NICOLA Sturgeon has hit out at opposition leaders who criticised the SNP’s Budget deal with the Greens, defending what she said were her government’s “fair and progressive” tax policies.
Ruth Davidson said the new tax rates were too high for wealthy people. Richard Leonard said the new tax rates were too low for wealthy people.
But it was the hapless Leonard who was the main focus of the First Minister’s scorn.
There was much laughter from the government benches as he attempted to push his “alternative Budget”.
Sturgeon, much to the amusement of her own MSPs, poked holes in the Labour leader’s proposals, and told Leonard to “go back to the classroom and do his homework on tax before he comes and questions me again on it in this chamber”.
During a feisty FMQs at Holyrood, Sturgeon had been asked by Leonard why she was “refusing to ask the richest people in Scotland to pay their fair share”.
She replied that it is precisely what her government was doing. She said that while the Tories seemed to only want a tax cut for the richest, all that Scottish Labour had provided was “an incompetent tax policy”.
Labour’s policy, she said, would not only require legislative powers that the Parliament didn’t have, but they would also go against Audit Scotland recommendations. The income tax portion of Labour’s proposals do not take into account any behavioural analysis, she pointed out.
The Scottish Fiscal Commission (SFC) is responsible for estimating what money tax policies would raise, and it would take behavioural changes into account into its analysis. The Scottish Government can only spend what the SFC estimates will be raised.
Sturgeon pointed this out to Leonard before attacking his claim that a Labour Budget would raise a billion pounds. She said that it would be closer to £300 million, and that would be “generous”.
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 added.
Leonard responded by saying that research had suggested raising taxes would not lead to higher tax avoidance, before asking why Sturgeon was not using her powers to raise the top rate of tax. The First Minister pointed out that, in fact, she was. Under the Scottish Government’s planned income tax changes, the two highest rates of the levy will be increased by 1p.
Sturgeon then said, again, that regardless of what other research may exist, the SFC’s opinion legally must be observed when budgeting as they determine how much money the Government can spend.
“It’s like Richard Leonard is suggesting we fund our NHS through Monopoly money or something,” she added.
“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.”
Responding during FMQs, Davidson said: "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," Davidson said.
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."
Harvie also defended the Budget deal, saying it had prevented cuts to local authority funding.
He also challenged 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."
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