SCOTTISH finance secretary Kate Forbes is being urged to follow Rishi Sunak’s lead and cut the basic rate of income tax.
In the Spring Statement, the Chancellor surprised MPs when he said his ambition was to cut the rate by 1p in the pound.
He told the Commons: “It would clearly be irresponsible to meet this ambition this year. And yet I refuse to let that ambition whither and drift.
“By 2024, the OBR currently expect inflation to be back under control, debt falling sustainably, and the economy growing.
“Our fiscal rules are met with a clear margin of safety. And so my final announcement today is this: I can confirm, before the end of this Parliament, in 2024, for the first time in sixteen years the basic rate of income tax will be cut from 20 to 19 pence in the pound.”
In Scotland, the starter rate is already 19 per cent on earnings between £12,570 and £14,732. However, it rises to 20 per cent for those making between £14,732 and £25,688.
The Scottish income tax rate for those on the intermediate band – earning between £25,297 to £43,662 – is 21 per cent, while those on the higher band – £43,663 to £150,000 – face a rate of 41 per cent.
Under Mr Sunak’s plans, that could mean a significant divergence between Scotland and the rest of the UK in 2024. Here, those earning just under £50,000 will pay the 41 per cent rate, while south of the border it will be 19 per cent.
Scottish Tory Shadow Cabinet Secretary for Finance, Liz Smith called on Ms Forbes to follow Mr Sunak’s lead.
She said: “It’s particularly welcome that the basic rate of income tax will be cut by 2024. The SNP must now agree to match Rishi Sunak’s announcement, which will put more money in the pocket of every single taxpayer.”
In her response to the Chancellor’s statement, Ms Forbes said: “We have already acted to introduce a 19 per cent starter rate of income tax below the basic rate, in line with our commitment to progressive taxation, which makes Scotland the fairest taxed part of the UK. We will continue to take that approach when we set taxation policy in future budgets.”
Ms Forbes told LBC that the cut in income tax in 2024 wasn’t what families “need right now”. She said the decision to press ahead with the hike in national insurance would “drive a wedge between the highest paid and the poorest paid in our country.”
Ms Forbes also said the Spring Statement did little to help families facing fuel poverty.
She said: “Well, right now families across Scotland are facing soaring energy bills and there was nothing in that statement to help address the fact that over 400,000 families in Scotland could be plunged into fuel poverty or deeper into fuel poverty.”
The SNP minister said the Chancellor could have helped by uprating benefits.
On the £45m in Barnett consequentials the UK Government says will come to Scotland, Ms Forbes said she needed to see the detail first before committing spending: “But we already have demonstrated our willingness and our ability to mobilise funding quickly to help families.”
Meanwhile, Scottish Labour leader, Anas Sarwar, said the proposals from the Chancellor were “the wrong choices, and the wrong answers”.