SNP faces fight to pass budget

Opposition parties have told Scotland’s Finance Minister, Derek Mackay, he will need to make more concessions before any of them will back his budget.

Because the SNP no longer holds an overall majority in the Scottish Parliament, it now requires support from elsewhere in the chamber to pass its budget.

Even support from the Scottish Greens' six MSPs or the Liberal Democrats five would pass the proposals.

However, all opposition parties warned they would not back it.

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"He's going to have to do a lot more listening,"said Scottish Green co-convener Patrick Harvie, claiming Mackay was not being progressive enough on income tax.  

Liberal Democrat leader Willie Rennie said Mackay had "miles to travel" to convince the Liberal Democrats to back the budget, pointing out cuts for Highland and Island Enterprise and funding for universities.

Mackay’s budget made concessions to Labour, including a U-turn on plans to use funds raised by local taxation centrally and a commitment to subsidise rail fares.

Initially the Scottish Government planned to raid local government budgets to give directly to schools to tackle attainment, but Mackay said the fund would be provided centrally via a new ‘pupil equity scheme’, allowing local authorities to keep additional funds raised by a council tax rise.

“Today’s budget delivers a strong settlement for local government,” he said. “The measures I have announced today mean that the total support from the Scottish Government and through local taxation provides an increase in spending power on local government services, not of £59.6 million, but of £240.6 million or 2.3 per cent.”

But Scottish Labour leader, Kezia Dugdale, said the Finance Secretary had cut council budgets by £327m “in the small print”.

"However the Finance Secretary tries to spin it, today’s budget means a real terms cut of £327 million from the SNP government to local services,” she said.

"And they’re making up the difference by holding councils to ransom – forcing them to use their tax powers, while they refuse to use theirs.”

On income tax, Mackay froze the basic rate and maintained the higher rate at £43,430, meaning Scotland will not apply the tax cut announced by the UK government.

Business rate poundage will be reduced by 3.7 per cent to 46.6p, while the Small Business Bonus will be extended.

“While I sympathise with those who have argued for an increase to the additional rate, I have had to balance that with the risk to our economy and am maintaining the current rate,” said Mackay.

Dugdale said: "This budget passes on Tory cuts to the people of Scotland. It makes Derek Mackay no better than a Tory chancellor.”

Murdo Fraser, Scottish Conservatives finance spokesman, said the SNP tax plans made Scotland “the most expensive part of the UK to work and live in” and his party could not support the budget.

"The finance secretary received an extra £140 million from the Treasury compared to the current year, plus an extra £800m for capital spending,” he said.

“He also has huge new powers over tax to deliver real growth in Scotland. However, Mr Mackay has chosen to hike taxes on families and businesses, risking a choking of economic recovery.

“That will only deprive Scottish public services of vital tax revenue.”

Harvie said: "Greens have been clear that reforming Income Tax to tackle poverty and protect public services should be the priority in this budget."

The most likely to win concessions may be the Liberal Democrats.

Leader Rennie said: “Liberal Democrats will be pragmatic and reasonable in negotiations but it is the Finance Secretary who needs to be prepared to make drastic changes that will deliver the investment our education needs and subsequently the boost our economy requires.”