Rennie: Scottish Budget a “missed opportunity”

Today was an historic day. Twenty years and three months ago, the Scottish people voted to have a Scottish Parliament with tax raising powers.

In his annual Budget, Scottish Finance Minister Derek Mackay increased the basic rate of income tax to 21p for those earning above £24,000. He also decreased it to 19p for the lowest earners up to £13,850. He put up the higher rate to 41p and the top rate to 46p.

It’s all pretty modest and it represents the sort of moves we were calling for in the Scottish elections last year and since. We wanted to see the money brought in put into education to make what Willie Rennie calls a “transformative”investment.

So we’re not going to complain about the idea of tax rises in principle. However, Derek Mackay is getting a world of pain from the Tories because the SNP said in their manifesto that they wouldn’t raise the basic rate of income tax. They were pretty scathing about our plans during the campaign and there are a whole load of words they said that are coming back to haunt them now.

They could have saved themselves that grief by ceding the principle last year.

Anyway, that is their problem to deal with. The Budget is a pretty modest affair. It’s certainly not the sort of budget to deal with a struggling health service, unfit for purpose education system and a housing crisis that keeps getting worse.

Willie Rennie had this to say:

The budget is a missed opportunity. It does not do enough to meet the long term needs in the economy. We’ll need to scrutinise the tax proposals but the government seem to have introduced a modest tax increase. That’s an approach that we advocated at the election and the SNP opposed.

We called on the Scottish Government to deliver a transformative investment in education, a step change in mental health and for the Scottish Government to keep their word on funding for lifeline ferry services in accordance with the will of parliament.

Instead we have a set of announcements that pay lip service to the challenges that Scotland faces; a fraction of the funding that we have identified as being crucial to transforming mental health and the money on attainment funding does not go anywhere near far enough.

What’s more, while the lifting of the public sector pay cap will be welcomed, it is unfunded. For local authorities this will impose additional costs and inevitably service cuts at the same time as the SNP Government have cut local authority budgets.

We will continue to press the Scottish Government to deliver the investment that the Scottish economy needs.

I do feel quite glad that we are seeing serious devolved powers being used. When the Lib Dems and Labour were in coalition at Holyrood, we wrung the neck out of the powers that we had. Unfortunately the SNP has, over the last decade, treated the Ferrari they have as if it were a horse and cart.

I have absolutely no problem with paying more tax. I was fully expecting to lose several hundred pounds a year but it seems that we will just about break even as my husband’s tax goes up and mine goes down. To be honest, I wouldn’t have minded paying a bit more if it meant that we had more GPs, the schools were better and local government was properly funded.

I have said for a long time that we need to have an honest conversation about what tax is for and the sort of society we want to live in. If we want good public services which we’ll all need at some point in our lives, we have to pay for them. The Tories will do the populist grievance stuff to death. It’s important that we get past that superficiality and have an enlightening conversation about the sort of country we want to be. We need to set our ambitions and work out how to reach them.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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  • Gavin Greig 15th Dec '17 - 1:12am

    If you “wrung the neck out of the powers that [you] had”, how did unused money wind up getting sent back to the Treasury in London? Surely more could have been done with it?

  • William Fowler 15th Dec '17 - 9:08am

    I am in favour of the devolved parliaments giving the voters the choice as to what kind of country they want to live in… but they have to be honest about it rather than claiming, as Labour does, they can get money out of the air with voodoo economics that will end up turning the country into Zimbabwe. So the SNP have kind of lied to the voters to get into power, although to be fair people at the lower end of the income scale will be slightly better off. I would guess that most of the extra money will go to increase public sector salaries so few improvement in services etc… it will be very good if at the next election the SNP offer increased welfare, NHS spending etc matched by a big increase in personal taxation so that electors actually have an honest choice between capitalism and socialism.

  • Steve Trevethan 15th Dec '17 - 9:36am

    Do we have policies on regressive and progressive taxation?

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