The leaders of Scotland’s main political parties must unite to build a fairer, greener country, underpinned by a new, fair tax system, campaigners have said.
In an open letter to the leaders of Scotland’s five main political parties issued on the eve of the draft Scottish Budget, over 60 organisations say that urgent cross-party cooperation is needed to deliver wide-ranging and fair tax reforms to boost investment in key national priorities.
The letter is backed by a range of leading think tanks, unions and charities, including the Poverty Alliance, Oxfam Scotland, IPPR Scotland, CPAG in Scotland, the Scottish Women’s Budget Group, One Parent Families Scotland, the Wellbeing Economy Alliance Scotland, and the Scottish Trades Union Congress. It is co-signed by figures from a range of sectors, reflecting wide concern that a lack of investment is simultaneously jeopardising multiple national priorities.
The letter describes the publication of tomorrow’s draft Scottish Budget as a ‘pivotal moment for fundamental change’ and says Scotland’s political leaders must be ‘honest with each other, and with the people of Scotland, about the crisis in social investment’. Amid short- and long-term fiscal challenges, it calls on them to ‘kick-start a series of fair tax reforms which could serve as the linchpin for a more equitable, resilient, and prosperous Scotland’.
The letter says:
“Despite best intentions and considerable effort to date, insufficient social investment is costing us all dearly. It is eroding the foundations of Scottish society and limiting our ability to realise our basic human rights. This lack of social investment is being fuelled by a failure to use our tax system as a transformative tool to raise sufficient money, reduce inequality, and to help deliver the fairer and sustainable Scotland we want and need.”
The letter adds that critical national priorities – such as tackling child poverty, investing in care, gender equality, and critical public services, while tackling the climate crisis – cannot be ‘put at risk or sacrificed due to a lack of sufficient investment’.
Short-term, campaigners say it is crucial that the Scottish Budget for 2024-25 builds on progressive changes to date with further measures to ensure that those with the broadest financial shoulders contribute more through existing tax levers, such as Income Tax.
For example, modelling by IPPR Scotland and the STUC suggests various changes, including a new and additional Income Tax band between the current Higher and Top rates, could raise significant additional revenues next year, even accounting for behaviour change.
However, beyond any minor adjustments made to existing taxes in tomorrow’s draft Budget, signatories of the joint letter are calling for parties from across the political spectrum to urgently work together towards wider fair tax reforms, with this then reflected within the Scottish Government’s new tax strategy, due to be published next May.
Ruth Boyle, Policy and Campaigns Manager at The Poverty Alliance, said: “A just and compassionate Scotland is one with strong, sustained social investment to make sure that everyone has the chance to develop their potential.
“People in Scotland believe in looking out for each other. But for too long our political leaders haven’t matched those values with social investment – weakening the shared services we have built together, and taking away the freedom and stability that people need to build lives beyond the injustice of poverty.
“The Scottish Government can take responsibility to fill the holes in the foundation of our public good, making progressive use of Scotland’s tax powers to create a stronger economy and a better society. People in poverty and struggling on low incomes can no longer wait.”
The letter is the latest call for the Scottish Government to rethink its approach to tax, with a report by the STUC released earlier this month setting out a range of short- and longer-term reforms in Scotland which it says could raise an extra £3.7 billion per year for public services.
In September, a joint briefing, The case for fair tax reform in Scotland, endorsed by more than 50 organisations, also laid out a series of options to fairly reform devolved taxes at national and local levels, including to target under-taxed wealth and change behaviours by incentivising fairer business practices and pollution reduction. The briefing highlighted analysis suggesting that a series of common-sense changes could each result in hundreds of millions of pounds of extra money being raised annually.
Since then, the First Minister has announced plans for a freeze in Council Tax, a move described as “abrupt” in today’s joint letter, which says it will do “little to seriously address the cost-of-living crisis for those with the least”. The letter instead challenges party leaders to support a cross-party process to replace the Council Tax before the end of this Scottish Parliament in 2026, and to back a revaluation of properties as an interim step.
Jamie Livingstone, Head of Oxfam Scotland, said: “The Scottish Budget isn’t just about balancing the books, it’s also about re-balancing the scales to ensure that everyone can live fulfilling, dignified lives in fairer, greener and caring communities. Achieving that ambition requires significantly more investment underpinned by a fairer tax system.
“The First Minister must move beyond short-term tax tweaks, however essential, and show genuine budget bravery by kick-starting common-sense tax reforms, challenging other party leaders to support the changes needed to deliver the transformative investment we all need.”
Philip Whyte, Director of IPPR Scotland, added: “Underinvestment in people, communities and public services ultimately holds back the economy and damages livelihoods. At this critical juncture, the government must do more than just make minor adjustments to tax and investment – with bold action to match the ambition of its rhetoric, and seriously investing in public services while tackling poverty and climate change. The alternative is to leave a legacy of damaged prospects and low prosperity.”