Scottish Budget 'will put more money in people's pockets', says finance secretary

Shona Robison said her tax and spending plans, which will be delivered in Holyrood today, will put “the people of Scotland first” and lay the foundations for long-term success.

It came as the respected Institute for Fiscal Studies (IFS) repeated its warning that ministers should “hold off” on further income tax rises until the impact of previous changes becomes clear.

SNP ministers previously hiked income tax for higher earners, but there is thought to be little appetite to do so again. However, the freeze on council tax announced last year is widely expected to end, which could pave the way for substantial increases in 2025/26 unless a cap is put in place.

The SNP operates as a minority administration in Holyrood, meaning it will need support from another party for the Budget Bill to pass. The Liberal Democrats and the Greens are the most likely options. First Minister John Swinney called on the other parties to work with the Government in “good faith”.

Yesterday, Scottish Liberal Democrat leader Alex Cole-Hamilton said his party was “still some considerable distance” from doing a deal. He said there had “definitely” been movement in talks with the SNP, but insisted the Scottish Government was “going to have to move some mountains”. MSPs will not vote on the plans until early next year.

Mr Cole-Hamilton said: “It is fair to say there is still some considerable distance to travel and they are going to have to pull out all the stops to persuade us.”

He said he wanted to see improvements to council funding, along with cash to improve access to local health care and boost social care. He has pledged to vote down any Budget that contains independence spending.

Last year’s Budget document contained no reference to independence planning. A series of papers on independence have been published in recent years, but ministers have not said whether these will continue.

The Greens want to see increased investment in climate action and local council services, as well as the expansion of free school meals for P6 and P7 pupils and the introduction of a £2 bus fare cap.

The party’s Ross Greer said: “The First Minister has a clear choice to make. Will he work with the Scottish Greens to deliver a progressive Budget that delivers for people and planet, or will his government move further to the right and cave in to the Liberals’ anti-democratic demand that the Scottish Government no longer even talk about independence?”

Speaking while on a visit to Logan Energy, a clean energy technology manufacturer in East Lothian, Ms Robison said the 2025/26 Budget will deliver “progress for Scotland, by Scotland - laying the foundations for long-term success”.

She said: “The First Minister has made clear his focus on delivering on people’s priorities – eradicating child poverty, growing the economy, improving public services like our NHS, and tackling the climate emergency.

“Unlike the UK Government’s Budget which treated Scotland like an afterthought, today we will publish a Budget that puts the people of Scotland first.

“We have listened carefully to the needs and priorities of organisations and businesses, and the people of Scotland. This is a Budget that will deliver for them by building on the positive change we’ve delivered for Scotland, creating more jobs, and putting more money in people’s pockets.”

The Scottish Chambers of Commerce said businesses are facing “significant headwinds”, including rising costs and economic uncertainty, and called for urgent support.

Chief executive Liz Cameron said: “We welcome the Scottish Government’s recognition of these challenges, but resilience alone won’t deliver the jobs, innovation, and growth Scotland desperately needs and we urge finance secretary Shona Robison to use this budget to commit to substantial relief and immediate non-domestic rates reform, extra funding for business, an overhaul of the apprenticeship levy and an accelerated spend on infrastructure.”

Hospitality bosses also called on the Scottish Government to reduce the business rates burden.

Stephen Montgomery, director of the Scottish Hospitality Group, said: “Restaurants, hotels and pubs are the lifeblood of our communities, but the current business rates system unfairly penalises Scotland’s hospitality sector and is not fit for purpose.”

Scotland is due to receive an extra £3.4 billion next year as a result of the recent UK Budget, as well as additional cash this year. David Phillips, associate director at the IFS, told Holyrood’s finance committee that Scottish ministers would have been forced to make “really quite deep cuts” if they had not received these top-ups.

SNP ministers have already confirmed plans to use some funding to restore a universal winter fuel payment for older Scots in 2025/26, with pensioners north of the border to receive at least £100 next winter, though some will receive £300.

Anyone earning more than £28,850 currently pays more income tax in Scotland. Mr Phillips said the Scottish Government should “evaluate” recent tax changes because there is “pretty limited” evidence about their impact. In the meantime, he said, it may be better to “hold off making further changes, certainly in an upwards direction”.

The Scottish Tories said the SNP’s “era of high tax, free spending must come to an end”.

Meanwhile, teachers told the Scottish Government they will declare a formal dispute if there is no plan in the Budget for cutting their daily contact time with classes.

The SNP manifesto in 2021 promised not only to increase the number of teachers and classroom assistants by 3,500 during this Parliament, but to reduce teachers’ daily contact time with classes by 90 minutes per week. The party said the pledge would give teachers “the time they need to lift standards”.

However, no progress has been made on either commitment, with teacher numbers actually falling.

The dispute warning was made following a meeting of the Teachers’ Panel of the Scottish Negotiating Committee for Teachers, which negotiates pay and conditions for teachers.

Des Morris, chair of the panel, said: “Scotland’s teachers have shown enormous patience in waiting for the Scottish Government to deliver on its promises on class contact time reduction and the recruitment of 3,500 additional teachers. But that patience is wearing very thin, after three-and-a-half years of delay and excuses from the Scottish Government.

"This week’s Scottish Budget must lay out a very clear plan as to how these commitments will be delivered – Scotland’s teachers, pupils, parents and carers, and indeed the whole Scottish electorate, have the right to expect the government to keep the promises it makes to them.”