Nicola Sturgeon today said many Scots won’t like the Scottish budget being unveiled on Thursday as the prospect of tax rises looks increasingly likely.
The First Minister said that Scots can expect a “tough budget” as she addressed the National Economic Forum in Edinburgh today. It came as grim unemployment figures today showed the number of Scots out of work jumped by 8,000, while falling across the UK.
The Scottish Government's spending plans for 2018/19 will aim to strike the "right balance" for business, Ms Sturgeon said, and hinted at extra cash for key areas like infrastructure and research and development which could boost growth.
But it came as a fresh warning was issued against tax hikes by one leading industry body north of the border.
Ms Sturgeon has already hinted that tax rises could be introduced in the budget being unveiled by Finance Secretary Derek Mackay tomorrow. She recently set out a range of options for redrawing the tax system in Scotland. It is likely to mean that Scots workers earning about £30,000 will pay more.
And she said today: “Nobody will agree with everything in the budget - that’s not how budgets, particularly tough budgets work. But I do hope you will be able to see that the interests of businesses and the interests of growing the economy have been absolutely central at every stage in our thinking.”
The prospect has already come under fire from business leaders, with the Scottish Chambers of Commerce last week warning against the move, along with the Tory opposition at Holyrood. They fear it could damage Scotland's struggling growth which has been struggling behind the UK rate in recent years.
But Ms Sturgeon said the Scottish Government’s block grant for “day to day expenditure” is decreasing, while the need for investment is growing.
“By setting clear ambitions, we believe we can encourage investment and innovation in technologies where we already have strengths, and for which there will be a global demand,” Ms Sturgeon added.
“The ability to help people to contribute to the economy is central to our thinking. We know that we need to ensure taxes are competitive. But we also need to invest in the infrastructure, the research and development, and the capacity for innovation that this country will need in the future.
“That’s the balance that we are looking to strike – in tomorrow’s budget, and well into the future. The interests of businesses, and the importance of economic growth, have been central in every stage of our thinking and they will continue to be central as we implement the budget.”
But the Scottish Retail Consortium called on Mr Mackay to focus on economic growth in his budget and stick to the SNP’s manifesto pledge to protect basic rate tax payers from hikes.
“Scotland’s economic growth has been weak in 2017, and with an unsettled outlook the focus must be on supporting sustainable growth,” he said
“The Scottish Government must take the long-term view, and focus on how to drive that economic growth which will deliver jobs and tax revenues in the years ahead. After all, with half of VAT receipts being assigned to the Scottish Parliament in just 16 months’ time our MSPs have a direct stake in facilitating a flourishing retail industry.”