Tories have warned that Scotland risks “being left behind” if SNP ministers at Holyrood fail to match the tax-cutting proposals being introduced in the rest of the UK.
While SNP Westminster leader Ian Blackford condemned as “nonsense” Chancellor Kwasi Kwarteng’s package of measures, Scottish Conservative MP John Lamont urged the Scottish Government to adopt similar “radical” proposals.
Changes to income tax included in Friday’s mini-budget included a cut in the basic rate to 19p in the pound, as well as the scrapping of the top rate for those earning £150,000 a year or more.
Those measures do not apply in Scotland – where control over income tax rates and bands is devolved – but with SNP ministers having previously boasted that the system north of the border results in most people there paying less in tax than their UK counterparts, that situation will no longer apply.
What I don’t want to see is Scotland being left behind while the rest of the UK powers ahead with this new, ambitious, radical plan set out by the Chancellor— John Lamont MP
Douglas McWilliams, a leading economist and deputy chairman of the Centre for Economics and Business Research told The Sunday Times that “it would be realistic to assume about 20% of top-rate taxpayers could move south” as a result of the changes announced by the UK Government.
Mr Lamont meanwhile told BBC Scotland’s The Sunday Show: “What I don’t want to see is Scotland being left behind while the rest of the UK powers ahead with this new, ambitious, radical plan set out by the Chancellor on Friday.”
Scottish Government minister Richard Lochhead has already vowed they will continue with a “fairer and more progressive approach to taxation”.
But Mr Lamont, the MP for Berwickshire, Roxburgh and Selkirk, said: “For example if you earn more than £15,000 in Scotland, if the SNP don’t match the UK Government’s proposals you will be paying more tax in Scotland, that is the harsh reality of the SNP not adopting this approach.”
He added: “I fully support the tax cuts, I fully support the other changes the Government is proposing.
“And the big question now for the Scottish Government and the SNP is whether they replicate those changes.”
The Institute for Fiscal Studies think tank, however, has calculated that only those people earning £155,000 a year or more will be “net beneficiaries” from the new Chancellor’s package.
And SNP Westminster leader Ian Blackford said “millions and millions of ordinary workers” across the UK would have less cash because of the changes – warning also that these could see the country endure a longer and deeper recession.
Mr Blackford, also speaking on The Sunday Show, said: “It is only the very wealthy that benefit from this.
“What has happened as a consequence of this budget is we are going to see higher interest rates, that is higher mortgage costs.
“That is going to undermine the housing market and that is a direct response to what the Chancellor has done.”
The SNP MP continued: “The Chancellor has placed us in the situation that the likelihood now is that we have a deeper and we have a longer recession and that is because of the wrong political choices.”
With the pound “plummeting” on the markets after the package was unveiled, Mr Blackford claimed there was “a real threat of the stability of the United Kingdom”.
He said that Scottish Deputy First Minister John Swinney would outline plans for income tax north of the border when the Scottish Government’s budget for next year is announced “in a few weeks”.
He hit out at the “nonsense of what the UK Government is engaging in”, while stressing: “We will take our responsibilities to deliver progressive taxation, but also a competitive regime that encourages people to invest in Scotland.”
