GRAHAM GRANT: Instead of whining about Tory tax cuts, isn’t it time the Nationalists stopped picking the pockets of ordinary Scots?
Shona Robison deputises for the First Minister – who is busy trying to save the Health Secretary’s job in the midst of iPad-gate.
The multi-tasking Ms Robison is also in charge of the nation’s purse-strings and in the process of putting together the Scottish Budget, to be unveiled next month.
But she found time in her schedule to write to Jeremy Hunt, the UK Chancellor, urging him to avoid ‘ill-timed tax breaks’ in tomorrow’s Autumn Statement.
Tax cuts would ‘place even greater pressure on the public finances’, she cautioned, while also lobbying for a boost in the SNP Government’s capital budget – lecturing one minute then demanding cash the next.
In the SNP’s twisted worldview our malign colonial overlords are the source of all our woes – but they do have their uses when times are lean.
Ms Robison, among her many other duties, is also contending with a £1billion black hole in the nation’s finances, projected to rise to £2billion within a few years.
John Swinney, when he was stand-in Finance Secretary, hiked the higher rate of income tax last year
Jeremy Hunt has been urged to drop his plan to ease the tax burden
Profligate spending has consequences, and the Nationalists are now reaping what they sowed with a succession of costly giveaways –from ‘free’ prescriptions to Nicola Sturgeon’s baby boxes.
The CalMac ferries farrago and a series of other financial scandals, from government-owned Prestwick Airport to multi-million payouts related to the Rangers malicious prosecutions case, illustrate a culture of endemic waste.
But it really is a little rich of Ms Robison to urge Mr Hunt to drop his plan to ease the tax burden when the SNP has taxed Scottish workers to the hilt, under the cover of ‘progressive’ politics.
Battered
Last year John Swinney, when he was stand-in Finance Secretary, hiked the higher rate of income tax by a penny – and promised the proceeds would be ploughed into ‘patient care’.
You can judge how well that’s going with a quick glance at the shocking figures on the state of A&E departments. Lengthy waits to be seen and treated may be linked to up to 1,400 excess deaths this year, according to Scottish Labour.
More cash has been extracted from your battered bank balance but it’s not clear where it’s going – apart from Michael Matheson’s iPad bill, before he belatedly vowed to pay back his £11,000 overseas data roaming charges.
Changes introduced earlier this year have already forced 530,000 workers earning more than £43,662 to pay more income tax.
And everyone earning more than £27,850 pays more income tax in Scotland than they would pay if they worked south of the Border.
It’s almost as if the SNP has focused all of its energies on coming up with disincentives for hard-working professionals to live and work in Scotland – and many of them have taken the hint.
The cross-Border tax gap will grow further if Mr Hunt does go ahead with an income tax cut tomorrow, assuming that the SNP fails to follow suit, though a National Insurance cut would apply across the UK.
Ms Robison considers the notion of tax breaks ‘ill-timed’, but it’s painfully obvious that for the SNP there’s no good time for allowing you to keep more of your hard-earned cash – savings that in any event would be sunk into sky-high energy bills and mortgage payments.
Humza Yousaf pays lip service to the idea of bolstering economic growth, but you’d struggle to find a single policy aimed at doing so.
For concrete action, we have had to look to the UK Government and its ‘Levelling Up’ fund which, as we learned yesterday, has provided funding of nearly £122million for six projects in Scotland, including town centre regeneration and improvements to transport links.
Anything Mr Yousaf or his colleagues say about growth can’t be trusted, given their ongoing alliance with the Greens – who are wholly opposed to the very concept of expanding the economy.
Pernicious
According to the Hunter Foundation, Scotland’s GDP per head has been about 8 per cent lower than the UK as a whole for many years, ‘largely because of poorer productivity’.
Scotland’s business ‘birth rate’ came ninth out of 12 UK nations and regions in 2019, and the Hunter Foundation forecast in 2021 that Scottish real-terms GDP growth will average just 1.3 per cent until 2035.
The SNP Government states that ‘while the majority of taxes remain reserved to the UK Government, we are committed to using the limited powers we do have to help meet our climate targets’.
Yet the ability to vary income tax (though it only ever seems to go in one direction) is hardly ‘limited’, and a cut would make a huge difference to thousands of families struggling to make ends meet.
Ministers rightly identify inflation, now thankfully in decline, as a corrosive force but ‘fiscal drag’ is just as pernicious – where the freezing of tax thresholds, combined with earnings growth, means more workers are dragged into higher tax brackets.
The Growth Commission – established by former Prime Minister Liz Truss – has calculated that, due to inflation and wage rises, the bonus from ‘fiscal drag’ across the UK will rocket to £75billion.
Yet any decision by the Chancellor to alter thresholds for income tax would not directly apply in Scotland – as bands north of the Border are set by Holyrood.
Research by the Institute for Fiscal Studies in May suggested one in five workers in the UK will pay the higher rate of income tax by 2027.
It estimates 7.8million workers will be dragged into the higher band due to frozen thresholds, with middle-income earners paying a rate that was originally aimed at the wealthy.
Mind you, the SNP has said previously that higher-rate taxpayers are ‘rich’ – which was news to many nurses, teachers and police officers.
That claim was made by disgraced former finance secretary Derek Mackay, who quit hours before the Scottish Budget in 2020 after it emerged he had bombarded a teenage boy with inappropriate online messages.
Illiterates
Mr Mackay admitted he’d never heard of the Laffer Curve, which dictates that revenues can go up if taxes are cut. Luckily, Tory MSP Murdo Fraser was on hand to explain the concept.
There’s little evidence Mr Yousaf or anyone else in his Cabinet has a better understanding than Mr Mackay of how the economy works.
Mr Mackay’s successor, Kate Forbes, advocated a more efficient public sector and wanted Scotland to become a ‘magnet for inward investment’, but she is on the backbenches and in no position to influence the SNP’s agenda on the economy, or anything else.
For now, we are saddled with economic illiterates whose mind-boggling incompetence has cost Scotland dear.
But just for once they could do us all a favour and keep their hands out of our pockets – or risk a further exodus of young Scots sick and tired of their ‘progressive’ tax raids.
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