Green's Warning Over Scots Gov Budget

22 January 2017, 06:00

Green MSPs have told Finance Secretary Derek Mackay he will need to make changes to income tax in Scotland if he wants them to help him get his Budget passed at Holyrood.

Scottish co-convener Patrick Harvie insisted there is a "clear need'' for new powers over income-tax rates and thresholds to be employed, arguing money raised this way should be used to boost local services.

2017-18 is the first year that Scottish Government ministers have had this level of control over the levy, but with the SNP having lost its majority in the Parliament Mr Mackay needs to win support from opposition MSPs to get his tax and spending plans through.

Labour has already said it will vote against the Budget because of cuts to local government, with leader Kezia Dugdale declaring the party cannot back "a Budget that cuts into our country's future''.

The Tories have also signalled their opposition, saying the SNP's failure to raise the threshold for the 40p rate of income tax, as the Westminster government is doing, will make Scotland the "highest-taxed part of the UK''.

Liberal Democrats have indicated they could back the Government if Mr Mackay increases spending on key areas, including education, mental health and the police, by about #400 million.

Mr Harvie said the Greens wanted ministers to use the tax system "to reduce inequality in our society and to generate additional funds for public services''.

Greens included plans to hike income tax to 60p for the very highest earners in their manifesto for the 2016 Holyrood elections - which saw the party increase its number of MSPs from two to six.

Mr Harvie said: "While we and the SNP had very different proposals on income tax, the reality is we have a parliament of minorities, so compromise is going to be needed.

"However, it takes two to reach a compromise and the SNP's draft budget showed no effort to work with others.

"In discussions with ministers, we have outlined a range of options for them to make the tax system fairer, to reduce inequality in our society and to generate additional funds for public services.

"They have total freedom over rates and thresholds, and there is a clear need for them to use this flexibility.''

The draft Budget will come under further scrutiny at Holyrood, with Labour to use a debate in the Scottish Parliament to highlight their concerns - which centre on what they claim is a £327 million cut to council funding.

Ms Dugdale said: "This is the most important budget the Scottish Parliament has ever had to scrutinise and with £327 million of cuts to local services in the pipeline from the SNP, it needs to go under the spotlight like no budget ever before.

"Scotland has the powers to do things differently now. It's not good enough for the SNP to pass on Tory cuts to our poorest communities when there are powers to do something about it.

"We have a health service struggling to cope and an education system where how much your parents earn defines your future more than your talent, ability and potential.''

A Scottish Government spokeswoman said: "We have published a Budget for growth and public services, for our environment and our communities. It delivers increased investment in education, with £120 million for schools to use at their discretion to close the attainment gap in 2017-18 - £20 million more than previously announced.

"It delivers record investment in the NHS through an additional £304 million in resource funding, £120 million above inflation as part of an overall commitment of an extra £500 million above inflation over this Parliament. And it protects low income households from tax hikes and supports more and better jobs.

"We are in active discussions with other political parties about the Scottish Budget. We are considering the detail of the propositions that we have received to date and will continue to take forward constructive discussions on our budget plans.''