John Swinney has said the Scottish Government will “think carefully” about the tax decisions announced by the UK chancellor, but insisted the approach will be based on “fairness”.
Scotland’s deputy first minister, who has taken charge of finance while Finance Secretary Kate Forbes is on maternity leave, said the tax cuts announced by Kwasi Kwarteng on Friday will have “significant” consequences.
The chancellor announced a series of measures, including cutting the basic rate of income tax to 19p in the pound and removing caps on bankers’ bonuses, plans which Swinney said would put the finances of the UK in ‘a very dangerous place’.
It also sees the top rate of income tax for those earning £150,000 or more each year.
Speaking on BBC Radio’s Good Morning Scotland, Mr Swinney said: “We will be thinking carefully about the announcements made by the UK government on Friday.
“We accept a tax approach that is based on the principles of fairness and ensures that we have a progressive character in our tax system.”
He added: “I think it needs to be clearly understood that there are some really significant and dangerous times that we’re facing right now.
“We are seeing the UK’s public finances in a very dangerous place because of Friday’s tax cuts.
“Debt is rising, interest rates are rising, investor confidence is falling and the value of the pound is collapsing.
“That’s what Friday’s Conservative changes have brought us, as well as tax cuts that benefit the wealthiest in our society.”
The Scottish Government is estimated to receive around £600 million as a result of tax cuts elsewhere in the UK.
But Swinney said tough decisions will have to be made about how that money is spent.
Earlier on the BBC programme, Scottish Tory finance spokeswoman Liz Smith urged the Scottish Government to follow suit with tax cuts.
“The challenge now is for the Scottish Government to match some of these changes, because what we cannot have is a widening gap between the tax agenda in Scotland compared to the UK,” he said.
He agreed there was a “very difficult message here when people see bankers’ bonuses going up” at a time when “a lot of people are struggling to pay their bills”.
But he said: “The bigger picture of this is to ensure the economy grows.
“We cannot continue on the path we are on now, where it is slow and the employment scene is not as strong as it should be, particularly in Scotland where we have a declining labor force relative to the total population, there are productivity issues. .
“These are really serious because they affect the tax take, they affect the potential for the economy to develop in the future and that’s what the prime minister is trying to target.”
Swinney hit back at his comments: “Yes, there will be around £600m that will be available to the Scottish Government as a result of the tax cuts.
“But you had a Tory spokesman on the radio this morning who wants me to equalize UK decisions and use all that money to cut taxes.
“And then you’ll have the Tory health spokesman on the radio demanding we spend the same £600m on health.
“Now what this tells us is two things. One, there are hard choices to be made and two, the Tories are opportunists who are simply trying to spend the same amount of money twice by demanding tax cuts and increasing public spending at the same time.”