SNP government vows to scrap two-child benefit cap

The Scottish authorities volition scrap the "pernicious" two-child headdress connected benefits northbound of the border, Finance Secretary Shona Robison has vowed.

Setting retired her draught Budget astatine Holyrood, she said SNP ministers would purpose to supply backing to affected families by 2026.

She besides announced changes to Scotland's income taxation bands to mean much of people's net volition beryllium levied astatine little rates.

Robison said this would mean that the bulk of radical successful Scotland would wage little income taxation than they would if they lived elsewhere successful the UK.

The two-child headdress prevents parents from claiming cosmopolitan recognition oregon kid taxation recognition for a 3rd child, with a fewer exemptions.

Robison said the headdress - primitively introduced by the Conservative UK authorities successful 2017 and kept successful spot by Sir Keir Starmer’s Labour medication - affected 15,000 children successful Scotland.

She said the Scottish authorities would request Labour ministers to supply information connected the headdress to afloat mitigate it northbound of the border.

The SNP curate told MSPs: "My situation to Labour is to enactment with america - articulation america successful ending the headdress successful Scotland, springiness america the accusation that we need.

"But, either way, fto maine beryllium crystal clear, this authorities is to extremity the two-child headdress and successful doing truthful volition assistance implicit 15,000 Scottish children retired of poverty."

A Scottish authorities root said they believed the measurement would outgo betwixt £110m and £150m. The Scottish Fiscal Commission has said the argumentation is uncosted due to the fact that they were lone told astir it past week, describing it arsenic a “fiscal risk”.

Scottish Conservative societal information spokesperson Liz Smith said her enactment continued to enactment the two-child headdress

“Social information payments indispensable beryllium just to radical who are struggling and to taxpayers who prime up the bill," she said.

"The rapidly rising benefits measure is presently unsustainable arsenic a nonstop effect of the SNP’s precocious taxation rates and mismanagement of our system and nationalist finances.”

Scotland has six income taxation bands, successful opposition to England, Wales and Northern Ireland wherever determination are conscionable three.

Robison told parliament that the threshold of the basal set – a taxation of 20% of net betwixt £14,876 and £26,561 – and the intermediate set – a taxation of 21% connected net betwixt £26,562 and £43,662 – would summation by 3.5%.

It means much of people’s net would beryllium taxed astatine a little complaint than nether the existent system.

Despite astir of the bands remaining static, much radical would wage a higher complaint of taxation done a process known arsenic fiscal drag.

This happens erstwhile bands are not raised with inflation, and bash not support gait with increases successful pay, meaning immoderate radical are "dragged" into higher taxation brackets.

Yvonne Evans, a taxation adept and Senior Lecturer astatine Dundee University, told BBC Radio Scotland's Drivetime that little and mediate earners would lone payment somewhat from the accrued taxation thresholds.

"At champion that helps radical by astir £20, truthful it's not worthy getting over-excited astir really,” she said.

Currently, radical successful Scotland earning much than astir £28,850 - astir fractional of the country's taxpayers - wage much income taxation than they would elsewhere successful the UK.

The Scottish authorities said the projected income taxation alteration would summation that fig to £30,300.

Those with net beneath this magnitude would prevention up to £28.27 per twelvemonth compared to if they lived elsewhere successful the UK, according to the Chartered Institute of Taxation.

It said Scots earning £40,000 would wage £97 much successful income taxation than they would elsewhere successful the UK, portion those connected £50,000 would wage £1,528 more. Scots connected £100,000 would wage £3,331 more.

The draught Budget, mounting retired £63bn successful spending plans, besides included:

• An other £2bn for the NHS, bringing full backing to £21bn
• Funding for a caller wintertime substance outgo for Scottish pensioners
• A full of £15bn for councils – with nary frost oregon headdress connected assembly taxation rises
• £4.9bn to tackle the clime and quality crises
• A 3% summation successful acquisition spending
• £768m for affordable homes
• Almost £800m much for societal information benefits
• And a £34m summation successful civilization funding

Announcing the wellness funding, Robison said: "That is wealth that volition marque it easier for radical to entree GP appointments, that volition amended A&E and guarantee much Scots get the attraction they request successful bully time."

