DEPUTY First Minister Shona Robison refused to confirm “speculation” around the reported introduction of a new tax bracket for high earners ahead of the Scottish Budget.
The Finance Secretary told BBC Scotland’s Sunday Show that she would not make any comment on reports suggesting that those earning between £75,000 and £125,000 could be set to pay more tax.
She insisted that the full details would be laid before Holyrood on Tuesday December 19 when she is set to make her full statement.
Robison also insisted that the council tax freeze policy, announced by First Minister Humza Yousaf at the SNP conference in October, is set to stay, stating that it will be “fully funded”.
According to The Times, the Scottish Fiscal Commission, which produces forecasts for the Scottish economy was told of the decision to introduce a new tax band last week.
However, ministers have refused to confirm the move, set to be part of a bid to plug an estimated £1.5 billion black hole in the public finances.
The Scottish Cabinet has met repeatedly in recent weeks, even with an emergency session, as ministers sought to make a collective agreement on how to proceed amidst a “challenging” fiscal outlook.
A 45% levy on earnings between £75,000 and £125,140 was proposed by the Scottish Trades Union Congress (STUC) as a way to raise additional revenue.
They suggested this could raise £92m, but the Fraser of Allander economic institute believes it would only bring in £39m because many people would change their behaviour to limit the amount of tax they pay.
It would mean an additional £400 would be taken from the wages of someone earning £100,000 a year.
However, Robison refused to confirm the plans during the interview on Sunday morning.
“I’m not going to confirm anything on tax until I stand up to give my statement on Tuesday to Parliament, that will be where I set it out,” she said.
Pressed on reports stating the tax band was set to be introduced, Robison added: “I’m not going to confirm speculation.
“What I will do to set out on Tuesday what those plans are.
“What I would say is, as I said to you earlier, the decisions that we have made previously have been based on those with the broadest shoulders, paying a bit mor.
“The social contract, of course, means that for that additional tax that some people pay, they get free tuition, free prescriptions, better child care…”
Journalist Martin Geissler interrupted to say that the social contract means: “If the rich pay a bit more, we all get better services - the reality of what’s coming down the line though is most people are paying a bit more, at least half the country are paying more, and the services are worse because that’s just the hole we’re in.”
Robison said she didn’t accept that suggestion, and Geissler added: “Things are worse than they used to be.”
The Deputy FM replied: “The Scottish Fiscal Commission will set out in terms of who pays what in terms of the tax position overall, and we base our analysis on their estimates, which will also be coming forward on Tuesday.
“But I think people in Scotland will recognise that if they lived elsewhere they would not get access to the child care system, they would not get access to free tuition, they wouldn't, for example, get Scottish child payment if they're on a lower income. All of these things are really, really important.”
Geissler went on to ask if the Scottish Government would consider removing universal benefits and moving to a means-tested system instead, adding that free prescriptions cost £1.5 billion.
“Nobody’s saying everybody should pay and that would solve your problem,” he said.
“But what people might argue is maybe the rich should pay for prescriptions, for their bus pass, for their winter fuel, for all that stuff because they can afford it?”
Robison said there is a “balance to be struck” between universal and targeted services.
Specifically on prescriptions, she added: “I was on the committee at the time when this was being looked at in detail.
“And the issue there is that if we were to set up a means tested system, the time to set up that system and bureaucracy, actually, that in itself would cost a lot of money and then would be disproportional.”
