Public-sector job losses regrettable, John Swinney admits

The reduction in public-sector jobs is regrettable but council cuts should not be plugged by raising income tax, according to Deputy First Minister John Swinney.

Local government has seen a £350 million reduction in revenue but this has been mitigated by Scottish Government investment in health and social care integration, Mr Swinney said.

However, once this investment is factored in, councils remain £100 million worse-off and some local authorities have warned they may have to slash jobs.

Labour and the Liberal Democrats have proposed a 1% rise in the Scottish rate of income tax to raise an extra £475 million for public funds.

Mr Swinney said this would have to be raised by putting a burden on low-income families''.

A new report by the Resolution Foundation, written by former Labour policy director and Treasury adviser Torsten Bell, said the overall impact of the 1% rise is progressive.

It stated: The richest 10% of households lose around £1,000 while 15% of households in the bottom half of the distribution actually gain from the policy and the majority are unaffected.

Some of the money raised - which would amount to £475 million in total according to HMRC - would provide £100 compensation to all taxpayers earning under £20,000, with the remainder serving to reduce the scale of public service cuts in Scotland.''

Mr Swinney acknowledged low-income households would be better-off if they received Labour's proposed #100 rebate.

But he said this rebate is a complete mirage and cannot be delivered''.

He said: There was a reduction in revenue expenditure of £350 million in the local government grant and aid.

Once you put into the equation the £250 million that the Scottish Government is investing in the integration of social care - social care being one of the largest elements of local authority expenditure in Scotland - there is a reduction in local authority budgets of £100 million, which equates to less than 1% of total local authority expenditure.''

He added: Over the years we have seen a reduction in public-sector employment - and I regret that fact very much.

But what I have got to do is make a balance between whether or not we will be prepared to increase the tax bill for low-income households and put additional pressure on hard-pressed individuals, or ask local authorities to try to secure 1% changes in the way in which they are delivering public services.''

He said some on the national living wage earning £13,000 would see a 5% increase in tax but someone earning #200,000 would see the tax they increase by 2.6%.

Scottish Liberal Democrat leader Willie Rennie said: This respected think tank is making it crystal clear to the SNP. Increasing income tax by one penny is progressive, with those on the highest incomes bearing the greatest burden.

John Swinney's faltering performance on the radio this morning tells you everything you need to know about the SNP's approach to this issue.''

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