Scotland receives even greater powers over income tax from next April, and you might think this would be framing the debate in this election. Yet you’d be wrong and I don’t see anything changing over the next four weeks of this campaign.
All Scottish tax payers now pay a Scottish Rate of Income Tax. Scotland’s Finance Secretary, John Swinney, for one year only, can change the income tax bands by 10p in the pound, but has chosen to keep them the same as announced by the Chancellor. From next April, the Scottish Government will have complete control over income tax levels. You may be one of the 10% of Scottish voters at the General Election who voted Tory because of its promises on tax. If you were you are probably disappointed because the Scottish Government now calls the shots.
You are also a little more relaxed as John Swinney has confirmed that while he has no plans to increase the higher rate of income tax. However, Scotland’s middle classes will not benefit from the planned increase to raise the threshold of the higher rate to £45,000. Instead it will rise by inflation only from £43,000 to £43,387.
But the election debate so far has been based on personalities and party positions on independence. Attitudes surveys have confirmed that many votes will be cast on these perceptions, rather than what the parties are proposing, despite the new powers coming to Scotland as a result of the referendum. The SNP has promised to maintain health spending but not increase it. Policies on education and childcare have already been announced at recent party conferences.
The Scottish Conservatives have made their pitch on tax but no one is listening. While Labour’s plan to add 1p to the higher rate did not capture the imagination of the public. Labour is also struggling to out-left the SNP, but any attempt is going to fall on deaf ears as trust in the party has been lost. Neither the Tories or Labour have managed to make any valid criticisms of the SNP stick, most prominently the fact that a newly independent Scotland would have started life in 2016 with a budget deficit of £14.9 billion or 9.7% of GDP, twice that of the UK’s present deficit.
Current polling points towards another SNP majority in Holyrood. Labour will likely finish second on a reduced seat count with the Tories aiming to pip them to be the official opposition, which is looking less likely as the campaign goes on.
Scotland’s middle classes remain disposed to the SNP. While you might expect the SNP to be radical and announce policies to end ‘imposed Tory austerity’, they won’t bite the middle class hand that feeds their popularity. The First Minister wants to command a steady ship and is doing so underpinned by her own record breaking personal popularity. Why shake the boat even if it makes for a very dull election.