Richard Leonard, the newish leader of Scottish Labour, has a favourite word, and that word is “radical”. Everything Richard does is “radical”. While shadow economy spokesman he published a “radical plan to place Scotland at the forefront of the fourth industrial revolution”. When running for leader, he promised to bring about “radical change”. Upon his election, he announced plans for a “radical” left-wing policy overhaul. Young people, he boasts, see Scottish Labour as “the radical party”.
Radical Richard is a radical socialist, in case you hadn’t quite got that. He has now published proposals for how Holyrood should use its new tax powers, ahead of Wednesday’s vote at Holyrood on the SNP government’s Scottish Budget. His big idea is for those powers to be exercised – yep, you guessed it – radically.
In December, setting out their draft Budget, the Nationalists revealed plans to fundamentally sever the link between tax policy at Westminster and in Edinburgh. The top tax rate would be increased by a single percentage point above the UK’s, to 46 per cent. The second-highest rate would rise from 40 per cent to 41 per cent. A new Scotland-only starter rate of 19 per cent would be created for those earning between £11,850 and £13,850, and a new intermediate rate of 21 per cent for those earning over £24,000. This, argued Finance Secretary Derek Mackay, meant that although the better-off would pay more in tax than their counterparts elsewhere in Britain, 55 per cent of Scots would pay less.
It felt like a pretty big moment, both in terms of economics and principle, but to Radical Richard it was tame stuff. Unveiling his alternative vision this week, he said it was “time to end the failed experiment of austerity by making radical use of the powers available to the Scottish Parliament.”
Leonard’s analysis seems to be that Scots are pining for a socialist messiah to tax the bejeesus out of them and spend the proceeds on Good Things – that Scotland is a land that looks at Jeremy Corbyn and judges him a bit too middle-of-the-road meh. I have my doubts as to whether Scotland is any such place, but it is at least intellectually interesting to watch Labour put this thesis to the test.
So they’re going for it. Under Leonard’s plans there wouldn’t be five tax bands, but six, the highest being a 50p rate on earnings above £100,000. The 46p rate planned by the SNP on earnings over £150,000 would instead apply to income above a relatively measly £60,000. According to Labour, this would raise £540m more than the Holyrood government’s proposals.
This may sound like a whole bunch of tax, but there’s more. Leonard wants further levies, including a local tourist tax and a land value tax on more than 10,000 hectares of economically inactive land, to be collected by councils. And there would be a “social responsibility” charge on bars and pubs for every unit of alcohol sold. A further £176m would be taken from the non-domestic rates pool.
The funds would be used, among other things, to raise public sector wages, give an extra £100m to the NHS and £545m to councils, and to increase child benefit by £5 per week.
Scots appear increasingly willing to wear higher taxes of some kind. A poll for the Times earlier this month found that 54 per cent of those interviewed supported the SNP’s proposal to increase income tax, while just a third said they thought the idea was “unfair”. A similar survey in October last year found only 45 per cent backed a rise.
But how far is too far? Are voters comfortable with the SNP’s tinkering or is there an appetite for Labour’s wolfish stance? The party remains third in the polls, behind Nicola Sturgeon’s Nats and Ruth Davidson’s Tories. The Conservatives are now the only party in Scotland opposed to raising income tax – the SNP, Labour, the Lib Dems and the Greens all favour a rise of one kind or another. So can Labour claim back the socialist deserters who joined 2014’s pro-independence movement, by shifting hard to the SNP’s left? Will Sturgeon’s managerialist style drive those radicals back to their traditional stomping ground? Or, to borrow a phrase from Jeremy Corbyn, has that ship sailed?
It’ll be fascinating to watch how this fiscal chess match plays out. The Scottish Labour Party seems just as supine in the face of its hard-left takeover as the UK party’s MPs. That’s not to say the country feels the same. Is Scotland really as radical as Radical Richard believes?
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