Finance Secretary rejects tax powers "gamble"
Derek Mackay argues altering tax rates could have been counter-productive
The Scottish Finance Secretary has said he does not want to take an "unnecessary gamble" with the new tax powers for Scotland by raising the top rate of income tax in his draft budget.
Labour has accused Derek Mackay of "bottling out" of using the new powers but the Finance Minister said analysis suggested increasing the top rate would lose money for public services in Scotland.
Two Labour-controlled Scottish councils claim they will have to make cuts and savings of ÂŁ90 million in total - Glasgow City Council claims it may need ÂŁ60 million of savings and Fife Council is predicting ÂŁ30 million cuts - but Mr Mackay said he had increased the money available for local government services by ÂŁ240 million in Thursday's draft budget announcement.
Opposition parties claim local government funding is being cut by up to ÂŁ300 million.
Mr Mackay said: "We're investing ÂŁ700 million extra resources and I don't want to take an unnecessary gamble with the new tax powers that we have.
"We had analysis that suggested if I increased the additional rate, the top rate of tax at this time, it would be possible that it would be counter productive and I would lose money to Scottish public services.
"That's not a gamble I was willing to take but I will continue to look at the evidence, engage with other political parties and monitor this situation, but I'll provide a balanced proposal on taxation and spending in Scotland to do the right thing to grow our economy and tackle inequality in our society."
Questioned about claims that some higher rate taxpayers in Scotland may end up paying ÂŁ300 more in tax than their counterparts elsewhere in the UK, he agreed.
He added: But you were also correct to say that I've frozen the basic rate, the higher rate and the additional rate and in Scotland there are public services and commitments, part of the social contract that we really value, such as no prescription charges in Scotland, concessionary travel, free education, that means no tuition fees and major investment in the infrastructure of our country as well as a very competitive business regime as well.
"You get what you pay for and we have a social contract in Scotland where we value these things and I'm not following the austerity approach of the UK Government."