Nicola Sturgeon has been warned that high earners could flee Scotland for England if she doesn't change tax policy to match the tax-cutting proposals being introduced in the rest of the UK.
Changes to income tax included in Friday’s mini-budget included a cut in the basic rate to 19p in the pound, as well as the scrapping of the top rate for those earning £150,000 a year or more.
Those measures do not apply in Scotland – where control over income tax rates and bands is devolved – but with SNP ministers having previously boasted that the system north of the border results in most people there paying less in tax than their UK counterparts, that situation will no longer apply.
While SNP Westminster leader Ian Blackford condemned Chancellor Kwasi Kwarteng’s package of measures as “nonsense”, Scottish Conservative MP John Lamont urged the Scottish Government to adopt similar “radical” proposals.
Nicola Sturgeon has been warned that high earners could flee Scotland for England if she doesn't change tax policy. Andrew Milligan
Mr Lamont, the MP for Berwickshire, Roxburgh and Selkirk told BBC Scotland’s The Sunday Show: “What I don’t want to see is Scotland being left behind while the rest of the UK powers ahead with this new, ambitious, radical plan set out by the Chancellor on Friday.”
“For example if you earn more than £15,000 in Scotland, if the SNP don’t match the UK Government’s proposals you will be paying more tax in Scotland, that is the harsh reality of the SNP not adopting this approach.”
He added: “I fully support the tax cuts, I fully support the other changes the Government is proposing.
“And the big question now for the Scottish Government and the SNP is whether they replicate those changes.”
Scottish Government minister Richard Lochhead has already vowed they will continue with a “fairer and more progressive approach to taxation”.
The Institute for Fiscal Studies think tank, however, has calculated that only those people earning £155,000 a year or more will be “net beneficiaries” from the new Chancellor’s package.
And SNP Westminster leader Ian Blackford said “millions and millions of ordinary workers” across the UK would have less cash because of the changes – warning also that these could see the country endure a longer and deeper recession.
Earlier today the Bank of England announced it will change interest rates by “as much as needed” to get inflation back under control from current runaway levels.
Nicola Sturgeon has been warned that high earners could flee Scotland for England if she doesn't change tax policy to match the tax-cutting proposals being introduced in the rest of the UK. Kirsty O'Connor
Chancellor Kwasi Kwarteng said his officials are “monitoring developments in financial markets very closely” after the pound plummeted to its lowest levels on record against the dollar.
Governor Andrew Bailey said that the Monetary Policy Committee (MPC) would discuss the impact of the Chancellor’s new mini-budget when it meets again in early November – quashing speculation that the Bank might announce emergency measures this week.
“As the MPC has made clear, it will make a full assessment at its next scheduled meeting of the impact on demand and inflation from the Government’s announcements, and the fall in sterling, and act accordingly,” he said.
“The MPC will not hesitate to change interest rates by as much as needed to return inflation to