Budget set to pass first hurdle amid opposition criticism
The Scottish Budget is set to pass its first hurdle at Holyrood today despite critics warning it will do “huge damage” to the economy and public services.
Shona Robison, the Deputy First Minister and Finance Secretary, said the plans were“rooted in fairness and the social contract we have built with the scottish people ”.
The proposals will result in a new income tax band created for those earning more than £75,000, while the top rate will rise by 1p in the pound.
The government says the Budget will deliver a £6.3 billion investment in social sec uri ty,£13.2bn for front line health boards, and increased funding for police and fire services. However, the Institute for Fiscal Studies previously said spending on the NHS could drop by 0.7 per cent in real terms in the coming year, and accused ministers of giving a “misleading impression” of spending rises in key areas.
Local authority leaders have also criticised a planned council tax freeze and warned the funding settlement will see essential services cut.
Opposition parties are set to vote against the Budget, but the Snp-green majority in Holyrood means it will pass its first stage today before being rubber stamped later this month.
Among the most contentious of measures in the Budget, a new “advanced rate” of income tax would be created, meaning those earning between £75,000 and £125,140 will pay 45 percent in income tax, affecting around 114,000 taxpayers in scotland.
The “top rate” of income tax – those earning more than £125,140 – will also be increased to 48 cent and the existing“higher rate” and“top rate” will be frozen.
Ms Robison says this will generate an extra £307 million in revenue, but others say this could make Scotland an unattractive place to do business. Those opposed to the proposals say it could put higher earnersoff living in scotland, as they would pay less tax in England.
Scottish Conservative finance spokeswoman Liz Smith said: “It goes without saying that the Scottish Conservatives will vote against Shona Robison’s disastrous tax-and-axe budget, which has been almost universally condemned. “As well as opposition parties, councils, business and unions, many within the SNP have also slammed these policies. Those MSPS must stand up and be counted, and vote against the damaging provisions of this deeply flawed budget, which would do huge damage to Scotland’s economy and public services.”
Labour finance spokesman Michael Marra said public services were “at breaking point”. He said :“in this budget, th es np green government is asking Scots to pay more for less and using dodgy accounting to hide swingeing cuts.
“Scots cannot keep paying the price for SNP failure – we need change. Scottish Labour will oppose this damaging Budget, demand an end to SNP waste and mismanagement, and prioritise economic growth to fund public services.”
Scottish Liberal Democrat leaderalexcole-hamiltonsaid:“We cannot vote for a Budget that impoverishes councils and deals a hammer blow to everyone waiting for healthcare. Astonishingly, this is a Budget that delivers a housing cut in the midst of a housing crisis and will starve us of the skills and green jobs needed to kickstart growth.”
The housing budget is to be cut from £738.3 min 2023/24 to £533.2 min 2024/25. This includes reducing the budget for building more homes by over £189m.
Ms Robison said in the build up to today’ s debate that housing would be the number one priorityif any extra money was found, or if the government received any more funding from the UK Government.
Another issue that has caused a lot of upset is reductions to funding for free tuition fees – a flagship policy of the SNP Government.
There are worries this could lead to less Scottish students being able to go to Scottish universities as a result of a stricter cap on funding.
This is on top of the government confirming that additional Covid-era funding for 1,200 extra Scottish places will not be
We cannot vote for a Budget that impoverishes councils and deals a hammer blow to everyone waiting for healthcare Alex Cole-hamilton, Scottish Liberal Democrat leader
continued. Ms Robison said: “I have been clear about the fiscal challenge that we face after the UK Government’s Autumn Statement delivered the worstcase scenario for Scotland’s finances and failed to invest in public services.
“In these circumstances, I have presented a budget rooted in fairness and the social contract we have built with the Scottish people. This is a Budget which puts our values into action, invests in the future, and will improve the lives of people across Scotland.”
In the Budget small print, the government has also said it would be “exploring the reintroduction of a non-domestic rates public health supplement for large retailers in advance to the next budget”. The public health supplement was introduced in 2012 and saw large retailers whose rateable value was over £300,000 paying to sell alcohol and tobacco. The move raised over £95m before being scrapped three years later.
This comes as the government proposes a real-terms cut to drug and alcohol funding in the 2024/25 Budget.
However, despite extensive criticism from the retail industry, the government insists any agreement on this would only be to consult on the proposals in the 2024/25 tax year, not formally introduce them.
MSPS will debate the Budget Bill at stage two on February 20. The final vote at stage three will then take place on February 27.