Meeting of the Parliament 14 December 2017
For nearly two years, the Scottish Greens have been leading the argument for reform of our income tax, now that we have the power to do that. We showed that by adding new rates and bands we can raise additional revenue for our public services, while reducing tax at the bottom end of the income scale—not at the top end, as the Conservatives in the UK Government seem to continue to want to do.
I am delighted that the basic argument for a more progressive income tax structure appears to have won the day, and that we will be seeing changes. It is not as soon as I wished—we should have been here last year—and does not go as far as I would have wished, but the basic argument has won the day.
We have also made the case for an uplift in public sector pay. Given the rising level of inflation, it is unacceptable for people who have continued to see reductions in their real-terms pay to face even more cuts. I recognise that the UK Government budget does not make that easy, and the Scottish Government is now proposing a CPI inflation uplift for those earning less than £30,000, but not for everybody else. I will wait to hear the response of the unions who represent those workers before taking a final view, but those who are at the bottom end of the income scale absolutely deserve the pay increase that we have argued for and which the Scottish Government is today applying—at least to its own workers.
The downside of what we have heard today is that the cost of that pay increase in local government will not be met by the Scottish Government grant to local councils. The Scottish Government is right to use its powers to increase the total revenue budget in real terms, but it is not acceptable for it to pass on a real-terms cut to our local councils. If we include the additional costs that our councils will face if they are going to apply the same 3 per cent uplift for their public sector workers, who are delivering vital services that every one of us depends on, it is clear that the Scottish Government will have to make changes to its local government settlement.
What will the consequence be, other than real-terms pay cuts, service cuts or job losses in our councils, if the cabinet secretary does not change what he has proposed today for local government?