Scottish budget: John Swinney softens stance over Tesco tax and college cash
John Swinney says he has listened carefully to the opposition parties. Picture: Dan Phillips / TSPL
JOHN Swinney sought to soften the blow of cuts to colleges and tax rises to supermarkets as the Scottish Government’s £28 billion spending plan for the next financial year was passed by MSPs.
Despite failing to win the backing of Labour, the Tories and the Greens, the SNP pushed through its spending plans for the next financial year, enforcing a pay freeze for all public sector workers, cutbacks to local government, but also offering a council tax freeze and free tuition for students.
In the final round of negotiations, Mr Swinney sought to reduce a round of controversial cutbacks he had planned for further education colleges across Scotland, offering more money to support students.
He also watered down a proposed multi-million pound a year tax grab on stores which sell alcohol and tobacco, cash which Mr Swinney wants to put towards improving the country’s poor health.
However, the broad thrust of the SNP’s Budget, published last year, remained in place, with the majority SNP administration this year under no pressure to secure backing from opposition parties in order to push the bill through parliament.
In the end, Mr Swinney won the backing of the four Liberal Democrat MSPs who reversed their initial opposition to the bill as a result of the SNP’s concessions on colleges.
Mr Swinney was helped by a fresh injection of about £130 million for the coming year as a result of spending changes ordered by Chancellor George Osborne, which were fed through to the Scottish block grant.
The finance secretary said yesterday he welcomed the extra cash, but insisted it went nowhere near making up for the near funding standstill the Scottish Government will hit next year. Mr Swinney claimed that, for his capital budget alone, he would have £6.7bn less over the coming four years. With extra funds to play with, Mr Swinney decided to spent the majority – £68m – on “capital spending”, with ministers having pledged to put as much money as possible into public works in the belief it could help maintain the economy.
Of that, £36m goes to the depleted housing budget, £10m to boost building works on the NHS and £11.7m to local government for their own building works. He then allocated a further £40m to further education colleges, split between cash for student support and money to support FE colleges themselves.
Despite the scale of the economic crisis and the demands for cash, Swinney opted to hold back a further £20m in his kitty, which is likely to be spent as the year progresses. Mr Swinney suggested it could be used to lessen the impact of welfare cuts and rising unemployment.
Mr Swinney said, taken together, the Budget would “accelerate recovery, support economic growth and improve public services in Scotland”. The concessions ensured that the response from outside the chamber last night were less hostile last night.
John Spencer, convener of Scotland’s College Principals’ Convention said: “We hope this will help colleges protect much-needed places for young people. However, there will still be significant challenges ahead.”
The revisions to the retail levy will mean that instead of collecting, £30m, £40m and £40m over the next three years, it will bring in £5m less a year. It adds up to a 9.3p supplement on top of the business rate for stores which are affected.
Ian Shearer, director of the Scottish Retail Consortium said: “There’s been some recognition that retail alone can’t bear all of the costs and we’re glad to see a small reduction in the overall bill retailers will face and the time limit of three years.”
He added: “But this levy still sets an alarming precedent, by singling out one part of one sector and businesses of all kinds will fear what future revenue-raising schemes might be devised. Allowing profitable businesses to be raided in this way creates significant uncertainty around future investment.”
Those decisions gave the SNP the important backing from the Lib Dems, ensuring the government was not isolated.
Scottish Lib Dem leader Willie Rennie said: “This Budget wasn’t perfect by any means, but it was good enough to get our support. The additional support for students, colleges, new homes and help for children from disadvantaged backgrounds reflected the priorities we argued for.”
However, the Conservatives opted to oppose the Budget – the first time the party has done so since the SNP came to power in Edinburgh in 2007.
Scottish Tory finance spokesman Gavin Brown said: “This is a budget that merely tinkers around the edges and is a missed opportunity by the SNP to give the Scottish economy a real shot in the arm.”
He added: “The real problem is that the SNP are obsessed with their independence referendum, rather than concentrating on growing the economy and creating jobs. The Scottish people deserve better.”
Ken Macintosh, Labour’s finance spokesman, added: “This 11th-hour attempt by John Swinney to remedy some of the worst aspects of his Budget will be welcomed by those outraged by his cruel cuts to housing, local services and Scotland’s colleges, but it does not go nearly far enough.
“With 200 Scots losing their jobs every day and one in five young people now unemployed, this budget does not recognise the scale of the jobs crisis Scotland is facing.”
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Comments
There are 25 comments to this article
Page 1 of 2
spacecadetrik
Thursday, February 9, 2012 at 10:26 PMIt is nice to see that the Nats are looking after the interests of the people who they feel need most help in this tough economic times. The multi million pound profit making supermarkets. Tartan Tories indeed. If you want any further evidence, see their plan to cut corporation tax.
Jolly
Thursday, February 9, 2012 at 09:42 PMSimonHurrll Comment is too long and boring!!
mallus12
Thursday, February 9, 2012 at 08:10 PMI don't know the details of this particular matter.I just look in now and again to see what the SNP's policy of the day is. If you miss a day you'll look a fool. A policy a day keeps the Unionists at bay!
Finnzz
Thursday, February 9, 2012 at 02:14 PMThank goodness there is a party in power that knows how to use a calculator. The lamentable Lamont was in full flow at FMQs today spouting absolute gibberish regarding the contract for the new bridge. I don't know what she taught at school, but it certainly wasn't Maths.
