FINANCE SECRETARY UNVEILS HIS BUDGET

Mackay’s Budget shares the burden of the bill for our vital public services

WEALTHY Scots will be taxed more to give public services a boost, Scotland’s Finance Secretary said yesterday.

Derek Mackay announced a series of changes designed to increase the burden on the rich.

His 2019-20 draft budget ruled out passing on UK Chancellor Philip Hammond’s income tax cuts and he also pledged to hike fees on those buying second homes.

Unveiling his £34billion spending plans, Mackay said “now is not the time” to cut taxes for higher earners.

Unlike Hammond – who is to increase the threshold for the higher rate of income tax for the rest of the UK to £50,000 in April – Mackay announced this would be frozen.

It means about 400,000 workers will pay the charge, set at 41p in Scotland, when they start earning more than £43,430 a year.

Overall, the changes mean Scots taxpayers earning more than £26,990 per year will pay more tax than in England. Those earning £50,000 will pay about £1500 more in tax than they would south of the Border.

Mackay stressed 55 per cent of taxpayers in Scotland will pay less than those on the same salary elsewhere, while everyone earning under about £124,000 would pay less tax than they did last year.

However, the Scottish Tories claimed the budget was “penalising hardworking families”. Tory finance spokesman Murdo Fraser added: “That’s the price of living in the SNP’s Scotland. None of this was necessary. There was absolutely no need for more SNP tax rises.

“UK Chancellor Philip Hammond delivered an additional £950million in his last budget. The SNP Government should have used that instead of further raiding the pockets of Scotland’s workers.”

Scottish Labour also attacked the budget, claiming it was too “timid” and did not do enough to combat Tory austerity.

Labour finance spokesman James Kelly said: “Public services are at breaking point, head teachers are writing to parents about unprecedented cuts, one in four children in Scotland are living in poverty and our rail system is in crisis. Scotland is being let down by Nicola Sturgeon’s timid Government and Mackay’s timid budget.”

With the Lib Dems also criticising the proposals, Mackay is likely to need the support of Green MSPs to get the Budget through parliament in the new year.

The Green Party’s co-convener Patrick Harvie said it was “astonishing” that Mackay made no reference to council tax reform – one of their key demands.

Mackay also revamped the land and building transaction tax by increasing the amount buy-to-let investors or holiday home buyers pay on a second residential purchase from three per cent to four per cent.

The change is expected to generate about an extra £20million per year.

The SNP minister announced a below-inflation cap of 2.1 per cent on business rate increases for 2019-20.

Health spending will increase by almost £730million next year, while schools will get more than £180million extra to boost attainment levels.

Education spending saw a real-terms increase including a £180million pot to raise standards in schools.

Mackay promised £5billion of spending on capital investment next year, including £1.7billion in transport infrastructure and £175million for nursery and childcare buildings.

Public-sector pay for workers earning up to £36,500 will rise by three per cent – less than the RPI rate of inflation.

But Mackay warned his budget plans might have to change if the UK crash out of the EU without a deal.