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| SNP deal with Green party saves Scotland's budget | SNP deal with Green party saves Scotland's budget |
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| The Scottish government has abandoned a planned tax cut for higher earners after striking a last-ditch deal with the Greens to save its budget worth £160m in extra spending. | The Scottish government has abandoned a planned tax cut for higher earners after striking a last-ditch deal with the Greens to save its budget worth £160m in extra spending. |
| Derek Mackay, the Scottish finance secretary, said he would freeze the top 40% rate of income tax for about 370,000 wealthier taxpayers at its current threshold of £43,000 to win crucial support from the Scottish Greens’ six MSPs. | |
| Abandoning his original plan to increase the 40% threshold by inflation to £43,387 would raise an extra £29m, Mackay said. Combined with extra money freed up from underspends, and lower borrowing and non-domestic rates costs, that would allow him to increase funding for councils by £160m overall. | Abandoning his original plan to increase the 40% threshold by inflation to £43,387 would raise an extra £29m, Mackay said. Combined with extra money freed up from underspends, and lower borrowing and non-domestic rates costs, that would allow him to increase funding for councils by £160m overall. |
| The package provoked furious exchanges between the Scottish Green party leader, Patrick Harvie, and Kezia Dugdale, Scottish Labour’s leader, after she accused him of acting as “a fig leaf for nationalists” in pushing through cuts in spending. | The package provoked furious exchanges between the Scottish Green party leader, Patrick Harvie, and Kezia Dugdale, Scottish Labour’s leader, after she accused him of acting as “a fig leaf for nationalists” in pushing through cuts in spending. |
| Backed by Willie Rennie, the Scottish Lib Dem leader, Dugdale said the tax freeze fell far short of the Greens’ manifesto promise to fight for higher taxes on the wealthiest, including a top rate of 60%. There were no extra green policies contained in the new deal, she said. | Backed by Willie Rennie, the Scottish Lib Dem leader, Dugdale said the tax freeze fell far short of the Greens’ manifesto promise to fight for higher taxes on the wealthiest, including a top rate of 60%. There were no extra green policies contained in the new deal, she said. |
| While Labour had stuck to its principles by insisting on higher tax rates to fund services, Thursday “will be remembered as the day that the Greens abandoned any claim to be part of the progressive left”, Dugdale said. | While Labour had stuck to its principles by insisting on higher tax rates to fund services, Thursday “will be remembered as the day that the Greens abandoned any claim to be part of the progressive left”, Dugdale said. |
| In a clash which rehearses their battle for votes in this May’s local council elections, Harvie hit back by accusing Dugdale of “ranting” from the sidelines. She had failed to win any concessions, while his deal would increase funding for hard-pressed frontline council services including in Dugdale’s home city of Edinburgh. | In a clash which rehearses their battle for votes in this May’s local council elections, Harvie hit back by accusing Dugdale of “ranting” from the sidelines. She had failed to win any concessions, while his deal would increase funding for hard-pressed frontline council services including in Dugdale’s home city of Edinburgh. |
| “Today the Greens have achieved the biggest budget compromise in the history of devolution in Scotland,” he said. “Is Labour’s posturing protecting a single council service? Have they prevented a single council cut?” | “Today the Greens have achieved the biggest budget compromise in the history of devolution in Scotland,” he said. “Is Labour’s posturing protecting a single council service? Have they prevented a single council cut?” |
| Mackay said the package would help increase NHS spending above inflation; protect free prescriptions, free university tuition and free personal care for the elderly; and achieve the doubling of free childcare. In addition, he had found another £25m for policing and £35m more for the investment agency Scottish Enterprise. | Mackay said the package would help increase NHS spending above inflation; protect free prescriptions, free university tuition and free personal care for the elderly; and achieve the doubling of free childcare. In addition, he had found another £25m for policing and £35m more for the investment agency Scottish Enterprise. |
