Scottish Labour proposes 50p top rate of tax

30 January 2018, 06:37

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Scottish Labour has published its alternative budget proposals including plans to introduce a 50p top rate of income tax.

The party claims its plans are the "most radical set of fiscal policies ever to be presented at Holyrood".

It said its alternative approach to income tax coupled with new tax powers for councils would generate almost £1 billion of additional revenue.

The Scottish Conservatives said Labour's plans would "hammer hard workers", while SNP ministers have previously warned a 50p top rate may in fact reduce revenues.

Labour's proposals come ahead of the stage one debate on the Scottish Government's 2018/19 draft budget on Wednesday.

Its income tax plan matches the Scottish Government's starter rate of 19p, but places the income threshold for a 45p rate at over £60,000 and introduces a new 50p top rate for those earning over £100,000.

Under the government's draft budget, a 46p rate only kicks in for earnings over £150,000.

Both the SNP and Labour proposals would see those earning above £33,000 pay more tax than they do now.

Ministers said their income tax policy is expected to raise an additional £164 million, while Labour quoted analysis from the Scottish Parliament Information Centre (SPICe) estimating their plans would raise an extra £540 million.

Labour also wants to give councils the power to introduce a tourist tax on hotel stays and a land value tax on economically inactive land.

The party also proposes a social responsibility levy for licensed premises and the full use of non-domestic rates income.

These measures would raise a further £422 million, Labour said.

The extra revenue would allow £545 million of spending on public services, a £5 child benefit top up, £100 million of extra NHS funding, and a fully funded public sector pay increase, it said.

Scottish Labour leader Richard Leonard said: "It is time to end the failed experiment of austerity by making radical use of the powers available to the Scottish Parliament.

"When we campaigned for a Scottish Parliament, we saw it as a bulwark against Tory austerity, but in recent years it has simply been a conveyor belt for cuts. That needs to end.

"Labour is willing to ask the wealthiest few to pay more to benefit the many, and redistribute real economic power to local communities. The question now for other parties is do they agree with us."

Tory finance spokesman Murdo Fraser added: "Like the SNP and the Greens, it seems Labour's only idea for generating more cash for public services is hammering hard workers."

Greens co-convener Patrick Harvie said: "The SNP now have a wide range of options for going beyond their own tax plans - some from the Greens, and some from Labour.

"If they intend to raise the revenue needed to protect local services, they'll need to accept at least some of what the opposition parties have proposed."

Finanace Minister Derek Mackay said: "These are fantasy figures from Labour and are riddled with factual blunders.

"Not only would their plans raise far less than they claim, even where they will

raise some revenue, for some of their suggestions that money won't be available for years.

"That's not much use to hard-pressed families looking for a tax cut now, or public sector workers hoping for a pay rise in April.

"Critically, Labour's Income Tax plans clearly do not take account of behavioural change - which, given the sheer number of people who would be affected, would run into tens of millions of pounds.

"Meanwhile, the Tourist Tax and the Land Value Tax proposals would not raise a single penny next year -

both require primary legislation, and in the latter case would require a valuation to be carried out on vacant land across Scotland.