A FORMER health secretary has called for the Scottish Government to introduce a land levy which he estimates could generate £2 billion a year to help fund public services including the NHS and social care.

Alex Neil, a former Cabinet minister under both First Minister Nicola Sturgeon and her predecessor Alex Salmond said the the new tax could be introduced by October next year and that in the interim period a suite of measures could be brought in to raise vital funds.

His intervention comes after Deputy First Minister John Swinney announced last Wednesday that frontline health services across Scotland will be scaled back to help save £1.2bn to cover wage rises and stem surging inflation.

Mr Swinney outlined a more than 2 per cent budget cut as he said “there has never been a time of greater pressure on the public finances”.

He said the savings included £400 million worth of “reprioritisation” of resources within the health and social care portfolio.

Mr Swinney told MSPs that a key cost pressure remained public sector wages amid a slew of new pay deals. 

He said that £700m has been committed to fund the wage increases, adding: “To be absolutely clear, every additional penny for pay has had to be found from existing, previously allocated and agreed budgets elsewhere within the current, finite, Scottish budget.”

But Mr Neil said a range of measures could be introduced by ministers to raise funds and underlined a possible land levy which exists in Denmark and Estonia.

“As a general principle, I think we should be trying to raise tax rather than cutting essential services,” he said.

“Apart from anything else, when you cut some of these services, it will end up costing the public purse even more as if people, for example, are not getting mental health services when they need them, they are going to have to use other services until they get the help they need.”

He added: “I realise this would require primary legislation but in my view,  a simple levy of, say, £100 per acre on anyone owning over an acre of land, could generate £2bn and that would avoid the most damaging cuts like the ones to health and social care.”

Mr Neil was the Scottish Government’s health secretary from 2012 to 2014 and was social justice secretary from 2014 to 2016. 

He was first elected to Holyrood in 1999 and stood down last year. He stood unsuccessfully against Mr Swinney in the SNP’s leadership contest in 2000.

In addition to a land levy, Mr Neil also urged the Scottish Government to consider introducing other local taxes and raising income tax on very high earners such as people on salaries exceeding £100,000 a year.

“The SNP should not be acting as a post office for Tory cuts,” he said.

“My view is that the land levy could be introduced ahead of a long-term plan for a proper land value tax, similar to one they have in Denmark and Estonia, both of whom have a comprehensive land value tax.

“That sort of emergency measure could be up and running by October next year.”

Mr Neil also suggested ministers could consider a mansion tax, derelict property taxes, and a council tax supplement on houses valued at more than £350,000.

A Scottish Government spokesman said: “We will continue to take a responsible approach towards developing tax policy in line with the principles of fairness and progressiveness set out in our Framework for Tax.”

The spokesman added: “Decisions on Scottish income tax are taken as part of the annual Budget process, and have created a fairer and more progressive tax system in Scotland, protecting lower earners while raising additional revenue to fund vital public services.”