Budget deal done as opposition parties slammed for 'seeking chaos'

To win them over, the Scottish Government had to promise Patrick Harvie’s party a raft of changes to local authority funding, including plans to ultimately scrap council tax in the next decade.

Mackay promised to start cross-party talks, saying that if agreement could be reached, then “legislation will be developed ... for implementation in the next session of Parliament”.

He said there would be no change to the council tax system during this parliamentary session.

But there will be a change to how much local authorities can charge, with the cap on council tax going up from 3% to 3% in real terms, which equates to 4.7%.

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In his speech, Mackay pointed out that this was still lower than the cap south of the Border.

The Finance Secretary also said he had been able to use “additional flexibility in management of the Scottish Budget” to find an extra £90 million of funding for local government.

As part of his deal with the Greens, Mackay also committed to launching a consultation on the tourist tax, before bringing in legislation to allow councils to start charging their own “transient visitor levy”.

Ministers will also back changes to allow local authorities to bring in a workplace parking levy – although hospitals and other NHS properties would be exempt.

The Tories described the agreement as a “triple tax bombshell”.

Their finance spokesman Murdo Fraser (below) accused the SNP of hypocrisy, saying they had broken manifesto commitments to keep council tax increases at 3%, and not to introduce a tourism tax.

Mackay told MSPs: “The Scottish Budget proposes an additional £2 billion of investment. It provides an increase of almost £730m for health and care services, more than £180m to raise attainment in our schools, and gives a vital boost to our economy through a £5bn infrastructure programme.

“As a result of these decisions, we have been able to invest in essential public services, particularly the NHS, while ensuring 55% of income tax payers in Scotland pay less tax than those earning the same income in the rest of the UK.

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“The Scottish Government has continued to ensure our partners in local government receive a fair funding settlement despite further cuts to the Scottish budget from the UK Government.

“These additional measures will deliver the most significant empowerment of local authorities since devolution and provide additional funding to support local services.”

As the SNP do not have a majority in the Scottish Parliament, they need the support of at least two other MSPs to pass their spending plans for the next year. For the past two years that support has come, mostly, from the Scottish Greens.

For the past few days it’s looked as if the Government could face defeat, with the Greens unwilling to lend their support unless Mackay made dramatic changes to local government funding.

At 2.17pm, just 13 minutes before the debate started, the Finance Secretary took to Twitter to reveal that he had “reached agreement with the Scottish Green Party to deliver a Scottish Budget that invests in health, education, our economy and supports local services.”

WATCH: SNP MSP falls off her chair during Budget laughing at Tories

Harvie criticised the other parties for not engaging with the Scottish Government in the budget talks: “Scotland has a centralised, constrained and under-powered system of local government and that needs to change.

“The package of local tax reform measures we’ve seen announced today will make real progress.

“We have, for the first time, a clear, definitive timescale for publishing legislation to abolish and replace council tax during this session of Parliament.”

He added: “Others seem to think that engineering a crisis would be the best outcome, instead of achieving changes that work for the country.

“It’s as though some people look at the US Government shutdown or the shambolic incompetence at Westminster and think they should do the same here.

“Chaos for the sake of chaos is not what Scotland needs.”

Green MSPs Patrick Harvie and Alison Johnstone

Scottish LibDem chief Willie Rennie said Harvie and the Greens had been “bought cheaply”

“The extra money for councils was already available,” he said. “Local government finance reform has been delayed until the next Parliament, bogged down, once again, in another commission. Patrick Harvie has settled for the vice-convenership of the car parking working group.”

Fraser said his party had offered to talk to the SNP, but claimed the Government would “rather talk to the anti-growth, anti-business Greens”.

He also criticised the Greens for not standing by their principles.

“In advance of the Budget, the Greens were very firm: nothing less than abolition of the council tax and wholesale reform of local taxation would get them on board. Instead, they have been sold short. What do we have? Just a fudge — another promise of a round of cross-party talks.”

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Labour’s James Kelly said the Budget was unfair on lower earners: “This is an unfair Budget based on unfair taxation, when it awards tax cuts up to everyone earning £124,000.

“So if you’re a chief executive or a managing director or a cabinet secretary, then you’re cheering this Budget on tonight, because it’s going to give you a tax cut.

“But if you’re a commuter on a platform waiting for a delayed or cancelled train, not able to get to your work or a hospital appointment, you won’t be cheering this Budget on.”

The final vote passed 67 to 58.

Former SNP MSP Mark McDonald abstained.

It’s understood he had asked to meet Mackay to discuss the Budget, but was rebuffed.

Labour MSP Neil Findlay’s speech in the Budget debate didn’t go as planned, after the hapless veteran left-winger accidentally emailed a copy of it to all Scottish ministers earlier in the day.