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The National (Scotland)
The National (Scotland)
National
Hamish Morrison

The six key things you need to know from today's Scottish Budget

JOHN Swinney announced today's Budget in what he called the "most turbulent economic and financial context most people can remember". 

A package of spending cuts worth around £1.2bn has previously been announced in smaller updates earlier in the year and on Thursday the acting Finance Secretary announced public spending would be funded in part by a raid on the earnings of Scotland's best-off taxpayers. 

Here's everything you need to know from the Scottish Budget... 

Taxes increased for highest earners

Taxes are being put up on the best-off to fund extra spending on the NHS, Swinney announced. Those earning more than £43,662 will now pay an extra penny in the pound in tax. For those on the higher rate of tax this means they will pay 42 pence in the pound in tax, while those on the additional rate will see 47 pence in the pound going to the public purse.

More people will pay the top rate of income tax, the Deputy First Minister said, by lowering the threshold at which people qualify for the additional rate from £150,000 to £125,140.  

Swinney said: “It is in short an extra penny to enable spending on patient care in our NHS.”

Other tax increases were also announced, including raising the tax on the owners of second homes and holiday homes, who will see the Additional Dwelling Supplement from 4% to 6%.

In total, Swinney said, the tax changes would raise £553 million for public spending in the next financial year.

Small business support package

Non-Domestic Rates for businesses will be frozen at the basic rate, something Swinney said would save businesses £308m than if they were raised in line with inflation.

He also reaffirmed an SNP manifesto commitment that around 100,000 properties would not be subject to rates altogether.

Benefits to rise with inflation

The Scottish Child Payment, which is available to around 387,000 children across the country and has been hailed by independent commentators as a “gamechanger” in tackling child poverty, will remain at its current level of £25 per child per week.

All other benefits controlled by the Scottish Government will be increased in line with the rate of inflation in September, which was 10.1% - slightly lower than the most recent level of 10.7%.

Indyref2 budget axed

Spending on preparations for a second independence referendum will be diverted to a scheme to help people suffering from fuel poverty, Swinney announced.

The £20m earmarked for the Scottish Government’s plans to hold a second vote on the country’s future will instead be used to extend the Fuel Insecurity Fund.

Swinney said he had to “make full use of the resources available to me” while a second referendum was off the cards, following the Scottish Government’s defeat in the Supreme Court earlier this year.

He added: “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 £20m to address yet another failure of the United Kingdom and its policies.”

End to peak fares

Peak time train fares will be a thing of the past in Scotland during a six-month trial period. It is not yet known when this pilot will begin. Swinney said this would cost the state £15m.

This is on top of £1.4 billion committed to maintaining, operating and decarbonising rail infrastructure, £60m to electric vehicle charging and £200m in active travel such as cycling and walking.

The Scottish Government will give £72m over the next two financial years to the nationalised Ferguson Marine to complete the construction of two delayed and over-budget boats for the CalMac ferry service and two more ships which are being procured.

Health and social care spending

Swinney announced the Scottish Government would invest £13bn in NHS boards in the year ahead. Some £2bn will go to services like GP surgeries and pharmacies in a boost to primary health care, he said.

And £1.7bn will be spent on social care – including money to establish the already troubled proposed National Care Service, about which grave concerns have been raised by unions, councils and backbench SNP MSPs.

On tackling drug and alcohol-related health problems, the Government has pledged £160m, part of an already announced £250m to tackling the drug deaths crisis.  

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