SNP would freeze Scottish income tax to raise £1bn, says Nicola Sturgeon

First Minister Nicola Sturgeon has vowed to freeze Scotland's income tax rates, rejecting the UK Government's move to lift the 40 per cent threshold.

The SNP's plans would see the basic and higher rates of tax 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.

Chancellor George Osborne pledged to increase the threshold for 40p tax payers to £45,000 next year in his budget last week.

Sturgeon rejected the notion of raising the additional rate of 45p for those earning above £150,000, but said the analysis will be updated each year to inform decisions in future budgets.

She said an the proposals would generate revenue of more than £1bn by 2021/22.

“In setting out our proposals we have balanced the need to invest in and support our public services with a recognition that many households are still facing difficult economic challenges, and with the need to grow the Scottish economy.

“We do not believe it is right that those on low incomes are asked to pay for austerity. That does not tackle austerity, it simply shifts the burden to those who can least afford it,” she said.

The First Minister added that instead of offering a "large tax cut", the Scottish Government would ensure the higher rate threshold rises only by inflation, rising from £43,000 to £43,387.

“That increase will prevent higher rate taxpayers from receiving a real terms cut in their tax bills, but nor will they see their bills increase.

“By adopting a different path to the UK Government we could generate more than £1 billion of additional revenues, enabling us to protect the public services we all rely on. We believe that this proposal is reasonable, it is balanced and it is fair.

The First Minister also confirmed 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.

Scottish Conservatives leader, Ruth Davidson said: ""Nicola Sturgeon has confirmed today that she wants to make Scotland the highest taxed part of the United Kingdom.

 "In the last five years alone, 140,000 Scots have been dragged into paying the higher rate of income tax, including public sector servants such as nurses, teachers and policemen and women.

"Nicola Sturgeon could have chosen to support them today but instead she has decided not to. That is bad for the Scottish economy and bad for Scottish jobs."

Scottish Greens leader Patrick Harvie said the SNP's plans are "breathtaking".

He said: "Scottish Greens argued alongside Nicola Sturgeon and John Swinney that Scotland needed the power to build a fairer, more equal society and an economy that protects our vital public services and invests in our young people’s future.

"To finally win these powers and then not use them is extraordinary.

"This proves the need for a bolder Holyrood, to push the Scottish Government beyond its safe comfort zone."