When your party is stuck at around 20 per cent in the polls, some thirty points behind your principal opponents, pledging to increase the taxes of 75 per cent of the population is certainly a bold approach. The sort of approach that Sir Humphrey, of Yes, Minister fame, may have described as “very brave”.
But that is precisely the approach that Scottish Labour leader Kezia Dugdale has set out for her party today in a speech in which she pledged that her party would use the new powers being transferred to Holyrood to increase the Scottish Rate of Income Tax (SRIT) by 1p in the pound.
When Ms Dugdale took over the leadership of Scottish Labour in August 2015, she was taking on what is perhaps the most unenviable task in British politics today. Scottish Labour had just lost all but one of its forty Westminster seats. Her predecessor but one had blasted the party as little more than a “branch office” of the party based in London. And the party that once commanded the loyalty of vast swathes of Scotland had come to be seen in the eyes of many of their traditional supporters as little more than “Red Tories”, thanks to their alliance with the Conservatives in the Better Together campaign.
The challenge facing Kezia Dugdale was made all the more daunting by the continued ascent in popularity of her opposite number in the SNP, Nicola Sturgeon. Never had an SNP leader featured so prominently in a UK General Election campaign as Ms Sturgeon did in 2015. Her appearance in the televised leaders’ debates consolidated her position as the leading voice of anti-austerity politics at not only Scottish but UK-level, and even though she was not a candidate in the General Election, her party’s 56 seat haul was undoubtedly a personal triumph for the First Minister.
Today’s tax rise announcement by the Scottish Labour leader represents her most significant attempt yet to wrest the mantle of anti-austerity champion away from Ms Sturgeon and re-align Scottish politics away from the constitutional question and back along traditional left/right dividing lines.
At the heart of Ms Dugdale’s case for the tax rise is a simple premise: that the SNP talks the talk on opposing austerity, but does not walk the walk. She argues that the draft budget put forward by Scottish Finance Secretary John Swinney late last year merely “manages Tory austerity” rather than seeking to reverse it and that while the SNP talks repeatedly of wanting more powers for Scotland, they have been strangely reluctant to commit to using them.
At First Minister’s Questions last week, Sturgeon brandished the Scottish Government’s draft budget and challenged Dugdale to say where any extra money she proposed to spend would come from. The First Minister now has her answer.
Scottish Labour state that their plan would see someone on a salary of £30,000 per year pay less than £4 extra per week. A high earner – the First Minister herself was the chosen example – on £144,687 per annum would pay an extra £28 per week. Low earners (under £20,000) would be protected from the tax rise by a £100 payment administered by local authorities to top up their income. It is estimated that the plan would raise an additional £500m for the Scottish budget. This money would be used specifically to invest in education, which Ms Dugdale has repeatedly sought to position as the central issue of her leadership.
The question now is can a party that is not exactly flying high in the popularity stakes sell everyone earning over £20,000 on the idea that they should vote Labour for a tax rise? There is some evidence to suggest that there is support in principle for the idea. A YouGov poll back in October found that 52 per cent of Scots voters would support an increase in income tax, provided the proceeds were spent on services rather than benefits. But whether people are prepared to put their money where the mouth is on this remains to be seen.
Either way, it is clear that Kezia Dugdale has taken a significant step towards framing the debate that will dominate the Scottish election campaign in the months ahead. She will be pleased that it is on an issue not of what further powers should be devolved, but instead how devolved powers should be used.
The SNP has yet to reveal its own hand in response to Labour’s announcement, beyond questioning Labour’s £500m figure. They have had their fingers burnt once before when they proposed to use the Scottish Parliament’s original tax-varying powers to introduce a ‘Penny for Scotland’ in 1999, a proposal which was soundly rejected.
But Scottish politics has changed immeasurably in the 17 years since. The SNP is now the establishment party in Scotland, and Scottish Labour the opposition desperately trying to make itself relevant.
When Kezia Dugdale was elected leader she asked the Scottish electorate to take a “fresh look” at her party. In the months that have followed it has seemed that this plea fell on deaf ears. She now hopes that this bold gamble on income tax can earn her party the fresh look she craves.