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SNP blow: Scots face tax hikes of up to 46 percent in independent Scotland
March 22, 2021
Scottish independence 'more difficult' than Brexit claims Blackett
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The TaxPayers’ Alliance said an independent Scotland would have the highest deficit in Europe if it were to quit the UK. This would force the Scottish Government to raise taxes and cut public spending, the research paper warned.
The paper claimed an independent Scotland would need to raise the basic rate of income tax to 46 pence in the pound to pay for its current level of spending.
Policy officials said the current rate of Scottish spending is £11,247, which is 20 percent higher than England, and could not be supported without huge tax rises, or a significant reduction in public spending.
The lobby group predicted the Scottish Parliament would need to increase taxes by at least 10 per cent of GDP to balance the books and raise VAT to 49 per cent.
Overall, the figures highlight a ‘Union dividend’ of almost £2,000 per person from Scotland being part of the UK.
The report also reveals the Scottish deficit is approximately 14 times than the average European country, averaging at 8.6 percent.
The latest GERS figures reveal the country is currently funded by a £2,000 “Union dividend” per person by Scotland being part of the UK.
The Taxpayers’ Alliance said any workable independence agreement with the UK would require Scotland to carry its share of existing UK government debt obligations.
Scotland’s share of the UK government’s total net liabilities – including borrowing – would be around £300 billion, or roughly twice the size of its GDP.
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “Scottish taxpayers expect their leaders to get to grips with the reality of Scotland’s fiscal position.
“An independent Scotland would start life with new economic freedoms, but also retain a fiscal deficit considerably larger than any other European country, with high levels of public spending and tax revenues which fall well short.
“Politicians need to have an honest debate about the public finances, whatever their position on the Union.”
Murdo Fraser MSP, Scottish Conservative finance spokesman, said: “This report shows the stark reality that would face an independent Scotland.
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“Even the SNP’s own Growth Commission acknowledged the tough economic decisions that would have to be taken in an independent Scotland – between tax rises and slashing public spending to get anywhere close to balancing the books.”
Mr Fraser said the Scottish Government and SNP should be “upfront about the financial position.”
In response, an SNP spokesperson, said: “The shadowy right-wing Tax Payers’ Alliance – which wants to slash Scotland’s budget – is the last organisation people in Scotland should be listening to.
“The UK is currently around £2 trillion in debt, and by the Taxpayers’ Alliance’s own daft logic, the UK income tax rate would have to have increased by 400% over the last 12 months to account for the enormous increase in public spending to tackle the COVID crisis.
“An independent Scotland would start out with human and natural resources that most countries could only dream of, with the added bonus of the key decisions about our future to be taken in Scotland – not by the likes of Boris Johnson.”