Nicola Sturgeon defends ‘fair and progressive’ income tax policies

Scottish Conservative leader Ruth Davidson accused the First Minister of making Scotland the highest-taxed part of the UK after the Budget – which has been approved in principle thanks to support from the Greens and two Liberal Democrats – set out a raft a changes to income tax.

Labour’s Richard Leonard, whose party wants to see the top rate of income tax upped to 50p, accused her of “refusing to ask the richest people in Scotland to pay their fair share”.

Under the Scottish Government’s planned income tax changes, the two highest rates of the levy will be increased by 1p.

While the basic rate will be frozen at 20p, ministers plan to create a new intermediate rate of 21p on earnings between £24,000 and £43,430 as well as a new “starter rate” of 19p, which will be applied to the first £2,000 of taxable earnings.

Ms Sturgeon insisted seven out of 10 Scots would pay less income tax next year under her government’s plans – adding 55% of taxpayers would be better-off than if they lived elsewhere in the UK.

In angry exchanges at First Minister’s Questions, she branded the Conservative leader “feeble” and told Mr Leonard to “go back to the classroom and do his homework”.

The First Minister insisted the Scottish Government had put forward a “sensible, responsible, balanced budget that reverses the cut to Scotland’s budget imposed by the Conservative government at Westminster, protects our public services and, of course, allows investment in the infrastructure and business support that is so necessary to growing our economy.”

Ms Davidson responded: “We already know that the SNP has put up taxes on buying a house, it has put up business taxes and now it is putting up tax on ordinary working people, breaking its own manifesto promise to do so.”

She accused the First Minister of ignoring business leaders, who have argued against tax rises, and instead only listening to Patrick Harvie, the Scottish Greens co-convener.

“The Greens passed her Budget last year, they’re passing her Budget this year and they have already told her which tax they want her to put up to pass her Budget next year,” Ms Davidson said.

Ms Sturgeon responded: “Let’s cut to the chase here, the Scottish Government have put forward fair and progressive tax policies that will allow us to protect our public services, reverse Tory cuts and support our businesses.

“The Tories want us to cut taxes for the very wealthiest in our society.

“That is a difference between this government and the Tories – and of course we know from polling evidence the majority of people in Scotland are on the side of this government.”

Labour leader Mr Leonard said: “We think it’s right that those at the top should pay a bit more.”

He highlighted research by his party showing a 24% rise in the estimated number of people in Scotland who could be paying a top rate of 50p.

Ms Sturgeon insisted, however, that the government was already “asking the richest people in Scotland to pay their fair share” through a 1p increase in the top rate.

She said Labour’s “completely incredible and incompetent” tax proposals did not take into account the impact that increasing the top rate to 50p could have on people’s behaviour.

“Labour sums simply do not add up,” she said.

She added: “It’s like Richard Leonard is suggesting we fund our NHS through Monopoly money or something.

“If Richard Leonard wants to be taken seriously, he’s really going to have to go back to the classroom and do his homework on tax before he comes and questions me again on it in this chamber.”

Mr Harvie also defended the Budget deal, saying it had prevented cuts to local authority funding.

He also challenged Ms Sturgeon to address how councils fund services in the future, saying: “It’s perfectly true that (council umbrella group) Cosla have welcomed the change to the budget and that will protect services across Scotland, but they also say … that there are long-term financial challenges ahead and those can only be expected to grow in the future.”