Published On: Thu, Dec 14th, 2017

'He's the Grinch!' SNP budget slammed for £164 MILLION tax raid on workers

The Finance Secretary pressed ahead with hikes that will leave those earning as little £26,000 worse off than south of Border, despite warnings it will wreak havoc with the economy.

Business leaders said the raid would steer Scotland into “uncharted waters” amid gloomy official figures showing weak growth of less than one per cent for four years.

Scots also face the prospect of seeing their council tax bill rocket, after cuts forced on local authorities made it almost inevitable that bills are increased by 3 per cent in April.

Mr Mackay clobbered high and middle earners through proposals to create a five-band system claiming his draft Budget was about “fairness and growth.”

But with inflation rising and real wages falling Scottish Tories insisted the “Nat Tax” would be an unnecessary burden on families.

Instead of offering taxpayers an early Christmas, this was a budget worthy of the Grinch

Murdo Fraser

The party’s finance Murdo Fraser spokesman said: “Instead of offering taxpayers an early Christmas, this was a budget worthy of the Grinch.

“It is a smash and grab raid on workers across Scotland.”

Mr Mackay’s shake-up means 45 per cent of the country’s 2.5 million taxpayers will pay more from next April than if they lived south of the Border.

He unveiled a new 21 per cent band between the basic and higher rates.

His fiscal plans for 2018-19 also included increases of a penny in the 40p higher and 45p top rate of tax.


Derek MackayGETTY

Derek Mackay unveiled a £164 MILLION salary raid


He also also proposed a new lower “starter rate” of 19 per cent for the first £2,000 of taxable earnings above £11,850 from next April.

This will see 55 per cent of Scots get a small pay cut, offset by much larger increases further up the scale.

The basic 20p rate will apply to earnings between £13,851 and £24,000.

Mr Mackay claimed the additional £164 million raised by the increases was needed to plug a spending gap on public services.

He also said no-one on less than £33,000 – 70 per cent of taxpayers – would pay more than now and more than two-thirds would pay less.

Murdo FraserGETTY

Murdo Fraser: ‘It is a smash and grab raid on workers across Scotland’

But the proposals will only see those gain by £20 a year – the equivalent of 38p a week.

Someone in Scotland earning £150,000 will pay £1,774 more than if they lived elsewhere in the UK, with someone earning £40,000 paying £140 more.

But the hikes could get even steeper as the most likely partner in any Budget deal with Nicola Sturgeon’s minority administration is the hard-Left Greens.

Mr Mackay defiantly told MSPs “Scotland is not just the fairest taxed part of the UK but, for the majority of taxpayers, the lowest taxed part of the UK”.

He claimed the country was facing the most challenging economic and fiscal environment for “any budget in the devolution era”.

Derek MackayGETTY

Derek Mackay with First Minister Nicola Sturgeon

Unveiling his £40.6 billion draft Budget he also announced:

*Public sector workers on less than £30,000 will get a 3 per cent pay rise, with a 2 per cent hike for those earning more and a cap of £1,600 extra for those earning £80,000 or more.

*A tax break for first-time buyers buying homes worth up to £175,000

*£600 million to provide superfast broadband to all premises in Scotland by 2021.

*An increase in health funding of more than £400 million.

*£243 million towards the expansion of free nursery education and childcare.

Mr Mackay told MSPs: “It provides the investments we need to meet the challenges of today and seize the opportunities of tomorrow.

“It uses the powers of this Parliament sensibly and in the interests of the country as a whole.”

But Mr Fraser said the plans were a “direct breach” of the SNP’s manifesto promise not to raise basic rate income tax for its whole term.

He added: “That will not escape the notice of voters, who will never believe a word the Nationalists say again.”

Labour leader Richard Leonard said the plans only “tinkered round the edges” instead of implementing “radical” change.

Green co-convener Patrick Harvie said he was “delighted that the argument for a more progressive tax structure appears to have won the day”, but insisted Mr Mackay should have gone further.

Andy Willox, Scottish policy convener for the Federation of Small Businesses, said:”We wanted to see a Scottish Government budget which offered firms a little ballast in choppy market and political conditions.

“Instead the Scottish Government has chosen to steer us into uncharted economic waters.”

David Lonsdale, director of the Scottish Retail Consortium, said: “The implications for consumer spending – a mainstay of our economy – from the £164 million uplift in the income tax take remains to be seen, but less money overall in consumers’ pockets is likely to cause shoppers to carefully consider what purchases they can afford.”

Alan McFarlane, chairman of think-tank Reform Scotland said: “We think the Scottish Government has taken an unnecessary risk today which could end up producing less revenue.”

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