When is the Scottish Budget and what will happen in it?

Chancellor of the Exchequer Shona Robison will unveil plans for income tax, benefits and more in the Scottish Budget.

Their proposals will be put forward in a speech to the Scottish Parliament on 4 December.

Robison and First Minister John Swinney I have been warned for months The government faces its toughest financial situation since the Scottish Parliament was reconvened in 1999.

But the UK government says it has provided the largest funding package in the world transfer date.

The Budget is the Scottish government’s opportunity to set out its tax and spending plans for the next financial year, running from 1 April 2025 to 31 March 2026.

This includes major decisions about increasing or decreasing taxes, as well as spending on areas controlled by the Scottish Parliament, such as health, schools, police and many other public services.

The government may also make proposals for new taxes, social benefits, public services and infrastructure projects.

The finance secretary’s speech will be accompanied by a draft Budget that sets out the plan in a legal document.

MSPs will initially discuss the proposals and may table amendments. They will not vote on the bill until February, when the SNP government will hope to see it become law.

The Scottish Budget will meet on Wednesday 4 December.

The conversation usually begins shortly after 2pm and lasts about 30 minutes. It will be broadcast live on the BBC Scotland News website.

Opposition MSPs will then be given about an hour to respond in the chamber.

The Scottish Budget is largely funded by block grants (mainly an annual lump sum transferred from the UK government) and taxes collected north of the border.

Changes in block allocation are calculated using: Barnett FormulaThis is designed to provide Scotland, Wales and Northern Ireland with a proportionate share of the UK government’s spending in England.

Total budget of the last two years was around £60 billion.

Holyrood ministers are legally obliged to balance their accounts and have only limited borrowing powers to raise additional funds.

In each of the past three years, they used emergency measures for part of the fiscal year because of unforeseen budget shortfalls.

This year government cuts £500m from spending plans Ministers have also funded higher-than-expected public sector pay deals, citing inflation.

UK government for next year £47.7bn block grantONE £3.4bn increase In 2024-25.

Economists from the Fraser of Allander Institute say this “is likely to make the Scottish government’s job of balancing its budget significantly easier”.

But Swinney said his government had “difficult” decisions to make and the extra Treasury funding was “not nearly as much as claimed”.

SNP ministers also warned They will have to pay an extra £500 million to fund public sector wages as a result of Labour’s plans to increase National Insurance payments to employers from April.

UK government He promised compensation to the transferred administrations for a tax increase, but has yet to say how much money will come to SNP ministers.

The Scottish government has also warned that this law could be changed at short notice because the public sector is proportionately larger.

The Scottish government can set its own income ranges and rates, so close attention will be paid to any proposed changes.

Scotland currently has six tax bands, while England, Wales and Northern Ireland have only three.

People earning more than £28,567 in Scotland (about half of the country’s taxpayers) pay more income tax than elsewhere in the UK.

Those earning below this amount pay slightly less than they would if they lived elsewhere in the UK.

While the Scottish government has argued that the tax system is “progressive”, Swinney has called on the UK government to copy the system.

The Conservatives have called for tax cuts and even some in the SNP do not seem entirely convinced of the Holyrood tax regime.

SNP MSP Kenneth Gibson, who leads Holyrood’s finance committee, recently suggested rates of 19%, 20% and 21% “nonsense” and “it was nonsense”.

Robison hinted earlier this year that income tax changes were unlikely. He warned MSPs that major UK-wide tax reform would be required to raise more revenue, telling MSPs the government could only “go so far”.

But even if the bands and rates remain constant, it could still lead to more people paying more taxes, through a process known as fiscal drift. This happens if bands are not raised with inflation and fail to keep up with pay rises, meaning some people are ‘drifted’ into higher tax brackets.

In this year’s budget of the government More than £200 million pledged helping local authorities cover the costs of a nationwide council tax freeze.

The house freeze was welcome news for homeowners, but it angered cash-strapped municipalities.

It has also been criticized as an inefficient way to help the worst off, with rates based on old property values ​​in 1991.

Ministers defended the measure; Swinney, however, refused to rule out another freeze in 2025-26.

Another important policy to consider is the potential to fund universal winter fuel payments.

Benefits to millions of pensioners south of the border were cut by the UK government earlier this year.

The Scottish government was required to introduce a Holyrood-run equivalent. But SNP ministers said the prime minister’s decision left them £150 million short and they had no choice but to follow suit. to impose means to test.

The decision is expected to result in around 900,000 fewer pensioners receiving payments in Scotland.

With a bigger block grant on the way, can the Scottish government now find the money to fund universal coverage?

The Scottish government is being pressured to repeat business rates cuts for firms south of the border.

Holyrood sets its own business rates, called non-domestic rates. These are a type of property tax administered by municipalities that help pay for local services.

The Allander Institute’s Fraser estimates it would cost £220 million to replicate the business rates cut in Scotland; This is much more than the £147 million achieved by the Barnett formula in the UK decision.

The MSP of the SNP group in the Scottish Parliament has been reduced to 62 MSP after John Mason was expelled from the party for his comments about the conflict in Gaza.

However, Glasgow Shettleston MSP He stated that he will continue to support the SNP.

Assuming it gets his support, the government will need two more votes for a 65 majority.

This means ministers must have two opposition MSPs side with them or abstain.

If the vote in the first stage results in a draw, Chairman Alison Johnstone will receive the casting vote. This traditionally “favours the status quo” and allows the bill to proceed and negotiations to continue.

However, in the event of a tie in the final vote, the “status quo” will be the current budget arrangements; Therefore, Johnstone will vote against the new budget.

If the parliament is completely deadlocked, elections may need to be held next year to break the deadlock.

Whether there is any appetite for early voting is another matter – especially since under Holyrood election rules this means: two elections in two years.