Scottish Labour to fight 'another austerity budget' over tax for highest earners

'Labour will not help the SNP pass an austerity budget'

Scottish Labour leader Kezia Dugdale arrives at a Scottish Parliament election count at the Royal Highland Centre, Ingliston (PA)

Labour is to seek to amend the Scottish budget to raise the basic rate of income tax by 1p and to restore the 50p top rate for the highest earners north of the border.

Scottish leader Kezia Dugdale will today insist her MSPs will vote against "another austerity budget" from the Scottish Government in Edinburgh, and will instead bring forward proposals to up the tax rates.

MSPs at Holyrood will be responsible for setting income tax in Scotland from April 2017, but First Minister Nicola Sturgeon has already rejected increasing the basic rate for the five year lifetime of the parliament, as well as ruling out upping the top rate in the first year.

SNP ministers fear that could be financially damaging if those earning £150,000 a year or move in a bid to escape the income tax hike.

But after Labour included the policies in its manifesto for May's Holyrood elections, Ms Dugdale will tell the Labour conference in Liverpool that her party will seek to amend the Scottish budget.

She will say: "With the full range of powers the Scottish Parliament now has, the SNP Government faces a clear choice.

"Accept a Tory Budget from Westminster, or go our own way with proposals to grow the Scottish economy and protect our schools and hospitals."

She will add: "If the SNP minority Government do not accept these proposals, and try to force another austerity budget through Holyrood, we will vote against it.

"If they want support, they'll need to look to the Tories for that. Labour will not help the SNP pass an austerity budget."

Ms Dugdale will use her conference address to hit out at the SNP leader over her refusal to use Holyrood's new tax powers to prevent budget cuts.

She will say: "With the cuts coming down the track from Holyrood, local Government is set to lose £1 billion over the course of this Parliament.

"Our health service is already beginning to show signs of strain as hospitals across the country face cuts or closure. When it comes to our schools, the SNP Government continue to refuse to protect the education budget.

"I accept what Nicola Sturgeon says about these cuts coming from Westminster. I don't question that. What I do question is her refusal to do anything about it."

Ms Dugdale will continue: "Nicola Sturgeon is the most powerful First Minister that Scotland has ever had.

"In her hands, she has more power than any of her predecessors to change our nation.

"But for a woman who is famous for saying yes, her answer when you ask her to use the powers she has is always no."

In contrast Labour will not "sit back and do nothing," Ms Dugdale will say.

When the Scottish Government brings forward its budget for 2017-18 later this year, she will pledge her party will "place amendments to introduce a 50p tax on those earning over £150,000 and to add a penny to income tax to pay for public services".

She will argue this shows Labour "making decisions for Scotland that the Tories would never make, and using the powers which we have argued for"

Ms Dugdale will add: "This, together with our other tax proposals, will enable us to stop further cuts to public services; to protect our schools and hospitals and the services we all value."

PA