John Swinney has used his budget statement to announce an increase to income tax for the highest earners, a freeze in business rates and the scrapping of funding for another independence referendum.
The Deputy First Minister and temporary Finance Secretary published his draft budget on Thursday- in what he said was the “most turbulent economic and financial context most people can remember”.
The announcements came in a budget statement that was delayed following a leak of the government's tax plans to the BBC.
Mr Swinney said an increase to the highest rates of income tax in Scotland would allow for an extra £1 billion in spending on health and social care.
READ MORE: Cost-of-living crisis shows up ‘fiscal constraints of devolution’ – Swinney
He said standard and basic rates of tax would not change.
The higher rate threshold will be maintained and the top rate will be lowered to £125,140 from £150,000.
Both the higher and top rates of tax will be increased by 1p each, to 42p and 47p respectively.
Mr Swinney said: “We’re asking all those earning more than £43,662 to pay an extra penny in income tax.
“If we want to be able to depend on the NHS, we have to be prepared to pay for it.
“When the UK Government set out its autumn statement, it gave rise to consequential funding for the NHS in Scotland of £291 million.
“I intend to pass on that funding consequential, but I do not believe it is nearly enough for the critical task that we ask our staff in the NHS to do.
“As a result of the choices I have made on income tax, I’m in a position in one year to increase the amount we spend on health and social care in Scotland by over £1 billion.”
In spring's resource spending review, £20m was allocated for an independence referendum next year.
But the Supreme Court ruled last month that the Scottish Parliament cannot legislate for another vote. In his budget statement, Mr Swinney said the £20m would instead be used to help those at risk of fuel poverty.
He said: "I intend to utilise the finance earmarked for a referendum on independence to meet provision to extend our fuel insecurity fund into next year, a further £20m to address yet another failure of the United Kingdom and its policies.
Mr Swinney said the Scottish Child Payment would remain at the current rate of £25 per week, while other devolved benefits will be uprated by the September inflation rate of 10.1% at a cost of £428m.
Local government will receive a funding boost of £550 million, while councils will be given the freedom to set their own rates of council tax.
Following lobbying by business groups, business rates will be frozen in a bid to help support smaller firms. That news was welcomed by David Lonsdale, director of the Scottish Retail Consortium.
The Scottish Parliament’s Presiding Officer delayed the start of the tax and spending plans to investigate a potential leak to the BBC.
The broadcaster published a story during First Minister’s Questions on Thursday which said Mr Swinney would increase taxes in his budget to cope with the cost-of-living crisis.
The story caused uproar in the chamber, with three MSPs - Conservatives Murdo Fraser and Stephen Kerr, and Labour’s Neil Bibby - urging Presiding Officer Alison Johnstone to take action.
Ms Johnstone has previously sanctioned ministers for leaks, not allowing them to make a statement in Holyrood and instead moving straight to questions.
Upon entering the chamber ahead of the statement on Thursday, the Presiding Officer said: “Members will be aware of my response to points of order raised at the end of First Minister’s Questions regarding information related to this afternoon’s budget statement.
“As I said at that point I would investigate this matter, I have been unable to conclude my deliberations in the time available and I am therefore suspending this meeting for 30 minutes.”
She then swiftly left the chamber.
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