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SNP and Greens strike deal ahead of Scots budget vote SNP and Greens strike deal ahead of Scots budget vote
(about 3 hours later)
The SNP and Greens have struck a deal ahead of the first vote on the Scottish budget, it has been confirmed. The SNP and Greens have struck a deal ahead of the first vote on the Scottish budget.
With the SNP a minority government, Finance Secretary Derek Mackay has held talks with opposition groups in a bid to win backing for his plans.With the SNP a minority government, Finance Secretary Derek Mackay has held talks with opposition groups in a bid to win backing for his plans.
It is understood the Scottish Greens have done a deal based on changes to the threshold for the 40p rate of tax. A deal was struck with the Greens totalling £220m of extra spending, including £160m for local authorities.
The agreement is also understood to increase the level of spending on local government services by about £160m. The deal will also see the threshold for the 40p rate of income tax frozen at £43,000.
Mr Mackay had said he was "confident" of finding "common ground" to get his proposals passed. After the deal was confirmed, he said it was "good news for the economy, taxpayers, communities and public services". The move means higher-rate tax payers elsewhere in the UK will pay up to £400 less tax every year than people earning the same wage in Scotland.
The full details will be announced at Holyrood on Thursday afternoon. Green co-convener Patrick Harvie told MSPs that his party had secured "the biggest budget compromise in the history of devolution in Scotland".
The budget was a strong theme at First Minister's Questions. Speaking at First Minister's Questions, Nicola Sturgeon said her priority was not to cut taxes for the top 10% earning Scottish taxpayers.
Nicola Sturgeon said her priority was not to cut taxes for the top 10% earning Scottish taxpayers. However, Scottish Conservative leader Ruth Davidson accused Ms Sturgeon of setting out to make Scotland the highest taxed part of the UK. But Scottish Conservative leader Ruth Davidson accused Ms Sturgeon of setting out to make Scotland the highest taxed part of the UK.
Members will debate the draft budget before voting on whether they agree to the general principles set out in the bill. Members are currently debating the draft budget before voting on whether they agree to the general principles set out in the bill.
Previous votes on the budget proposals and on taxation had failed to find any consensus between the parties.Previous votes on the budget proposals and on taxation had failed to find any consensus between the parties.
A deal with the Greens appeared likely after co-convener Patrick Harvie said he was "not willing" to see emergency cuts to services in the event of the budget not passing. However Mr Mackay confirmed on Thursday morning that a deal had been struck with the Greens, centred around £160m of extra funding for the core council grant.
Mr Mackay had been holding detailed negotiations with the Greens and Lib Dems, having all but ruled out a deal with the Conservatives or Labour. It will also see £25m extra for the police reform budget and £35m for Scottish Enterprise, and a freezing of the higher 40p rate of tax at £43,000. The threshold for this rate in the rest of the UK is to rise to £45,000.
He said he was confident that the budget, which is of "huge importance to Scotland", would be agreed. Mr Mackay said this would only affect 10% of the population, who would end up paying more tax than people earning the same amount in the rest of the UK.
Mr Mackay said: "I do not expect that all parties will agree with every aspect of the draft budget but there are large areas that should have unanimous support. He said the "income forgone amounts to £7.70 a week - less than the cost of a prescription in England".
"This is a parliament of minorities and we must all recognise that compromise is the only way any party will be able to make good on the promises it made to the people of Scotland. Mr Mackay said: "I entered into discussions with all parties in good faith in order to build the consensus we need to deliver a budget for Scotland. I particularly welcome the constructive approach taken by the Scottish Greens.
"I am confident that those who share that view will find the common ground needed to come to agreement, support this Budget and invest in our crucial public services." "My latest assessment of the financial position this year and our projections for 2017/18 has enabled me to identify available resources to support additional spending.
"I therefore propose, with the support of the Scottish Green party for all stages of this budget to allocate additional resources, of £160m, to local government to be spent at the discretion of individual authorities.
"Once again this government has listened and acted."
Challenged about the deal by Labour's Kezia Dugdale, Mr Harvie said he believed the Scottish government had "given far less ground than I think they could on taxation".
But he added: "The reality though is £160m additional [funding] going into the un-ringfenced local government allocation.
"The fact that the Scottish government found this money in other ways [than taxation] is not what I would have wished.
"This is not a budget I would have written, but nobody who cares about protecting public services in Scotland can look at that extra £160m investment and say, no thanks, I'd rather just keep ranting and make no difference in people's lives."
Mr Harvie was attacked by other opposition leaders from across the chamber.
