LABOUR/Lib Dem proposals to raise income tax in Scotland by 1p above the rate of the rest of the UK were rejected last night by MSPs. Ministers said the measure – put forward by Scottish Labour and backed by the Liberal Democrats – would punish low-paid workers. Instead, The SNP Government used its Holyrood majority to back an income tax freeze for 2016/17 by passing Finance Secretary John Swinney’s budget at its first stage. Labour and the Lib Dems say it is necessary to use new tax powers due to come into effect from April 6 to provide almost £500 million of additional funds for education. They insist schools will be hit by decreases to local authority budgets, with council group Cosla complaining they are facing £350 million of cuts. But Swinney said the tax increase would hit the lowest-paid as he criticised Labour’s proposals to balance the rise with a £100 rebate for low earners as “back-of-the-fag-packet” policy. “This Government will freeze income tax and we will deliver a pay rise to around 50,000 of the lowest-paid workers in Scotland,” he said. “The uprating of living wage, its extension to social-care workers and an uplift of £400 for those covered by public-sector pay policy earning £22,000 or less will see tens of thousands better off because of this budget.” He said Labour’s rebate proposal recognised a tax rise would damage the income of those on low pay. Councils have until February 9 to sign up to a financial package which includes a continuation of the council-tax freeze, investment in integrating health and and social care and as well as a commitment to maintain the pupil-to-teacher ratiosin schools. Members of the Unite and GMB Scotland unions protested outside Holyrood against the settlement ahead of the budget debate. Labour’s Jackie Baillie said: “Make no mistake, the big losers in John Swinney’s budget are local communities, local schools and the local public services that people value.” Responding to criticism of the party’s rebate plan, she insisted council leaders had said they were willing to implement it. Scottish Lib Dem leader Willie Rennie accused Swinney of “imposing the kind of budget that he previously condemned.” ENDS
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