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Scottish tax and spending plans to be published No changes to tax rates in Scottish budget
(about 8 hours later)
Efforts to tackle climate change and funding for health and education are to be key themes of the Scottish budget. There will be no changes to income tax rates in Scotland in the coming year, the government has announced.
Minister Kate Forbes will set out tax and spending plans for the coming year after the resignation of Finance Secretary Derek Mackay Public Finance Minister Kate Forbes set out the budget in the place of Derek Mackay, who resigned as finance secretary on Thursday morning.
The budget process has been pushed back by December's snap election and a delay to the UK government's own plans. She announced that tax rates will not increase, although the threshold where the upper rates kick in will be frozen.
Mr Mackay stepped down after a newspaper allegation about social media contact with a 16-year-old boy. And she committed extra funding to health, education and investment aimed at tackling the "climate emergency".
Speaking ahead of the budget statement, Mr Mackay had said he would set out a "transformational budget, investing in the environment and the economy". The SNP need votes from opposition parties to pass the budget, and Ms Forbes urged them not to be "partisan".
He also voiced confidence that he could win support for the budget, with the minority SNP administration requiring opposition votes to pass its plans through parliament. The build-up to the budget was disrupted when Mr Mackay was forced to quit the government over reports he had sent hundreds of social media messages to a 16-year-old boy.
Budget negotiations would normally take place over a period of months, but the constrained timetable this year means there are only four weeks between Thursday's speech and the final votes. Junior minister Ms Forbes - a first-term MSP who is aged just 29 - stepped in at the last minute to deliver the speech, and is set to take the lead in talks with opposition parties.
Mr Mackay had originally hoped to see the UK government's budget before drawing up his own, but Chancellor Sajid Javid has put his announcement back to 11 March. She said the package included "significant investment in our response to the global climate emergency, to strengthen our economy and improve our public services".
This is also the date by which Scottish councils legally must set their budgets, so the Scottish finance secretary has been forced to push ahead with his plans ahead of the UK process. Under the plans, Scotland's current tax rates will not increase, and the threshold at which people start paying the basic and intermediate rates will increase by the rate of inflation.
The UK government insists there is nothing to prevent Mr Mackay from setting his budget in advance of Mr Javid's. The thresholds for the higher and upper rates will be frozen, with Ms Forbes calling this the "fairest and most progressive income tax system in the UK".
The MSP said there was "heightened uncertainty and risk" around the budget due to this, saying he had to base his plans on commitments made by the Tories during the election campaign. Funding proposals in the budget include:
He said: "The uncertainty caused by both the delay to the UK budget and the UK's exit from the EU last week is unacceptable, and has forced the Scottish government to take the exceptional decision to publish our budget ahead of the UK government's. The budget had a particular focus on environmental issues, with Ms Forbes saying it would "step up the delivery of our ambition to tackle climate change".
"I would urge the Scottish Parliament to work constructively with us and support this budget to provide much needed clarity for local authorities and our vital public services." This includes £1.8bn of capital investment in projects to reduce emissions, and funding for active travel, electric vehicles, agriculture and peatland restoration.
'Time for investment' A budget bill will now be introduced at parliament, and is due to be voted on by MSPs in three weeks' time - which is how long Ms Forbes now has to secure a deal.
Scottish Conservative finance spokesman Murdo Fraser said "a great deal" of information was available to Mr Mackay, noting that the Welsh government set out its budget in December. Opposition parties praised Ms Forbes for stepping in to deliver the budget, but were critical of some of the content.
His party wants to see no further changes between the Scottish and UK tax regimes, extra funding for the police and drug rehabilitation services, and an uplift in council funding "at least in line with inflation". Murdo Fraser said the Conseratives could not support the budget because it "falls well short of where we need it to be".
Labour, meanwhile, is demanding free bus travel for young people, a "fair deal" for local authorities and education, and action to tackle the climate emergency. He said freezing the upper rate tax thresholds would widen the gap between what higher earners pay in Scotland and the rest of the UK, and said "not enough money is being handed to police".
Finance spokeswoman Rhoda Grant said the NHS, education, social care and public transport "are all in worse shape than they were when the SNP came to power", saying "it's time for investment". For Labour, Rhoda Grant said essential services were "worse off" under the SNP, and that the government was using "smoke and mirrors" to obscure this.
The Greens called for money to be cut from "projects which increase Scotland's emissions", and instead spent on "bold and radical investments" in public transport and insulating homes. She said the budget was a "disappointment", calling for a "step change" in local government funding and extra money to make Scottish education "world-leading" again.
Scottish Lib Dem leader Willie Rennie called for the Scottish government to drop its plans for an independence referendum "so we can all work together to achieve a budget that's sustainable for Scotland". Scottish Green co-leader Patrick Harvie said the budget was "timid" and was not an "emergency response" to climate change.
And Lib Dem leader Willie Rennie said councils "have only been given half of what they need", saying the government should focus on services rather than independence.