Murphy Vows Not To Increase Taxes

19 February 2015, 07:14 | Updated: 30 March 2016, 13:50

Labour leader Jim Murphy has promised to take a "radical'' approach to tackling inequality in Scotland - but he has vowed not to increase taxes on the middle classes to do so.

The politician described growing inequality as "the biggest moral, social and economic challenge'' facing Scotland today, costing the economy billions over the past 25 years.

He set out a series of policies aimed at addressing the issue in his first major economic speech since becoming party leader.

"Disadvantage now cascades down the generations in Scotland,'' he said as he gave a speech to the David Hume Institute in Edinburgh.

"It is simply wrong that in Scotland today opportunities for many young people are determined by their social background and family history.''

Labour, he said, would make "pre-tax'', "after tax'' and economic growth interventions to increase spending in education and health, and boost job opportunities.

"We cannot have this sort of policy radicalism on the cheap,'' he said.

"Scots are tired of listening to politicians setting out a lofty vision of a more equal Scotland but failing to deliver because we aren't prepared to make the difficult choices.''

Mr Murphy said he would use the so-called mansion tax - an annual tax on owners of properties worth more than £2 million - a 50p top rate of tax on incomes of £150,000 and a bankers' bonus tax would be used to finance measures such as 1,000 extra nurses, doubling the number of classroom assistants in poorer schools and guaranteed job opportunities for young people.

He said: "The Labour Party is not willing to increase taxes on the mainstream middle classes and it is not going to increase council tax.''

Asked about how the middle class was defined, he continued: "Generally speaking it wouldn't be someone living in a #2 million house.

``There will be some people in houses worth £2 million who don't have significant monthly income - we know that.

"So we will consult on how to introduce this tax on £2 million houses across the UK.

"The starting point there is that would be an extra £250 per calendar month of payment... and we simply feel that a combination of that, and an increase in tax for those who earn over £150,000, of who there are 16,000 in Scotland we think, that is a fairer way of doing it than trying to increase the number of (council tax) bands or increase the council tax more generally.

"There is just a sense more generally that a lot of those people in the broad middle class are struggling.

They work hard and they already pay enough tax, so in government my instinct and approach would be not to increase their taxes either through income tax or through the bands of council tax.``

Setting out Scottish Labour's policies, Mr Murphy said: "We will raise the minimum wage, use the power of government to promote a living wage, including through procurement, ban exploitative zero-hour contracts, ban practices that abuse migrant labour to undercut wages such recruitment agencies that only hire workers from overseas.

"To tackle poor education we propose to use some of the proceeds of a 50p top rate of tax, raised on incomes of over £150,000, on educational disadvantage.

"For that to happen we need to radically change Scotland. That's what I plan to do.''

He added: "I want to begin by identifying the 20 secondary schools in the country where poorest kids are being failed the most.

"I would double the number of classroom assistants in the primaries associated with the most challenging twenty secondary schools.

"And I want to transform the twenty poorest schools into places of community learning and opportunity, where the parents can learn as well as their children.''

Mr Murphy also pledged to increase spending in the NHS, and increase productivity in the economy.

Scotland should seek to become a world leader in the oil decommissioning sector, he said.

"We face enormous challenges as a nation.

"The challenge to our oil economy. An ageing population. Greater competition from developing economies.

"Low productivity in the national economy and personal insecurity in the personal economy. Alongside the growing inequality.''

He concluded: "We know what works; we know how to ensure that more of us share in this prosperity. We just need the leadership to make the right decisions.''