Scottish budget 2022-23: At a glance
Finance Secretary Kate Forbes has detailed her tax and spending proposals against the continuing backdrop of the Covid-19 pandemic, the SNP government's partnership agreement with the Greens, and the election pledges set out earlier this year. Here are the key points from her speech to MSPs.
- Income tax rates will remain unchanged next year but the thresholds at which it is paid will increase for lower earners.
- The Starter and Basic rate income thresholds will increase in line with CPI inflation (3.1%).
- The Higher Rate threshold will be frozen in 2022-23. It remains at 41% for earnings between £43,662 and£150,000.
- The Top Rate tax (46%) threshold will also be frozen at £150,000
- The land and buildings transaction tax rates and bands will be maintained at their current level
- Scottish landfill tax - standard and lower rates will be increased
Public sector pay
- Minimum wage rises to £10.50 an hour for social care staff and all people covered by the Public Sector pay policy.
- The pay policy for next year focuses on those on low incomes, guaranteeing an inflationary uplift of at least £775 to those earning up to £25,000, £700 to those earning between £25,000 and £40,000, and £500 to those earning above £40,000.
Council tax freeze ends
- Last year's freeze on council tax rises will not continue
- For 2022-23, councils will have complete flexibility to set the rate they want for the first time since the SNP came to power in 2007.
NHS and social care
- In total, the Budget provides funding of £18bn for Health and Social Care, including £12.9bn for health boards.
- The overall package provides £1.2bn for mental health. There is a commitment that 10% of all front-line NHS spend goes to mental health by the end of the parliament in 2026.
Business and economy
- Over the past two years the retail, hospitality, leisure and aviation sectors have had 100% rates relief to deal with effects of the Covid pandemic
- This ended in July for businesses in England but will continue until April next year in Scotland.
- There will be 50% rates relief for the first three months of 2022-23, capped at £27,500 per ratepayer, to prevent a "cliff edge".
- The Non-Domestic Rates poundage will be 49.8p, a below inflation rise.
Tackling child poverty
- More than £4bn will paid out in Scottish social security and welfare payments, including £1.95bn to start delivery of the Adult Disability Payment in 2022-23
- It also includes £197m to double the Scottish Child Payment to £20 from April 2022 for families in poverty with children under six - and extend it to under 16s by the end of 2022.
A Green budget?
- The Budget sets cash for the decarbonisation of homes and buildings, transport and industry.
- It includes: the first £20 million of a 10-year £500 million Just Transition Fund for the North East and Moray
- £336 million for energy efficiency, and low carbon and renewable heat
- £150m for infrastructure to make walking, wheeling and cycling safer;
- £1.4 billion to maintain, improve and decarbonise Scotland's rail network
- Supply chain bottlenecks, labour market shortages, inflationary pressures and rising energy prices are all placing extra pressure on businesses and households trying to recover from the impact of the pandemic
- The Scottish Fiscal Commission forecasts a level of long-term economic damage to the Scottish economy from Covid-19 is about 2%, similar to the OBR's forecast for the UK.
- This means the long-term impact of Brexit on the economy will be worse than that caused by Covid-19.
- The Fiscal Commission forecasts the economy will recover to pre-pandemic levels by April-June 2022, almost two years earlier than forecast at the previous Scottish Budget in January.