Controversial proposals to raise the Scottish rate of income tax have been rejected by MSPs amid claims that the policy would “punish” the nation’s lowest paid workers.
Dismissing calls from Labour and the Liberal Democrats to increase income tax in Scotland to 1p above the rate in the rest of the UK, Deputy First Minister John Swinney said any rise would “hit those taxpayers least able to pay”.
But during heated exchanges at Holyrood, Labour accused the SNP Government of creating “austerity on stilts” by passing Westminster cuts onto councils rather than taking action – adding that the “big losers” of the Budget would be schools and local public services.
Labour said Scottish councils were facing cuts of £350 million which could only be stopped by using Holyrood’s new powers to increase tax. But the party’s amendment to the Budget calling for the Scottish rate of income tax to be increased to 11p was rejected by MSPs.
Describing the decision as “bitterly disappointing”, Labour’s public services spokesperson Jackie Baillie said: “Nicola Sturgeon promised that more powers meant we could be different from the Tories. Today she voted not to use the powers alongside the Tories. It is our children’s schools that will pay the price in cuts the SNP Government don’t need to make.”
UK news in pictures
UK news in pictures
1/17 22 June 2017
Cosplay fans (L-R) George Massingham, Abbey Forbes and Karolina Goralik travel by tube dressed in Harry Potter themed costumes, after a visit to one the literary franchise's movie filming locations at Leadenhall Market in London, Britain
2/17 22 June 2017
Racegoers cheer on their horse on Ladies Day at the Royal Ascot horse racing meet, in Ascot, west of London
3/17 21 June 2017
A reveller walks among the tipi tents at the Glastonbury Festival of Music and Performing Arts on Worthy Farm near the village of Pilton in Somerset, South West England
4/17 20 June 2017
A police officer lays some flowers passed over by a member of the public, close to Finsbury Park Mosque in north London, after one man died and eight people were taken to hospital and a person arrested after a rental van struck pedestrian
The Borough Market bell is seen in Borough Market in central London following its re-opening after the June 3 terror attack
Two women embrace in Borough Market, which officially re-opens today following the recent attack, in central London
Mayor of London Sadiq Khan attends the re-opening of Borough market in central London following the June 3 terror attack
People walk through Borough Market in central London following its re-opening after the June 3 terror attack
News Corp CEO Rupert Murdoch, with one of his daughters, visit Borough Market, which officially re-opened today following the recent attack
A woman reacts in front of a wall of messages in Borough Market, which officially re-opened today following the recent attack, in central London
Vivenne Westwood walks the runway at the Vivenne Westwood show during the London Fashion Week Men's June 2017 collections
Millwall fan and London Bridge hero Roy Larner on 'Good Morning Britain'
Richard Arnold, Roy Larner, Piers Morgan and Susanna Reid on 'Good Morning Britain'
14/17 11 June 2017
England players celebrate after defeating Venezuela 1-0 to win the final of the FIFA U-20 World Cup Korea 2017 at Suwon World Cup Stadium in Suwon, South Korea
15/17 11 June 2017
England players celebrate with the trophy after the final match of the FIFA U-20 World Cup 2017 between Venezuela and England at Suwon World Cup Stadium in Suwon, South Korea
16/17 11 June 2017
Great Britain's Alistair Brownlee celebrates winning the Elite Men Columbia Threadneedle World Triathlon Leeds
Danny Lawson/PA Wire
17/17 11 June 2017
Two men drink beer outside the Southwark Tavern which reopened for business today next to an entrance to Borough Market which remains closed in London
Labour said its proposed tax rise would raise almost £500m and would be balanced by a £100 rebate for low earners, but Mr Swinney dismissed it as a “back of the fag packet” policy. “I want to say to the teachers and the public service workers who have had to endure pay constraints because of the austerity programme of the UK government that I value the sacrifice they have made, and the last thing I am going to do is put up their taxes,” he added.
Scotland’s 32 local authorities have been given until next week to sign up to Mr Swinney’s financial package, which includes a continuation of the council tax freeze and will result in a 2 per cent fall in their overall income. Council leaders have described the settlement as “totally unacceptable” and members of the Unite and GMB Scotland unions staged a protest against the cuts outside the Scottish Parliament.
However, Mr Swinney said it was “frankly over the top” to suggest that the reduction in councils’ budgets would severely impact local services, describing his proposal as “very credible”. Ms Sturgeon, the First Minister, has also called on councils to “do the right thing” and accept the deal before the deadline.Reuse content