Scottish Conservative MSPs have strongly opposed suggestions by First Minister Humza Yousaf to raise taxes on higher earners to fund policies of the Scottish Government. The First Minister suggested this course of action at the beginning of the month, during a cross-party “anti-poverty” summit in Edinburgh, centred around easing the effects of the cost-of-living crisis. He specifically highlighted introducing a new tax band focused on the middle class, with a new rate of 44p, almost as high as the current highest tax rate. However, further research has shown that increasing taxes within Scotland could limit its desirability for people wishing to move there, depriving the country of much-needed investment and workforce.
While support from the Scottish Government during the cost-of-living crisis is sorely needed, raising taxes is likely to create additional problems which would complicate this aim. A Survation survey, working on behalf of the True North consultancy, found that 36 per cent of Scottish workers would consider relocating to other parts of the UK should the income tax rise go ahead. Worryingly, it was younger people who were more likely to move, suggesting the rise could have negative consequences on the future of the Scottish workforce, which desperately needs to grow to support an ageing population. The survey also found that men were more likely than women to consider moving as a result of the new tax proposal.
Overall, despite the aim of the new tax band being to help aid Scottish public services, it is possible that it would have the exact opposite effect, depriving the Scottish Government of funding due to a mass exodus of young earners, vital to the prosperity of the nation over the coming years. As such, it is vital that the Scottish Conservatives raise awareness of this proposal, and counter it with the findings from this survey.
Liz Smith, Scottish Conservative spokeswoman on finance and the economy said of the findings:
“These figures make it clear that concerns about the tax gap created by the SNP being a disincentive aren’t fanciful, but something that would put a substantial number of people off living and working here.”
“At a time when, as the poll responses recognise, growth will be vital to Scotland’s ability to fund public services, it is reckless to manufacture artificial differences with the rest of the UK and to discourage people with the skills that could help improve our economy”.
In addition to the unpopularity of this proposal, it may come at a cost to other benefits which have been promised by the Scottish Government. The plan to expand free school meals to those in P6 and P7, already delayed by the Government, as well as a pilot to expand free school meals to those in secondary school, may be shelved entirely to cut costs which are not targeted as heavily on benefits. While an attractive plan on paper, this current attempt by the Scottish government to fix the economic troubles it has created is more likely to lead to further problems than they are to offer people in Scotland the support they deserve through this current period of financial instability.