The Scottish Government’s tax and spending plans for 2019-20 are to be formally approved by Holyrood today thanks to a deal between SNP ministers and Green MSPs.
Finance secretary Derek Mackay reached an agreement with the Greens last month that will enable his Budget to pass through the Scottish Parliament.
The controversial arrangement will mean local authorities can raise council tax by almost 5% in the coming year, with councils also being given powers to introduce a workplace parking levy or a new tourist tax on hotel stays.
Speaking ahead of Thursday’s final vote on the Budget, Mr Mackay said it would deliver “the public services, social contract and economic investment people expect while mitigating, where we can, the impacts of the UK Government’s policies of austerity and Brexit that are causing so much harm”.
The income tax divide between Scotland and the rest of the UK will grow from April, when taxpayers south of the border will benefit from an increase in the threshold for the higher rate of the charge.
In the rest of the UK the 40p rate will only apply to earnings over £50,000, but, in Scotland, people will be charged income tax at 41p when their salary goes above £43,430.
Mr Mackay stressed: “This budget provides an increase of over £730 million for our health and care services, invests more than £180 million to raise attainment in our schools and gives a vital boost to our economy through a £5 billion infrastructure programme.
“As a result of these decisions, we have been able to invest in essential public services, particularly the NHS, while ensuring 55% of income taxpayers in Scotland pay less tax than those earning the same income in the rest of the UK.
“Taken together with the personal allowance, 99% of taxpayers will pay less income tax next year on the same income.”
The support of Holyrood’s six Green MSPs means the Budget will be passed, despite opposition from the Scottish Conservatives, Labour and the Liberal Democrats.
But Scottish Green co-convener Patrick Harvie said the deal his party agreed showed the “shallowness” of the Conservatives and how Labour are “increasingly irrelevant”.
The Budget agreement could see a replacement for the council tax system of local taxation introduced in Scotland after the 2021 Holyrood elections, with Mr Harvie saying: “This year’s Green budget deal builds on previous years’ achievements, protecting public services and bringing about a fairer system of income tax.
“Green pressure means immediate help for councils to protect schools and social care, leisure centres and libraries, and there’s longer-term reform to give councils stability and control.”
He continued: “By contrast, the other opposition parties chose from the outset to whine from the sidelines and as a result they have delivered nothing for the communities they are supposed to represent.
“Labour in particular are becoming increasingly irrelevant, shirking the opportunity to influence a minority government to make Scotland fairer.
“The Tories’ shallowness is fully exposed by their hysterical and misleading reaction to giving local councils the kind of taxation choices taken for granted in cities and regions across Europe.
“Greens will continue to bring constructive challenge in this parliament, and we look forward to getting on with delivering powers to local government and working toward a replacement for the hated council tax.”