The Scotsman Bulletin Wednesday November 27 2024 #Tax

The Scotsman

Dale speaks to David Bol about his splash on the divergence between Scottish and RUK income tax

Transcript

00:00Hello and welcome to the Scotsman's daily video bulletin for this Wednesday.

00:04My name is Dale Miller.

00:05I'm Deputy Editor of the Scotsman and I'm joined by Deputy Political Editor, David Bowle.

00:11David, we'll get around to talking about the front page, which is your splash.

00:17So we led on Ministers being told to end the policy for higher income tax.

00:23This was Scottish Financial Enterprise and it's interesting, it comes on the back of

00:29the Institute for Fiscal Studies putting out effectively some analysis research, I think

00:35it was last week, in which they said actually the devolved tax take on the back of past

00:42income tax rises may have been restricted rather than growing.

00:46There's various bodies and a lot of pressure on the Scottish Government not to lift income

00:51tax further.

00:52In fact, to maybe scale back income tax in general to try and get closer to what exists

01:00in the rest of the UK.

01:02It's a talking point.

01:03There's been a lot of speculation over whether it contributes to any sort of brain drain.

01:08Effectively, people looking to base themselves elsewhere to pay less tax than Scotland.

01:13And just a week out now from the budget, you'll hear plenty more about this over the coming

01:18seven days or so.

01:20Ceasefire deal struck.

01:22You'll see the main image there on Lebanon with a push and a call from John Swinney and

01:27Humza Yousaf this morning for that to be extended to Gaza.

01:31David, thanks for coming on.

01:34So this story around income tax, there is growing pressure around this, isn't it?

01:41And it would be hard politically for the Scottish Government to lift income tax any further.

01:47Yeah, I would be very surprised if they did lift it any further.

01:50But as you mentioned, they're now having calls for them to kind of close that gap with the

01:55rest of the UK.

01:56So anyone in Scotland who earns over £29,000 pays more income tax than the rest of the

02:01UK. And that is a choice the SNP government have made to try and tally up more funding

02:07for public services, particularly during the years under the Conservative government in

02:12Westminster, they felt they weren't getting a good deal.

02:13And that was one of their only real ways of kind of bringing forward more money to

02:20spend. Obviously, there's only so much they can do.

02:23And there have been suggestions from Kate Forbes in particular and John Swinney kind

02:27of hints that they're not going to use that all the time.

02:29And there's only so much they can do with that.

02:31So it is unlikely they would, but it's also very unlikely that they will start to scale

02:36that back and lower taxes given the financial situation they're kind of in.

02:41And we usually get these calls from sort of the Tories and even Labour the last couple of

02:44years have asked them to basically have the UK on a level playing field in terms of income

02:49tax. But now we're getting, like you said, the financial services sort of body saying

02:55that this isn't kind of working in their eyes.

02:58That IFS study you pointed to said that just by raising tax brackets doesn't necessarily

03:05get you more money to spend.

03:06And there is sort of concerns that it's not been as effective as it was intended.

03:11So there is more pressure upon the SNP ministers to kind of rethink that strategy,

03:16whether we will or not, we'll just have to wait to find out next week.

03:20And just an update, we reported earlier this week that the UK government's going to give

03:25the Scottish government 300 million to 330 million to compensate for national insurance

03:30contributions. Now, there's been at least 500 million asked for, 360 odd million from

03:39memory alone, just from Scottish councils to try and cover this.

03:44So that's not as much money as the Scottish government wanted.

03:47So don't be surprised if you hear that there's more spending cuts on the table effectively

03:52next week. It's one to watch, David.

03:53I was interested looking at the prisoners bill around early release of prisoners going

03:59through parliament late last night that the Greens basically helped out the SNP and

04:06helped pass that legislation.

04:08Any suggestions?

04:09They're back on speaking terms, the two parties, and the Greens will be the one to help

04:13get the budget through.

04:15Yeah, it felt like business as usual, really, with the Greens kind of supporting the SNP.

04:19It was not that surprising the Greens kind of stepped in on this issue, I guess.

04:23The SNP, to be honest, don't really have much of a choice but to do this.

04:26If you look at the pressures on prisons, it's happening at UK level as well.

04:30But yeah, the kind of frosty relationship we saw after the Butte House agreement was

04:35ripped up has definitely thawed.

04:37And I mean, the Greens still think that there's a possibility of a deal being struck.

04:43One Green source told me on Sunday that a deal was still feasible.

04:47And so it's between the Greens and the Lib Dems, realistically, to kind of carry a deal

04:52for the SNP.

04:54From the Greens point of view, they see it as either they'll get a deal done and they'll

04:57get lots of Green policy ideas in the budget.

05:01There's quite a lot of hard demands, I think, that the Greens are wanting.

05:04They don't just want a little bit of their policies tagged on the end.

05:07They want everything to kind of be on that path where they were during the Butte House

05:11agreement. And they also are quite positive even if they don't get a deal, because

05:16politically, if they have to deal with the Lib Dems, that will kind of suit the Greens

05:20to kind of chip away at that sort of left side of the SNP support that they have been

05:25successfully been doing for the last couple of years.

05:29The Lib Dems, I don't know if they actually want to do a deal.

05:32They're obviously open to talking and they've got this red line about independent

05:35spending, which seemed a bit bizarre given that issue had kind of gone away from

05:40Scottish politics, at least temporarily.

05:42So we'll see whether they'll actually want to do a deal.

05:45An election would suit the Lib Dems.

05:47But Alec Colhampton at the weekend acknowledged that if his party are the ones to

05:52kind of force this election, they won't be thanked by the voters at the ballot box.

05:57So still a lot to play for, but time running out to get a deal secured.

06:02Yeah, David, that red line, not a single penny of spending towards independence, that

06:09is what we've requested for budget backing.

06:12Perhaps they're just making a political point, David.

06:14We know that the SNP have scaled back, you know, the time and basically investment

06:21that they're putting into independence at the moment.

06:23So could be could be one to watch.

06:27Yeah, absolutely. Absolutely.

06:29I mean, I asked the Scottish government at the weekend whether they were still going to

06:32press ahead with these independence papers and they said a decision was still to be

06:35made. They got paused during the general election.

06:37So that's a key part of maybe the budget negotiations, whether they'll get a deal

06:42done with the Greens or the Lib Dems.

06:44You can read David's story in full at Scotsman.com if you're looking for any of our

06:49political coverage. There's a politics tab at the navigation bar.

06:53You can read everything from David as well as the rest of the team, Alastair, Rachel

06:58and Alexander Brown from Westminster.

07:01Please follow us on Facebook and Instagram.

07:03We're on Blue Sky, as I've been talking about for the past week and a half.

07:07You can get us on there and go out and pick up a copy of the paper tomorrow.

07:11It'll have all the very latest from John Swinney's speech a week out from the budget,

07:16exactly what he had to say and what may be on the cards.

07:20Thanks for joining us, everyone.

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