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5 March 2014

Alex Salmond refuses to commit to reintroducing 50p tax rate in Scotland

The First Minister says Scotland would not put itself "at a tax disadvantage with the rest of the UK" at New Statesman event.

By George Eaton

In his New Statesman lecture last night, Alex Salmond emphasised his commitment to social justice and to making an independent Scotland a “beacon of progressive opinion”. With this in mind, I asked him in the Q&A that followed whether he would reintroduce the 50p tax rate on earnings over £150,000 (as Labour has pledged to do) following a Yes vote. He replied: 

In terms of the White Paper [on Scottish independence] we said that we don’t have proposals for changing taxation, we certainly are not going to put ourselves at a tax disadvantage with the rest of the UK. 

In other words, since the current UK top rate of tax is 45 per cent, an independent Scotland would not reintroduce the 50p rate because, in Salmond’s view, this would put it at a “disadvantage”. For similar reasons, while Labour would raise corporation tax from 20 per cent to 21 per cent in order to cut business rates for small firms, the SNP would reduce it to at least 3 per cent below the UK level. This, Salmond said last night, would be essential to help Scotland counter the “gravitational pull of London”. 

It’s possible that his position on income tax would change if a Labour government reintroduced the 50p rate (thus eliminating any possible UK advantage), but the party has responded by accusing Salmond of following George Osborne’s lead by “siding with millionaires instead of hard-working Scots”. 

The party’s shadow Scottish secretary Margaret Curran said: 

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Tonight Alex Salmond made clear whose side he is on. He’s with George Osborne – siding with millionaires instead of hard-working Scots. Labour would reintroduce the 50p tax rate because we believe those with the broadest shoulders should bear more of the burden for reducing the deficit.

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And just like Alex Salmond won’t give a straight answer to ordinary Scots about the currency, he won’t tell them which of their schools and hospitals he would cut to give big companies and millionaires lower taxes in a separate Scotland.

Salmond also told me: “In terms of the cause of social justice, I think it’s validated by the policies we’ve pursued in administration. If I had to pick one policy which I think would transform inequality in this country, then you should look very carefully at the policies for transformational childcare, which I think are absolutely fundamental. I’ve spoken tonight about the benefits to the economy…an equally important argument is the emancipation of people back into the workplace and what that can do for families, and secondly, for child development, which is fundamental to change some of these statistics we’re seeing. 

All of this might be true (although Labour is keen to point out that it is also committed to introducing Scandinavian-style childcare) but Salmond’s stance on tax does make it harder for him to argue that Scotland would encourage a progressive race to the top, rather than a race to the bottom.