SNP Conference: Party endorses wealth tax plan and criticises NICs increase

John Swinney is widely regarded to have steadied the SNP ship, having guided it through the stormy waters that accompanied the end of Nicola Sturgeon’s first ministership and the brief Humza Yousaf interregnum.

Despite public trust in the Scottish Government falling to its lowest level since the beginning of devolution, party strategists believe that a parliamentary majority next May is “within reach”, as support for both the Scottish Labour and Conservative parties plummets amid an increase in popularity north of the border for Reform UK.

That being said, this year’s Scottish Social Attitudes (SSA) Survey found that just 47 per cent of respondents said that they trusted the Scottish Government to work in the country’s best interests. This is down from 61 per cent in 2019 and 81 per cent when the Scottish Parliament reconvened in 1999.

Despite this, the fragmentation of the anti-SNP vote means the party senses a path back to power. Insiders told the Guardian that they are “within touching distance of the 65 seats that will make the world sit up and take notice”, and while outsiders may feel that a majority of seats is unlikely, the SNP will most certainly – on current polling at least – emerge as the largest party in Holyrood, opening the door to a third decade in power.

The leadership’s preferred strategy of securing a second independence referendum by achieving a majority of MSPs at the next election was endorsed by conference in the face of organised opposition from some local SNP branches, who wanted to use a pro-independence majority in Holyrood (i.e. a combination of SNP and other, pro-independence parties like the Scottish Greens) to immediately open independence negotiations with the UK. 

In his speech on the final day of conference, Swinney spoke up for the SNP’s achievements in office, citing an income tax regime where “most [are] paying less, [but] the highest earners [are] paying more” and the “lowest” council tax bills in the UK amid a raft of wider policy achievements.

Swinney had argued that the country had reached the “limits” of devolution in a speech last week, and this idea bled through into some of the tax debates at conference.

Income tax: “We’ve reached our limits”

In 12 of the 17 SSA surveys carried out in the devolution era, a higher percentage of Scots have expressed support for higher levels of taxation and spending compared to their English counterparts. While 50 per cent of respondents were of that view this year, they are unlikely to see much in the way of action from an SNP that has one eye on polling day. 

Scotland’s Finance Secretary, Shona Robison, told a fringe event that the government had taken “bold” decisions on tax to raise additional money for public services.

Under Robison’s stewardship of the finance brief, the Scottish Government has introduced a new ‘advanced’ rate of income tax of 45p (on earnings between £75,000 and £125,140), frozen the higher, advanced and top rate thresholds and increased the basic and intermediate rate bands, creating an income tax regime where around half of Scottish taxpayers pay less income tax than if they lived elsewhere in the UK.

However, the days of income tax rises may be over – at least for now. According to Robison, “we have, I think, reached the limits of what we can do around income tax and therefore we need to look beyond that”.

Conference endorsed a motion criticising the Labour government for its decision to increase employer national insurance contributions. The MSPs Colin Beattie and Gordon MacDonald chastised the Chancellor for a policy they dubbed ‘Labour’s job tax’.  Beattie said the measure betrayed a “total lack of understanding of the economy” and called it a “direct tax on jobs” that had inflicted “a fairly savage budget cut” on the Scottish Government. The motion, which calls on the Chancellor to scrap the increase, was passed by acclaim.

Council tax reform in the “foothills”

Next year will mark 20 years since the first attempt to reform council tax in the devolution era was disowned by the then Labour/Liberal Democrat Scottish Executive. And while the SNP was first elected to office on a pledge to “scrap the unfair council tax”, attempts at reform have been limited to say the least.

The party was re-elected in 2021 on a pledge to reform the system and make it fairer. That remains a policy commitment, but fundamental reform of the system is unlikely to happen without cross-party support, something the SNP tried to achieve with its 2021 partnership agreement with the Scottish Greens. Earlier this month the Greens secured an amendment to the Housing (Scotland) Bill that will give councils the power to increase the tax on second and holiday homes by unlimited amounts.

Robison has sought to temper speculation that the Scottish Government would support a pre-election council tax freeze, recently telling a Holyrood committee that there would be “no surprises” for town halls, a comment interpreted as a sign that the government will not follow the example of 2023, when then First Minister Humza Yousaf announced a council tax freeze in his leader’s speech just weeks after the government proposed increasing the tax paid by the most expensive homes by as much as a fifth.

But longer-term reform? According to a Tweet from one journalist, those discussions, according to Robison, are in the “foothills”.

Is it time for a wealth tax?

Delegates backed a motion brought forward by the SNP’s Trade Union Group that would require the Scottish Government to start discussions with HMRC and trade union groups on the introduction of a local wealth tax.

Chris Stephens, until last summer the MP for Glasgow South West, spoke to the motion, calling on his remaining Westminster SNP colleagues to make the case for a windfall tax on supermarkets, banks, insurance and energy companies. He said that the estimated wealth of the five richest families in Scotland was worth more than the Scottish Government collected in income tax last year and that a ‘modest’ 2 per cent levy on assets worth more than £10 million would deliver around half a billion pounds to support public services. The motion, he said, would empower the Scottish Government to “take the case to HMRC to make sure that the Scottish Parliament can have a Scottish wealth tax”. 

However, the use of the word ‘local’ could be an acknowledgement that, under the current devolution settlement, the Scottish Parliament cannot legislate for new Scotland-wide taxes without the UK Parliament’s approval. And even though some Labour MPs and grandees continue to press the Chancellor and Prime Minister for a UK wealth tax, the prospects of there being a Scotland-specific levy remain little more than an aspiration.

Forbes: End the energy profits levy

In her valedictory speech to conference before she steps down from the Scottish Parliament next year, the Deputy First Minister, Kate Forbes, called on the UK Government to end the Energy Profits Levy. She described the levy as ‘destructive’ and a threat to jobs in the North East of Scotland, a region she said had generated “billions of pounds of tax revenue (and) bankrolled the UK Treasury for years”.  She told party delegates, “In a classic move by this Labour Government, they accept the 78% tax rate is costing jobs, but they won’t do anything about it for five years. So, we call on the Chancellor today, don’t wait, replace this destructive fiscal regime at the next Budget with a fair one that protects workers and enables the energy transition.”