Mackay vows to prioritise stopping UK cuts and protecting public services

14 December 2017, 06:20 | Updated: 14 December 2017, 06:28

Finance Secretary

Scotland's Finance Secretary Derek Mackay has said stopping UK Government spending cuts and protecting public services are his priorities as he prepares to announce a tax hike for some Scots.

Mr Mackay will unveil his draft tax and spending plans for 2018-19 to Holyrood on Thursday afternoon - with wide expectation he will use the Budget to increase income tax for higher earners.

While that would see some Scots paying more than their counterparts in the rest of the UK - a move which some in business have warned against - the Finance Secretary insisted his proposals would be "good for taxpayers, good for public services and good for business".

However, some think tanks have warned upping income tax will not provide extra investment for public services, warning the additional cash raised will instead be needed to make up for Westminster reductions to Holyrood's block grant

IPPR Scotland claimed on Wednesday that day-to-day spending north of the border could be slashed by £700 million a year in just two years' time, adding that a 2p hike in the basic rate of income tax would be needed to cover such a cut.

With Holyrood having been granted control over income tax rates and bands, the SNP fought the 2015 election on a manifesto pledge not to increase the basic rate for the lifetime of the parliament.

But Mr Mackay said his draft Budget plans would "demonstrate beyond doubt where the Scottish Government's priorities are - stopping UK cuts, protecting public services and unlocking Scotland's economic potential".

The Finance Secretary pledged: "The Budget will bring forward key measures to protect public services like our NHS against the worst effects of UK budget cuts and continued Brexit uncertainty, and deliver a growth package to support the economy, unlock innovation and drive increased productivity.

"This will be a Budget that is good for taxpayers, good for public services and good for business. It is a Budget that will deliver for Scotland."

But Scottish Tory leader Ruth Davidson said First Minister Nicola Sturgeon had "promised Scotland's workers that no low or middle earner would pay more tax under the SNP".

The Conservative added if that pledge was not met, the SNP leader would "risk losing all trust from the people of Scotland".

The Budget is being presented to Holyrood after unemployment figures showed the jobless total in Scotland rising, alongside a drop in the number of people in work.

Ms Davidson stated: "With Scotland's growth lower than the rest of the UK, the overwhelming priority in this Budget is to deliver a shot in the arm to the economy."

She added: "This is the most significant Budget in the history of devolution. We urge the SNP to rise to the occasion."

Scottish Labour leader Richard Leonard said people needed real change from the Finance Secretary, not a Budget that "just tinkers round the edges".

The SNP made minimal changes to income tax in the 2017-18 Budget - the first in which Scottish ministers had control over rates and bands.

Mr Leonard said: "We know that councils are facing an effective cut of around £850 million and we know the human cost of that would be devastating. It would mean an end to breakfast clubs, cutting childcare to the bone and axing additional support needs in schools.

"That would be the cost of a nationalist Budget which just tinkers around the edges and fails to make the radical decisions that the people of Scotland need. People need real change, not more cuts."