Scotland politics

Scottish budget 2017: Greens put £150m price on support

Scottish Greens Image copyright Getty Images
Image caption The Scottish Greens backed last year's budget after winning concessions from Mr Mackay during two months of talks

The Greens have said they cannot support the Scottish budget as it stands - but could do so if an extra £150m is given to councils.

Finance Secretary Derek Mackay outlined his draft budget on Thursday, including a new five-band income tax system.

The minority SNP government will need the support of at least one other party if it is to pass the proposals.

The Greens are seen as being the government's most likely partner, having backed last year's budget.

But their support was only secured after two-months of negotiations saw the government make concessions totalling £220m of extra spending - including £160m for local authorities.

Speaking to the BBC's Good Morning Scotland programme, Scottish Green local government spokesman Andy Wightman suggested that a similar funding package for local authorities would be needed this time around.

He said his party would need to see a "real terms increase" in council funding before it could support the budget, which he said he had calculated at an additional £150m.

That is similar to the £153m that council body Cosla says has been cut from council budgets in real terms, although Mr Wightman said there were "various figures".

The MSP said councils had for years been treated as "second cousins" in Scotland's political system, and had been forced to "accept crumbs from the table from the Scottish government".

He added: "We want a real terms increase (in council budgets) and that would involve somewhere in the region of £150m as I calculate it this morning".

Image caption Mr Wightman said there were several areas where the Scottish government could find cash to boost council budgets

Mr Wightman said the Greens would be discussing with the government where it could find the additional money that would be needed.

This would include talks over the new income tax rates and bands that Mr Mackay set out on Thursday, and about the 3% cap on council tax rises.

But he said the negotiations could look at the "very flawed" small business bonus scheme, which he said led to "lots of people getting tax breaks they don't deserve".

Mr Wightman has been campaigning for the owners of short-term lets in Edinburgh to lose their business rate exemptions under the scheme.

But he insisted the Scottish Greens "don't want to tax businesses more - we want to tax them more fairly".

What has Derek Mackay had to say?

Image copyright Getty Images
Image caption Mr Mackay says Scotland is now the fairest taxed part of the UK, with lower earners paying less income tax than elsewhere but higher earners paying more

In his budget statement, Mr Mackay told Holyrood that the local government resource budget would be protected in cash terms with the capital budget increased in real terms.

He said this would result in a total increase in local authority core funding of £94m.

But Cosla has said that: "The reality is that this is not a flat cash revenue settlement for local government. It is a cut of £153m for essential local government services."

'Flat cash'

Mr Mackay told Good Morning Scotland that councils had been anticipating a £300m reduction in their budgets, but that he had managed to offer a better settlement.

He added: "It is essentially flat cash in resource with an increase in capital. If local authorities choose to use their powers to raise council tax by up to 3% they will have real-terms growth as well.

"And again this is in the context of the UK right wing Tory government reducing the resource block grant to Scotland in real terms."

Income Comparison to 2017-18 Impact relative to rUK
£15,000 £90 £20
£20,000 £90 £20
£26,000 £70 £0
£33,000 £0 -£70
£35,000 -£20 -£90
£40,000 -£70 -£140
£50,000 £85 -£655
£60,000 -£15 -£755
£75,000 -£165 -£905
£100,000 -£415 -£1,155
£120,000 -£715 -£1,455
£150,000 -£1,174 -£1,774
Source: ICAS

Mr Mackay also denied breaking an SNP manifesto pledge to "freeze the basic rate of income tax to help low and middle income earners".

His budget outlined plans to introduce a new tax band of 21p for those earning between £24,001 and £44,273 - who are currently taxed at the 20p rate.

The higher rate of tax will be increased from 40p to 41p and the top rate from 45p to 46p.

But a starter rate of 19p in the pound will also be introduced - which Mr Mackay said means that no-one earning less than £33,000 in Scotland will pay more tax than they do now.

Mr Mackay said he had "changed the income tax structure to be fairer, to be more progressive and to be designed in a fashion that protects lower income earners".

And he said he found it "very difficult to see how a progressive opposition party could vote this budget down when it invests so much in fairness, in the economy, in education, the environment as well and of course the precious National Health Service".

What about the other parties?

Image copyright PA

Speaking during Thursday's debate on the draft budget in the Scottish Parliament, Scottish Conservative finance spokesman Murdo Fraser said Mr Mackay's income tax plans would "hit nearly half of Scottish workers in the pocket".

He added: "That is a tax on aspiration, a punishment for daring to work hard, and a direct breach of the promise made by the SNP in its election manifesto.

"Today, every single SNP member of the Scottish government has broken that promise to the Scottish people."

Scottish Labour leader Richard Leonard said the government's tax and spending plans had "tinkered round the edges" instead of implementing radical change.

He said: "It should be based on the principle of from each according to their means, to each according to their needs. A penny on the top rate just does not do it."

And Scottish Liberal Democrat leader Willie Rennie said the budget was a "missed opportunity" and did not do enough to meet the long-term needs in the economy despite the "modest" tax increase.