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The Progressive Policy Think Tank

IPPR Scotland: Income tax rises welcome but only short-term relief

Russell Gunson, Director of IPPR Scotland, said of today’s draft budget announcements:

The income tax rises proposed today are welcome news and will help to shield most departments from cuts this year. However, at this level they will only provide short-term relief for public funding in Scotland, buying us only a year or so before public spending cuts will likely have to return.

“Without a stronger economy in Scotland, raising taxes will be like running to stand still. We want to see inclusive growth in Scotland and to deliver it we must now see further reform to go along with today’s proposed tax rises.

“We must now redouble efforts to ensure that every single penny of public investment from the Scottish Government - in skills, in education, and in business development - is designed to narrow inequalities and deliver inclusive economic growth. Without this, tax rises will be needed next year and into the future.”

On tax cuts for lower earners in Scotland, he said:

The Scottish Government today announced a tax cut for the lowest earners under £13,850 per year. This should not be the priority, and will likely benefit a number of second earners in higher income households, and misses people who are out of work or the very lowest earners.

“A much better targeted way to help poorer households, and to contribute to tackling poverty and inequality in Scotland, would be to invest further in the Scottish social security system.

“With UK Government decisions to cut benefits over the coming years, the money spent on a tax cut for low income workers in Scotland would be much better spent on topping up benefits through the Scottish Parliament’s new powers.”

ENDS


Contacts

Rosie Corrigan, 07585772633, r.corrigan@ippr.org

Russell Gunson, 07766 904 332, r.gunson@ippr.org

Notes

IPPR Scotland is IPPR’s dedicated think-tank for Scotland. We are cross-party, progressive, and neutral on the question of Scotland’s independence. IPPR Scotland is dedicated to supporting and improving public policy in Scotland, working tirelessly to achieve a progressive Scotland. For more information, visit: https://www.ippr.org/scotland

The Scottish draft Budget has been published online at: https://beta.gov.scot/budget/