Yesterday, Parliament passed the Scottish Government’s 2017-18 Budget. This Budget is historic as it represents the first time ever that the Scottish Parliament has set rates and bands of income tax to represent the priorities of the people of Scotland – freezing tax rates for next year and keeping the higher rate threshold unchanged. It will ensure that 99 per cent of taxpayers will not be paying any more income tax if they are earning the same wage.
But even more importantly, it secures investment in public services on a massive scale, meaning increased NHS spending, protection for free prescriptions, free personal care for the elderly, mitigation of the bedroom tax and free higher education.
Households in Edinburgh and the East will continue to benefit from concessionary travel, free prescriptions and public service workers from a modest pay increase. The NHS in Lothian will see funding of £1.34 billion in the next financial year alone and eight new schools in the East of our country will be operational or in construction in 2017-18 benefitting from £97 million of Scottish Government funding.
We need to do everything we possibly can to sustain and grow the local economy, which also means investing in our infrastructure. We are also investing £60 million in the workforce and infrastructure necessary to begin the expansion of free childcare to 1140 hours – the same number of hours as primary school – by the end of this Parliament.
The Royal Hospital for Sick Children/Department of Clinical Neurosciences is currently under construction and scheduled to open April 2018 and the NHS Lothian Partnership Centre Bundle is estimated to be operational in June 2017 and the huge investment in the Queensferry Crossing is already bringing massive benefit to the local area and beyond.
All of this extra capital investment helps the construction sector, which in turn leads to wider economic growth – every additional £100m of capital spending being estimated to support around 800 jobs across the economy.
We are doing everything we can to support growth and our public services – something that is even more important this year in the face of the uncertainty caused by the Brexit vote. We are supporting jobs and growth with a cut of 3.7 per cent in the Business Rates Poundage down to 46.6p and an expansion in the Small Business Bonus to lift 18,000 businesses in Edinburgh and the East out of rates altogether, by increasing the payment threshold to a rateable value of £15,000.
Our tax policy must be fair and progressive and make sure the biggest burden doesn’t fall on people with the lowest incomes.
Of course, some of our key public services are delivered by local government and we are delivering a fair and strong settlement for local authorities which is why a further £160m has been added to the original local government finance settlement. That’s why Edinburgh City Council will get an extra £12m over and above their fair settlement of £773m to deliver for the people of the East of Scotland.
This is a Budget for Scotland’s future, supporting our economic growth and delivering essential public services.
Derek Mackay is Scottish Government Finance Secretary