Aim of budget is to make society fairer
Scotland’s First Minister writes for the Evening Times
IN the cacophony that is Scottish politics, every so often a single voice cuts through the noise. This week, for me, it was a report on the impact of Tory policies on ordinary families.
In a week that saw the UK Government prepare to formally notify the EU of its intention to leave by triggering Article 50 – and in the midst of crucial discussions between Westminster and the devolved administrations – this report still grabbed the headlines.
The Resolution Foundation warned – thanks to a combination of inflation, a pay squeeze and welfare cuts – the UK could see the biggest rise in income inequality since Margaret Thatcher. Add to that the fact Scotland’s block grant is being cut by Westminster by almost 10 per cent over this decade, and it gives us a sense of the scale of the challenge facing our nation.
That’s why even among all the Brexit discussions, there are few more important tasks for the Scottish Government than setting the Budget, which received its provisional approval in Parliament last week.
The budget defines our approach to tax and it delivers the investment our health service, schools and social services rely upon. And it reveals what is really important to each political party.
In the face of the economic upheaval caused by Brexit, we mustn’t lose sight of our long-term vision of making Scotland a fairer country.
Our budget will deliver record funding for our NHS, with an additional £300 million this year.
It will see more than £1.6 billion invested in further and higher education – protecting free university tuition and meeting our commitment to maintaining 116,000 full-time college places.
For parents, the budget includes £60m to support the first phase of our childcare revolution, which by the end of this parliament will see a doubling of the hours of state funded childcare. And in a major boost to schools, Glasgow is to receive the largest share of any council in Scotland of our new £120m attainment fund – with more than £21m being allocated directly to Glasgow headteachers.
There will also be more than £60m extra funding to continue the process of transforming our police service and meet the VAT costs imposed by the Tory government.
We are expanding our highly successful Small Business Bonus Scheme, with more than 100,000 of our small businesses being taken out of paying rates altogether – and cutting the business rate poundage for all business properties.
And later this year, we’ll be launching a £500m growth scheme to support businesses with high growth potential.
These are the key spending decisions – but of course, for the first time this year the Scottish Parliament must also decide how to raise the money it spends. Deciding how to set income tax has been one of the key debates this year, illuminating the real priorities of all the political parties.
The Tories want us to follow what the Tory government are doing south of the Border, and cut taxes for the 10 per cent top income earners.
I think this is wrong in principle – but it is also disingenuous for the Tories to demand these tax cuts while making extra spending demands left, right and centre. They can’t have it both ways.
Their claims Scotland is now the highest taxed part of the UK don’t wash. Higher earners in Scotland will pay no more than they do now. However, as a result of our decision not to cut the higher tax rate, they will pay slightly more than counterparts elsewhere in the UK. That difference will amount to around £7.70 a week – less than the cost of a prescription in England.
And not only do people living in Scotland pay no prescription charges, they pay no tuition fees for university and they benefit from a host of other social policies which people south of the Border have to pay for.
Labour’s tax plans don’t add up either. They want to hike income tax for people on lower incomes, effectively forcing people to pay for Tory austerity twice.
While family budgets continue to be under pressure, this is simply not something I am prepared to do.
We’ve taken a balanced approach – protecting investment in public services while also protecting people on low incomes.
As a minority government, we must work with other parties to secure Parliamentary approval for our budget bill, and we have reached an agreement with the Scottish Green Party to enable the budget to pass. Their constructive approach was in stark contrast to Labour and the Tories, who from the outset were intent on opposing our budget plans.
The budget will now go through a process of detailed scrutiny before final approval in a couple of weeks.
It’s safe to say, however, we’ve already learned a lot about the priorities of the various political parties in the Scottish Parliament – there are those who are united in a simple political aim of opposing the SNP in all circumstance, and those who work with others to govern and achieve for Scotland.