Nicola Sturgeon admits almost a third of Scottish taxpayers could face increase

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Three out of ten taxpayers in Scotland could be facing a rise in their bills after Thursday’s Scottish Budget, the First Minister has indicated.

Nicola Sturgeon added however her government would seek to “protect those on low and middle incomes”.

But she said there was a need to “protect our vital public services” ahead of Holyrood’s Budget, which is widely expected to include income tax rises for some higher earners.

Finance Secretary Derek Mackay will unveil the Scottish Government’s tax and spending plans for 2018-19 later on Thursday afternoon.

Ahead of his Budget statement the First Minister said: “I can tell the chamber today that 70% of taxpayers in Scotland – 83% of all adults in Scotland – will pay no more income tax after this Budget than they do now.”

Speaking about the draft Budget, the SNP leader said the “vast majority” of taxpayers would be “protected” from any increase in taxes.

But Scottish Conservative leader Ruth Davidson, who pressed her on the issue at First Minister’s Questions, recalled how the First Minister had committed to not increasing the basic rate of income tax for the entire parliamentary term.

As a result she said any increase for some in this group would mean taxpayers would be unable to “ever trust her again”.

Ms Sturgeon insisted: ” We will set out fair, balanced, progressive Budget proposals that protect our public services from more than £200 million in real terms of cuts being imposed by the Tories.

“Our spending is being cut by more than £200 million in real terms next yea, and the proposals we put forward this afternoon will set out how we protect our NHS our education system and other vital public services from that, while protecting the vast majority of tax payers and also investing in business and the economy.”

Ms Davidson quoted the First Minister as having pledged that “when inflation is rising and living standards are under a lot of pressure it is not right ot increase income tax for those who are on the basic rate”.

She added: “Th ose were the direct words of the First Minister herself, just this year in May.

“What I was asking her was whether she agreed with herself that all people who currently only pay the basic rate of income tax, which is 2.2 million people in this country, shouldn’t have to pay more, because that was the promise she made.”

But after Ms Sturgeon 70% of taxpayers would not pay any more, the Tory hit out: “H asn’t she just told at least some of them that she is breaking her promise.”

She continued her attack, saying: “Time and time again ahead of elections the SNP Government make promises to people on tax.

“And it was only in May of this year the First Minister was absolutely clear – it is not right she said for any person on the basic rate to pay more.

“That is 2.2 million people in this country that would be protected and she’s just stood up and said some of them are going to take a hit.

“This is simple matter of trust, promises were made, she’s failed to meet them, so how can Scottish workers ever trust her again?”

Ms Sturgeon hit back, saying her ministers were dealing with the “most challenging economic and fiscal context” since devolution as a result of Conservative reductions to public spending.

She told MSPs: ” Over the next two years Tory cuts will take £500 million in real terms out of the spending this Parliament has available for our nurses, for our doctors, for our teachers and for our police officers.

“It is a bit rich in light of that for the Tories to come to this chamber and lecture anybody about tax and public spending.”

The Brexit “divorce bill” which the UK will pay for leaving the European Union will also mean ” every household across not just Scotland but the UK will be facing a bill of £1,400″, she said.

The First Minister added: “I n light of all of that the proposals we put forward this afternoon will be responsible, they will be balanced, they will protect our vital public services from Tory cuts, they will protect the majority of tax payers and they will invest in business and the economy.

“And in all of that they will stand in stark contrast to anything the Tories are doing.”

Scottish Labour leader Richard Leonard called for the Budget to tackle Scotland’s housing and homelessness “crisis”.

He said new figures published this week showed the government was “way off course” to meet a target of building 50,000 affordable homes and 35,000 for social rent by the end of this parliament.

Pointing out that a shortage of affordable housing was a key cause of homelessness, Mr Leonard said: “As long as the supply of affordable housing is stalling and as long as this government cuts local authority budgets – which provide housing support, which provide temporary accommodation, which provide funding for women’s aid and refuges – the (homelessness prevention and strategy group) is fighting an uphill battle to prevent homelessness.”

He cited the case of a young Edinburgh woman named Hanibelle, a recovering drug addict and survivor of domestic abuse who became homeless.

“This week marked one whole year of being stuck in unsuitable temporary accommodation,” he said.

“What Hanibelle and thousands like her need is an affordable home and the local authority services that will get her back on her feet.”

He urged Ms Sturgeon to “use the powers of the Parliament to invest in lifeline council services and end Scotland’s homelessness crisis once and for all”.

In response the first minister said the government would meet its target for affordable homes, with the finance secretary due to set out funding plans to do so in the budget.

She said the government had increased funding for affordable housing and pointed out that it had set up the homelessness strategy group in the first place.

“The reason rough sleeping is increasing are the welfare cuts being imposed on Scotland by the Tory government,” she said.

Ms Sturgeon said Hanibelle’s story was “completely unacceptable” but her government was increasing funding to tackle alcohol and drug addiction as well as providing an extra £50 million to tackle homelessness and rough sleeping.

Greens co-convener Patrick Harvie urged the first minister to reveal what was in store for public sector workers in the budget.

He said: “They’ve seen their wages cut year after year in real terms and they want to know whether their pay will again be cut this year or whether there is the hope of at least an inflation based increase.”

Ms Sturgeon said the government had already committed to lift the 1% public sector pay cap and wanted to see “fair pay settlements for our public sector workers that do recognise the rising cost of living but also pay settlements that are affordable as well.”