Master stroke

Derek Mackay’s budget was very smart. The poor and uninformed think he has soaked the rich to pay for a public sector pay rise, and the media oblige with headlines that he has ‘hammered’ 750,00 Scots earning over £33,000, which he hasn’t.

It’s pitched as necessary to deal with Tory ‘austerity’ and give more for the NHS, schools and broadband, and buys off Patrick Harvie, out-corbyns Richard Leonard and plants a big “I’m a horrible Tory” stamp on many foreheads.

The truth is until you get to those earning £75K pa the maximum effect is plus or minus £90 per year, or four cigarettes a week.

The £164m tax increase might cover the pay rises but not £400m for the NHS, £600m for Broadband, £400m promised for Child Care, or the bluster about supporting WASPI women (£800m).

There are only four solutions: grow the economy, borrow, more tax or a lot more cuts.

The Scottish economy is forecast to grow 0.7%, half the UK figure and the SNP can’t borrow, in fact the UK pays for the £14bn GERS deficit.

So that leaves more taxes and cuts. Free prescriptions costing £1.1bn a year and free bus passes and other travel (£250m) are sacred cows, so raising council tax seems the best option, since Mr Mackay can blame councils, and, if Angus Council’ s 20% workforcecuts are replica ted across Scotland, around 50,000 jobs will go in the next three years,

shaving around at least £1bn in wages while unemployment benefits are paid by Westminster, who can also be blamed for the paucity of the benefits.

So at a stroke the SNP have conned the poor, not laid a glove on the rich, and set the scene for the real tax and spend surgery that unfortunately Scotland needs before it can be viable - in or out of the UK.

ALLAN SUTHERLAND

Willow Row, Stonehaven

Was Holyrood Finance secretary Derek Mckay’s budget statement a radical measure or a fiscal ‘damp squib’ (Scotsman, 15 December)?

On the face of it the changes to the tax bands and rates simply to raise £164m do seem farfetched. This amount is considerably less than 1/2 per cent of what the Scottish government spends annually. Those who argue that this could easily be found by a strong examination of how the Scottish Government actually spends money - tackling waste in things like purchasing policy and inter departmental duplication, for example-have a strong case.

Yet I think Professor David Bell is right( comment same edition ). This budget announcement will be remembered more for its symbolism than for its fiscal impact. It signals, for good or ill, that Scotland wants to manage its economy in a different way to the rest of the United Kingdom. It is as significant as the power-granted in the devolution referendum of 1997 and then the 1998 Scotland Act- for Holyrood to vary the rate of income tax in either direction by 3%. This power was never actually used but nevertheless symbolised something of a difference between the fiscal frameworks north and south of the Border. Mr Mckay’s measures can be seen as seminal in the sense that they have set a pattern for the future of budgets north of the Border, irrespective of the controversy about

the constitution. But they can hardly be seen as radical given the relatively small amount of money involved.

The phrase ‘the inevitability of gradualism’ springs to mind when looking at what he has proposed. After 18 years of devolution even the party of independence is showing that

it is right to test public reaction to small measures before a leap into an uncertain financial future.

BOB TAYLOR

Shiel Court, Glenrothes

The SNP is always crying for more powers to be devolved to Holyrood. Powers were handequates

ed down for income tax, and what did we get - a tinkering at the edge.

If powers are devolved, then they should be used to good effect.

As Brian Wilson asked in the Scotsman (15 December) overall, - have they been? I’m not so sure either.

WILLIAM BALLANTINE,

Dean Road, Bo’ness, West Lothian

What exactly is the point of having a ‘starter’ tax band of 19% to cover income earned between £11,850 and £13,850?

At the current tax rate of 20%, there would be £400 due on this £2000. At 19%, there would be £380 due. That is a difference of £20. (That is £20 a year, not a week or a month).

The most damaging tax decision made by Gordon Brown was the 75 pence per week increase in the state pension. This tax concession to the lower paid will make them 38 pence per week better off. It is patronising and derisory, and serves no useful purpose whatsoever. It merely adds one more calculation that any computer system administering this has to make, and increases the chance of a mistake.

If you look at the free personal allowance, the Tories at Westminster have aspirations to increase this to £12,500 in the near future anyway, therefore almost squeezing out this new band completely.

For this current tax year, 2017-18, the free personal tax allowance has gone up from £11,000 to £11,500.

So, if you are earning £13,850, you have saved 20% of £500 or £100 from changes in UK taxation, and £20 from changes in Scottish taxation.

I am fairly certain that the snow that is currently falling will last longer than this particular tick box exercise.

VICTOR CLEMENTS

Taybridge Terrace, Aberfeldy