Dale speaks to David Bol about his splash on the divergence between Scottish and RUK income tax
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00:00Hello and welcome to the Scotsman's daily video bulletin for this Wednesday.
00:04My name is Dale Miller.
00:05I'm Deputy Editor of the Scotsman and I'm joined by Deputy Political Editor, David Bowle.
00:11David, we'll get around to talking about the front page, which is your splash.
00:17So we led on Ministers being told to end the policy for higher income tax.
00:23This was Scottish Financial Enterprise and it's interesting, it comes on the back of
00:29the Institute for Fiscal Studies putting out effectively some analysis research, I think
00:35it was last week, in which they said actually the devolved tax take on the back of past
00:42income tax rises may have been restricted rather than growing.
00:46There's various bodies and a lot of pressure on the Scottish Government not to lift income
00:51tax further.
00:52In fact, to maybe scale back income tax in general to try and get closer to what exists
01:00in the rest of the UK.
01:02It's a talking point.
01:03There's been a lot of speculation over whether it contributes to any sort of brain drain.
01:08Effectively, people looking to base themselves elsewhere to pay less tax than Scotland.
01:13And just a week out now from the budget, you'll hear plenty more about this over the coming
01:18seven days or so.
01:20Ceasefire deal struck.
01:22You'll see the main image there on Lebanon with a push and a call from John Swinney and
01:27Humza Yousaf this morning for that to be extended to Gaza.
01:31David, thanks for coming on.
01:34So this story around income tax, there is growing pressure around this, isn't it?
01:41And it would be hard politically for the Scottish Government to lift income tax any further.
01:47Yeah, I would be very surprised if they did lift it any further.
01:50But as you mentioned, they're now having calls for them to kind of close that gap with the
01:55rest of the UK.
01:56So anyone in Scotland who earns over £29,000 pays more income tax than the rest of the
02:01UK. And that is a choice the SNP government have made to try and tally up more funding
02:07for public services, particularly during the years under the Conservative government in
02:12Westminster, they felt they weren't getting a good deal.
02:13And that was one of their only real ways of kind of bringing forward more money to
02:20spend. Obviously, there's only so much they can do.
02:23And there have been suggestions from Kate Forbes in particular and John Swinney kind
02:27of hints that they're not going to use that all the time.
02:29And there's only so much they can do with that.
02:31So it is unlikely they would, but it's also very unlikely that they will start to scale
02:36that back and lower taxes given the financial situation they're kind of in.
02:41And we usually get these calls from sort of the Tories and even Labour the last couple of
02:44years have asked them to basically have the UK on a level playing field in terms of income
02:49tax. But now we're getting, like you said, the financial services sort of body saying
02:55that this isn't kind of working in their eyes.
02:58That IFS study you pointed to said that just by raising tax brackets doesn't necessarily
03:05get you more money to spend.
03:06And there is sort of concerns that it's not been as effective as it was intended.
03:11So there is more pressure upon the SNP ministers to kind of rethink that strategy,
03:16whether we will or not, we'll just have to wait to find out next week.
03:20And just an update, we reported earlier this week that the UK government's going to give
03:25the Scottish government 300 million to 330 million to compensate for national insurance
03:30contributions. Now, there's been at least 500 million asked for, 360 odd million from
03:39memory alone, just from Scottish councils to try and cover this.
03:44So that's not as much money as the Scottish government wanted.
03:47So don't be surprised if you hear that there's more spending cuts on the table effectively
03:52next week. It's one to watch, David.
03:53I was interested looking at the prisoners bill around early release of prisoners going
03:59through parliament late last night that the Greens basically helped out the SNP and
04:06helped pass that legislation.
04:08Any suggestions?
04:09They're back on speaking terms, the two parties, and the Greens will be the one to help
04:13get the budget through.
04:15Yeah, it felt like business as usual, really, with the Greens kind of supporting the SNP.
04:19It was not that surprising the Greens kind of stepped in on this issue, I guess.
04:23The SNP, to be honest, don't really have much of a choice but to do this.
04:26If you look at the pressures on prisons, it's happening at UK level as well.
04:30But yeah, the kind of frosty relationship we saw after the Butte House agreement was
04:35ripped up has definitely thawed.
04:37And I mean, the Greens still think that there's a possibility of a deal being struck.
04:43One Green source told me on Sunday that a deal was still feasible.
04:47And so it's between the Greens and the Lib Dems, realistically, to kind of carry a deal
04:52for the SNP.
04:54From the Greens point of view, they see it as either they'll get a deal done and they'll
04:57get lots of Green policy ideas in the budget.
05:01There's quite a lot of hard demands, I think, that the Greens are wanting.
05:04They don't just want a little bit of their policies tagged on the end.
05:07They want everything to kind of be on that path where they were during the Butte House
05:11agreement. And they also are quite positive even if they don't get a deal, because
05:16politically, if they have to deal with the Lib Dems, that will kind of suit the Greens
05:20to kind of chip away at that sort of left side of the SNP support that they have been
05:25successfully been doing for the last couple of years.
05:29The Lib Dems, I don't know if they actually want to do a deal.
05:32They're obviously open to talking and they've got this red line about independent
05:35spending, which seemed a bit bizarre given that issue had kind of gone away from
05:40Scottish politics, at least temporarily.
05:42So we'll see whether they'll actually want to do a deal.
05:45An election would suit the Lib Dems.
05:47But Alec Colhampton at the weekend acknowledged that if his party are the ones to
05:52kind of force this election, they won't be thanked by the voters at the ballot box.
05:57So still a lot to play for, but time running out to get a deal secured.
06:02Yeah, David, that red line, not a single penny of spending towards independence, that
06:09is what we've requested for budget backing.
06:12Perhaps they're just making a political point, David.
06:14We know that the SNP have scaled back, you know, the time and basically investment
06:21that they're putting into independence at the moment.
06:23So could be could be one to watch.
06:27Yeah, absolutely. Absolutely.
06:29I mean, I asked the Scottish government at the weekend whether they were still going to
06:32press ahead with these independence papers and they said a decision was still to be
06:35made. They got paused during the general election.
06:37So that's a key part of maybe the budget negotiations, whether they'll get a deal
06:42done with the Greens or the Lib Dems.
06:44You can read David's story in full at Scotsman.com if you're looking for any of our
06:49political coverage. There's a politics tab at the navigation bar.
06:53You can read everything from David as well as the rest of the team, Alastair, Rachel
06:58and Alexander Brown from Westminster.
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07:03We're on Blue Sky, as I've been talking about for the past week and a half.
07:07You can get us on there and go out and pick up a copy of the paper tomorrow.
07:11It'll have all the very latest from John Swinney's speech a week out from the budget,
07:16exactly what he had to say and what may be on the cards.
07:20Thanks for joining us, everyone.