re cutting taxes for people in Scotland. That’s kicking in in January.”
Sunak said: “There’s a very clear difference here and ultimately, the Scottish Government needs to explain why it’s choosing a different path which is one of higher tax for both people and businesses.”
However, Robison said: “What I would say to Rishi Sunak is he has got a bit of a cheek, pitching up in Scotland to say anything given his autumn statement is deprioritising public spending.”
The deputy first minister said the autumn statement had included a “real terms cut to the NHS in England”, branding this as “an astonishing position at a time when services are still recovering from Covid”.
She argued that the autumn statement failed to provide sufficient funding for public services, while at the same time cutting taxes.
“This is an astonishing budget which is about pre-election positioning by the Tories, entirely at the expense of public services,” Robison insisted.
Speaking for the Scottish Government she added: “These are not our values or our priorities.”
Meanwhile the Scottish Trades Union Congress (STUC) urged Robison to be “bold and ambitious” in the budget, after a paper it commissioned suggested a series of tax measures could raise almost £4bn in extra revenue in the coming years.
STUC general secretary Roz Foyer said: “The Scottish Government is facing an unenviable task in delivering a balanced budget but it is simply untrue to suggest they must cut and it should be public sector workers who bear the brunt.
“The Deputy First Minister must be bold and ambitious. Our tax paper has shown that £1.1 billion of tax reform could be in place as early as April next year, rising to £3.7 billion by 2028.
“Taxing higher earners and redistributing the wealth – at a time when we have seen record profiteering from those at the top of our society – isn’t a radical proposal but it’s a start.
“Now more than ever, we need the Scottish Government to step up for Scotland and protect our public services.”
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