Income tax disagreement 'sticking point in Greens and SNP government talks'

Nicola Sturgeon announced on Wednesday that she had embarked on talks with the smaller pro-independence party about a “formal co-operation agreement” for this parliament.

Although it would stop short of a coalition, it could see Green MSPs entering government as ministers.

However the First Minister’s official spokesperson yesterday ruled out the SNP giving any ground on its manifesto commitment to freeze income tax for the five-year parliament.

“Our manifesto promise is clear and we’re not deviating from that,” he said.

The SNP manifesto contained a headline pledge to “freeze Income Tax rates and bands” for five years.

It added: “While it is important for any government to have flexibility to respond to a change in circumstances, our aim is to maintain current Income Tax rates for the duration of the parliament and increase thresholds by a maximum of inflation.”

However the Scottish Greens want higher income tax for high earners.

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The party's manifesto boasted that in the last parliament it had helped to deliver a “reformed income tax so that most pay less whilst the rich pay more, raising hundreds of millions of pounds for public services across Scotland”.

Although vague on details, it said a “more progressive approach to income tax at Holyrood” should continue with further hikes on the wealthy.

It said: “Now is not the time for increases in income tax for the majority of people in Scotland, many of whom have faced severe financial hardship as a result of the pandemic. 

“However, there is widespread consensus that those who can contribute more, should.”

An SNP ban on income tax rises would be increasingly hard for the Greens to stomach if the economic recovery from the pandemic was rapid.

The tax difference may also bar the Greens holding any finance brief.

Asked if income tax changes were on the table or if the SNP would stick to its manifesto promise, the First Minister’s official spokesman said: “Our manifesto promise is clear and we’re not deviating from that.

“We’re not in a position to give a running commentary on the ongoing discussions with the Greens.

“There will be a continuous dialogue over the next few weeks as we build up towards the summer recess and we’ll see where that leads in terms of hopefully getting to a formal agreement.”

Asked if income tax was a red line for the Government, the First Minister's spokesperson said: “What I said is we stick to our manifesto commitment and I don’t foresee us deviating from that, because we’ve given a commitment. So that’s what I’m saying about that.” 

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Asked about the Green demand for a total ban on foxhunting, the First Minister's spokesperson again said the Government would not give a running commentary on “what’s in, what’s out”, adding: “There will be ongoing discussion and we’ll see where that leads in the next few weeks.”

A spokesperson for the Greens likewise refused to get into a “running commentary” on the talks.

The Green manifesto also called for an end to new licences for oil and gas exploration, an end to tax breaks for the North Sea industry, and no more public funding for new road building projects.

It also called for an annual 1 per cent “millionaire’s tax” on wealth and assets above £1m, including land, property, pensions and other assets.

Scottish Tory leader Douglas Ross warned Sturgeon she was risking “disaster” for Scottish businesses by linking up with the left-wing Greens.

At FMQs, Ross said the SNP Government was already regarded by some as “anti-business” and the potential deal with the Scottish Greens would only make that worse.

He said: “Instead of business people who understand how to create jobs, it’s the Greens who might get a seat around the First Minister’s table.

“A Green party that doesn’t even believe in economic growth and a Green party that wants to risk the entire oil and gas industry and the tens of thousands of jobs it supports.”

Sturgeon replied: “I think most people across the country, and most responsible businesses that I speak to, know that it is important to support a strong, vibrant, sustainable economy, but it is also vital - in fact it is a moral imperative - to do that in a way that meets our obligations to the planet and delivers our climate change targets.

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“From that last question, I’m not sure that the climate is particularly high up the agenda of Douglas Ross. We will continue to make sure that we support industry, that we support the economy, but that we also support the country to move to net zero [carbon emissions] which is a key priority, and should be a key priority for all of us.”

She later said her government was still committed to dualling the A9.

Ross added: “A nationalist coalition with the Greens is a disaster for anyone who was hoping to see an end to the SNP’s anti-business approach.”

The Scottish Greens said: “The Tories are in no place to talk about supporting businesses when Brexit has thrown so many Scottish firms to the wolves.

"Their interests are not in a real ‘reset’ which would empower ethical and sustainable community businesses to lead the recovery, but about going back to the failed economics which favoured big businesses who pay poverty wages, hide their profits offshore and donate to the Conservative party.

“Scotland faces unprecedented challenges and needs a new kind of politics, not outdated, unwanted Tory cronyism.”