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Scots would receive a huge tax cut ahead of the crunch Holyrood election under Budget plans being considered by the Labour Government. Plans to cut national insurance would benefit people living north of the border, while proposals to hike income tax would not apply to Scotland. The Daily Telegraph reported that Chancellor Rachel Reeves is looking at adding 2p to the basic rate of income tax in her November Budget. But it is claimed she is also looking at slashing national insurance contributions by 2p. The combined move would raise about £6bn. However, the devolution settlement means Scots taxpayers would be protected from the tax rise, but benefit from the NI cut. Income tax is devolved to Scotland and it would be up to Holyrood whether to follow suit. National insurance is reserved to Westminster and a cut could end up in Scots’ pay packets ahead of the May poll. If the plan is announced in the Budget, Scottish Labour leader Anas Sarwar would be able to argue that Labour had made taxpayers better off. Reeves’ is mulling over the options as she contends with a budget black hole believed to be at least £20bn. Labour promised before the general election that they would not raise income tax rates, VAT or national insurance. During Prime Minister’s Questions, the Prime Minister was asked by Kemi Badenoch, the Conservative leader, whether he stuck by his 2024 election promises. He replied: “I am glad that the Leader of the Opposition is now finally talking about the economy. I can update the House [of Commons]: retail sales are higher than expected; inflation is lower than expected; growth has been upgraded this year; and the UK stock market is at an all-time high. “The Budget is on November 26, and we will lay out our plans then.” To sign up to the Daily R ecord Politics newsletter, click here
