Tax rises in Scotland would be ‘very disappointing’, says Sunak

The Prime Minister has said tax increases in Scotland announced this week would be “very disappointing”.

Scotland’s Deputy First Minister Shona Robison will announce her Government’s tax and spending plans for the next year on Tuesday, dealing with a potential £1.5 billion black hole in the country’s finances.

According to reports in recent weeks, First Minister Humza Yousaf is set to create a new tax bracket for higher earners in a bid to bring in more revenue.

He said he would consider such a move – suggested by the STUC – while he was running for SNP leadership earlier this year.

But business groups and now the Prime Minister have warned against increasing the tax burden on Scots and further diverging from the rest of the UK.

Speaking to journalists at RAF Lossiemouth in Moray on Monday, the Prime Minister said: “The first thing I’d say is the UK Government has provided a record amount of funding to the Scottish Government through the Barnett formula, so they’re ultimately responsible for the finances here in Scotland.

“But I can tell you what we’re doing in the UK is controlling spending and cutting people’s taxes and that’s going to kick in for everyone in Scotland and across the UK, a reduction in the rate of national insurance from 12% to 10% from January.

“That will save a typical person in work around £450 – it’s a significant tax cut.

It would be very disappointing to see that tax burden continue to rise in Scotland

“So that’s what the UK Government is doing to help Scottish families with the cost of living, which we know is a priority for them.

“But ultimately, it’s the Scottish Government that are responsible for their own finances – it’s already the highest taxed part of the UK and obviously it would be very disappointing to see that tax burden continue to rise in Scotland.”

In a statement on Sunday, however, Ms Robison – who also serves as the country’s Finance Secretary – hit out at the level of funding available to Scotland, but said the budget unveiled on Tuesday would seek to protect people and public services.

“In the face of a deeply challenging financial situation, this budget will reaffirm our social contract with the people of Scotland,” she said.

“The autumn statement was devastating for Scottish finances. The Institute for Fiscal Studies has acknowledged that it will lead to planned real-terms cuts in public service spending.”

But she added: “We refuse to follow UK Government spending decisions – indeed, we are doing all we can to mitigate them.

“We are proud that Scotland has a social contract which ensures people are protected by a safety net should they fall on hard times.

“This contract underpins this budget, with targeted funding to protect people and public services.”