MSPs approve “fair and progressive” Scottish Budget, despite criticism it will target higher earners

Following a debate in the Scottish Parliament, the bill was approved by 68 votes to 57, despite criticism from Labour that it does not give enough to public services and from the Conservatives that it forces increased taxes on middle and higher earners.

The proposals in the Budget include:

• A 1p increase to both the higher and top rates, taking them to 42p and 47p respectively
• The threshold for the top rate being lowered to £125,140, in line with the UK government
• An extra £100 million for local authorities
• £6.6 million in funding for Creative Scotland for 2023-24

Swinney, standing in for Finance Secretary Kate Forbes, said this budget was “by far the hardest” he has been involved with, with the effects of inflation and the cost-of-living crisis affecting the money available for public services.

However, he said that £125 million in additional funding from Westminster had allowed extra money to be allocated to local authorities, resulting in a 3% real terms increase, on top of the £123 million announced last week to fund a new pay offer to teachers. A planned cut to public body Creative Scotland, which would have seen it fund itself from reserves, has also been reversed.

Swinney said: “I am now confident of the path to balance for this financial year. That is the result of careful budget management and of taking hard decisions in order to live within our means, despite the ferocious pressures that are being created by high inflation.

“The budget strengthens our social contract with every citizen of Scotland. The Scottish Government has taken the steps that we believe are appropriate to deliver fair and progressive taxation. We ask those who can afford to contribute more to support investment in our public services to do so.”

However, MSPs from other parties criticised the budget for failing to allocate more funding to areas such as social care and councils, as well as focusing tax increases on higher earners.

Murdo Fraser (Conservative) said the budget “does nothing for the economy”, delivering only higher taxes and “savage cuts” to council funding, while Shadow Cabinet Secretary for Finance and the Economy Liz Smith said the Government was “increasingly reliant on taxing middle and higher earners much more” and “widening the differentials” between tax in Scotland and the rest of the UK.

Douglas Lumsden (Conservative), added: “Higher taxes, reduced local government spending, a lack of support for business and a lack of focus on economic growth paint a dismal and bleak picture for the economic prosperity of Scotland over the next couple of years.”

Lib Dem leader Alex Cole-Hamilton said the budget was “just not good enough”, while Daniel Johnson, Labour's spokesperson on the Economy and Finance, added that the leadership contest prompted by First Minister Nicola Sturgeon’s resignation made the budget vote “faintly ridiculous” as a new First Minister may want to introduce their own financial policies, adding: “the budget will not last.”

Labour Deputy Leader Jackie Baillie welcomed the additional money for Creative Scotland and teachers’ pay but criticised the lack of funding for the NHS and social care, adding: “Scottish people are being asked to pay more, but they are getting worse services.”

Pam Duncan-Glancy (Labour) added: “The budget should have defended the Scottish people against deepening inequality and tackled the scourge of poverty that exists. It should be reducing pressure on families, making work pay and empowering local councils to take decisions that protect their communities. Instead, the budget does none of that.”

Defending the budget, Kenneth Gibson (SNP) said the “financial chaos” seen across the UK had impacted budget spending, with the Government forced to make “hard choices to help people through difficult times”, including decisions on child poverty, protecting public services and meeting net zero ambitions.

Michelle Thomson (SNP) agreed that the Government faced “huge challenges” due to the economic outlook and “acted in the interests of the majority of the Scottish people”. She said: “Given the context of high inflation, a lack of borrowing powers and a decades-long failure by successive UK Governments to address issues of economic growth, the acting finance secretary has done a remarkable job in constructing a budget that protects Scotland from some of the worst potential effects of a decline in the UK.”

John Mason (SNP), welcomed increases to income taxes, saying while many people are struggling with inflation and other financial worries, “others are doing very well and have ample money to spend”. He said: “Some people in our society are clearly comfortably off and can afford to pay a little more in tax. That means that we can use the extra money for those in greater need.”

James Dornan (SNP), said while the budget is “not what I would like it to be”, the Government was restricted by the overall economic picture. He said: “Scotland works within a fixed budget. We must have the money to implement everything that we commit to. If we want to spend more money on schools, we have to find that money from another service.”

Read the full transcript here.