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20 December 2017

Scottish 2017 budget

Scottish 2017 budget

On 14 December 2017, the Scottish Government introduced their new plans for the Scottish Budget outlining changes to our current income tax system, increases in the number of social houses built and pay rises for public sector workers. Increasingly Budget day in Holyrood resembles a Westminster-style affair, with recent devolved powers on taxation meaning all eyes are on any changes or increases to levels of tax.

This year’s changes are the first significant ones since the new powers came into force with two new income tax bands announced, and increases in higher rates leading to controversy about whether SNP are breaking their manifesto promise that they would not raise tax.  The Scottish budget will ensure that seven out of 10 income tax payers in Scotland pay less tax next year, including everyone earning less than £33,000 per year. And most Scots will pay less tax than if they lived in rest of the UK. This means that it will primarily be those paying the highest levels of tax that are affected by increases of 1p on the top two rates. However, even with all these caveats, the overall tax take will be higher.

Additionally, the Budget announced plans that next year the SNP will deliver a minimum three per cent pay rise for public servants earning less than £30,000, a two per cent rise for those earning more and a cash cap on increases for those earning more than £80,000. This idea has been widely welcomed after the current pay freeze. However, the Green Party, who's six votes the SNP require if they are to pass the Budget, have called for a further £150m to be invested in to local government to ensure that staff in councils also have an opportunity to be paid more.

Finally, the new budget also saw proposals of 30,000 new houses being built with two thirds of those being social houses; a promise to introduce 30 hours free childcare by the end of this parliament; and a change to make Scotland’s independent schools pay business rates, with the exception of those for children with additional needs.