Holyrood will borrow ‘to the max’
● Mackay says government will use powers to back spending plans
The Scottish Government is to use its enhanced borrowing powers “to the max” taking its overall debt to about £1 billion, finance secretary Derek Mackay has confirmed.
As part of the devolution of new post-referendum Smith Commission powers, Scottish ministers will be able to borrow up to £3bn, with a maximum annual limit of £450 million. Borrowing powers have also been available for the previous two years under the Calman Commission powers and the Scottish Government said about £1bn will have been used by the end of 2017-18.
Holyrood’s finance committee grilled Mr Mackay on his spending plans for 2017-18 yesterday.
Mr Mackay said: “In terms of our new powers from the Scotland Act, we will use them to the max.
“Our proposal
is
to
set
0 Derek Mackay said Holyrood’s beefed-up borrowing powers will be used, up to the £450 million cap out further spending plans around borrowing and we fully anticipate using them to the cap of £450m. We do intend to use them over the course of the year.”
He defended the SNP administration’s income-tax plans – the Conservatives have raised concerns Scotland will be the highest-taxed part of the UK.
While the UK government is to raise the earnings threshold for the higher 40p tax rate from its current level of £43,000 to £45,000, the Scottish Government has insisted it will not pass on the “Tory tax cut”. Instead, the threshold in Scotland will rise in line with inflation, initially to £43,430.
Followingadjustmentstothe Scottish block grant, this will raise “around £79m” in revenue for the Scottish Government, the finance secretary said.
Conservative MSP Murdo Fraser said a “differential“income tax system exists in Scotland.
Mr Fraser added: “There is a risk this sends out a message about Scotland being the highest-taxed part of the United Kingdom and the impact this might have on the ability to attract investment.”
The finance secretary accused Mr Fraser of having “put out quite a negative message” on tax.
Mr Mackay said: “We’re not passing on the tax cut for some of the richest in society, I think that’s the right thing to do.
“But 99 per cent of adults will pay no more tax, given their current level of income, than in 2016-17.
“The message that Scotland is high tax has really been put out by the Conservatives, and I think that is unhelpful when it’s the wider package that is important around taxation.”