Kezia Dugdale floats income tax rise to avoid services cuts

SCOTTISH Labour leader Kezia Dugdale will today unveil plans to increase income tax by 1p in a bid to avoid swingeing cuts to education and other local services next year.

Scottish Labour leader Kezia Dugdale. Picture: John Devlin
Scottish Labour leader Kezia Dugdale. Picture: John Devlin

She will accuse the SNP of “managing” Tory cuts rather than using the Scottish Parliament’s new powers to counteract them.

And she will pledge measures to ensure low-income workers would not pay extra.

The move comes after city leader Andrew Burns claimed the Scottish Government was holding “a shotgun at my head” over council funding and warned the relationship between ministers and local authorities was “close to broken”.

In a speech in Edinburgh, billed by the party as her most significant since becoming leader, Ms Dugdale will say: “The cuts the SNP have decided to inflict will be felt in every community in Scotland.

“The hundreds of millions of pounds taken from local services are cuts to things that we all rely on.”

The Lothian MSP will focus particularly on the effect on education. She will say: “On top of the £130 million of cuts announced to the Scottish Government’s centrally managed education budget, the hundreds of millions of pounds of cuts to local government will mean a new round of cuts to our children’s nurseries, primary schools and secondary schools.

“Education is already falling behind. Further cuts to schools will only make it harder to catch up. These cuts will disadvantage children, hold back business and harm our economy.”

Labour’s proposal is to use the latest powers handed to Holyrood to put 1p on each of the tax bands from the next financial year.

But the party says under its plans, 810,000 workers across Scotland would not pay any more and taxpayers earning less than £20,000 would receive a £100 annual boost to their income through a payment scheme administered by local authorities.

It said someone on a salary of around £30,000 a year would pay under £4 a week extra while someone on the First Minister’s £144,687 wage would pay an extra £1447 a year.

In her speech Ms Dugdale will say: “Given the choice between using our powers or making cuts to our children’s future, we choose to use our powers.

“We will tear up this SNP budget that simply manages Tory cuts and instead use the power we have to set the Scottish rate of income tax one pence higher than the rate set by George Osborne.

“This will provide an extra half a billion pounds a year to invest in the future.”

The proposal will also form part of Labour’s election platform for the next five years. But from next year, Holyrood will have stronger tax powers, with more chance to vary the rates.

Labour has already pledged a 50p top tax rate, but says it will set out other proposals in the run-up to the elections on May 5.