Scottish budget will ‘protect what matters most’, says Finance Secretary Derek Mackay

SCOTLAND’S Finance Secretary said his budget for 2019-20 would “protect what matters most” as he announced additional cash for health and education.

Derek Mackay said spending on the NHS and care services would increase by almost £730 million next year, while schools will get more than £180 million more to boost attainment levels.

Revealing his tax and spending plans for the coming year to MSPs, he said: “The Scottish Government can not completely protect Scotland from the recklessness of the UK Government but the decisions was have taken in this Budget ensures we protect what matters most.”

Most taxes will remain the same after the Finance Secretary opted to increase higher rates of the levy last year as well as introducing two additional income tax bands north of the border.

Unlike Chancellor Philip 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, Mr Mackay announced this would be frozen.

This means workers will continue to be liable for the charge, which is set at 41p in Scotland, when they start earning more than £43,430 a year.

The draft Scottish budget for 2019-20 will “protect funding for education and improve attainment”, Mr Mackay said, at the same time as investing “record sums” in health services.

He also told how his decisions would provide a real-terms increase in funding for local councils, expand free personal care in Scotland and help deliver a new social security system north of the border.

Here he pledged £435 million of spending to provide additional cash “over and above” Westminster welfare payments – including £100 million to continue to mitigate the impact of the so-called bedroom tax in Scotland.

The Finance Secretary told MSPs the Scottish Government was “doing all this while the UK Government implodes on their journey of economic self-harm”.

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

Public-sector pay for workers earning up to £36,500 will rise by 3% – more than the rate of inflation.

Meanwhile, he announced a below inflation cap of 2.1% on business rate increases for 2019-20

“This will ensure that over 90% of properties in Scotland and all small and medium-sized businesses will pay a lower poundage than they would in other parts of the United Kingdom,” Mr Mackay stated:

Overall he said his Budget was one of “stimulus and stability”.

Mr Mackay stressed: “It delivers for today and invests in tomorrow and does so with fairness, equality and inclusiveness at its heart.

“It provides an increase of almost £730 million for our health and care services, invests more than £180 million to raise attainment in our schools and gives a vital boost to our economy through a £5 billion infrastructure programme.”

He added: “As a result of these decisions, we have been able to invest in essential public services, particularly the NHS, while ensuring 55% of income taxpayers in Scotland pay less tax than those earning the same income in the rest of the UK.

“Taken together with the personal allowance, 99% of taxpayers will pay less income tax next year on the same income.

“This budget delivers the public services, social contract and economic investment people expect while mitigating, where we can, the impacts of the UK Government’s policies of austerity and Brexit that are causing so much harm.”

Responding to the Budget, Scottish Greens leader Patrick Harvie argued that local councils need to be allowed to raise money independently of the Scottish Government for services.

Mr Harvie said: “It is clear that after two budgets in a row where the Scottish Government proposed deep cuts to Local Government to see those reversed under Green pressure, the Scottish Government no longer feels able to turn the screw on local councils and the services they provide across the country, and I’m pleased that that pressure has been brought to bear.

“It’s equally clear that in the face of rising demand for those services, councils urgently need the power to raise the funds themselves to meet that rising demand and to do it fairly.

“Why was there no mention in this Budget of the need for reform of local taxation?,” he added.

Derek Mackay replied by saying that there has been a package of support for Local Government of £11.1 billion, adding this amounted to a real-terms increase of £210 million.