| “In other words, [this is] the best deal for taxpayers in the whole of the UK,” he said. Dean Lockhart, the Scottish Tories’ economy spokesman, retorted that Holyrood’s higher spending was funded heavily by UK taxpayers, since Scottish public spending was £1,600 per head higher than the taxes raised in Scotland. | “In other words, [this is] the best deal for taxpayers in the whole of the UK,” he said. Dean Lockhart, the Scottish Tories’ economy spokesman, retorted that Holyrood’s higher spending was funded heavily by UK taxpayers, since Scottish public spending was £1,600 per head higher than the taxes raised in Scotland. |
| The deal follows a very rare parliamentary defeat over the Scottish government’s £31bn budget last month after all four opposition parties voted against the draft budget in a non-binding motion tabled by Scottish Labour. | The deal follows a very rare parliamentary defeat over the Scottish government’s £31bn budget last month after all four opposition parties voted against the draft budget in a non-binding motion tabled by Scottish Labour. |
| With Nicola Sturgeon only commanding 63 votes in Holyrood, two short of an overall majority, she has to win support from at least one other party to pass the budget or face calling a snap election. The Scottish Lib Dems, with five MSPs, has refused to compromise. | With Nicola Sturgeon only commanding 63 votes in Holyrood, two short of an overall majority, she has to win support from at least one other party to pass the budget or face calling a snap election. The Scottish Lib Dems, with five MSPs, has refused to compromise. |
| While the deal falls far short of the Scottish Green party’s demands for a new additional rate of 60%, this compromise has clear political advantages for both the SNP and the Greens, and leaves Labour outmanoeuvred. | While the deal falls far short of the Scottish Green party’s demands for a new additional rate of 60%, this compromise has clear political advantages for both the SNP and the Greens, and leaves Labour outmanoeuvred. |
| The agreement will strengthen the bonds between the two pro-independence parties since Sturgeon also needs Green votes to guarantee she can pass new legislation calling for a second independence referendum, or controversial motions refusing to endorse the passing of article 50. | The agreement will strengthen the bonds between the two pro-independence parties since Sturgeon also needs Green votes to guarantee she can pass new legislation calling for a second independence referendum, or controversial motions refusing to endorse the passing of article 50. |
| Meanwhile, the Scottish Greens need the votes of SNP supporters in May’s local council elections, which are fought on a proportional system in multi-member wards. A battle over Sturgeon’s budgets would have alienated potential voters. | Meanwhile, the Scottish Greens need the votes of SNP supporters in May’s local council elections, which are fought on a proportional system in multi-member wards. A battle over Sturgeon’s budgets would have alienated potential voters. |
| Until the new deal, Labour, the Greens and the Liberal Democrats had been united in their demands that Sturgeon, the first minister, use new powers to set entirely separate income tax rates and bands for Scotland to introduce a top rate of 50p or 60p. | Until the new deal, Labour, the Greens and the Liberal Democrats had been united in their demands that Sturgeon, the first minister, use new powers to set entirely separate income tax rates and bands for Scotland to introduce a top rate of 50p or 60p. |
| The 40% band for income tax payers in the rest of the UK will be raised to £45,000 in April, which means higher rate tax payers in Scotland will pay at least £400 more each year than those in the rest of the UK. | The 40% band for income tax payers in the rest of the UK will be raised to £45,000 in April, which means higher rate tax payers in Scotland will pay at least £400 more each year than those in the rest of the UK. |
| About 374,000 Scots pay the 40% rate in the current financial year but Scottish officials admit more higher earners will be caught by the new tax threshold as their salaries rise with inflation. The new, lower Scottish threshold would cost those taxpayers £86 each more a year. | About 374,000 Scots pay the 40% rate in the current financial year but Scottish officials admit more higher earners will be caught by the new tax threshold as their salaries rise with inflation. The new, lower Scottish threshold would cost those taxpayers £86 each more a year. |