Budget Bill passed despite argument over cuts

The Scottish Government's Budget Bill for the 2016-17 financial year passed its stage 3 vote in Holyrood yesterday, only a day after the financial settlement between the Scottish and UK Governments under the new devolution settlement was announced.

MSPs voted 64-57 to back the measure despite claims from Labour and the Liberal Democrats that the proposals would mean severe cuts to local services and resulting job losses. 

Finance Secretary John Swinney has resisted raising the Scottish rate of income tax, and defended his decision to deter councils through heavy financial penalties from raising council tax on the basis that it had been an SNP commitment in 2011 to freeze the tax during the present Parliament. He maintained that the claims of job osses had been exaggerated.

The Government has said it will look at creating a more "progressive" tax regime when full powers over income tax are devolved under the Scotland Bill now before the UK Parliament.

First Minister Nicola Sturgeon said in a speech on Tuesday that the Government will also announce detailed plans to reforming the local taxation system through a combination of revenue raising powers for local authorities, as proposed last year by the Commission on Local Tax Reform. 

There will also be a review of the business rates system.

The bill now passed includes the new 3% LBTT surcharge on the purchase price of second homes and buy-to-let properties.