Careful decisions will be taken on tax, says Swinney ahead of Scottish Budget

Decisions on tax have to be considered “very carefully”, the First Minister said as he was pressed to give a “cast-iron guarantee” that next year’s Holyrood Budget will not raise taxes.

Amid speculation Chancellor Rachel Reeves could increase taxes in her Budget later this month, Scottish Conservative leader Russell Findlay urged John Swinney to rule out raising charges north of the border.

When the First Minister refused to do so – saying only that those decisions will be set out in the Scottish Budget on January 13 – Mr Findlay accused his SNP rival of “plotting yet another income tax raid on hard-working Scots”.

The Tory raised the issue just eight days after Mr Swinney told an event in Edinburgh there “won’t be any changes to income tax in the remainder of this Parliament”.

Mr Swinney said afterwards there had been “a tremendous moving of the ground since then”.

Economics experts at the Fraser of Allander Institute have warned a 2p increase in the basic rate of income tax across the rest of the UK could cost the Scottish Government £1 billion through adjustments to the block grant.

Earlier this week, Ms Reeves refused to commit to maintaining Labour’s manifesto promises not to raise income tax, national insurance or VAT – fuelling speculation higher charges could be on the way.

The First Minister said that meant the UK position had “changed very dramatically this week”, adding he was “simply looking at the changing lie of the land”.

Mr Findlay raised the issue of tax at First Minister’s Questions on Thursday – with the Tory leader also taking the opportunity to hit out at the UK Labour Government.

Mr Findlay accused Labour of “breaking promise after promise”, as he said working people could be hit with higher charges.

The Tory leader added: “Labour are doing the same as the SNP have done over the past decade.

“Most workers in Scotland pay more than those in the rest of the UK who do the same job and earn the same amount.

“The SNP have increased taxes, driven away aspirational workers, damaged business confidence and held back Scotland’s economy.”

Insisting Scots “deserve a break” from increasing costs, Mr Findlay challenged the First Minister to “give a cast-iron guarantee of no further tax rises – income, business and property – in the Scottish Budget”.

Mr Swinney told him: “The Scottish Government will set out our position on tax in the Budget on January 13, and we will obviously be considering all of the issues and implications of the United Kingdom Government’s Budget in November.

“Decisions have to be taken very carefully on tax issues and the Chancellor will be accountable for the decisions she makes.

“The Scottish Government will take our decisions accordingly and respond.”

Mr Findlay said the First Minister’s response “won’t assure any Scottish worker, homeowner, or business owner”.

Hitting out at the SNP leader, he added: “He won’t rule out increasing the tax on buying, he won’t rule out raising taxes on businesses, and it seems he is plotting yet another income tax raid on hard-working Scots.”

With the Scottish Government having previously increased income tax for middle and higher earners, Mr Swinney said Holyrood ministers had “asked some people in Scotland to pay more in taxation”.

But he added the independent Scottish Fiscal Commission had “confirmed the majority of taxpayers in Scotland are set to pay less than they would elsewhere in the United Kingdom this year”.

While he said tax issues are “to be confronted”, he also stressed Scottish ministers are making “public expenditure decisions that are improving the lives of people in Scotland today” – citing free prescriptions, free bus travel for under-22s and the introduction of the Scottish child payment.