Scottish Budget: 5 things you need to know from John Swinney’s tax rising statement
John Swinney #JohnSwinney
John Swinney responds to allegations of a Scottish budget leak
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John Swinney has laid out the Scottish Government’s Budget in what is seen as one of the most important since the devolution period.
The Deputy First Minister and interim Finance Secretary announced tax rises and spending cuts during his statement to Holyrood this afternoon.
Ahead of his statement Swinney apologised to the Presiding Officer after details of his Budget were leaked to the media, saying no-one was authorised to do so.
It comes after Alison Johnstone paused Holyrood’s proceedings to investigate the leaks, delaying the start of Swinney’s budget statement by more than 30 minutes.
He said: “I give you my categorical assurance as a member of this Parliament since its foundation in 1999 that no individual was authorised on my behalf to disclose any information.”
Here are five things you need to know from the Budget:
Income tax
Scotland’s tax rates are changing, Deputy First Minister John Swinney has confirmed, with those earning more than £43,662 being asked to pay more.
He said the standard and basic rates of tax would not change. Both the higher and top rates of tax will be increased by 1p each, to 42p and 47p respectively.
He said: “We’re asking all those earning more than £43,662 to pay an extra penny in income tax.” This will allow additional spending on health, he said.
Tax threshold
The higher rate threshold will be maintained and the top rate will be lowered to £125,140 from £150,000. It means more people will be dragged into the higher tax band.
Swinney told MSPs: “On income tax, I intend to maintain the thresholds for the starter and the basic rate bands at their current levels. I will also maintain the higher rate threshold at the current level, and I will lower the top rate threshold from £150,000 to £125,140.
“I also intend to make no changes to the starter, basic and intermediate rates to protect those on lower incomes. I have decided to increase the higher and top rates of tax by 1p each, to 42p and 47p respectively.”
Council tax
The Scottish Government will not mandate a council tax freeze, Swinney said as he outlined the budget.
John Swinney told MSPs that local government will get a funding boost of £550 million next year and the freedom to set its own rates of income tax.
“I can confirm that the Scottish Government will not seek to agree any freeze or cap in locally-determined increases in council tax as requested by Cosla and council leaders,” he said.
“This means that each council will have full flexibility to set the council tax rate that is appropriate for their local authority area. I encourage councils to consider carefully the cost pressures facing the public when setting future rates.”
Health spending to rise
Spending on health and social care in Scotland will increase by £1 billion, John Swinney has said, as he set out details in his annual budget statement.
He said: “If we want to be able to depend on the NHS, we have to be prepared to pay for it. When the UK Government set out its autumn statement, it gave rise to consequential funding for the NHS in Scotland of £291 million.
“I intend to pass on that funding consequential but I do not believe it is nearly enough for the critical task that we ask our staff in the NHS to do.
“A result of the choices I have made on income tax, I’m in a position in one year to increase the amount we spend on health and social care in Scotland by over £1 billion.”
Independence funding scrapped
Funding of £20 million set aside for a referendum on Scottish independence will instead be used to help people at risk of fuel poverty, Swinney has said.
Swinney said the Government respects the ruling of the Supreme Court, which said Holyrood cannot legislate for its own independence referendum.
He said: “When that opportunity is available, the Scottish Government will make financial provisions for that to happen.
“However, at this moment, I must make full use of the resources available to me.”
He continued: “I intend to utilise the finance earmarked for a referendum on independence to meet provision to extend our fuel insecurity fund into next year, a further £20 million to address yet another failure of the United Kingdom and its policies.”
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