Scottish taxpayers could face increased income tax bills as the SNP government confirms it may break previous promises not to raise rates before the next Holyrood election.
Budget Uncertainty Prompts Tax Review
Finance Secretary Shona Robison has revealed she is preparing for a 'nightmare' scenario that might force her to reconsider the Scottish National Party's commitment to maintaining current income tax levels. This potential U-turn comes in response to expected changes in the UK budget, where Chancellor Rachel Reeves is anticipated to increase basic income tax by 2p while cutting national insurance contributions by 2p.
The Scottish government faces a potential £1 billion reduction in funding through the fiscal framework agreement between Edinburgh and London. Ms Robison described this as "unforeseen exceptional circumstances" that require careful planning for every eventuality.
Broken Promises and Political Fallout
The Finance Secretary's warning comes less than two weeks after Deputy First Minister John Swinney reaffirmed the party's 2021 manifesto pledge not to alter income tax rates during the current parliamentary term. However, following reports of the UK government's planned tax changes, Mr Swinney declined to repeat this assurance during First Minister's Questions.
Scottish Tory finance spokesman Craig Hoy strongly criticised the potential policy shift: 'Shona Robison and the SNP are signalling yet again that higher taxes for Scotland are being actively considered.' He added that the Chancellor's budget was giving nationalists "an excuse to hike tax, putting families and businesses at risk."
Limited Options for Scottish Government
During an appearance on BBC Scotland's Sunday Show, Ms Robison confirmed that tax increases are among options being explored despite previous guarantees. When questioned about coping with the substantial funding shortfall, she stated: 'We are scenario planning for every eventuality and looking at what the options may be. This £1 billion is of such a magnitude it can't just be magicked away.'
The Finance Secretary explained that if the anticipated scenario materialises, the Scottish government would have "very limited" levers available to address the funding gap. While emphasising that they "don't want to raise taxes," she acknowledged that exceptional circumstances might force a reconsideration of their tax strategy.
Scottish taxpayers earning above £30,318 already pay more in income tax than their counterparts in other parts of the UK. The potential additional increases have raised concerns about Scotland's economic competitiveness and the financial pressure on households and businesses.
Meanwhile, Scottish Labour leader Anas Sarwar has positioned his party differently, stating on Radio 4: 'I don't support increasing income tax in Scotland. I want to reduce the tax burden in Scotland.' This sets up a clear political divide as Scotland approaches its next budget announcement on January 13.
