Tax Clash In Election Debate

30 March 2016, 08:05 | Updated: 30 March 2016, 08:08

Holyrood's political leaders were involved in heated exchanges over tax as the second TV debate of the Scottish election campaign last night.

With the Scottish Parliament getting new powers over income tax  rates and bands, the issue has been centre stage in the run up to the May 5 vote.

First Minster and SNP leader Nicola Sturgeon accused Labour of "throwing in the towel'' in the fight against austerity by backing the Tory budget at Westminster.

She insisted the purpose of tax is to raise revenue for services - and said: "My tax proposals will do that.''

But the SNP has rejected increasing the top rate of income tax to 50p in 2017-18 - the first year Holyrood has the powers -  arguing such a move could cost £30 million.

Scottish Labour leader Kezia Dugdale hit back at her rival, saying: "You won't ask rich people to pay a penny more.''

Ms Dugdale told the STV programme Scotland Debates: "Nicola says her plans raise £2 billion - actually you need to raise double that to stop the cuts.

"If she is not prepared to raise that amount of money she can not feasibly say she is against austerity.''

She argued: "Nicola Sturgeon has spent her whole entire life saying more powers would mean fewer cuts, We now have this immensely powerful parliament, we should use use the powers of the parliament to stop the cuts and Nicola's proposals just don't raise enough to do that. Labour's do.''

Labour backs a 1p rise in the basic rate of income tax in Scotland, and also wants to restore the top rate of tax -  paid by 17,000 people in Scotland earning £150,000 a year or more - to 50p.

Scottish Conservative leader Ruth Davidson said all four other leaders "want to raise taxes on the hard working people of Scotland'' adding that in contrast the Tories would "fight to keep more money in the pockets of the workers of Scotland''.

She insisted taxes should be about raising cash for public services "not punishing people that earn money''.

The Conservative argued: "I think it's not in the national interest to have a higher rate of tax here than the rest of the UK. Yes we need fair taxes but we also need competitive taxes too if we're going to encourage the kind of enterprise and jobs we want to see here.''

But Liberal Democrat leader Willie Rennie said: "Ruth has just talked about cutting taxes, she only really wants to cut taxes for the rich, she doesn't want to improve services for anybody else.

"I want to make a transformational investment in education so it is the best in the world again.''

The Lib Dems plan a 1p rise in the basic rate of income tax, which they say would raise almost £500 million for education, with the money to go to schools, nurseries and colleges

He added: "Nicola Sturgeon has bellyached about austerity and when she finally gets the chance to do something about it she is frozen to the spot, she's not seizing the opportunity to do something radical, transformational.''

Scottish Green co-convener argued: "Taxation isn't just an accounting mechanism to ensure we fund public services, it should also be about income and wealth inequality in our society because our economy belongs to all of us.''

His party plans to raise income tax to 60p for the very highest earners, though Mr Harvie insisted most taxpayers would be better off under the Green reforms.

He said: "We do need to be investing in the public services, all the public services, everyone of us depend on everyday throughout our lives.

"But the Scottish Green Party doesn't believe we can do that with a status quo tax policy.''

Ms Dugdale said the Tories were "hiding'' planned tax rises.

"Ruth Davidson says that she is against tax rises, but she stands for tax rises, she just wont tell you about them,'' the Scottish Labour leader said.

"She wants to reintroduce prescription charges - that's a tax on ill health. She wants to introduce a tax on disabled people with the 'Bedroom tax'.

"Don't stand there, Ruth, and say you're not for tax rises, you just want to hide them from people.''

When the debate moved on to the NHS, Ms Davidson said: "We know that the money that's come into Scotland's NHS hasn't been as much up here as it has been down south.

"Money is only part of the problem but it is one that we would address, which is why we have introduced an NHS guarantee.

"One of the things that GPs have said to us is reintroducing a prescription charge for people that can afford to pay - the NHS spends £10 million on paracetamol alone - would help reduce demand and allow people to use pharmacists more and GPs less.''

Lib Dem leader Mr Rennie called for a "radical revolution'' in support for mental health.

"What I think we should be doing is treating mental illness on the same basis as physical illness,'' he said.

"You can't get a child or adolescent mental health bed north of Dundee - that's got to change.''

Ms Sturgeon said there was a "big challenge'' with an ageing population but the SNP plans to ensure real terms increases in NHS budgets in each year of the next parliament.

When the debate returned to the audience, one woman asked Ms Dugdale why she "approves of spending all the money on Trident'', before branding the party a "shocking disgrace''.

Ms Dugdale said: "When I took over the leadership of the Scottish Labour party we had a very open and democratic debate on Trident and the position of the Scottish Labour party is to oppose the renewal of Trident.''

Ms Davidson was pressed on Tory plans to end free prescriptions and free university tuitions fees in Scotland.

In part of the debate where she was cross examined by Ms Sturgeon, the Tory leader said her party would charge students "just over £1,500 a year'' for university education, which would be paid after they had graduated and started earning.

The Conservative leader also said her party wanted to "phase in'' prescription charges, increasing them gradually to "about £8''.

