Shona Robison’s “disastrous tax and axe” budget has “united Scotland in fury” it was claimed today.
Scottish Conservative leader Douglas Ross insisted the SNP have run out of money and excuses after a “brutal” mix of tax rises and spending cuts that has received a “universally negative reaction”.
He said that income tax rises, which widen Scotland’s tax gap with the rest of the UK, had angered hard-working Scots, while the failure to pass on the rates relief available to firms in England had left businesses livid, and cuts to local government and the public sector had enraged service providers.
Mr Ross pointed out that below-inflation rises in the thresholds for the basic and starter rate of income tax meant that even lower earners were being punished to fill the £1.5billion black hole in the SNP finances.
He added that no one is buying the SNP’s “Westminster blame game” and that the glum faces on the SNP backbenches during Ms Robison’s statement confirmed as much.
Scottish Conservative leader Douglas Ross MSP said: “I’ve never seen a budget, at Holyrood or Westminster, receive such a universally negative reaction as Shona Robison’s tax and axe package.
“And no wonder – this is a budget for no one which has united Scotland in fury.
“Scottish taxpayers – including, shamefully, those on modest earnings – are paying the price for years of SNP waste, pitiful economic growth and uncosted pledges and pay deals. That’s why no one is buying their weary Westminster blame game.
“Scotland was already the highest taxed part of the UK and this budget makes the situation far worse. Scots on the average salary pay more than they would south of the border and the gap gets wider higher up the income scale, making it harder for us to recruit and retain the skilled staff needed to run our NHS.
“The SNP have also betrayed struggling businesses by ignoring their pleas to pass on the 75% rates relief enjoyed by firms south of the border.
“On top of that, key public services have been brutally squeezed. A £200m cut in housing is disastrous when a housing emergency has been declared in our two biggest cities, while our councils have once again been short-changed and will struggle to provide core services.
“The huge cut in the rural affairs budget reaffirms the SNP-Green contempt for those who live outside the Central Belt, while slashing funding to mental health and tackling drug and alcohol dependency will be hugely damaging.
“The glum faces of SNP backbenchers as Shona Robison delivered her brutal budget was telling and the reaction of virtually every stakeholder to it justifies their pessimism. The SNP have run out of time, money and excuses for their failure.”
Notes
The starter rate income tax threshold has failed to increase in line with inflation. The starter rate income tax threshold increased from £14,732 in 2023-24 to £14,876 in 2024-25. This is an increase of just £144 or less than 1%. This is below both the current inflation rate of 3.9% and the inflation rate cited in the Scottish Government’s own income tax fact sheet of 6.7% (BBC News, 20 December 2023, link; Income Tax Policy Proposal: Scottish Budget 2024-25, 19 December 2023, link).
Similarly, the basic rate income tax threshold has failed to increase in line with inflation. The basic rate income tax threshold increased from £25,688 in 2023-24 to £26,651 in 2024-25. This is an increase of 3.4% to the threshold, below the current inflation rate of 3.9% and the Scottish Government’s cited inflation rate in their income tax fact sheet of 6.7%. (BBC News, 20 December 2023, link; Income Tax Policy Proposal: Scottish Budget 2024-25, 19 December 2023, link).
The Chartered Institute of Taxation says anyone earning more than £28,867 pays more income tax in Scotland. (Chartered Institute of Taxation, 19 December 2023, link).
The median annual salary in Scotland is set to grow to more than £30,500 in 2024-25. The current median annual salary in Scotland is £29,675 in 2023 according to the Office of National Statistics. According to the Office of Budget Responsibility, average earnings are set to grow by 3.3% in 2024-25, meaning this figure will grow to £30,654 by the time the SNP’s new tax changes come into effect. (Earnings and hours worked, UK region by public and private sector 2023 edition, 1 November 2023, link; Economic and fiscal outlook November 2023, 22 November 2023, link).
This means the majority of Scottish taxpayers will continue to pay more tax in Scotland than they would in the rest of the UK. Given that the median taxpayer in Scotland is expected to earn £30,654, this is well above the £28,867 threshold that means you pay more in income tax. Therefore, most Scots will pay more in income tax compared to the rest of the UK. This contradicts the Scottish Government’s claim that most taxpayers in Scotland will pay less in income tax in 2024-25. (Income Tax Policy Proposal: Scottish Budget 2024-25, 19 December 2023, link).