Scottish Budget: Income tax rise for higher earners, confirms John Swinney

By Lucy Ashton

The Scotsman is reporting that higher earners in Scotland will pay more income tax next year, John Swinney has announced, as he set out the Scottish Budget.

The Deputy First Minister said the higher rate of tax will rise from 41p to 42p in the pound and the top rate will increase from 46p to 47p.  The tax threshold for the top rate is being lowered from £150,000 to £125,140.

Mr Swinney, right,  said those on higher incomes are being asked to pay more than those who earn less.

But he said most Scots will stay pay less than they would elsewhere in the UK.

The SNP’s 2021 Holyrood election manifesto pledged to freeze income tax rates and bands.

Mr Swinney told MSPs the Budget was taking place in the “most turbulent economic and financial context most people can remember”.

He said this had been “compounded by the utterly catastrophic decisions of the UK Government”, adding: “In short, Presiding Officer, these are spectacularly difficult times in which to manage the public finances.”

It comes after the Budget was delayed by around 45 minutes after some of the key tax measures were leaked to the BBC.

Meanwhile, a fund to hold an independence referendum in October 2023 has been ditched by the Scottish Government in their budget.

Opposition parties have demanded the Scottish Government use the fund for other spending priorities ahead of the budget, and following the Supreme Court result it was clear it was highly unlikely a referendum would take place next October.

The independence referendum fund, worth £20 million when it was set out for the 2023/24 budget in the Resource Spending Review earlier this year by Kate Forbes, will instead go towards funding an extension of the government’s fuel insecurity fund.

The fund was initially doubled to £20 million in the first round of interim finance secretary’s emergency budget review, set out in September by Mr Swinney.

That fund will now be extended for another financial year, with Mr Swinney stating that if there is another independence referendum, the government will find the money within the budget.

He told MSPs: “In the Resource Spending review, the Scottish Government committed to make £20m available to fund the cost of a referendum on Scottish independence. The government believed that to be a necessary investment to ensure the people of Scotland have the opportunity to express their democratic right to self-government.

“The Scottish government respects the decision of the Supreme Court but still believes that people of Scotland must have the opportunity to have that say in a democratic referendum in line with our clear mandate. And 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 added: “One of the reasons why I believe Scotland will be a successful independent country is because of the energy wealth that we enjoy. Scotland is a country with an abundance of renewable energy opportunities. The travesty however is that despite that strength too many of our people languish in fuel poverty.

John Swinney announced the Scottish Budget in Holyrood today.

John Swinney announced the Scottish Budget in Holyrood today.

“In order to help our most vulnerable citizens, I intend to utilise the finance earmarked for a referendum on independence to make 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.”

Later today, responding to the Scottish Government’s budget in the Scottish Parliament, Scottish Liberal Democrat leader Alex Cole-Hamilton said:  “This is a bleak day for our country. External factors have certainly played their parts but they have been compounded by the manifest failures of this government.

“Failure on mental health waiting times, on educational attainment and on ferries and energy generation. On top of all that this government has failed to grow our economy despite the extensive leavers they have available to them.

“There is a lot of pain in this budget. Pain for mental health services, for a voluntary sector on it knees that will now face another £4 million cut and a local government uplift that is barely half what COSLA have asked for in order to keep the lights on.

“I presented the Deputy First Minister with further savings so I am disappointed that it appears there is still a £17 million contract for national testing of children as young as four and five, and the vast and unnecessary bureaucracy that is the ministerial takeover of social care.

“There is still time to turn this around, if he cancelled those particular plans, that would allow him to offer some hope for the 200,000 sufferers of long Covid on whom this budget is silent.

“This government had an opportunity to be transformative in terms of the climate emergency and the rising cost of living by instructing an immediate programme of public works to insulate every home in Scotland. He even had a photo op. But interrogating the figures it appears he is re-announcing large portions of the energy efficiency budget, so can I ask, how much of this is actually new money?”

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