Chancellor insists Scots should 'not pay a penny more' in tax

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George Osborne has insisted taxpayers "should not pay a premium for living north of the border", as the SNP said it is the wrong time to consider raising the threshold for the top rate of income tax.

The SNP has pledged to outline its plans for the first income tax rates to be set by the Scottish Parliament in its manifesto next month.

Stewart Hosie, the SNP's economy spokesman, dismissed the Chancellor's decision to raise the threshold for the top rate to £45,000 as "the wrong decision at the wrong time".

But Mr Osborne said Scottish Conservative leader Ruth Davidson's call for Scots to pay "not a penny more" in tax "makes sound economic sense".

Writing in the Scottish Daily Mail, Mr Osborne said: "Yesterday was the last time a UK Chancellor will set income tax rates and thresholds for Scottish taxpayers.

"From next year, the Scottish Government will be responsible for setting income tax rates and thresholds in Scotland.

"What the rates will be is a matter for them.

"But Scottish Tory leader Ruth Davidson was right when she said families in Scotland should not pay a premium for living north of the border. Her 'not a penny more' pledge makes sound economic sense.

"And I am confident that the powers, used effectively, can further increase the economic prosperity of Scotland, as part of the UK."

He said the Scottish election will be fought "on the issue which matters most: how the next Scottish Government uses these extensive new powers".

He said "the brilliant Miss Davidson" has been one of the strongest voices urging him to support the North Sea oil industry.

Mr Hosie said the SNP supports the tax cuts for the oil sector but will not back a Budget which "continues a decade of austerity and pain for normal people".

He told BBC Radio Scotland's Good Morning Scotland programme: "This is the wrong time to be putting in a rise to the 40p threshold which is many, many times the rate of inflation when at the same time, on the same day, the Chancellor was announcing billions of pounds of cuts to people with disability.

"That is the wrong decision at the wrong time."

He added: "We will lay out in our manifesto, to be published in a month's time, what the future rates will be and at that point we will also have an assessment of what impact that will have."

He said tax thresholds must be set "in light of the prevailing economic circumstances".

He added: "When we are seeing growth forecasts marked down, productivity marked substantially down, a Chancellor who's not going to reach the borrowing figure he promised for this year for another four years, (Finance Secretary) John Swinney is absolutely right, this would not be the time to have way above inflation rises in those thresholds."