She told MSPs it would mean by March 2026 no-one volition hold longer than 12 months for a caller outpatient appointment, inpatient attraction oregon time lawsuit treatment.

The concern caput said the backing for councils would beryllium a grounds magnitude and would money wage increases for teachers, societal attraction workers and garbage collectors, among others.

There is presently a frost connected assembly tax, but the concern caput said she did not mean to repetition this measurement successful 2025-26.

However, she suggested section authorities should not spot that arsenic an accidental to hike rates.

Robison added: "While it volition beryllium for councils to marque their ain decisions with grounds funding, determination is nary crushed for large increases successful assembly taxation adjacent year.”

The two-child headdress announcement was welcomed by the Child Poverty Action Group successful Scotland and Save the Children Scotland.

However, they called for further enactment to assistance families much quickly, specified arsenic an summation successful the Scottish Child Payment.

The authorities chopped affordable lodging backing by £196m successful past year’s budget. Although this was reduced to £163m pursuing in-year adjustments, the backing was inactive down by much than 22% successful existent presumption from 2023-24.

Aditi Jehangir, chairwoman of Living Rent, said the £768m of backing announced by Robison was “only a reverse of erstwhile cuts made to the budget” and a “drop successful the water compared to what is needed”.

Council assemblage Cosla, which warned up of the Budget that cash-strapped section authorities were astatine a fiscal “tipping point”, said it would instrumentality clip to see the concern secretary’s proposals.

Probably the biggest announcement successful the Budget really isn’t portion of the taxation oregon spending plans for adjacent year.

It was Shona Robison’s “rabbit retired of the hat” infinitesimal of announcing that the Scottish authorities would determination to scrap - oregon offset, oregon mitigate - the two-child cap.

That’s a UK-wide policy, imposed by the Department of Work and Pensions connected payment payments specified arsenic Universal Credit and kid taxation credits - truthful it volition instrumentality immoderate time, and volition request immoderate assistance from the UK government.

It’s not yet wide what the mechanics volition be, however it volition work, oregon however overmuch it volition cost.

But beryllium successful nary uncertainty that this is simply a large situation to Labour.

It comes days aft an announcement connected the wintertime substance outgo besides designed to outflank Anas Sarwar’s enactment and embarrass the UK administration.

If each goes to program past the SNP authorities volition commencement sending retired payments to families of the 15,000 children affected successful April 2026. One period earlier the adjacent Holyrood election.

Labour says it's consenting to perceive to ideas, but points retired that determination is not a penny successful the coming year’s fund to enactment it.

They volition surely request to travel up with a much important effect earlier that predetermination gets overmuch closer.

MSPs volition initially statement the proposals and are capable to array amendments. They volition not ballot connected the measure until February, erstwhile ministers volition anticipation to walk it into law.

The authorities has a number of the seats successful parliament, and volition request assistance from non-SNP MSPs to propulsion done its plans.

If the fund cannot beryllium agreed, determination could beryllium a drawback predetermination – though the authorities is hopeful of being capable to hold a woody that volition spot absorption MSPs either backmost the fund oregon abstain.

The Scottish Greens, who were kicked retired of a power-sharing statement with the SNP earlier this year, person said they volition not enactment the Budget without important changes.

Green MSP Ross Greer said: “This fund fails to present connected Green proposals similar expanding escaped schoolhouse meals for P6 and P7 oregon a terms headdress connected autobus fares.

“It slashes backing for halfway section services similar schools and for cardinal clime projects similar the Nature Restoration Fund.”

Scottish Labour concern spokesperson Michael Marra said the Budget was an accidental for the SNP to instrumentality Scotland successful a caller absorption aft the UK authorities provided £3.4bn of further funding.

"If lone they had the imaginativeness to instrumentality that caller direction,” helium told MSPs.

"Scotland is going successful the incorrect absorption nether the SNP."