On the Scottish Budget, Tax, Arts and Housing
The Scottish Budget was a mixed bag of bewildering figures as the DFM Shona Robison tried to juggle spending commitments, financial aspirations and legitimate claims on the public purse with a large black hole. Some lauded it. The Scottish Greens pointed out that among today’s key announcements were:
- £4.7 billion of total investment in climate and nature
- A £1 billion increase to social security spending, now totalling £6.3 billion
- Almost £360 million for warmer, greener homes
- Extension of the trial removing peak fares from Scotrail
- Scrapping school meal debt and the further expansion of free school meals
- Record funding of £220 million for walking, wheeling and cycling
The much heralded Income Tax rise (the creation of a new income tax rate at £75,000-£125,000) brought the inevitable shrieks of despair and denouncement. Humza Yousaf pointed out that it was supported by the: STUC, The Poverty Alliance, The Child Poverty Action Group and Oxfam. Others such as Merryn of ‘Nicola Sturgeon Stole My Skiiing Holiday‘ fame were less positive:
And… Scotland is not open for business. https://t.co/XXTwq23i2E
— Merryn Somerset Webb (@MerrynSW) December 19, 2023
The meltdown was continued across all of the Unionist commentariat. Andrew Neil claimed that people earning £75k or more were not in fact ‘rich’ at all. Others predicted a ‘brain drain’ Rishi Sunak asked for an explanation.
The Daily Record’s Political Editor Paul Hutcheon said: “Shona Robison’s Budget was the most disastrous in the history of devolution.” Others were less positive. Euan McColm said the “SNP had run out of ideas“.
The fact is that the rise in Income Tax will raise a significant if not game-changing amount of money, but it is far more useful as a point of principle and a marker than anything else. It is progressive taxation, if the Council Tax freeze (also announced) is not.
Scotland now has six tax bands
STARTER RATE (19%) £12,571 – £14,876
BASIC RATE (20%) £14,877 – £26,561
INTERMEDIATE RATE (21%) £26,562 – £43,662
HIGHER RATE (42%) £43,663 – £75,000
ADVANCED RATE (45%) £75,001 – £125,140
TOP RATE (48%) Above £125,140
— BBC Scotland News (@BBCScotlandNews) December 19, 2023
The logic around the denunciation of the tax rise are difficult to follow but they go something like this. First anyone earning £75k or more isn’t REALLY rich, and if they are they’ll find ways to avoid paying tax because they’re so clever. Second many of them aren’t from here so they’ll just return to England (or wherever). The code here is that Scots aren’t really successful or high-earners. The third is that its essential to attract ‘high earners’ (who also aren’t really high earners remember?). Also this won’t work because hardly anyone earns that much (but also its essential to attract more people at this rate …). Follow this if you can.
If the scrapping of the school meal debt and its further expansion are to be welcomed, other announcements are not to be. Slashing the house-building budget at a time of an unprecedented housing crisis is an unforgivable act of folly.
… and the rise in the Scottish Child Payment to £26.70 (up from £25 per week) is also to be welcomed but is also nowhere near what was promised by Humza previously (he promised during the leadership election to raise the Scottish Child Payment to £30 a week). And while its true that poverty campaigners and think-tanks have called the child payments scheme a ‘game changer’ they have also said it needs to be nearer £40 per week to do its job.
And finally the announcement of the funding for the arts Angus Robertson (Secretary for the Constitution, External Affairs & Culture) claimed: “Positive news for the Scottish culture and arts sector, increasing funding by £15.8m and aiming for a further £25m on the way to raising culture spending by £100m”.
But this is very confusing. Earlier this year, as the arts journalist Brian Ferguson explained: “At least £6.6m of this isn’t increased funding at all, it’s the restoration of Creative Scotland’s 10% cut, which was revealed a year ago, dropped in the spring, reinstated in September & now presented as “increased investment.”
We are now faced with a situation where up to a third of Creative Scotland’s Regularly Funded Organisations are at serious risk of insolvency in the short term, and over half are financially weak (requiring redundancies or other cost savings).
Not only does this make no sense to the vibrant but struggling Scottish arts scene, which are a huge boost to the economy, it makes no sense within the SNP’s own view of the world. The ‘soft power’ of a connected arts and cultural sector that connects literature, playwriting, screenwriting with theatre tv and film industries is universally acknowledged – and can be seen across the water in Ireland where investment brings huge awards.
The budget is a microcosm of the dilemma of devolution, and the failures and successes of the present government. It speaks to their good instincts and limitations and the predicament we inhabit. For the positives they have outlined they should be applauded and for the narrowness and frankly reactionary policy decisions they should be castigated. We don’t (nobody does) have all of the details as yet, when we do we’ll have a follow up on all of this.