THE Finance Secretary has said her Budget for the coming year “offers hope for Scotland’s future”, with 60% of Scots estimated by the Government to be better off because they live in Scotland.
Speaking as she unveiled her tax and spending plans for 2025/26 to MSPs on Wednesday, Shona Robison said the Budget shows the Scottish Government understands the pressures people are facing.
She also thanked those who are in higher tax brackets as they "are enabling Scotland to spend more on the things that matter most".
The majority of Scottish workers are in line for a tax cut, with the basic and intermediate tax rate thresholds to “increase this year by 3.5%, effectively twice the rate of inflation”.
Robison told MSPs that the changes mean “more of people's money will be taxed at the starter and basic tax rates”.
She announced that there would be no change in this parliament to the rates, nor would any more bands be introduced.
Robison added: “Taking our tax and social security choices together, including on pension age Winter Fuel Payments, 60% of Scots will be better off because they live in Scotland.”
SNP ministers have previously confirmed plans to use some funding to restore a universal Winter Fuel Payment for older Scots in 2025-26, with pensioners north of the Border to receive at least £100 next winter, though some will receive £300.
Robinson also highlighted that the latest forecast from the Scottish Fiscal Commission said that Scottish taxes will raise an estimated £24.6bn in 2025/26.
She told MSPs: "I'm sure members will be pleased to hear the good news that this increase is in part due to average earning are growing faster than in the rest of the UK.
"Overall, the tax decisions that we have taken have delivered £1.7bn times more in 2025/26 than if we had followed UK polices."
With free school meals to be extended to primaries six and seven in Scotland for “low-income families” , an additional £800m in social security benefits in 2025/26, and the mitigation of the impact of the two-child benefit cap, Robison said “it is a Budget filled with hope for Scotland’s future".
Hitting out at Prime Minister Sir Keir Starmer’s UK Government, Robison said many had looked to Labour to end the “pernicious” two-child benefit cap policy – but said the Scottish Government will act where it had not.
Outlining her tax and spending plans in Holyrood on Wednesday, Robison said: “Be in no doubt that the cap will be scrapped.”
The Joseph Rowntree Foundation described the move as "a positive recognition that political choices can reduce poverty".
The organisation's associate director for Scotland Chris Birt said: “Reversing the huge cuts to affordable house building is welcome while we're in the jaws of a housing emergency.
“The Parliament as a whole, however, face the challenge of how the child poverty reduction targets will be met. The budget as drafted should nudge things in the right direction but there remains much work to do."
Robison also said warm and safe houses are “critical” to tackling child poverty, pledging to invest£768m in affordable homes to enable more than 8000 new properties for social rent, mid-market rent and low-cost home ownership to be built or acquired this coming year.
Meanwhile the Scottish Fiscal Commission’s chair, Professor Graeme Roy, said the Scottish Government had benefited from "significant extra funding" from Rachel Reeves’ Budget, but several factors act "as a binding constraint on the Scottish Government’s broader spending decisions".
He said: "The consequences of much stronger income tax revenues elsewhere in the UK affecting the net tax position, combined with ongoing pressures from a rising pay bill and increased commitments on social security, continue to act as a binding constraint on the Scottish Government’s broader spending decisions.
"There is a significant increase in capital spending in 2025-26 allowing the Scottish Government to restart paused capital projects and make some new commitments.
"But day-to-day spending remains constrained with much of the Government’s extra headroom for this year and next taken up by existing commitments and new measures that lock in longer-term fiscal costs.”
The largest financial boost is for the NHS, with record funding settlement of £21bn next financial year.
Robison told MSPs this was her “biggest commitment”. She said it would mean by March 2026 no-one will wait longer than 12 months for a new outpatient appointment, inpatient treatment or day case treatment.
Elsewhere, the Scottish Government will fund the replacement of the Eye Pavilion in Edinburgh, the Belford Hospital in Fort William and Monkland's Hospital in Airdrie. There have been major campaigns across these areas calling for action after funding for NHS construction projects was previously paused.
Councils are also to receive more than £1bn uplift, but Robison warned that levies should be kept low, after a council tax freeze in the last 12 months.
“While it will be for councils to make their own decisions with record funding, there is no reason for big increases in council tax next year,” she said.
Robison also announced an extra £20m in capital funding for Orkney Islands Council and Shetland Islands Council.
The culture budget will also see an increase of £34m next year, saying this is “another record increase”. Music venues would also receive continued non-domestic rates support.
Funding from the ScotWind leasing round will not be used in this financial year, and instead £300 million will be used on job creation and meeting climate challenges.
With the SNP in a minority administration at Holyrood, Robison and First Minister John Swinney need to persuade MSPs from at least one other party to back their Budget when it comes back to Holyrood to be voted on next year.
Simon Barrow, national secretary of the SNP Trade Union Group, the party’s largest affiliate body, said: “We welcome many aspects of the Scottish Government’s budget, not least the commitment to ending child poverty, the scrapping of the Tory-Labour two-child cap, maintaining universal Winter Fuel Payments in Scotland while the UK abolishes them, further anti-poverty measures, and investment in infrastructure and the green economy.
“This shows the real difference between Labour austerity and SNP ambition. But the huge cost of mitigating UK cuts means that the Scottish Government needs to raise more revenue, and that ultimately only the powers of independence can bring the transformational change Scotland needs.
“In September, SNP party conference overwhelmingly backed trade union calls for land, assets and wealth taxes. So far this is not being taken forward. We will continue to press hard for action. It is vital that the wealthiest pay their share, and that we use the full extent of our devolved powers to take Scotland forward and make the case for independence.”
