SNP minister gives strong signal Scottish Government 'revisiting' income tax hikes under 'nightmare scenario'

Ms Robison has admitted that if the Chancellor does hike income tax south of the Border as anticipated, then the Scottish Government will have no choice, but to “potentially revisit” previous commitments not to raise the levy next year. It is the strongest signal yet SNP ministers could usher in further tax increases.

The finance secretary’s intervention on Sunday comes after First Minister John Swinney repeatedly failed to rule out tax hikes last week.

Speaking to the BBC, Ms Robison insisted “we don’t want to raise taxes”.

READ MORE: SNP ministers may be forced to slash public spending or hike taxes due to UK Budget 'hard choices'

She said: “We had already set out the tax strategy that we wanted to stay that stability until the end of the Parliament. But in the event of unforeseen, exceptional circumstances, clearly we will have to potentially revisit that. We are looking at all of the options here.”

Forecasting by the Fraser of Allander Institute (FAI) has warned a 2p tax rise for the rest of the UK by the Chancellor would result in a funding gap of almost £1 billion for the Scottish Government.

In a stark analysis, the FAI warned there was “no free lunch here”, adding: “If UK income tax rates are raised, either the Scottish Government will have to spend less or Scottish taxpayers will also have to pay more tax – it’s just arithmetic.”

Ms Robison branded that scenario as “the nightmare situation for Scotland”.

She said: “I can’t believe a UK Labour government would want to actively cut Scotland’s funding by £1bn. That would be an extraordinary set of circumstances.

“I would hope that the Chancellor would not put Scotland in that position. Labour would pay a very high price for that in Scotland.

“We are scenario planning here for every eventuality and looking at what the options may be - £1bn is such a magnitude that it can’t just be magicked away.”

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Reports suggest that alongside potential income tax rises south of the Border, Ms Reeves could also cut UK-wide National Insurance. The SNP finance secretary has called for National Insurance to be accounted for in the fiscal framework, the funding agreement between Scotland’s two governments.

Ms Robison said: “The fiscal framework, when it was developed, was never designed in a way that was going to see UK governments use income tax and National Insurance interchangeably. That was never envisaged.

“National Insurance is not accounted for through the fiscal framework and that is a problem for Scotland’s finances.”

Ms Robison, who was previously called for a meeting with the Chancellor ahead of the November 26 Budget, has urged the UK government to either rule out the scenario that would leave a £1bn funding gap for Holyrood or to include National Insurance in the fiscal framework.

“This is unchartered territory,” she warned.

The Scottish Conservatives have hit out at Ms Robison repeating the Scottish Government’s plea for Ms Reeves to end the fiscal rules introduced by the previous Tory UK government with the SNP finance secretary claiming the Chancellor has “boxed herself in here with her self-imposed fiscal rules”.

Scottish Conservative finance and local government spokesperson, Craig Hoy, said: “Shona Robison’s call to ditch the UK’s fiscal rules shows just how reckless and out of control the SNP have become with Scotland’s public finances.

“The SNP’s answer to every problem is more spending, more borrowing and no accountability - the same approach that’s left a £1.5bn black hole in their own budget.”

He added: “While Labour can’t be trusted on tax, the SNP can’t be trusted with a calculator. Instead of grandstanding and demanding rule changes from Westminster, Shona Robison should focus on fixing the chaos in her own departments and getting Scotland’s finances back in order.

“The SNP’s spendthrift instincts are exactly why we must protect the discipline and stability that fiscal rules provide.”

Scottish Labour finance spokesperson, Michael Marra, said: “Shona Robison is desperately trying to blame anyone but the SNP for the financial chaos they have created.

“For years John Swinney has demanded income tax rises England and Wales and, crucially, he negotiated the fiscal framework Shona Robison and the SNP is now complaining about. The SNP designed the very system they are attacking.

“Scotland’s finances are not in a ‘nightmare scenario’ because of decisions elsewhere — they are in crisis because, after 17 years, the SNP have run out of excuses and run out of credibility."