MSPs pass Scottish Budget

MSPs passed the budget by 64 votes to 57 after opposition parties continued to press Finance Secretary John Swinney for a 1p rise in Scottish income tax rates to generate funding for education.

Mr Swinney, who ruled out raising income tax, announced extra funding for closing the attainment gap in schools.

He pledged an extra £80m over three years for the Attainment Scotland Fund, a scheme aimed at supporting pupils from Scotland’s “poorest neighbourhoods”.

Mr Swinney prompted anger from the Labour benches when he said claims about council job losses had been “utterly exaggerated”.

He said: “My priority all along has been to deliver a financial settlement that councils can accept in order that we can pursue our shared priorities to protect household incomes, improve outcomes for people through health and social care integration and by improving educational attainment.

“We have worked to protect our public services and pursue ambitious reform to help ensure that public services meet the needs of the people of Scotland.”

Mr Swinney said the government must also “look to the future” while considering new powers to be devolved as part of the Scotland Bill, the financial groundwork for which was agreed with the UK government this week.

Among the key measures in the budget are a new 3 per cent levy of the purchase price of second homes and buy-to-let properties.

Mr Swinney also pledged to continue the council tax freeze, and to invest £200m over the next five years in six new NHS treatment centres.

Other measures in Mr Swinney’s budget included:

Reaction to the budget has largely focused on its impact on local government finances, with council body Cosla previously claiming that Scotland’s 32 councils would lose out on £350m between them.

But despite threats from some councils that they were considering raising council tax rates in an attempt to ease the burden on their finances, none have actually done so.

Both Scottish Labour and the Scottish Liberal Democrats called for the Scottish rate of income tax to be set one penny higher than the rate set elsewhere in the UK by Chancellor George Osborne, arguing the move could raise about £475m.

Scottish Labour leader Kezia Dugdale said the move would mean “we can end cuts, not enforce them”.

Reacting to Holyrood’s final approval of the Budget on behalf of Scotland’s retail industry, David Lonsdale, director of the Scottish Retail Consortium, said: “There is much in the Scottish Budget that the retail industry can support, including the investments in skills and infrastructure, the promised review of business rates and the decision not to increase income tax in the coming year.

“We would though have liked to have seen a stronger emphasis on keeping down the cost of doing business. Business rates are once again set to increase across the board from April, compounded by a troubling £60 million hike in the business rates supplement to be levied on firms operating from medium and larger sized commercial premises. This latter tax increase sits at odds with repeated claims from Scottish Ministers to be pursuing the most competitive rates regime in the UK, as these companies will be forking out more in business rates than firms operating in comparable premises elsewhere in the UK. Our fear is that this will simply open the door to even higher taxes in subsequent years if there is another shortfall in expected overall tax revenues.”