The Scottish Budget 2026-27, announced on 13 January 2026 by Finance Secretary Shona Robison, gives welcome short-term help to families and the NHS. But it also delays the big changes most Scots want — and need — to make life more affordable, homes more accessible, and jobs more secure.
It keeps taxing wages and hard work more heavily than the unearned value that comes from Scotland’s land and natural resources. This isn’t fair. And it’s a direct result of devolution’s limits. When Scotland takes full control, we can build a system that works for everyone.
A Budget Constrained by Devolution
The budget allocates nearly £68 billion, including record £22.5 billion for health and social care. It raises the Scottish Child Payment to £28.20 per week (and £40 for under-ones from 2027-28), introduces breakfast clubs in schools, and expands wrap-around care.
These are positive steps. Many families will feel real help. But the budget is still short-term thinking. It doesn’t fix the root problems most Scots face every day.
Scotland’s land and natural resources are worth billions — from the surface of the land to oil and gas, wind, wave, tidal power, water, and forestry. Their value is created by nature and our communities, not by any one person’s effort. Yet the budget taxes your wages far more than these unearned gains. That’s backwards.
Devolution ties Holyrood’s hands. Westminster controls the big money levers — monetary policy, borrowing, major taxes. This forces short-term fixes instead of real change. When Scotland has full sovereignty, we can tax land and natural resources fairly, cut taxes on work, and keep more money right here in Scotland for the things that matter.
Taxation and Natural Resources: A Missed Opportunity
The budget’s property measures fall far short of what devolved powers already allow.
The introduction of two new Council Tax bands for properties over £1 million from April 2028, supported by £5 million for targeted revaluation, offers only limited progressivity. The system remains anchored in 1991 valuations, failing to reflect current values of land and associated natural resources. This perpetuates speculation that inflates housing costs and leaves derelict sites underused.
Scotland already has the legislative authority to reform local taxation — replacing Council Tax and non-domestic rates with a system that taxes the unimproved value of land and natural resources rather than buildings, improvements, or labour inputs. Such a reform could generate billions in stable revenue, as evidenced by Scottish Land Commission analysis and land reform advocates.
Instead, the budget relies on fiscal drag through frozen higher income tax thresholds to raise £190 million, while continuing to tax earned income more heavily than unearned gains from natural resource ownership and appreciation.
The £1.5 billion efficiency savings target risks cuts to frontline services — local libraries, roads maintenance, community facilities — without addressing untaxed value appreciation from land and natural resources that accrues to private owners rather than the public.
A resource-value-based approach would capture these gains, ease the tax burden on wages, discourage hoarding and under-use of natural assets, and provide reliable funding for essential services, local regeneration, and the NHS.
The budget’s £5 billion just transition commitment and £93 million for offshore wind supply chains are constructive steps. However, these coexist with policies that impose disproportionate costs on ordinary households. Sovereignty opposes Ultra Low Emission Zones, carbon credits, and the internal combustion engine ban, which act as additional taxes on working families without delivering a genuine just transition. We advocate protection of Scotland’s oil industry — including development of new fields where economically viable — and a balanced all-energy strategy to secure jobs in energy-dependent regions.
Housing Emergency: The Budget Does Almost Nothing
Scotland is in a housing emergency. Rents are sky-high, affordable homes are scarce, homelessness is rising, and too much land lies empty or hoarded for profit.
The budget’s tiny Council Tax tweaks and delayed property changes do nothing to fix this. Efficiency savings could even cut housing support.
Sovereignty’s plan would:
- Tax the unimproved value of land and natural resources → stop land banking and speculation
- Bring derelict and vacant sites back into use → massively increase land available for new homes
- Use the revenue to fund a huge expansion of truly affordable, community-led housebuilding
This isn’t radical — it’s common sense. More homes mean lower rents and prices your children can afford.
Sovereignty’s Plan: Real Solutions for Real People
Devolution’s limits mean Scotland loses out. A projected £2.1 billion capital shortfall by 2029-30 forces short-term thinking.
Independence removes those limits. Sovereignty’s policies would start on day one:
- A Scottish Central Bank and national currency → full control over our money (requires sovereignty, as monetary policy is reserved to Westminster)
- Negative Income Tax → simple cash support that rewards work and cuts poverty traps (requires sovereignty to fully replace reserved benefits like Universal Credit)
- Joint tax filing for couples → doubles thresholds for married and civil partners, helping families keep more (could be implemented under devolution, but sovereignty enables full integration with other reforms)
- Armed neutrality → avoids expensive alliance costs and keeps resources for Scottish priorities like health, education, housing, and jobs (requires sovereignty, as foreign policy is reserved)
Sovereignty would CUT income tax for all Scots, and simplify the tax bands. From £20,001-£50,000 – 19% £50,001 and above – 38%. These rates would make us more competitive than England for all tax brackets, and should reduce the flight of higher earners. This works seamlessly with Negative Income Tax below the threshold, ensuring support for lower earners while rewarding work.
Budget vs Sovereignty
- Taxation → Heavy on wages; light on land & natural resources → Shift to unimproved value of land & natural resources, with cuts to income tax for all Scots
- Child Poverty → Phased increases → Negative Income Tax: direct, work-rewarding support
- Housing → Minimal action → Tax land value → release sites & fund affordable homes
- Energy → Restrictive just transition → Balanced all-energy strategy protecting oil jobs
- Money → Controlled by Westminster → Scottish Central Bank & currency from day one
These changes would cut child poverty more effectively, stop privatisation through freeports, solve the housing crisis, protect jobs, and build a stronger Scotland.
What Independent Experts Say
Future Economy Scotland calls the budget’s £1.5 billion efficiency savings “highly optimistic” and says it delays tough choices rather than avoiding them. They argue tinkering with Council Tax isn’t enough and warn of damaging cuts unless serious tax reform happens. Read their initial response | Detailed analysis.
Common Weal consistently criticises short-termism and devolution’s barriers to real reform. For their wider work on fiscal fairness and independence: Common Weal website.
Other strong views include:
- IFS: “pre-election sweeteners and post-election cuts” → IFS response
- Fraser of Allander follow-up → More on the 2026-27 Budget
Electioneering: Short-term Gains Over Long-term Solutions
Four months before the election, the budget is full of visible, voter-friendly measures: family supports, business rates relief, modest tax threshold rises.
Big changes — like the “mansion tax” and private jet tax — are pushed back until after 2027. The IFS calls it “pre-election sweeteners and post-election cuts,” with modest gains now followed by real-terms cuts later. This is classic devolution politics: short-term wins, long-term pain.
Sovereignty offers something different — long-term fairness, real control, and policies that put Scotland’s people first.
Scotland Deserves Better — Let’s Build It Together
The 2026-27 budget gives some help today, but tomorrow brings cuts and the same old problems. Scotland deserves more: fair taxes on land and natural resources, more homes our families can afford, secure jobs, and real control over our future.
Sovereignty is ready to make that happen.
Visit sovereignty.scot today to read our full policies and join the campaign ahead of May 2026.
Shareable quotes
- “Tax unearned gains from land and natural resources, not your hard-earned wages.”
- “The housing emergency ends when we stop rewarding land hoarding and start building homes people can afford.”
- “Devolution means short-term fixes. Sovereignty means lasting change.”