Finance Secretary To Announce First Budget Under New Holyrood Tax Powers

15 December 2016, 05:31

The Finance Secretary, Derek Mackay, will set out how he will use new tax powers being handed to Holyrood when he unveils his first budget.

Mr Mackay, who took charge of the finance brief after May's Scottish Parliament elections, is to reveal his spending plans for 2017-18 to MSPs in a statement this afternoon.

But with new powers being devolved to Edinburgh, including the ability to vary income tax rates and bands, the draft budget will also set out how the Scottish Government is to raise some of the cash it spends.

The Finance Secretary said it would be an ''historic budget, delivered in challenging economic and political times''.

He added: ''The UK Government's Autumn Statement was a missed opportunity to end austerity. It did not go far enough to get the economy back on track and lacked much needed investment in public services.

''Despite these challenges, the proposals I will publish later today will be a budget for our economy and public services, our environment and communities. It will support stability and growth, help tackle climate change and promote fairness in our society.''

Scottish Conservative leader Ruth Davidson said the powers put the SNP administration ''in the driving seat'' as she challenged the party to ''ditch its obsession with a referendum on independence, ditch its plan to make Scotland the highest taxed part of the UK, and focus on growing Scottish jobs''.

Ms Davidson stated: ''From next year, it will be the Scottish Parliament which decides the tax rates on all our pay cheques. And it will be those taxes which will then be used to pay for the NHS in Scotland and for our vital public services.

''The absolute priority in today's budget therefore must be to grow jobs, grow the economy and so increase the funding we have to support our NHS and school funding.

''To do that, Scotland must remain competitive within the United Kingdom, and Scottish families and businesses should not be taxed more than in the rest of the United Kingdom.''

Labour's Kezia Dugdale said however that voters in Scotland would ''learn the truth about the SNP'' from the budget.

With Labour backing the reintroduction of a 50p top rate of income tax in Scotland Ms Dugdale said: ''The Nationalists claim to be a progressive party. If that is the case, they will use Holyrood's historic powers to ask those with the broadest shoulders to pay more tax to raise money to tackle Scotland's schools crisis.

''If Derek Mackay fails to do that, he is no better than a Tory Chancellor - and he will single handedly destroy any claim the SNP has to be a party of the progressive left.''

The Scottish Greens and Liberal Democrats also want to see income tax rise in Scotland to raise cash for public services.

Green co-convener Patrick Harvie said: ''Like all high earners, every single MSP will get a tax cut from the UK Government this year. It would be a disgrace if we don't take the chance to reverse that in Scotland and use the resources instead to tackle child poverty and support teachers, GPs and young carers. We can provide this investment by using Holyrood's powers in a progressive way, leaving everyone with a below average salary better off.''

With the SNP now forming a minority administration at Holyrood, Mr Harvie said the Scottish Government ''must work with others to pass their budget''.

He added: ''This is a test for Scottish Ministers. If their budget is timid it will go nowhere. If it's bold it will signal that they want to work constructively to make a real difference to people's lives.''

Meanwhile, Scottish Liberal Democrat leader Willie Rennie said: ''Liberal Democrats are proposing a modest penny on income tax that would deliver hundreds of millions of pounds that can be invested in our schools.

''After seeing education slip in the SNP's hands now more than ever we need to see investment to make sure we can make our education systems one of the best in the world again. A boost to education would provide a boost to the economy and help make Scotland a high wage, high skilled economy that we all strive to see.''