Budget will deliver for Scotland and Rutherglen
Last week the Scottish Budget was passed at Holyrood.
For any party, getting your budget through parliament is critical to ensuring that you can put your manifesto commitments into action.
This was an important budget for Scotland and the government sought, and gained, parliament’s approval for tax and spending plans which will have a positive impact on our economy and public services, as well as our communities and our environment.
The Scottish people gave the SNP manifesto commitments their support at the election last May and this budget delivers on that mandate: to increase investment in education and the NHS, to protect low income households from tax hikes at a time of economic pressure and to support small businesses by extending the small business bonus scheme.
Of course, in this session we are a minority government, and that requires us to consult with other willing parties to find common ground - as was the original design of the parliament. In this situation, compromise is the only way that any party is able to make good on the promises it made to the people of Scotland.
Not everyone will agree with every aspect of a draft budget. On one side of the chamber we had the Labour Party demanding that everyone earning over £11,500 be taxed more to counter the UK Government austerity cuts. On the other side, the Tories were baying for tax cuts for the better off whilst, at the same time, demanding a raft of additional spending commitments.
Where sensible and affordable suggestions have been made, the government has listened and incorporated additional measures into the final draft of the budget.
The result of these negotiations is a budget that will deliver for Scotland and the Rutherglen constituency, and commanded enough cross-party support to be voted through in the parliament.
On taxation, the government has set the rates and bands of income tax in line with Scotland’s needs and priorities.
They protect low and middle income taxpayers - but generate extra revenue in every year of the rest of the parliamentary term which will be invested in key public services.
Income Tax will not be used to pass on austerity to the household budgets of the lowest income taxpayers, and 99 per cent of adults in Scotland will not pay more tax than they did last year under this budget.
Tax is only one side of the balance sheet in any budget. Those on higher incomes being asked to pay a little more than they would in the rest of the UK are benefitting from free higher education, free personal care, free prescriptions, and other vital public services in Scotland.
The new system of council tax in Scotland will be fairer. The rates paid by those in the four highest council tax bands (E,F, G and H) will be adjusted in a move that will generate £100 million a year, while protecting those on low incomes in these bands.
All council tax raised locally will be spent locally. The Scottish Government will use its own resources to fund £120 million going to schools to close the attainment gap and will not fund this from the reform of council tax bands for higher value homes. Primary and secondary head teachers in Rutherglen constituency will share £2,348,000 of this attainment funding.
Many small businesses in the constituency will also benefit from the extension of the Small Business Bonus Scheme which raises the rateable value threshold at which businesses become liable to pay rates from £10,000 to £15,000.
The government has also listened to the concerns of some businesses, particularly those in the hospitality sector, about the impact of the recent rates revaluation, capping any rates increase for those affected to 12.5% for the coming financial year, pending the outcome of the current review into rates system.
As a result of these measures 75 per cent of businesses in South Lanarkshire will pay less in rates, or will be taken out of rates altogether. We understand that small businesses are the engine room of the local economy and are vital in areas such as Rutherglen, Cambuslang and Blantyre.
The reforms will also provide additional support to families on low incomes across all council tax bands by extending the relief available to households with children. This will benefit 77,000 low income families by an average of £173 per year, supporting an estimated 140,000 children.
Overall, the local government finance settlement, plus council tax income, and the support through the health and social care integration, amounts to an overall increase of potentially £250 million or 2.4 per cent in real terms for Scotland.
By focusing on closing the poverty-related attainment gap, bringing together health and social care, and delivering a real-terms increase on spending on education, this budget will improve life for people in South Lanarkshire and across Scotland.