Ms Dugdale said: "To accept anything less than bold use of this parliament's tax powers is an astonishing and deeply disappointing revelation from the Greens.
"And let's not kid ourselves. This isn't the Greens' responsibility to parliament shining through, it's the responsibility they have put on themselves to do nothing which might jeopardise the prospect of another divisive independence referendum.
"This is the truth - nationalism first, austerity second, and somewhere down the list of credentials you might just find the environment."
Ms Dugdale said this be remembered as the day the Greens "abandoned any claim to be a party of the progressive left".
'Lentil-munching watermelons'
Tory MSP Murdo Fraser meanwhile accused the SNP front bench of "swallowing hook, line and sinker the Green Party's hard-left, high-tax agenda".
He said: "They have let Patrick Harvie pull all the strings and it will be hard working Scottish families that suffer as a consequence.
"The finance secretary had a choice going into today's debate. He could have come with us, drop his plans to make Scotland the highest taxed part of the United Kingdom and work together with us to deliver an ambitious Budget focused on growing the economy.
"Or he could turn sharp left and embrace the anti-growth, anti-business agenda of the Green Party. What a pity, what a tragedy for Scotland that he chose to throw in his lot with the lentil-munching, sandal-wearing watermelons on that side of the chamber."
The Lib Dems had asked for up to £400m in spending commitments for mental health, education, policing and transport, but later indicated that "the distance is too great" between the parties.The Lib Dems had asked for up to £400m in spending commitments for mental health, education, policing and transport, but later indicated that "the distance is too great" between the parties.
Leader Willie Rennie said: "Despite making considerable effort to engage in constructive talks with the Scottish government we are firm that if we do not see the changes we believe the country needs then we will vote against the budget. The party's leader, Willie Rennie, said the Greens had abandoned earlier pledges about a "greener, bolder" Holyrood and were now backing a "timorous and grey deal".
"Brexit, slipping educational performance and the weakness in the economy shows the need for more action not less. That's why the government needs to change." He said the SNP had "turned down an opportunity" to do a deal with the Lib Dems, which he said would have seen millions invested in education and mental health.
The Greens targeted changes to tax as well as more spending for public services. He said: "All of that has been turned down today in pursuit of an agenda that was contrary to what they promised that they would deliver.
Co-convener Patrick Harvie said his party was "making a strong case" to use Holyrood's tax powers to protect public spending. "So I think the SNP have missed a big opportunity. I think they are hollow with their promises and we will cast a harsher eye over them in future years when they promise to make a big change to Scottish society."
He too raised the budget at First Minister's Questions.
Mr Harvie said: "Isn't it clear that even if we do see this afternoon a Budget concession restoring significant funding to protect local services in every part of Scotland that that was not only essential but it should also mark the beginning of a new approach, one in which we invest not only resources but local control back into the hands of our communities."
He went on to urge the first minister to ensure that fiscal policy setting in the Scottish Parliament must be a "living debate", able to respond to events such as the vote for Brexit.
Meanwhile, a group of organisations including the Children's Commissioner and the Church of Scotland have come together to call for proposals to top-up child benefit payments by £5 to be included in the budget bill.
The group has circulated a briefing around all MSPs, saying the move could reduce child poverty by 14% and lift 30,000 children out of poverty.
Scottish councils have also lobbied all MSPs to improve the settlement for local government.
'Student politics'
The Scottish Conservatives had said they would be willing to support the budget - but only if the SNP were willing to scrap most of their tax proposals.
Finance spokesman Murdo Fraser said Mr Mackay should not "side with other opposition parties in hiking taxes for workers and businesses". saying he should instead "prioritise growth ahead of left-wing student politics".
After the deal was confirmed, he called it a "lurch to the left", with the SNP choosing to "embrace the anti-business, anti-growth agenda of the Greens".
Scottish Labour has tabled an amendment for the debate calling for increases to income tax, and a new 50p rate for earnings above £150,000.
Leader Kezia Dugdale said her party would not back any budget that cut funding from local services, calling her amendment a "positive alternative".
If the budget passes stage one in the chamber, with the general principles of the bill approved, then it will be debated at committee level the following week.If the budget passes stage one in the chamber, with the general principles of the bill approved, then it will be debated at committee level the following week.
Stage three would see separate votes on tax and spending proposals in the chamber in the week beginning 20 February. Mr Mackay confirmed a deal had been agreed for "all stages".Stage three would see separate votes on tax and spending proposals in the chamber in the week beginning 20 February. Mr Mackay confirmed a deal had been agreed for "all stages".