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Sturgeon paves the way for Holyrood tax rises

First Minister Nicola Sturgeon addresses the Scottish parliament in Edinburgh. Photo: PA

Where's the beef? That was the cry in an American election of long ago, where one candidate was trying to highlight the paucity of the other's policy platform.

If we ask the same question of today's Programme for Government, unveiled today by First Minister Nicola Sturgeon the answer is: there's beef a plenty.

  • Changing the presumption against short terms sentences from three months to 12 months.
  • Ending the public sector pay cap of 1%.
  • Measures on the environment including a possible deposit scheme for plastic bottles.
  • Legislation to give head teachers more powers to try to bridge the still wide attainment gap.
  • Confirmation that the south of Scotland is to get an enterprise board.
  • The setting up of an National Investment Bank.
  • Identifying a public body to allow a possible public sector bid for the Scotrail franchise.
First Minister Nicola Sturgeon addresses the Scottish parliament in Edinburgh where she announced her Scottish Government's legislative programme for the coming year. Credit: PA

Whether the SNP government can deliver on all of these is, of course, another matter, but there's enough beef in this programme to make the average vegetarian feel slightly queasy.

However, there was one part of the First Minister's speech on the PfG (as it's known) which leapt out, and that was the passage on tax.

The SNP went into the Holyrood election with the following pledge: "We will freeze the Basic Rate of Income Tax throughout the next parliament to protect those on low and middle incomes." Pretty clear.

Today Ms Sturgeon told MSPs: "The time is right to open a discussion about how responsible and use of our tax powers could help build the kind of country we want to be."

Her government will publish a paper setting out "...the current distribution of income tax liabilities in Scotland; analyse a variety of different options, including proposals of the other parties across parliament, explain the interaction between tax policy and the fiscal framework, and provide international comparisons."

The purpose of the paper will be to form the basis of discussions with other parties ahead of the budget.

Well, well. Now I've just asked Humza Yousaf, the SNP minister charged with explaining the PfG, if they were going to stick to that manifesto pledge. I asked him twice in fact. He refused to say that they would and said minsters were dealing with the impacts of Brexit and austerity and would have to consider their options.

When I suggested that they were going to go ahead with putting up income tax he told me I was "getting ahead of myself", meaning discussions on the budget had not yet started.

You can see my interview on tonight's Representing Border and judge it for yourself.

Scottish Conservative leader Ruth Davidson responding after First Minister Nicola Sturgeon addressed the Scottish parliament in Edinburgh where she announced her Scottish Government's legislative programme for the coming year. Credit: PA

What to make of this? Well, the Greens, Lib Dems and Labour are all in favour of raising taxes in some form, using the new income tax powers Holyrood has.

The Tories are against, the only party to be so.

And remember the SNP is a minority government so will have to depend on votes from somewhere when it comes to getting its budget through.

It looks therefore like the ground is being prepared for tax rises, including possibly - and it is only possibly at this stage - on the basic rate of income tax.

From the SNP's point of view, it might help soften the potential political blow to the SNP if it had wide cross-party support for tax rises.

As Holyrood now has power over tax rates and bands there could be clever ways that the manifesto pledge is kept - perhaps creating a new rate which is not defined as the basic rate?

We shall have to see but the clear message from the Programme for Government today is that tax rises are in the air at Holyrood - next year when they come to decide rates are decided.

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