Let’s not weep for middle classes on tax

These misfiring best guesses aren’t inconsequential, they are straws in the wind that tell their own story about how people perceive their place in the economy, and the equity or inequity of the government’s spending plans. Your sense of reality is mediated through local experiences. You trace economic generalisations from the company you keep, affluent or impoverished, in work or out. There’s a pernicious tendency to dwell in a social echo chamber of the left or right.

Most ordinary citizens won’t have ploughed through all 186 scintillating pages of the cabinet secretary for finance’s draft budget, introduced to Holyrood last week, but the rhetoric accompanying the proposals is now the stuff of angry front pages, newspaper columns, television studio spats and bar-room arguments. In these forums, images matter. Clichés matter. And for many commentators, the cliché of choice for this Scottish budget was “Middle Scotland”.

The criticism was unrestrained. The SNP was “staging a £190 million raid on Middle Scotland”, “clobbering hard-working families” and generally working its villainy and wickedness against grafting punters of Pollokshields and Aberfeldy.

Hell mend the finance minister who publishes his budget before Christmas. He is doomed to be cut for either a Saint Nicholas costume or for Ebenezer Scrooge’s fingerless gloves and bashed top hat.

The Scottish government’s critics were in no doubt which of these characters Derek Mackay represented. The decision that the higher rate of income tax should kick in at £43,430 in Scotland compared with £45,000 in the rest of the UK was characterised as a “bitter package of tax hikes to clobber middle-income Scots”. A tight-fisted hand at the grindstone, Derek, a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner.

Missing from this orgy of immiseration and self-pity was any serious contemplation of the underlying analysis. If the brutalised class of citizens who pay the higher rate of income tax are “Middle Scotland”, what precisely are they supposed to be in the middle of?

It was maladroit for Mr Mackay to characterise these voters as “rich”. It isn’t necessary to be rude about middle-class Scots, contributing their considerable share to our wealth, but the victim fantasies of parts of middle-class Scotland must be challenged. Nobody enjoys turning over their hard-earned lucre to the taxman.

But let me tell you: if you earn more than £43,430 a year, you are not Middle Scotland. You may not be rich. Your mortgage may still pinch. Your pay packet may be comfortably spent and more each month. But you are considerably wealthier than most of your fellow citizens and that ought to count for something.

The median full-time worker in Scotland earns a mighty £15,720 short of any liability to pay 40 per cent income tax. The overwhelming majority of Scottish workers need a pair of binoculars to see the upper rate. If the taxman is shaving off 40 per cent of your income, you already fall in the top 15 per cent of earners in this country.

Critics say that Mr Mackay’s policies will hit “nurses, teachers and police officers” but as a serious analysis of the Scottish labour market, the suggestion withstands no scrutiny.

At the end of December last year, the NHS in Scotland employed 59,287 nurses and midwives, of which 58,111 staff are employed on contracts of less than £43,000. Only 1,176 nudge above that. Official statistics suggest that at most about 2 per cent of Scottish nursing staff would gain a single farthing from a higher-rate tax cut. The teaching payroll tells the same story. School heads would gain some extra spending money, but the overwhelming majority of Scotland’s 48,000 dominies will be untouched by these tax changes.

Police constables earn £23,493 in their first year, increasing to £36,885 over long service. There are no higher-rate taxpayers here. Nor do we find them among sergeants, working ordinary hours. By contrast, the chief constable will have to contribute more if Philip Hammond’s cuts are not mirrored north of the border. Something like 90 per cent of officers would be unaffected.

The first minister has said that cutting income taxes for “those on the highest incomes at a time when support for the disabled is being cut and at a time when our public services are under pressure, is in my view the wrong choice”. She is right. Taxes are the price we pay for a civilised society. Bob Cratchit isn’t earning £43,000 a year. Scrooge is a tale of what happens when the social safety net gets frayed.

The challenge for the SNP now is keeping up their side of the social compact, and to explain why this higher rate is not only necessary but worth every penny. Many see Middle Scotland as Phil Ochs saw the American liberals of the 1960s — “ten degrees to the left of centre in good times, ten degrees to the right of centre if it affects them personally,” was his barbed analysis. There is nothing inevitable about this characterisation. Inevitably voters consider their own pocketbooks in going to the polls, but those aren’t the only values in play.

The Scottish government has only begun to make the rhetoric link higher taxes with the provision of services. Perceived failures in public services are now doubly corrosive.

The finance secretary defended his proposals on the basis that they deliver “the social contract that we really value, such as no prescription charges in Scotland, concessionary travel, free education that means no tuition fees and major investment in the infrastructure of our country”.

By all means, dissent from the economic logic. Criticise wrongheadedness where you find it. Ask about value for money. But let’s not govern ourselves according to a catechism of cliché. A sad tale’s best for winter. The idea that this budget punishes blue-collar Scotland is one of sprites and goblins.