As she revealed the figures the SNP leader told her: "You're not the party of low taxes, you're the party of hidden taxes.''

Asked about charges for university students, Ms Davidson said: "It's not a graduate tax, it's a contribution after you have graduated and once you are earning money. We expect it to be within the region of just over £1,500 a year that you are at university, so that's a lot less than England.''

She then told Ms Sturgeon: "You keep talking about the cost of university education being free. Do you know what is the cost of university education, the cost is 152,000 college places, the cost is the fact that poor people in Scotland are half as likely to be able to get into university as south of the border.''

Defending plans to end free prescriptions in Scotland, Ms Davidson said: "The difference between you and me Nicola is I'm happy to pay for paracetamol in order that someone on a cancer ward can get a cancer drug they can get down south that they can't here.

Meanwhile the Scottish Labour leader was quizzed on her party's decision to campaign jointly with the Tories in the run up to the Scottish independence referendum - a move UK Labour leader Jeremy Corbyn has blamed for the party's fall in support north of the border.

While Ms Dugdale said she had no regrets about voting for Scotland to stay part of the UK, she stopped short of saying whether Labour would take part in a second cross party campaign in the style of Better Together

Ms Sturgeon recalled how in the run up to the 2014 ballot Ms Dugdale had taken part in a debate in same venue, Edinburgh's Assembly Rooms, alongside Ms Davidson.

The SNP leader challenged her: "Now that you know what the Tories are doing to Scotland, cutting budgets, penalising the vulnerable do you understand why people across Scotland are so angry with Labour, do you regret your alliance with the Tories and will you take the opportunity tonight to apologise for it?''

Ms Dugdale told her: "I don't regret voting No and I would do it again.''

She added: "I'm relieved Scotland voted No but I tell you something else Nicola I want us to leave those arguments behind and I think you do actually.

"I think you want to use the powers of the parliament to make different choices from the Tories, you've spent the last 10 years of your political life arguing for that.''

The Tory leader then joined the questioning, telling Ms Dugdale: "If there was ever another referendum I would stand shoulder to shoulder with you again. Would you do so with me?''

The Labour politician told her: "I'll campaign for a No vote again, of course I would. I think the future of Scotland lies best within the United Kingdom, it's good for the economy, I think it's a good way to tackle poverty and I'm so glad we have a more powerful Scottish Parliament where we can choose to make different decisions from your Tory government down south and that's what I intend to do.''

Ms Dugdale added: "The country's future I think lies beyond constitutional politics. I think regardless of whether you voted Yes or No you should vote Labour because we believe in using the powers of the parliament to end your government's austerity.''

Under the First Minister's questioning by the other party leaders, Ms Davidson asked how plans announced at the SNP conference to start a new drive for independence "can possibly be seen as respecting the result of the referendum''.

Ms Sturgeon said: "It is absolutely respecting the result of the referendum because I'm admitting that in the referendum, although I came close with my colleagues, we didn't persuade a majority.

"So if I'm going to achieve what I want to see in my lifetime, and that is Scotland becoming an independent country, then I've got to persuade more people and that's what I plan to do over the months and years to come.

"Because then we don't just have to talk about about how we deal with the impact of Tory austerity, we can take different decisions like not spending money renewing Trident.''

Both Ms Davidson and Ms Sturgeon received applause from the audience during the section.

Ms Sturgeon added: "The people will decide and I don't know why any of us would fear public opinion in the years to come. If support for independence doesn't increase then there won't be another referendum, on the other hand if we see support for independence increase, if we see strong, stable, majority support for independence, what right would any of us have to rule out another referendum?''

Under his questioning, Lib Dem leader Mr Rennie said the First Minister should be "embarrassed'' by falling standards in Scottish education.

Earlier Mr Rennie had been attacked by opposition party leaders for "propping up a Tory government'' after the 2010 UK general election.

The leaders were also asked about who would win a second Scottish independence referendum, with Ms Sturgeon saying: "I think the next time I think we will vote Yes.''

She added: "If you go two years out from the last referendum, nobody would have predicted that the Yes support would have reached 45%. And almost every opinion poll we've seen since the referendum support for independence has been higher.''

Ms Sturgeon went on to state that as "people see the implications of not being independent'', such as Westminster spending cuts and the renewal of Trident "I think more people will see the benefits of independence''.

Asked  if referendum plans would feature the SNP manifesto for May's election, Ms Sturgeon said: "My manifesto, in essence, will put this decision in the hands of the people where it should be.''

Meanwhile Ms Dugdale said Labour's manifesto would "rule out another referendum for the lifetime of the next parliament''.

She added: "I will represent the vast majority of people in this country who voted no in the belief that it was a once-in-a-generation opportunity.

"With Labour there will not be support for a second referendum on independence, that's a guarantee.''

Ms Davidson said the First Minister was keeping the country "on a knife edge'' over referendum plans.

She stated: "What people in Scotland want is a period of stability and calm like they were promised.

"If it had been the other way by one vote do you think she would be standing here saying we could have a second referendum and we could have a campaign for it, I don't think so.''

Ms Dugdale also told the SNP leader: "I actually believed you Nicola when you said it was a once-in-a-generation opportunity.''