SNP tax plans ‘will only soften cuts for one year’

Income tax increases proposed in the draft Scottish Budget will only provide relief from public spending cuts for one year, according to a cross-party thinktank.

Analysis by the Institute for Public Policy Research (IPPR) Scotland found the day-to-day spending budget is expected to fall by £250 million between 2018-19 and 2019-20.

However, with commitments to increase NHS spending and protect police budgets, nonprotected departments will see falls of £350m in 2019, which the IPPR Scotland says is a 2.7% cut in one year.

The Scottish Government has proposed income tax rises in its draft Budget for 2018-19 that will prevent spending cuts for most departments.

But the thinktank’s calculations show this will only be sufficient to end the cuts for one year.

Further tax increases or stronger than forecast tax receipts will be needed to protect public services in Scotland beyond 2018.

Russell Gunson, director of IPPR Scotland, said: “The Scottish Government’s draft budget has proposed income tax increases in Scotland from April next year.

“However, as welcome as the tax rises are, our analysis shows that they will only be sufficient to soften cuts for one year.

“Serious cuts to public spending remain just around the corner. Without further tax increases the year after next, or a stronger economy, deep public spending cuts in Scotland will restart in 2019.”

Finance Secretary Derek Mackay said: “Scotland is facing continued austerity from the UK Government.”