Anas Sarwar, a Scottish Labour leadership contender, has proposed substantial tax increases raising £700m from all higher earners in Scotland in an effort to outflank his Jeremy Corbyn-supporting rival.
Sarwar unveiled his policy programme in Edinburgh on Wednesday with a radical proposal to introduce a 50p top income tax rate for all those earning more than £100,000, in part to fund tax cuts for people earning less than £28,000.
A former deputy leader of Scottish Labour, Sarwar is widely believed to be trailing his lesser-known rival for the leadership, Richard Leonard, whose campaign has been backed by Corbyn’s supporters and was overwhelmingly endorsed by Scottish trade union leaders.
Leonard is trading heavily on his consistent support for Corbyn’s agenda but has so far only called for a “once in a generation debate” on raising taxes. He has not set out clear proposals and instead backs the Scottish party’s established plans for a new 50p tax rate for those on £150,000 a year and a 1p across-the-board rise for most other taxpayers.
With Scotland able to set its own income tax rates, raising about £11.8bn this year under current bands, these plans differ from Corbyn’s proposals for the rest of the UK.
Scottish public spending is more than £1,400 per head higher than the UK average, and Labour is competing against the Scottish National party, the Scottish Greens and the Liberal Democrats over how best to use the tax system to fund extra public services and mitigate UK government spending cuts.
Nicola Sturgeon, the first minister, has said she wants to increase some taxes in next year’s budget but has challenged opposition parties to help her do so. Her government is struggling to fund its manifesto pledges, including raising public sector pay. With Labour in opposition at Holyrood, Sarwar can only influence Sturgeon’s final decision.
With voting in the contest due to start on Friday, Sarwar claimed his proposals raised doubts about Leonard’s claims to be the more radical candidate. “In this contest, it’s not good enough to just use the word ‘radical’. You have to prove it,” Sarwar said.
Raising taxes for everyone earning above £28,000 a year would enable Holyrood to reverse Tory disability benefit cuts in Scotland, offer a means-tested £10 a week child tax credit to 275,000 families and fund higher public sector pay.
Sarwar said low earners on wages of £11,801 to £18,000 should pay 15p, compared with 20p at present. Nurses on a starting salary would pay £177 less in tax a year, and those on an £8.45 an hour living wage pay £235 less.
This article was written by Severin Carrell Scotland editor, for theguardian.com on Wednesday 25th October 2017 16.50 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010