SNP members back plans for further tax increases
The Scottish National Party (SNP) conference has approved a motion backing tax increases on the wealthiest in Scotland as a senior government minister warned that further tax divergence could lead to people moving out of the country.
The motion was proposed by the SNP’s Trade Union Group (SNPTUG) and was debated at the party’s annual conference held in Edinburgh last weekend, calling for the “creative use” of the Scottish Parliament’s existing tax-raising powers to “increase the tax contribution of higher earners across Scotland”.
While the text of the motion was light on policy specifics, some of the measures that have been suggested include consideration of “realistic options” for introducing a wealth tax, as well as giving councils the “power and discretion” to levy taxes that support local investment priorities.
SNPTUG secretary Simon Barrow told the conference that the motion offered “fresh thinking” on how the Scottish Government could use its tax-raising powers to counter “unnecessary” UK spending cuts. Barrow also argued that the plans would build upon the “good work” already undertaken by the SNP in government to increase (income) taxes on higher earners. Citing the London School of Economics, Barrow said it was a “myth” that higher earners would choose to leave Scotland in the event of further tax increases.
However, there was some dissent about the nature of the proposals. One party member argued that the plans did not go far enough and were lacking in detail. The senior SNP MSP Christine Grahame criticised the motion’s focus on the “mitigation” of austerity measures. Grahame said: “we (the Scottish Government) have mitigated enough. We’ve had no thanks from the Scottish people (for policy decisions already taken).”
Forbes warning
However Kate Forbes, the Deputy First Minister, has warned that wealthy Scots could leave the country if the government increases taxes further.
Speaking at a conference fringe event organised by the Child Poverty Action Group, Forbes argued that the way tax powers have been devolved to the Scottish Parliament made it possible for higher earners to shift their tax liabilities away from Scotland. She said: “you just can’t get away from the reality, it’s very easy to move.”
It is not the first time that Forbes has warned of the limits of divergence. In an interview for the Herald newspaper in June, the Deputy First Minister suggested the government’s income tax policies were “under review” following the reaction to the decision at the last Scottish Budget to increase the top rate of tax and introduce a new 45p rate on incomes between £75,000 and £125,140.