Scottish Labour cancels £100 rebate in income tax plans

A £100 ‘rebate’ for low paid workers has been dropped from Scottish Labour’s income tax plans ahead of the Holyrood election in May.

Announced in February, leader Kezia Dugdale said the payment would offset the party’s plans to increase income tax rate by a penny for those earning under £20,000, but the party now says an increase in the tax free allowance in George Osborne’s UK budget means the measure is no longer necessary.

Dugdale had told Holyrood there were "three or four different ways" the policy could work.

The SNP and Scottish Conservatives have accused the party of breaking a promise to low paid workers.

Shadow Scottish Secretary Ian Murray told STV’s Scotland Tonight the general principles of the policy remained.

“The promise we made when we set our income tax policy was that no one earning £20,000 a year would be worse off, and indeed they’ll be better off under this policy to the tune of about £55 a year on a salary of around £16,000, the salary of a care worker,” he said.