The Chancellor of the Exchequer, Rachel Reeves, delivered the first Labour Budget in 14 years last Wednesday, announcing a £40bn tax increase.
She said the measures would put “more pounds in people’s pockets” and “create wealth and opportunity for all”.
The budget included a promise of an extra £3.4bn for Scottish public services, after the Scottish National Party made cuts of £500m from its budget this year.
Labour sources have also said that the Scottish Government would receive an additional £1.5bn to spend in the current financial year.
Scottish Finance Secretary Shona Robinson said the Budget “met a core task of the Scottish government” but emphasised that they would continue to face “enormous cost pressures”.
Income tax rates and thresholds for Scotland, set by the Scottish government and already diverged from those at Westminster, will remain unaffected by Reeves’ plans.
The Scottish government will outline its own Budget on 4 December 2024, with Shona Robinson expected to announce tax and spending plans for Scotland for 2025-26, including decisions about Scottish income tax.
Reacting to the Budget, the President of Edinburgh Labour Students, Jonny Alvarez-Buylla told The Student that it “marked the end to failed conservative austerity” and showed that Labour was “on the side of working people”.
The Student approached the Edinburgh University Conservative and Unionist Association for comment, but did not receive a response.
The Conservative Party Leader Rishi Sunak criticised the Budget, claiming it contained “broken promise after broken promise” and went much further than what Labour had pledged during the election.
Edinburgh Labour Students reiterated that the Conservatives had left a “£22bn black hole” in the nation’s finances, a topic of ongoing debate between the parties.
Labour’s plans to boost spending on the National Health Service and schools across the United Kingdom will be funded by increases on National Insurance contributions from employers, projected to raise around £25bn a year.
The government will also raise revenue through higher capital gains tax and a freeze on inheritance tax thresholds.
Despite keeping the promise to not directly increase taxes on working people, the Office for Budget Responsibility has forecast that businesses will pass on 76 per cent of the tax rise to workers through lower wages.
The national living wage, the legal minimum for over-21s, will rise by 6.7 per cent in April 2025, from £11.44 to £12.21, equivalent to £1,400 a year for an eligible full-time worker.
Workers aged 18 to 20 will also see a rise in pay, from £8.60 to £10.
Tobacco duties will rise by two per cent above the Retail Prices Index (RPI), while vape taxes will be kept in line with tobacco tax rates.
Alcohol taxes will also increase with RPI, although a 1.7 per cent cut in draught duty promises “a penny off a pint” in pubs.
It was also announced that VAT will be brought in on private school fees in January 2025, which will apply to Scotland as well.
Edinburgh Academy’s Chief Operating Officer, Samantha Byers, told The Scotsman that the decision to implement it from January “has seriously taken us by surprise”.
University of Edinburgh students explained to The Student how they felt about changes made in the Budget.
One student who studies nursing said:
“It is fantastic to see that the government is funding more for the NHS.”
“It might relieve some of the stress on nurses and doctors and reduce the likelihood of strikes and benefit everyone.”
Another student said:
“With the cost of living rising, the increase in minimum wage might make student life in Edinburgh more affordable.”
Illustration by Violet Studdert-Kennedy