John Swinney to outline 2015-16 Scottish budget

FINANCE SECRETARY John Swinney is to outline his budget plan for 2015-16 with a pledge to make Scotland a more prosperous country and tackle inequality.

Finance Secretary John Swinney. Picture: Lisa Ferguson
Finance Secretary John Swinney. Picture: Lisa Ferguson

Mr Swinney will present the draft budget detailing the Scottish Government’s spending proposals to MSPs at Holyrood today.

It will include details of new taxation and borrowing powers transferred to the Scottish Parliament through the Scotland Act 2012 - the first Scottish tax rates in more than 300 years.

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The Conservatives called on Mr Swinney to take action to boost the economy and jobs while Labour urged the Scottish Government to outline more progressive measures.

Mr Swinney will propose the first rates for the two devolved taxes, the land and buildings transaction tax - which replaces the existing UK stamp duty land tax paid when buying property over a certain value - and the Scottish landfill tax, both of which are due to come into effect on April 1 next year.

The Finance Secretary said the draft budget was set against a strengthening Scottish economy and record levels of employment on one hand and the economic challenges posed to public finances by the “UK austerity programme” on the other.

He said the content and the setting of the new tax rates would be informed by the “unprecedented” levels of political engagement seen during the recent debate on Scotland’s constitutional future.

Mr Swinney said: “What will lie at the heart of the budget will be a determination to make Scotland a prosperous and fairer country where the benefits of economic growth are not only maintained but are shared by everyone.

“Many of these aspirations will be taken forward within the budget and also within the setting of tax rates. The land and buildings transaction tax is the first tax created by the Scottish Parliament since before the 1707 union.

“The budget is a major landmark in taking forward the Government’s programme and is also a historic opportunity to set new tax rates for Scotland.”

Conservative finance spokesman Gavin Brown said the Scottish Government must take action to boost the economy and jobs and create opportunity, areas he said had been “neglected” in recent budgets.

He said: “We also need to see a vast improvement on last year when the Scottish Government slashed the college budget when youth unemployment was a concern and cut the housing budget when the economy was still suffering the effects of the recession.

“The Scottish Government also has to make sure local government is well financed.

“It is sending down a lot of responsibility like the state guardian, free school meals and increased childcare - all of that costs money and that will need to be accounted for in the budget.

“Encouraging our Scottish firms to be more innovative, sustainable and to increase exports is something that should also be included in this draft budget.”

Under the land and buildings transaction tax, Mr Swinney will set out the threshold below which house buyers will not need to pay any tax, currently £125,000 under the stamp duty system.

The Scottish Government says the new system north of the border will be fairer as it will be more directly related to the value of the property.

Labour’s Shadow Finance Secretary Iain Gray said his party would welcome a more graduated replacement for stamp duty but argued that claims that the tax was progressive were “a little desperate”.

He said: “In his seven years as Finance Secretary John Swinney has never taken a single progressive, redistributive measure.

“His flagship policy has been an underfunded council-tax freeze benefiting the better-off and leaving council service users paying higher charges.

“He has funded universities with swingeing cuts to college budgets and last year he promised to fully mitigate the impact of the bedroom tax in Scotland yet still has not put the agreed mechanism in place.

“If this is a progressive budget from Mr Swinney, that will be a first. As ever the devil will be in the detail and under the SNP we have seen the detail is often lacking.”

The Scottish landfill tax, paid by companies and local authorities when they dispose of waste to landfill, will be extended to illegal dumping, which is not currently covered by the UK tax.

The two taxes are expected to bring in between £500 million and £600 million each year, with Scotland’s block grant from the UK Treasury adjusted to reflect the transfer of tax receipts to Holyrood.

The new body Revenue Scotland will be responsible for collecting and managing the two new taxes.

The Scotland Act 2012 also brought in a Scottish rate of income tax which will take effect from April 2016.

Scottish ministers will be able to vary that rate but it will continue to be collected by HMRC.