Mackay hints at cuts and tax hikes in ‘challenging’ Budget

THE Finance Secretary has given the strongest signal yet that he is plotting major cuts and tax rises by warning that next week’s Budget will be the ‘most challenging’ since devolution.

Derek Mackay tried to blame the UK Government for the decisions he will announce, saying ‘Tory austerity’ is responsible.

He also said ‘even using our tax powers’ won’t offset the need for cuts.

But the Tories said the £2billion funding boost provided to Scotland by Chancellor Philip Hammond’s UK Budget has destroyed the case for raising taxes.

Mr Mackay said: ‘When you take everything into account – the decade of Tory austerity, changing demographics, the impact of the pay cap, a worsening UK economy and an impending Brexit – it is no exaggeration to say that we are facing the most challenging Budget in the history of the Scottish parliament.’

He claimed frontline services would be squeezed in Scotland due to ‘Tory austerity’ and insisted Mr Hammond’s Budget ‘brings new financial challenges’.

He also gave a strong indication that public sector workers will receive only a small increase in their salaries, despite his high-profile announcement that he would end the 1 per cent pay cap.

He said: ‘That commitment is not an easy one to deliver. With cuts landed upon us to resolve and increasing pressures ahead, no government can meet every demand – so this Budget will be tough.’

Scottish Tory finance spokesman Murdo Fraser said: ‘As has been proven time and again, this SNP Government has seen a real terms increase in their budget.

‘When you add to that the £2billion boost announced by Phillip Hammond earlier this month, it destroys the SNP’s case for raiding the pay packets of ordinary Scottish families. ‘Derek Mackay needs to close the tax gap between Scotland and the rest of the UK rather than growing it. Only with a growing economy can we generate additional tax revenues.’

A UK Government spokesman said: ‘We are delivering for Scotland by giving a £2billion funding boost to the Scottish Government.’

Comment – Page 16