Nicola Sturgeon appears to have ruled out upping the threshold for the higher rate of income tax in Scotland, as she blasted the Conservatives “absolutely damning and shameful” Budget.
Conservative interim leader Jackson Carlaw warned that meant “middle income” Scots would lose out on tax cuts that are being introduced south of the border.
He called on the Scottish Government to follow the lead of UK Chancellor Philip Hammond, who announced an increase in the threshold for the higher rate of income tax earlier this week.
The changes being brought in by Mr Hammond mean in the rest of the UK the point at which people start to pay the 40p tax rate will rise from £46,351 to £50,000 in April.
In Scotland workers not only pay a slightly higher rate for this – 41p as opposed to 40p – but it kicks in earlier, with the threshold currently set at £43,430.
Scottish Finance Secretary Derek Mackay has already indicated he has no plans to follow the Chancellor’s example when he reveals his Scottish Budget in December.
But Mr Carlaw called on the the First Minister to give some “hope of tax relief to people like senior teachers, nurses and police officers”.
Pressing her on the issue at First Minister’s Questions he said without this these people would “face paying a bill of £1,000 extra in income tax compared to those doing exactly the same job elsewhere in the UK”.
He praised the Budget, saying it would deliver a 1.4% increase in public spending in real terms – contrasting this with an “evangelical bible of economic misery”, from the SNP’s Growth Commission report on the economics of an independent Scotland.
Ms Sturgeon however slammed the Conservatives, saying the Budget delivered “tax cuts for the rich and just cuts for everybody else”.
And she said Mr Carlaw had been “completely unable to defend the policies of his own party at Westminster” in this regard.
While the Conservative claimed the Budget would provide an additional £950 million for Scotland, the First Minister countered the “reality” was the Scottish Government budget would be cut by £2 billion over a decade.
“That amounts to almost 7% in real terms, the Tories should be utterly ashamed of that,” she stated.
On the subject of income tax she argued the Tories had shown their “true colours” and pledged the Scottish budget – which sets income tax rates and bands north of the border – would stand in “stark contrast” to Mr Hammond’s policies.
The First Minister said: “When we set our Budget on December 12 the decision we take will be driven by our determination to protect our National Health Service and our other public services, to tackle poverty and low pay, ensure that those who earn the most in our society make a fair and reasonable contribution to public services.
“It will be a balanced, progressive and fair budget and it will stand in stark contrast to the one we saw on Monday.
“Let’s not forget as a result of our budget decisions last year 55% of taxpayers in Scotland right now pay less tax than counterparts across the UK because of our new starter rate – not helping those at the top, helping those at the bottom of the income scale, that’s a progressive change.”
She added: “This government stands for public services, it stands for helping the poorest in our society, it stands for fairness and progressive principles.
“What we’ve seen today is the Tories stand for tax cuts for the rich and just cuts for everybody else and Jackson Carlaw can’t even try to defend it.”
But the Conservative branded it an example of the SNP’s “grudge and grievance government led by a grudge and grievance First Minister”.
Ms Sturgeon answered his questions with the “usual basket of cliches”, he claimed.
Mr Carlow said: “This was a Budget which froze fuel duty and delivered a tax cut of £132 to the record number of Scots in work.
“It delivered a freeze on the duty in whisky, welcomed by the industry, help for the oil and gas sector, welcomed by those in it.
“More than £0.5 billion for Scotland’s NHS, help for our high streets, investment in roads. And the SNP response an all to predictable whinge. How tired, lacklustre and miserable.”