Ruth Davidson is the leader of the Scottish Conservative and Unionist Party. She is a Member of the Scottish Parliament for Glasgow.
Last week, without much fanfare, the Scotland Act received Royal Assent. In the face of the SNP’s endless confected criticism and complaint, the UK Government got on with delivering huge new financial powers for the Scottish Parliament. And the passing of the new Act has confirmed what we have now known for some time: that, from next year, sweeping new powers on tax will come to the Scottish Parliament.
With less than six weeks to go until Scotland goes to the polls on May 5th, it means that this Scottish election is entirely different from those which preceded it. Taxation will be central to the campaign. And Scotland needs to have a proper debate about how best we find the money to fund the public services on which we depend.
It’s clear to me that the tax decisions over the last five years by the UK Government have been the right ones for all of the country. We have sought to ensure people keep more of the money they earn, taken the lowest paid out of tax altogether and supported job creators by lowering jobs taxes.
My concern is that the lessons of those last six years are now being passed up by the SNP, Labour and the LibDems here in Scotland. Last week, we learned the full cost of the SNP’s plans. Firstly, middle earners in Scotland will be forced to pay £3000 more in tax than people in England over the next five years. By the turn of the decade, the difference in take home pay for someone touching £50,000 will be £800 a year. And, secondly, the additional rate may go up too.
On Wednesday last week, the First Minister rightly declared she would not be increasing the additional rate of tax – because we know Scotland will lose money if she does. But in the live BBC debate on Thursday night last week which kicked off the campaign, we learned that, actually, she’s had second thoughts – and that she may do so in future years.
In short, we now have a Government which we know will make middle earners pay more – and which may make higher earners pay even more too. None of this is enough for Labour and the LibDems – who also used last week’s debate to confirm they want to increase the basic rate of tax in Scotland as well.
My view is clear. Don’t get me wrong: I’m pretty sure that somebody on £150,000 can pay a bit more. But that’s not the issue here. The issue is: what’s best for Scotland? What’s in our national interest? What’s going to help jobs? And my fear is that the kind of tax rises that Nicola Sturgeon is proposing will drive jobs away, not just because of the specific measures she’s adopting – but also because of the cumulative effect they have.
People are already beginning to take notice. For example, at a biotech conference in Edinburgh a few weeks ago, an entrepreneur called Alan Walker was reported talking about how he wanted to expand his firm into Scotland. However, he added that he was having trouble getting staff to come here. “They see it as more expensive to buy a house and there are rumours of a differential in income tax between England and Scotland. Our chief scientists will not move out of London,” he said. London’s gain – our loss.
This is what my opponents just don’t get. Tax needs to be fair – of course it does. But it must also be competitive. Because if it isn’t, we will all lose. Only last week, we heard from Jim McColl – one of Scotland’s greatest entrepreneurs, and a member of Nicola Sturgeon’s own Council of Economic Advisers – making similar points. Put taxes up, he warned, and “we’re just going to accelerate the loss of this talent that we want to help grow the Scottish economy.” Our loss – somebody else’s gain.
And another example; the Scottish Government has recently launched a drive to encourage more doctors to come and settle here in Scotland. I support their idea completely. But Sturgeon is now telling doctors they’re going to have pay thousands of pounds extra in tax than in England or Wales. Is that going to help the Scottish Government’s own efforts? Is it going to help our NHS? The truth is: it won’t. The Scottish Government needs to wake up to the damage this tax plan is doing to Scotland that will only undermine its own long-term goals.
So our message in this campaign will be that we will fight to keep people’s taxes as low as possible, not just because workers deserve to keep more of their own money – and they do - but also because it is good for Scotland. I want to deliver the kind of balanced parliament that will make better decisions for all of us. I am afraid that will not happen if the principal fight in Scotland continues to be Labour versus the SNP. We saw what will happen from the debate last week – we will end up with a high tax First Minister being told by a high tax Opposition leader that taxes aren’t high enough.
My fear is that the SNP and Labour will ensure Scotland is trapped for the next five years on a high tax escalator, with the political contest solely focussed on who can tax more – and the only question being how high taxes rises should be, not whether they should happen in the first place. It’s now clear that it is only the Scottish Conservatives which can stop that escalator in its tracks. By ensuring the Parliament is more balanced, we can ensure better, more moderate, government.
That’s what strong oppositions do – not egging on the Government to do more of what they’re already doing, but challenging, confronting and questioning the Government’s very philosophy. Scotland doesn’t need a left wing party in opposition – we’ve got one of those in government. What Scotland needs is a strong Conservative opposition which finally challenges the SNP. Which takes them on, fights for our Union – and backs Scottish taxpayers.