The Scottish Parliament passed their new Finance Bill by 63 votes to 55. It was presented by their new Finance Secretary Kate Forbes and accounts for how the Scottish Government will spend their £40bn budget in the 2020-21 tax year. The leading SNP had the support of the Green Party in order to get their bill passed.
Scottish Income Tax in the 2020-21 Scottish Budget
Scottish Income tax rates are different to those in the rest of the UK. In fact, 56% of Scottish taxpayers pay less income tax than they would if they lived elsewhere in Britain. This Budget confirmed that the five different rates are staying the same:
- Starter rate: 19%
- Basic Rate: 20%
- Intermediate Rate: 21%
- Higher Rate: 41%
- Top rate: 46%
In the new Scottish Budget, basic and intermediate rate thresholds will go up alongside inflation. Higher and top rate thresholds are frozen at £43,431. This means that 370,000 taxpayers will have to pay £149 more in income tax. This rakes in £51milllion for the Scottish government.
What else is in the new Scottish Budget?
- £95m extra for local authorities
- £15bn health and care investment, with £117m for mental health support services
- £45m for low carbon projects
- 60% additional funding to tackle the alcohol and drug deaths crisis
- £18m for police services
- £180m for ‘closing the attainment gap’ between children of different economic backgrounds in schools
- £270m in rail services
- £1.8bn capital investment for emissions projects, active travel, agriculture, electric vehicles and peatland restoration.
- A big headline grabber is their commitment to having free bus travel for under 19s by January 2021. In addition to their free over-60s bus travel.
What do the politicians think about these new Scottish Budget decisions?
Obviously, the leading SNP and supporting Scottish Green Party are happy with the outcome.
Scottish National Party
Kate Forbes, Scotland’s Finance Secretary, said: “I’m pleased that Parliament has supported this budget which will deliver certainty for our vital public services and local government. It supports our ambitious plans to accelerate Scotland’s transition to a net-zero economy and provides a record £15 billion investment for health and social care. It will also help us tackle inequalities, deliver first-class public services and ensure no taxpayer in Scotland will pay more income tax on their current income. I now hope the UK Government will deliver on its promises in their overdue budget next week.”
Scottish Green Party
Mark Ruskell, The Scottish Greens’ environment spokesperson, said: “This is a historic budget, thanks to the Scottish Greens. Next year over 700,000 young people across Scotland and their families will benefit from free bus travel for under 19s. Greens have also provided extra funds for councils which has enabled councils to take proposed cuts off the table, increased the walking and cycling budget to £100m for the first time, won new funds for new rail projects to reach the next stage and a commitment to provide warm homes through energy efficiency measures.”
“It seems incredible that other opposition parties could not back a bold transformational move such as this, especially Scottish Labour, who have put tribalism over principle once again. In fact, in the debate Labour’s finance spokesperson even made the baffling claim that free bus travel for under 19s will encourage young people to buy cars. The truth is Labour once again sat on their hands rather than negotiate real change. Once again, the Scottish Greens have proved the most effective opposition at Holyrood. Free bus travel for young people joins a growing list of achievements, like introducing a fairer income tax system, winning equal protection for children and securing vital environmental protections.”
The budget did get passed, but only by eight votes. Not everyone is in agreement about the decisions it contains. Neither Labour, nor the Conservative Party had anything positive to say about it.
Scottish Labour Party
Rhoda Grant, Scottish Labour finance spokesperson, said: “Scottish Labour entered discussions with the Scottish Government this year in the hope, if not in expectation, that we could push the Government to invest in Scotland. Instead the SNP squander the public purse and refuse to invest. While the SNP boast of not increasing income tax, they heap inflation-busting rises on the regressive council tax, a tax that they promised to abolish over a decade ago.”
“We ask that young people 25 and under travel free on buses. This policy would have helped young people become more independent while also making family travel more affordable. Instead the Greens settled for talks about introducing free bus travel for young people eighteen and under. This short-changes young people because on past performance it is unlikely to happen. We wanted fair funding for Local Government, but they are now facing a £205m real terms cut. This budget is damaging. It does not invest in the future of Scotland or its people. It does not deal with mismanagement. That is why Scottish Labour cannot support it.”
Scottish Conservative Party
Donald Cameron, Scottish Conservatives shadow finance secretary, said: “It’s a budget that underfunds our vital public services, especially local councils. And despite the drugs deaths crisis, it completely neglects the wellbeing of vulnerable addicts who need rehabilitation beds to turn their lives around. This bad budget is being made possible by the Greens, who never in the history of this parliament have asked for so much and yet received so little in return for their support. This budget categorically fails to meet the needs of the people and businesses of Scotland.”
What do you think? Which element of the Scottish Budget most affects your life?