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Taxing questions over income tax rises for the SNP

Conservatives argue money currently raised could be better spent Photo: PA

Here is a public service announcement for people living and working in Scotland: your income tax is about to go up.

By how much is not yet clear, but it's coming yet for all that.

How can I be so sure? Well, all of the political parties at Holyrood, apart from the Tories, said so in a debate today.

And why do the SNP, Labour, Greens and Liberal Democrats want to put up taxes?

To pay for what they say would be better public services - improving hospitals and schools for example - and to allow an end to the 1% public sector pay cap.

Many Scots, particularly the ones who rely heavily on those public services, will think that this is a GOOD THING.

Only the Conservatives disagree.

They alone argue money currently raised could be better spent and taxes in Scotland should be no higher than those south of the Border.

But despite much heat in what was a debate of some quality today (there were some exceptions but no names etc...) what we do not know is the detail.

Having dropped its manifesto commitment to freeze the basic rate of income tax (see previous blog) the SNP has said it will publish a discussion paper on tax options.

Finance secretary Derek Mackay today said all parties had manifesto promises but as Holyrood was a 'parliament of minorities' there had to be compromise and consensus.

The problem, which Tory finance spokesperson Murdo Fraser pointed out, is that while we know pretty much where the opposition parties stand, we don't know what the Scottish government is proposing.

Just to recap: Labour and the Lib Dems want to put a penny on the basic, higher and additional rates of income tax.

Labour would ask those on more than £150,000 a year to pay a top rate of 50p.

The Greens policy is nuanced, with extra rates and bands, aimed at ensuring those on low earnings are protected, but those at the top pay a fair bit more with a top rate of 60p for earnings over £150,000.

While the estimates vary, these plans would give Holyrood an extra half a billion pounds or so to play with. That's a chunky sum in the context of the Scottish government's total budget of around £33billion.

At the end of today's debate Labour's call that "income tax should be increased to allow greater investment in public services" was unexpectedly passed.

The SNP MSPs abstained and it looks like the Greens and the Lib Dems backed Labour.

So increasing income tax to pay for public services becomes the official view of the parliament, though it is not binding on the SNP government - this was just a motion, not legislation.

What will matter is the SNP's paper which we await with interest, and which Mr Mackay promised would come in time for income tax to be set for the next financial year.

As things stand we do not yet know what form this paper will take, but it seems unlikely that the SNP can avoid at least setting out a series of options - including their own - which can then be discussed.

After all, as Mr Mackay said, they will in the end need support from at least one other party if they are to get tax rises through.

SNP ministers hope that they can be clever enough to make a proposal that Labour, the Greens and Lib Dems can all vote for.

That way they can say there is a broad cross-party consensus in Scotland, which would be true, but it would also spread the political blame for something potentially unpopular.

The downside of this stance for the SNP is that if the move proves popular, which is equally possible, then they will not be able to take all the credit.

Which leaves us with the Tories who will be quite prepared to take the inevitable taunts from all the others of being the party which wanted to continue austerity.

For the Conservatives being the party which is against tax rises - and in the long term for tax cuts (as yet unspecified) - opens up clear blue water between them and the rest.

For the Tories that is a good political place to be.