Holyrood election: analysis suggests Scottish Labour would raise more revenue via income tax

Analysis of the political parties’ tax plans ahead of the Scottish Parliament election has suggested a Scottish Labour government would generate more additional revenue than other parties.

Because new powers are coming to the Scottish parliament, including the ability to set rates and bands of income tax on non-savings and non-dividend income, the election campaign has focused on how much parties are prepared to tax Scottish voters.

Research by the left-leaning think tank IPPR Scotland took account of plans already outlined by the political parties ahead of their manifesto launches, and used its own modelling to conclude Scottish Labour would raise between £1.1bn and £1.2bn per year, depending on how raising the top rate to 50p would impact the economy.

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The Scottish Greens would raise up to £950m using the same methodology, while the Liberal Democrats would raise £750m and the SNP £300m.

The Scottish Conservatives, who launch their manifesto today, would generate no additional income as they have committed to keeping in line with tax arrangements in the rest of the UK.

The research also divided up the impact of the tax plans by income bracket, revealing the highest earners would pay more tax under every proposal apart from the Scottish Conservatives, where they would pay less tax.

Low income earners would only pay more tax under the proposals by Scottish Labour and the Liberal Democrats.

Russell Gunson, Director of IPPR Scotland said the election campaign had been dominated by tax.

“With billions of pounds of spending cuts and benefits coming to Scotland over the next few years, the balance of tax rises and spending cuts proposed by the parties needs to be front and centre of the plans they will take to the country to vote on next month.

 “Ahead of manifestos being published over the course of this month, the parties need to be clear with voters as to how much, if any, tax they hope to raise - and what scale of public spending cuts and reform of our public services they're proposing.”

Scottish Labour’s Jackie Baillie welcomed the findings.

“This expert intervention shows that only Labour has a credible plan to use the powers to stop the cuts to schools and public services. The SNP's refusal to tax the richest will see the poorest lose out,” she said.

But the SNP said the analysis showed Labour was prepared to tax low income families.

Finance Secretary John Swinney said: “At every level, even amongst the poorest 10% of the population, ordinary households will lose money under Labour’s plans.  
 
"Labour have been found out making false promises on tax to people who simply cannot afford to pay more. This is an absolute betrayal of Labour values.” 

Scottish Greens co-convener Patrick Harvie said the research showed only his proposals tackled inequality.

“With the SNP's timid approach and Labour's lack of vision, it is clear that the Scottish Greens are leading the debate on how to use Holyrood's tax powers to create a more equal Scotland,” he said.