It didn’t take the Scottish Government long to get over its temper tantrum about the timing of the UK Budget. When it was announced a fortnight ago that the Chancellor would deliver his Budget for the UK on 11 March, Scottish Finance Secretary Derek Mackay slammed the move as “really disrespectful to devolution”, going on to say that there would be “profound consequences”.
Just a few days later, Mr Mackay decided to do the sensible thing and go ahead and produce a Budget for Scotland anyway, assisted by information provided by the UK Treasury. It is worth remembering that the Welsh Government, despite suffering similar challenges, produced their own draft budget back in December, which puts into perspective the faux outrage from the SNP.
What we do know about the forthcoming Scottish Budget is that the Finance Secretary is likely to have at his disposal the highest sum in a decade, thanks to Barnett consequentials of at least £1.2 billion, deriving from increased spending in areas such as health and education already announced by the UK Government. Against this backdrop, there can be no justification for any additional tax rises, or further cuts to vital public services.
Business rates not fit for purpose
In recent years, we have seen the SNP do a deal with the Greens to deliver a growing tax gap between what individuals pay in income tax in Scotland compared with the rest of the UK. Anyone earning more than £27,000 a year, hardly a group of wealthy individuals, will pay more income tax than their counterparts in England, and there is increasing concern in the business community about the perception that Scotland is the highest taxed part of the UK.
Scottish Conservatives set out at the weekend our ‘asks’ for the Budget. We are clear in our ambition to see the tax gap reduced, and at least no more divergence in tax rates. And, specifically, there should be no clawback of the promised National Insurance cut by the UK Government, through higher income tax rates set in Scotland.
The second key measure we propose to help economic growth is to tackle business rates. It is our view that the current system of rates is no longer fit for purpose, and in need of comprehensive reform. In the short term, and as a minimum, the Large Business Supplement needs to be reduced to the same rate payable in the rest of the UK. Retailers in particular have borne the brunt of these high additional rates, with a devastating impact on traditional shopping centres. And all existing rates reliefs need to be protected.
In relation to spending priorities, we want to see all Barnett consequentials arising from NHS spending in England passed on to the health service in Scotland, and funds utilised to end the underfunding of NHS boards, provide a hospital parking charges refund scheme, and restore the number of drug rehab beds, which have been cut by 80 per cent since 2007.
In recent years, local government has borne the brunt of SNP cuts, with a substantial impact on council services. As a minimum, the core funding for local government needs to be increased at least in line with inflation, and all new or additional commitments fully funded from the centre.
One other vital public service feeling the squeeze is the police, where the Chief Constable Ian Livingstone recently highlighted his concern about underfunding threatening the number of police officers. As a minimum we want to see an additional £50m in the coming year to protect 750 police officer roles.
All these measures, together with additional support for higher education, and an expansion in the Ending Homelessness Together fund, represent a package to support frontline public services, whilst not penalising hard-working Scottish families with additional taxes. At a time when the overall sums available are growing, they are all affordable. When it comes to the Budget negotiations in Holyrood, the Finance Secretary will have a simple choice. He can either reach a deal once again with the Scottish Green Party, who in the past have demanded even higher taxes, were the authors of the hated car park tax, and now are proposing stopping vital road safety improvements. Or, he can come and talk to the Scottish Conservatives about putting together a Budget that will support economic growth, and give our public services the investment they need.
I hope that he and his SNP colleagues will be prepared to work with us on delivering a Budget that takes Scotland forward, not back.
Murdo Fraser is a Scottish Conservative MSP for Mid Scotland and Fife