SNP Considers Alternatives to Tax Rises: Cutting Civil Service and Selling Government Buildings

The Scottish National Party (SNP) is considering measures to improve public finances without raising taxes for higher earners. Shona Robison, the Deputy First Minister and finance secretary, has suggested that the number of civil servants could be reduced, and government buildings could be sold or leased out. These measures are being considered to fund new policies proposed by Humza Yousaf, who aims to tackle poverty by growing the economy. The Scottish government is facing a £1 billion deficit, putting pressure on tax and spending decisions.

A Cautious Approach to Taxation

During an interview with the BBC, Shona Robison emphasized the government’s cautious approach to tax. While the administration believes in progressive and fair taxation, it is mindful of the cost of living pressures facing households. Robison noted that 52% of people in Scotland still pay less tax than they would if they lived elsewhere in the UK, according to figures from the Scottish Fiscal Commission. She stated that the government would reveal its tax and spending plans in the upcoming budget.

The finance secretary also highlighted ongoing work in government on prioritization and re-prioritization. This includes evaluating the right size of the workforce across government and public bodies, examining the Scottish estate, and exploring more efficient ways for public services to collaborate and provide services. Robison emphasized that these measures are not intended to result in job losses, and some departments may even grow, depending on the changing needs and demands of different areas.

She also mentioned that remote working has become more prevalent, making it possible to reassess the configuration of government buildings. The Scottish government plans to consult with trade unions on these matters.

Uncertainty Surrounding Tax Rises for High Earners

Robison clarified that no decisions had been made regarding tax increases for high earners. The government is aware of the challenges faced by households and will exercise caution in its approach. Ivan McKee and Ben Macpherson, SNP MSPs, have proposed using empty parts of the Scottish Government headquarters in Leith to accommodate businesses and stimulate economic growth while saving public funds. This indicates a cautious attitude toward taxation.

Humza Yousaf’s previous openness to changes in Scotland’s income tax system, such as the introduction of a new 44% tax band, has been met with uncertainty. While he initially indicated a willingness to consider such proposals, he recently expressed concerns about the potential brain drain from Scotland to England if taxes were lowered in the rest of the UK. He emphasized the need to consider the behavioral impacts of any tax divergence.

However, First Minister Nicola Sturgeon has suggested that new wealth taxes should not be ruled out given the extraordinary pressure on public finances. This includes the potential introduction of an annual wealth tax of 1% on the wealthiest 12% of Scottish households, as proposed by the Scottish Trades Union Congress.

Council Tax Changes and Opposition

Apart from income tax considerations, the Scottish government is also consulting on changes to council tax. They are considering sliding scale increases of 7.5% to 22.5% for properties in band E or higher. These changes could potentially impact 740,000 households.

In response to Shona Robison’s comments, Liz Smith, the Scottish Conservative shadow finance and local government secretary, accused the SNP of planning to increase taxes for hard-working Scots. She emphasized that by 2023, most Scots will pay more income tax compared to those living elsewhere in the UK. Smith also pointed out that the SNP government has proposed council tax increases of up to 22.5%, burdening working families.

The Scottish Conservatives are focusing on priorities such as reducing NHS waiting times, improving schools, and growing Scotland’s economy.

In summary, the SNP is exploring alternative measures to increase public funds without raising taxes for higher earners. The government is considering staff reductions, selling or leasing government buildings, and reshaping public services to work more efficiently. There is uncertainty regarding tax rises for high earners, with cautiousness urged due to the economic climate and potential behavioral impacts. The Scottish government is also discussing changes to the council tax structure, which has faced opposition from the Scottish Conservatives.