Scottish budget gains first stage approval

1 Feb 18

The Scottish budget yesterday gained stage one parliamentary approval after ministers struck a deal with the Scottish Greens.

Under the agreement, an extra £170m was secured for local government, and public sector pay rises will apply to 75% of public sector workers, instead of the 51% originally proposed.

An anomaly in the draft budget, under which some higher rate income taxpayers would have seen their tax bills fall next year, has also been addressed.

The adjustment to the higher rate threshold, which finance secretary Derek Mackay said would raise £55m, will mean tax increases for almost 400,000 taxpayers. 

The revised proposals were approved by 69 votes to 56 in the Scottish Parliament following negotiations with the Greens, who also secured investment in low-carbon infrastructure.

Two Liberal Democrat MSPs also backed the plan in return for a funding boost for local ferry services. 

Mackay said it had been necessary to work across the chamber to find consensus.

“This budget invests record amounts in our NHS, supports our efforts to improve attainment in our schools, invests in our economy with support for infrastructure, for broadband and for innovation, and supports our ambitions to tackle climate change,” he said.

“We are lifting the pay cap with a real terms increase in pay for the majority of public sector workers and we are supporting local services with a real terms increase for day to day spending and for long term investment, with an additional £170m going into local services, on top of the £10.5bn already proposed.”

Changes to income tax ensured the Scottish tax system was progressive, he added, with 70% of taxpayers paying less next year than they do currently, and 55% paying less than they would across the rest of the UK. “The changes I have announced ensure that people in Scotland will benefit from the best deal for taxpayers in the whole of the UK,” he said.

Patrick Harvie, co-convener of the Scottish Greens, said his party stood firmly with local communities and public sector workers affected by years of cuts and closures.

“Last year we stopped the cuts; this year we’ve pushed the government even further, and delivered a real- terms increase in funding, including a fair contribution towards the additional pressures councils are facing.”

Gail Macgregor, resources spokesperson for the Convention of Scottish Local Authorities, said the deal put local government in a better situation, although serious financial challenges remained.

“COSLA made no secret of the fact that our original allocation from the Scottish Government fell some way short of where local government as a sector ought to be and I am pleased that this has been recognised and acted upon,” she said.

A final vote on the budget will take place next month.

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