“The Fiscal Commission forecasts a level of long-term economic damage to the Scottish economy from Covid-19 of about -2 per cent, similar to the OBR’s forecast for the UK economy. This means the long-term impact of Brexit on the economy will be worse than that caused by Covid-19, with the OBR attributing a 4 per cent long-term reduction in living standards due to the UK’s exit from the EU.”
This year, like last year and like next year too, we start from a position not of our choosing. We must operate in circumstances we neither created nor desired. We cannot be expected to work miracles. Some things are irretrievably broken.
“Ultimately, without full control over economic policy and immigration — which the UK government refuses to give us — we do not have full powers to mitigate the effects of Brexit, secure a green economic recovery from the pandemic, and raise the revenues our public services need.”
If our plans displease you, remember the underlying fault lies elsewhere. My hands, like those of the nation as a whole, are tied. This is the best we can do in the present, sub-optimal, conditions. You know who to blame.
“Income tax rates in 2022-23 will remain unchanged. The starter and basic rates will increase in line with inflation. The higher and top rates will remain frozen at their current levels. Our progressive income tax policy means majority of Scottish taxpayers will continue to pay less income tax than if they lived elsewhere in the UK, while those who earn more will pay more.”
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I am increasing income tax on wealthier Scots — who already pay more — and, better still, I am broadening the definition of “rich” to include more taxpayers who will find themselves paying higher rates of tax on some of their income.
“In total, this budget provides record funding of £18 billion for health and social care, not only to address immediate pressures, but delivering the first step to ensure frontline funding, which directly supports patient services, increases by at least £2.5 billion by 2026-27.”
The Scottish government is first and foremost a healthcare provider with secondary interests in other public services. £18 billion is a lot of money . . . it won’t be enough to achieve our stated aims.
“This budget also deepens our partnership with local government . . . working to increase the fiscal autonomy and power of local government, and put more say over how local budgets are raised in local funds.”
Your council tax — sorry, your “unfair council tax” — is going to increase but I shall leave it to local authorities to tell you this.
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“The most immediate and direct way to tackle poverty is by putting more money into the pockets of people who need it most, ensuring a decent standard of living, especially for children.”
A hand-out IS a hand-up. Where we double the Scottish child payment; Westminster scraps the Covid-related increase to universal credit.
“I know, presiding officer, that when our economy is prospering, there is more public revenue to reinvest. So, we cannot talk about public services without ensuring we are supporting businesses to recover.”
I know this, but a number of colleagues do not. Enterprise is not the budget’s centrepiece but I remind commercial Scotland that some of us appreciate their efforts.
“Our [public sector] pay policy for next year therefore focuses on those on low incomes, continuing our progressive approach and guaranteeing an inflationary uplift of at least £775 to those earning up to £25,000, £700 to those earning between £25,000 and £40,000, and £500 to those earning above £40,000.”
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These numbers may already be out of date. Should inflation hit 5 per cent next year, this will be a below-inflation increase for anyone earning more than £16,000. Nevertheless it is the best we can do in the circumstances and the signal is as important as the substance.
“Today’s budget is a budget of choices, and we have chosen to tackle child poverty, to invest in the transition and to boost economic prosperity . . . It is a budget for households . . . It is a budget for our businesses and workers . . . It is a budget for a net zero future, that once again shows Scotland leading from the front, in the mission of our generation.”
Wha’s like us? Damn few and certainly not them down south. If they are to blame for all that is bad, this government should be credited for all that is good. In Scotland everything is awful and everything is splendid all at the same time.
