Scottish Government Draft Spending and Tax Plans 2019-20

Part of the debate – in the Scottish Parliament on 12th December 2018.

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Photo of Murdo Fraser Murdo Fraser Conservative

I thank the cabinet secretary for advance sight of his statement, heavily redacted as it may have been.

It is a source of regret for us all that today’s big statement has been overshadowed by events at Westminster. I refer, of course, to the £950 million increase in the Scottish block grant that was announced by the chancellor in his October budget, which means that, according to the Scottish Parliament information centre, the finance secretary’s total budget has not been cut by the Conservatives but is up in real terms by nearly £1 billion since 2010.

In advance of today’s budget, every business representative group in Scotland had one key ask from the finance secretary. Those groups asked that the tax differential between Scotland and the rest of the United Kingdom not increase. They were concerned about the impact that a growing tax gap would have on their ability to recruit talented people to Scotland, which is a concern that has been echoed by those in the public sector.

However, the finance secretary has chosen to ignore all those calls with today’s announcement that the threshold for paying higher-rate tax will be frozen. That means that, from April, those in Scotland who earn between £43,430 and £50,000 will face a marginal tax rate of 53 per cent on every extra pound that they earn. It means that a police sergeant who earns £45,942 will pay more than £700 in tax more than his counterpart south of the border; a senior nurse manager who earns £49,000 will pay £1,350 more than south of the border; and a principal teacher who earns £51,330 will pay more than £1,500 more. That is the price of living in the Scottish National Party’s Scotland.

Anyone who earns just over £26,000 will be paying more than their equivalents south of the border. Surely no one will seriously argue that a household with an income of just over £26,000 is rich, yet those are the people who are being punished in the SNP’s Scotland. There was no need to do that, because the finance secretary had more money in his budget—£950 million more in Barnett consequentials. There was no requirement for the tax rises that we have seen today.

We will scrutinise carefully the spending pledges in the budget. We welcome the additional money for the NHS, which was made possible by spending choices that were made at Westminster and a UK Conservative Government’s commitment to health spending. We will look at the figures for local government in detail, but the headline sum that has been announced today falls short by £1 billion of what the Convention of Scottish Local Authorities assessed is needed just to stand still. People will be paying more in taxes, but they will face poorer local services. This is a pay more, get less budget.

It does not have to be this way. There is a different route that the finance secretary can choose. We are happy to sit down and have a serious discussion with him about his budget, if he commits to reducing, not increasing, the tax gap with the rest of the UK, and if he commits to dropping the SNP’s ruinous plans for a second independence referendum. Will he join with us and develop a budget to help the people of Scotland and not punish them?