Orcadian 21/12/16

There really is nothing quite like listening to Scottish Finance Secretary, Derek Mackay deliver his budget statement to get you in the mood for Christmas.  At the very least, it is likely to have you reaching for the sherry.

So it was that last Thursday Mr Mackay presented his budget to parliament for the coming financial year. To the surprise of no-one, sadly, he failed to announce any additional funding for Orkney and Shetland’s internal ferry services.

Casting himself in the role of Ebeneezer Scrooge, Mr Mackay chose to break his earlier promises to both island councils while also defying the will of parliament following the vote the previous week. It is to be hoped that, like Scrooge, the Finance Secretary may yet be persuaded to see the error of his ways. Perhaps the spectre of industrial action on Orkney’s lifeline internal ferry services might just be enough to prick his conscience.

More generally, of course, the headlines were dominated by Mr Mackay’s announcement in relation to taxation. Having passed up the chance to use these powers last year, the Finance Secretary’s decision to finally make a move on tax was significant and gave him a little more room for manoeuvre.

It must be said, it also represented another broken promise by Mr Mackay and his colleagues who solemnly swore during both the Holyrood elections 18 months ago and the Westminster elections earlier this year that they had no intention of raising income tax. SNP Ministers had even alluded, with a Dickensian flourish, to such a move being akin to ‘pickpocketing’ of ‘hard working families’. This ignored the fact that many hard working families were hardest hit by cuts to public services but it also coloured the debate around tax in a way that has made it more difficult for Mr Mackay now to act.

In the end, the changes he has proposed are relatively modest. In a bid to deflect criticism about tax rises for medium and high earners, the Finance Secretary has cleverly managed to ease the tax burden on lower earners. While this has also had the effect of adding to the overall complexity of the system, I’m sure Mr Mackay will see that as a price worth paying, at least for now.

Of more concern, perhaps, is that the relatively limited changes are unlikely to deliver the sort of uplift in tax revenues that would enable the government to make real advances in key areas. In education and skills, for example, we have seen Scotland slipping down the international rankings over recent years. Nothing announced last week seems up to the task of arresting that trend by allowing the necessary investment to be made from the earliest years through to further and higher education.

Similarly, while the problems we are seeing in health, including mental health, are not solely a reflection or a lack of funds, it is difficult to see how the lack of capacity in key parts of our NHS can be addressed without additional resources being committed.

All that said, Derek Mackay has at least demonstrated a willingness to use the powers that many of us argued the parliament should have in order to be more accountable as well as able to respond to the needs of people and communities across Scotland. For that, at least, credit is due.

In terms of the budget process, this will not be concluded until mid-February. Before then, parliament has an opportunity to scrutinise the detail of Mr Mackay’s proposals and recommend changes.

Along with my Shetland colleague, Tavish Scott, I intend to use this time effectively to increase the pressure on the Finance Secretary to honour his commitments to fair funding for our lifeline internal ferry services. We have made clear that when the government introduces its Budget Bill next month, we will look to bring forward an amendment that will allow parliament another opportunity to call to account SNP Ministers on the promises they have made to Orkney and Shetland on this vital issue.

For now, let me take the opportunity of wishing you a Merry Christmas and a happy, healthy and successful 2018.

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