Scotland's draft budget fails to tackle challenge of Covid, say critics

The Scottish government’s draft budget “bakes in inequality”, according to campaigners and opposition parties who say the measures announced on Thursday fail to use available powers to meet the economic challenges of Covid.

With no change to income tax rates and a council tax freeze, both of which benefit wealthier households, unions described the public sector pay offer as “a slap in the face” for those who had worked on the frontline through the pandemic.

Setting out her draft budget to MSPs on Thursday afternoon, Scotland’s finance secretary, Kate Forbes, said she would mitigate the UK government’s “ill-judged” public sector pay freeze, announcing a 3% increase for those on salaries up to £25,000, and a 1% increase for those on higher incomes.

While Forbes defended the move as “progressive” on Friday morning, GMB Scotland estimated the 3% rise “won’t amount to more than a tenner a week for most”, while the STUC said it meant a real-terms pay freeze for thousands of public sector workers earning above £25,000 a year, including most teaching staff, firefighters and civil servants.

Peter Kelly, the chief executive of the Poverty Alliance, said: “In the midst of a rising tide of poverty across Scotland, yesterday’s budget should have signalled a drive toward economic and social renewal. It contained some very welcome actions like the landmark Scottish Child Payment, but ultimately failed to meet the scale of the challenge that is facing our communities”.

He argued that unfreezing the higher-rate tax threshold would result in lost tax revenue that could have put cash into lower-income families’ pockets.

Scottish Labour’s interim leader, Jackie Baillie, said: “The SNP said that this budget would be the most important in the history of devolution, but all we got on Thursday was baked in inequality. No matter how big the crisis and how deep the inequality, the SNP will continue to plough on with unfair tax policy and pay freezes which benefit the wealthy to the detriment of the vast majority of working people.”

The co-leader of the Scottish Greens Patrick Harvie – whose support the SNP minority government has relied on pass previous budgets – said the draft budget was “not as green or progressive as is needed to provide a fair and green recovery from the pandemic”.

“Of the already announced five-year spending on things like green jobs and energy efficiency, this year’s allocation seems short, while again the government seems unwilling to use the tax levers it has to rebalance the economy and tackle poverty.”

Forbes told MSPs on Thursday it was a time for “stability, certainty and targeted support”, pledging an “exceptional response” to the pandemic, with extra funding for the NHS, local government and to promote jobs and skills.