SNP’s tax decisions have cost more money than they raised, says Ian Murray

Scottish Secretary Ian Murray has accused the Scottish Government of “missed opportunities” as he insisted tax decisions taken by SNP ministers at Holyrood had cost more than they had raised.

The Labour UK Government minister said as a result of this the Scottish Govenrnment had “created an even more difficult fiscal position” for itself.

His comments came after Finance Secretary Shona Robison announced an almost £1 billion package to balance this year’s budget in Scotland, by bringing forward some £500 million of savings at the same time as drawing down £460 million of cash from the ScotWind fund, created when the Scottish Government leased areas of the seabed for offshore green energy projects.

Mr Murray likened the decision to use that cash – which was originally intended to support the transition to a green economy – to the Government having “sold off the family silver”.

The Scottish Secretary also criticised the tax decisions of SNP ministers, saying: “Their tax regime has cost more money than it’s raised overall which has created an even more difficult fiscal position for them.”

Mr Murray, speaking to Scottish political journalists at his Dover House office in London’s Whitehall, highlighted analysis by the Institute for Fiscal Studies (IFS) which he said showed that increases in income tax brought in by the Scottish Government had not raised as much as the ministers had spent on freezing the council tax for 2024-25.

Referencing the IFS work, Mr Murray said this showed that the increases in income tax for higher earning Scots “when offset against other tax decisions about council tax etc, mean the overall tax take into the Scottish Government is less, rather than more”.

The UK Government minister said while the “principle behind obviously increasing taxation should  be to bring in more” as far as Scotland was concerned “the basket of tax policy decisions they’ve made has generated less income”,

He stressed this was “not less income than projected – just less income full stop”.

His comments came after David Phillips,  associate director at the IFS, wrote last week that the decision to freeze council tax, which was made when Humza Yousaf was first minister, had “cost almost double the amount raised from increases in income tax rates on higher earners”.

Mr Phillips added: “Tax policy decisions therefore reduced rather than raised revenues, increasing the pressure on Scotland’s public finances.”

Mr Murray, meanwhile, declared that boosting growth was one of the key priorities set for Scotland Office.

Adding that the country’s economy was “fragile”, the Labour MP blamed the action of Tory governments at Westminster and the SNP at Holyrood for this situation.

The Scottish Secretary said: “Things are incredibly fragile and these are the kind of things we have to get onto a much more solid foundation before we can start to grow the economy and that’s a really difficult thing.

“It’s a symptom of 17 and 14 years respectively of SNP and Tory governments really not taking the economy seriously enough and that flatlining growth that we’ve seen.”

Ms Robison said: “Despite being tied to a declining UK economy and without the economic or fiscal powers of a normal independent country, since 2007, GDP per person has grown by 10.8% in Scotland, compared to 5.6% in the UK, and productivity has grown at an annual average rate of 1% a year, compared with the UK’s 0.5%.

“However, Westminster austerity is unsustainable and is having a hugely damaging impact on public services and living standards. As Ian Murray’s colleague, the Health Secretary says, ‘all roads lead back to Westminster.’

“For months, Labour refused to be honest with voters that their spending plans would lead to billions of pounds of cuts to public services – despite repeated warnings from the SNP.

“Now, following the Chancellor’s announcement of £22 billion of cuts, Scotland faces the most challenging financial situation in the history of the reconvened Scottish Parliament, and we have taken tough decisions to avoid further spending cuts.

“I am proud to serve in a Government which has delivered a balanced budget every year that we have been in office, is investing to lift children in Scotland out of poverty, and is ensuring our police, our nurses and our teachers are the best-paid in the UK.”