An SNP MSP claims Scottish Labour’s proposed tax rise would hit thousands of hard up Fifers.
Annabelle Ewing, MSP for Mid Scotland and Fife, insisted many workers would end up being worse off as Labour’s plan to offer a rebate to those on low incomes was “unworkable” and “not fit for purpose”.
Last week, Scottish Labour leader Kezia Dugdale pledged a Labour government at Holyrood would add an extra penny to income tax, bringing in additional revenue of £479m to protect public services.
As the increase would apply across all tax bands, the less well off would be able to apply for a rebate to offset the rise.
But Ms Ewing argued that analysis of Labour’s proposals revealed even the lowest income workers in Fife could be adversely affected.
She said the increase the basic rate of income tax would impact on 2.2 million people in Scotland – including 500,000 pensioners – and while Labour had claimed those on incomes between £11,000 and £20,000 could apply for a rebate, it had failed to acknowledge that many people did not claim for benefits they were entitled to.
UK Government figures show approximately one in three people entitled to claim certain benefits do not do so.
Ms Ewing said an estimated one million taxpayers in Scotland earned between £11,000 and £20,000, and if the average level of uptake was maintained, around 350,000 people on low incomes in Scotland would miss out on Labour’s rebate – including thousands in communities across Fife.
“Since announcing their plans for a tax hike on low-earners, Labour has claimed its proposed rebate would protect the poorest workers – but the fact is Labour has no way of telling us how this scheme would work, or how it could guarantee that the rebate gets to those who need it most,” she said.
“The reality is Labour cannot guarantee a single person in Fife would claim or receive this £100, but if Labour ever got into power everyone locally would have to pay more taxes.
“During the budget debate last week, we had the extraordinary spectacle of Labour’s finance spokesperson dismissing serious questions on how Labour’s proposed rebate would work as mere ‘details’ – now we know Labour’s plans could hit thousands of the people in Fife they have specifically pledged to protect.
“Last week the Resolution Foundation told us that even if Labour’s rebate plans are workable, they don’t make the planned tax hike any more progressive. The fact is Labour doesn’t have a clue how its plans would work or how many low-earners in Fife would be hit.
“Poorly thought out, knee-jerk policies are not an appropriate response to the very difficult financial pressures that are coming from Westminster.”