Nicola Sturgeon: Scotland will move away from existing UK tax structure over time

The First Minister has predicted Scotland will “move away” from the existing UK income tax structure as she defended SNP taxation proposals against claims they are not “creative” enough.

The SNP leader has vowed to freeze Scotland’s income tax rates - rejecting the UK Government’s move to lift the 40 per cent threshold - and raise the personal allowance.

However, Sturgeon has faced criticism from both Labour and the Liberal Democrats, who are proposing a 1p rise in income tax across all bands, as well as the Greens, who want to use new devolved powers to increase tax on higher end taxpayers. 

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Speaking at a hustings in Glasgow last night organised by the National Union of Students Scotland, Greens co-convener Patrick Harvie, who claimed “wealthy people have been under-taxed for a long time in this country”, said he was “genuinely surprised” the SNP have not proposed “something more creative” such as creating more tax bands.

“Why is it progressive to have the same band of income tax on everybody between the personal allowance and 40-odd grand?” said the Glasgow Kelvin candidate.

Sturgeon said: “I think over time we may well see Scotland and the Scottish Parliament moving away from the structure of income tax that prevails in the UK right now.

“The judgment I make in this election and it’s a judgment I am happy to defend across the country is that higher rate taxpayers should not get a tax cut – they should be bearing more of the burden – but that people on the basic rate of income tax, given the difficulties people are facing, should not have their tax increased.”

Harvie responded: “It does sound to me as though a period of minority government might be really good for you.”

The SNP leader also faced questions as to why the party has opted to freeze the basic rate of 20p over the course of the next parliament given their ‘penny for Scotland’ policy in 1999 which suggested lifting income tax by 1p to fund extra public spending.

“I wasn’t leader of the party in 1999 when we did propose that policy,” she said. “Labour opposed that policy in 1999. We take particular decisions at particular elections.

“We have just come out of a recession where real wages have declined and declined quite considerably. I speak to people in my own constituency and across the country all the time on basic income, on low or average incomes, who have got tough decisions to make about childcare or feeding their kids sometimes. I speak to people who are in work, who sometimes over the past few years have had to be reliant on food banks.

“I don’t think raising the tax of people on very low incomes is the right thing to do.”

Under the party’s plans, the basic and higher rates of tax are to be frozen in real terms and increased only in line with CPI inflation in 2017/18, and by no more than inflation until the end of the next parliamentary term.

The First Minister has also said an SNP government would utilise new powers to set a zero rate on taxation, to raise the tax threshold by 2021/22 to £12,750, when the UK rate is expected to be at £12,500.