Buford Van Stomm
Thursday, February 9, 2012 at 12:45 PM20 Self Determination is self policing........ much like the SNp administration.
Self Determination
Thursday, February 9, 2012 at 11:58 AMWhy pending? no rules broken ,this site is a disgrace
Self Determination
Thursday, February 9, 2012 at 11:52 AMPending Moderation
duelaynomore
Thursday, February 9, 2012 at 11:39 AMBIG MAN.....well done sir.....The very fact that a prosecution was considered just shows how little the prosecutors and probably the police, understand of threats made to persons lawfully carrying out their duties, and the need for their support from the public. Time they got out of their offices and experienced the real pain of public transport carrying unruly hooligans and fare dodgers...student was he.....what was he studying...crime? The public was the victim in this case, and fortunately common sense prevailed. Again well done...some courage is needed when the majority wish to sit on their hands, but expect others to act for them.
SimonHurrll
Thursday, February 9, 2012 at 11:32 AMThe biggest savings in Local Government that can be made by Mr Swinney would be to manage the treatment of the residual materials in Municipal Solid Waste more effectively. A parallel artiicle in this newspaper talks of saving £20 Million in Recycling across Scotland. £20 Million in 7 million people, well what a saving...£3 per person. That whole article as presented and discussed in the wider forum is a total nonsense. We all agree that Recycling - or whetever term you use - separates those items which have value for those that have a use for them and those that have a use for them make money from this. It is the residuals in the waste that are the issue. The idea of providing a cost effective and environmentally suitable residual waste tretament system is the greater goal here and it can be achieved. Under the current system the solutions to treat these wastes is for mega-companies that go for incineration (BURNING) of waste and this cost us (i) a fortune in the building of these, (ii) a fortune in subsidies to build them through this fraudulent placement of PFI (Private Finance Initiative) style of project which entails subsidies to the service provider with... [a] high costs for treatment [b] high costs for the sale of any anergy they produced - Green Tarrifs on Electricity, [c] a Put or Pay backing that means they are guaranteed a supply of residual waste even if it isn't there, for which they are still paid [d] the transposition of this "Put or Pay" scenario to the result that if there is a lower quantity of waste they are paid for the theoretical electricity they would have produced at the throughput they had been advised was available in [c] [e] a subsidised input supply of electricity which means that if a facility like that proposed for a community that might be - say - Glasgow was supposed to be able to produce 45 MW continuously but used 28 MW to make it run the needs for the electricity to make it run (that is the 28MW) would be charged at £60--00 per MWh whereas they would reap the rewards (for the 45 MWh) of electricity they said they could make would be paid for to them at £150--00 per MWh. [f] under the PFI scheme they are allowed interest rates of 2% below current market rates of interest. If you do not believe this then have a look at the UK Government's own figures about how the PFI Companies across the UK are ripping off the Tax Payers in the PFI Health Care and Schools and Roads programmes. This is not divorced from the Waste sector. This means that for a project which would cost £400 Million for 650,000 tonnes per year the Council Tax Payer means that the Council Tax Payers are totally caught in the hoop with a white elephant of debt which within 6 years will also cost a further £200 million to upgrade to meet new standards for emissions, and by 2024 require an additional £400 Million extra to be spent on iot to accommodate the total elimination of all emmitive particles and to the atmosphere. There is an alternative system which makes use of the residual waste and converts it to real transport fuels namely Bioethanol or Biobutanol and it would cost around £125 Million for the same quantity of waste and it could survive with a Treatment Fee that will start at significantly lower than Land Fill Costs at about £30--00 per tonne and within 7 years that cost would be eliminated altogether and be at a ....ZERO COST TO the COUNCIL TAX Payer. The issue of Recycling is one part of the whole waste agenda. It does help but whilst the Scottish Government is hell-bent on this issue they are missingthe fact that the total Waste Treatment bill for Scotland could be slashed to less than a third.. Inother words for Scotland this would save the Budget of Mr Swinney £4000 Million (£4 Billion ) at a stroke. But they do not care.
samcoldstream
Thursday, February 9, 2012 at 11:29 AMSwinney still has £400 million extra in Barnet consequentials stashed away for handing out before the referendum. More promises and pledges, better known as politicians bribes, for the voters.
Gibbo
Thursday, February 9, 2012 at 11:03 AM10 Once again we have the usual suspects who have no idea them selves why they try to block the Budget voting against it, as seen on newsnet last night, if you are not sure if you like what is offered you then and I donot agree with the abtension rules but then they should just abstain, however they just vote against because they have not got the knowledge on how to run a Scottish budget, like another blogger put it when LibdemCoalition was in in Scotland they could not figure out how to spend monies so they sent it back to the UK treasury, that is some way to run a country is it not, roll on MAY.
Lies and stats
Thursday, February 9, 2012 at 09:52 AMOnce minimum pricing for alcohol comes in if I was Swinney I would increase the Tesco tax to clawback their extra profits
Family guy
Thursday, February 9, 2012 at 07:38 AMI think Labour have forgotten that because of their mismanagement of the economy, the Scottish Block Grant has been reduced. Yes, we remember Labour - its your fault we are in this position.
ianfaeclerrie
Thursday, February 9, 2012 at 06:52 AMI continue to revel in Labour being powerless in Scotland after having to put up with their arrogance all my adult life.
bridgetthecat
Thursday, February 9, 2012 at 05:09 AMComment removed by moderator
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