Labour tax policies could raise £110m, insists Kezia Dugdale

Updated: 

Kezia Dugdale has dismissed fears that raising the top rate of income tax in Scotland alone could cost the country tens of millions of pounds as "ridiculous".

First Minister Nicola Sturgeon has warned that if the 50p rate was brought back north of the border without the rest of the UK following suit, Scotland could lose £30 million if just 7% of top rate taxpayers moved out of the country.

But the Scottish Labour leader condemned that suggestion, and she claimed the policy could raise "between £70 million and £110 million" in additional revenue.

She also hit out at the SNP leader over her failure to up taxes for those earning £150,000 a year or more.

With Holyrood poised to get powers to set income tax rates and bands, the issue of how these would be used has been central to the debate in the run up to the May 5 Scottish election.

Labour has put forward proposals to add 1p on the basic rate of income tax, as well as to restore the 50p rate for top earners.

But the SNP, which is on track for a third Holyrood victory according to the polls, has ruled out raising the basic rate for the five years of the next parliament, with Ms Sturgeon also pledging the top rate will not rise in 2017-18.

Neither Labour nor the SNP would increase the threshold for the 40p tax rate next year, as Conservative Chancellor George Osborne plans to do, and while the SNP proposes to cut Air Passenger Duty in Scotland, Labour is committed to keeping the levy.

Ms Dugdale told BBC Radio Scotland that her party's tax policies could raise "around £600 million a year" north of the border, adding this could "ensure there would be no further cuts to public services in Scotland".

She told the Good Morning Scotland programme: "The sums are there, our tax proposals would generate around £600 million a year, some years more than other, but over the lifetime of the next parliament, between now and the general election, there would be enough money to say very clearly 'Labour can end the cuts and stop austerity'. The SNP cannot say that."

Labour also plans to introduce a fair start fund, which would see headteachers given extra cash to help them cut the achievement gap between rich and poor students.

This would be funded from the cash raised by raising the top rate of income tax, paid by 17,000 Scots, to 50p - a  policy which "could raise between £70 million and £110 million", according to Ms Dugdale.

She conceded she had previously said such a rise could fail to bring in any additional cash, but added that since then, Her Majesty's Revenue and Customs has "had a crackdown on people being able to move their tax liability throughout the United Kingdom".

The Labour leader hit out at Ms Sturgeon and said: "Her problem is not with the detail of this, it is the principle, she quite clearly, like (Scottish Conservative leader) Ruth Davidson, doesn't think the richest should pay more tax in Scotland. I fundamentally disagree.

"I think Nicola Sturgeon is making the same excuses the Tories made, they're trying to say rich people will be able to avoid tax while the rest of us have to pay.

"I think if you believe in the principle of the richest paying their fair share, you chase after the money, you make sure they pay their taxes."

Ms Dugdale continued: "The Scottish Government's own evidence says that a 50p tax rate would generate additional money, that's clear from Nicola Sturgeon's own evidence.

"She likes to suggest, and I heard her yesterday on your own programme say that it might not make any money at all, it might lose the Scottish Government revenue. That is a ridiculous proposition and one that isn't stood up by her own evidence."