The Scotsman Politics: Budget Review 2023
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00:00 Good afternoon and welcome to a special edition of the Scotsman's Politics Show.
00:13 My name is Dale Miller, I'm Head of News at the Scotsman and I'm joined by our political
00:17 editor Alistair Grant.
00:18 And we're here to discuss the Scottish Budget, Alistair, and a new income tax ban had been
00:26 discussed at length over recent days and it's now a reality.
00:30 Yeah, so as you say there's been a lot of speculation about the Scottish Government
00:35 going down a route like this, introducing some kind of new ban.
00:38 Today they confirmed that is the case, they will do that, so there will be a new tax bracket
00:42 of 45p in the pound for those earning between £75,000 and £125,000, £140,000.
00:52 So just over £125,000 a year and that's going to be called the advanced rate, it's going
00:57 to sit between the higher rate and the top rate of income tax that already exists, meaning
01:02 there will be six separate bans in Scotland compared to, I think it's three down south,
01:06 so you can see how much divergence now there is between Scotland and England and the rest
01:12 of the UK.
01:13 The Scottish Government also announcing that the top rate of income tax will increase by
01:17 1%, so one penny in the pound, and those policies together will affect the top 5% of taxpayers
01:26 and raise an extra £82 million.
01:29 And it's worth saying that I think the Scottish Fiscal Commission have given a bit more detail
01:34 about that and I think it's 114,000 people in Scotland will sit within that new advanced
01:40 rate and an additional 40,000 people who are in the top rate will be affected by that change
01:46 in the advanced rate.
01:47 So we're talking about just more than 150,000 people in Scotland who are going to see quite
01:51 substantial in some cases rise in income tax next year, but they very much are in that
01:56 much wealthier bracket, they're not even really middle Scotland, it's wealthier Scots we're
02:00 talking about here.
02:01 But that was one of the key announcements today, as you see a lot of speculation about
02:06 that in the run up to the budget.
02:09 I think elsewhere we had council tax, the Scottish Government saying that council tax
02:15 will be the council tax freeze that Humza Yousaf announced back at the SNP conference
02:19 in October.
02:20 They said they're going to fully fund that and we finally found out what the Scottish
02:24 Government means by that, and they will fund it basically as though councils were going
02:29 to raise council tax by 5%.
02:33 And the Scottish Government says that's more than 3%, that's going to be a fully funded
02:40 situation for councils, but I think you can guarantee that COSLA, the council umbrella
02:43 body, a lot of councils across Scotland will say that's not enough, that they were planning
02:47 to raise council tax by more than that, and that's not enough to protect services, and
02:51 that council taxpayers should still expect cuts to services.
02:56 I think some of the other elsewhere business rates, there was the announcement that they
03:00 will freeze the poundage rate, which I think will be welcomed, however they're not going
03:04 to pass on some of the tax breaks that we saw the Prime Minister and his Chancellor
03:09 announced in England for businesses in England, that 75% rate for hospitality and leisure
03:15 businesses, I think there will be a lot of anger across the hospitality industry about
03:19 that.
03:20 In fact I've seen just before I came on that there's a reaction already flowing in from
03:23 a lot of hospitality industry bodies, who will now feel that they are at a disadvantage
03:27 compared to businesses just across the border.
03:30 Elsewhere in the budget there's a real focus on spending on health and protecting some
03:34 areas, while seeing cuts elsewhere, quite substantial cut to the housing budget, substantial
03:41 cuts across a range of other areas as well.
03:43 So a very difficult budget, we knew that going into, how difficult some of these decisions
03:48 would be to balance the books, but I think we'll just have to wait and see what kind
03:53 of reaction there will be in the coming days.
03:56 Ellis, I saw some initial comments that given the Scottish child payment there was no scope
04:03 to increase it within this.
04:05 You mentioned the housing budget being cut, that there were concerns around lack of support
04:11 for anti-poverty measures as such.
04:14 You mentioned the hospitality reaction.
04:16 Where do you think the worst of that reaction is going to come and what form do you think
04:21 it's going to come at towards the Scottish Government?
04:26 I mean I think all these things will be difficult for them to deal with.
04:28 I think businesses being angry at them is going to be difficult.
04:32 Humza Yousaf has a relatively new First Minister, he's been trying to build a better relationship
04:38 with the business community in Scotland.
04:40 Nicola Sturgeon's predecessor was always seen as a bit cold towards the business sector,
04:45 wasn't on very good terms with them.
04:46 Humza Yousaf came in, tried to do something about that.
04:48 There was all this talk of this new deal for businesses and I think any kind of backlash
04:54 from that sector, the Scottish Government will feel it.
04:56 They will say that they can't do everything, the cuts had to come in some shape or form
05:01 and this is obviously where they've chosen to pass on funds and where they haven't.
05:05 I think for Humza Yousaf, as someone who sees himself as poverty being one of his driving
05:11 focuses as First Minister, to have poverty charities, poverty bodies annoyed that you
05:17 didn't introduce, you mentioned the Scottish child payment, one of his things during the
05:22 SNP leadership contest is that he would increase that to £30 a week.
05:26 This budget, I think it's £26.70 it's been increased to.
05:30 It's actually less than £30 a week.
05:32 So there'll be anger from that quarter as well.
05:35 I think the Government, Humza Yousaf, his deputy Shona Robison were braced for anger
05:40 in some quarters.
05:41 There's just no way they were going to keep people, keep everyone happy.
05:46 I think from the point of view of his politics, getting criticism from those anti-poverty
05:51 charities on things like the housing budget as well and the impact that might have on
05:55 homelessness, temporary accommodation, it'll be a difficult one for them to deal with.
06:00 Politically.
06:01 Alistair, we should say I know our education correspondent Callum Ross is looking at the
06:06 fact that it looks about a hundred and seven million cut to colleges and universities as
06:11 well within this budget.
06:13 There will be reaction to that as well.
06:15 Look, the budget is a chance for the Government to sell its economic vision, so to speak.
06:21 This was Shona Robison's first budget personally delivering.
06:23 How did you think she went?
06:25 I mean, I really do not think that Shona Robison's strong point is performing in the Holyrood
06:31 Chamber.
06:32 She just does not.
06:33 It's just not where her strengths lie.
06:35 I think today it was very lacklustre delivery, very robotic.
06:39 It felt like she was just trying to get to the end of the speech.
06:42 It goes on for half an hour.
06:43 It's a long time to stand there speaking in Parliament and engaging people and, like you
06:48 say, selling the vision that you have as a Government.
06:50 What's your vision for the economy?
06:53 What's the narrative you want to put across of where your priorities lie?
06:57 I don't think she's very good at doing that.
06:59 I think you look back at previous finance secretaries, Kate Forbes, I think there was
07:04 a better parliamentary performer before her.
07:07 I think, again, there was better parliamentary performers.
07:10 But, yeah, it's something that people have raised about Shona Robison in the past.
07:15 She's obviously a humbly abusive deputy.
07:17 She stood in for it in First Minister's questions.
07:20 And she's just not - it's just not where her strengths lie, I would say, in terms of delivery
07:25 in Parliament.
07:26 Look, you can follow all the latest budget coverage, including our analysis and the reaction
07:34 from some of the sectors that we've discussed at scotsman.com.
07:39 You'll find a dedicated slab just around all our budget content, but you can also find
07:45 it under the politics tab on the navigation bar.
07:48 Please follow us on Facebook, Instagram and Twitter, or X, and go out and buy a copy of
07:54 the paper tomorrow for all the latest coverage.
07:57 Thanks to you, Alastair, and thanks for everyone else for joining us.
08:00 [Music]