Q&A with Derek Mackay

Derek Mackay, Cabinet Secretary for Finance & the Constitution

1.         You are now doing the job that two Cab Secs did previously, is the FM basically getting value for money out of her Finance Secretary?

Of course, it is a great privilege to have been appointed by the First Minister to serve as Cabinet Secretary for Finance, Economy & Fair Work – it’s a fantastic role in the new cabinet.

Following the successful establishment of the new Scottish system of income tax and with my focus on growing the economy, the creation of a combined portfolio for finance, economy and fair work makes sense.

People can have confidence that the Scottish Government will continue to deliver for people, public services and communities across the length and breadth of the country. The figures in the latest Scottish Social Attitudes Survey show that we are maintaining the trust of the Scottish people and that our priorities and budget decisions are in line with what the public expect – growing the economy, protecting frontline health services and improving education.

I am also supported by an excellent team of ministers.

2.         You’ve now held the nation’s purse strings for over two years, what do you see as the current priorities?

Transforming Scotland’s economy is at the heart of everything this government does, including the way in which we plan, utilise and allocate our available financial resources. My priority is focusing on inclusive growth –  growth that combines increased prosperity with greater equality, creates opportunities for all, and distributes the dividends of increased prosperity fairly. Or put simply, growth that benefits people, business and places in Scotland. And this focus on growth opportunities shows that Scotland means business.

We are ambitious for Scotland and we will target our resources to support the delivery of the social contract. Over the rest of this parliament we will deliver on our key commitments, build on the principle of equality for all, from birth through early years and education, to employment and retirement.

This government will ensure that people are able to access essential public services, when they need them, which are free at the point of delivery. As I said when you interviewed me in your January issue, I believe in a strong NHS, a strong pension system and strong social security support.

3.         You will go down as the first Finance Secretary in Scotland to raise tax. Is that a legacy to be proud of?

I am proud to have led a discussion about using the Scottish Parliament’s powers to make income tax fairer and more progressive. And I am proud that when faced with UK Government budget cuts, increasing pressure on public services and the critical challenges of Brexit, the Scottish Government had the courage to explore alternative approaches to tax in a principled, transparent and collaborative way.

I feel privileged to have introduced a uniquely Scottish income tax system that will raise more than £210 million extra in 2018-19 to support public services and Scotland’s economy. The new system asks those with the broadest shoulders to pay proportionately more: that is progressive taxation. We are protecting the majority of Scottish taxpayers while raising revenue to support the cherished public services on which we all rely.

Our income tax reform is historically significant –  it is a crucial development for Scotland, an important milestone for devolution and sets a precedent for other parts of the UK. Given the current debate about raising taxes to fund the NHS in England and Wales, the Scottish Government is leading the field in this area, as in so many others.

I am very proud with what we have achieved as a government to protect the vulnerable, reduce health inequalities and address social need across Scotland. This contrasts strongly with the relentless austerity approach pursued by the UK Government which has cause needless pain and hardship.

by Mark McLaughlin

Society & Welfare

Analysis: The last year has seen Derek Mackay become part Robin Hood reformer, part austere King John

My predecessor implemented reforms to Land and Buildings Transactions Tax ensuring more than 85 per cent of house purchasers pay less tax relative to Stamp Duty Land Tax, or none. I am continuing this progressive trajectory by cutting income tax for the 55 per cent of Scottish taxpayers who earn less than £26,000 this year, making Scotland the lowest taxed part of the UK for the majority of Scottish taxpayers.

4.         Scottish local authorities are calling for more powers to raise taxes locally, for example, through a tourist tax or workplace parking levy. Would you support this?

The Scottish Government is committed to making local taxation more progressive whilst improving the financial accountability of local government and is always open to further dialogue on options for reform. Our reforms to Council Tax, in place since April 2017, protect household incomes, make local taxation fairer and ensure local authorities continue to be properly funded while becoming more accountable.

Scottish ministers have been very clear that we will not consider requests to explore a tourism levy unless the tourism and hospitality industry are involved from the outset and their long-term interests are fully recognised.

5.         You have held a variety of posts in government before now; transport, local government & planning and finance and constitution. What lessons from those roles do you bring to the current one?

My time in government has taught me the importance of listening to experts. I value the insight, and like the evidence-based approach to decisions. That’s why I’ve spent the days since being appointed to my expanded brief listening to experts in business, trade unions and civic life.

And I think it is equally important to use positivity to build consensus and find solutions. As Finance Secretary, I have had to work to build consensus to ensure that the Scottish Government’s budget gets cross-party support. I want to carry that engagement forward into my work to support the Scottish economy. While robust debate is part and parcel of democracy, the public rightly expects their politicians to work together for the good of the country.

I value having a team approach, and I want my new ministerial team to work closely together to deliver economic growth for Scotland. The impact of the economy is wider than just my remit, it is something that should be at the forefront of the agenda for the Scottish Government as a whole, and that we as a cabinet team need to work closely together to deliver.

6.         You have three ministers working under you now and two are new to government, what advice do you offer new ministers and how would you describe you approach to fair work in the context of being their boss?

I have a very committed team that is excited by the challenge we are taking on. Combining the finance and economy portfolios into one cabinet position, supported by Jamie Hepburn as Minister for Business, Fair Work and Skills, Ivan McKee as Minister for Trade, Investment and Innovation, and Kate Forbes as Minister for Public Finance and Digital Economy, provides a cohesive platform to ensure that the government’s finance, tax and business support functions are aligned to better deliver sustainable economic growth.  

As a ministerial team, we have a strong platform to build upon and we will work as a team to deliver for Scotland’s economy.

7.         In terms of the arguments for independence, it is the economy that will ultimately swing it. How heavy does that responsibility rest on your shoulders as SNP Finance Secretary and having done the role now for two years, are you still convinced of the arguments?

The economic arguments remain central to the case for Scottish independence. This is not because growing the economy is an end in itself, but because a strong economy provides the foundations for creating high quality jobs and strong public services, and ensuring that everyone in Scotland has the opportunity to achieve their potential.

We have the potential to become one of the most successful countries in the world. The Sustainable Growth Commission set out a strong case for why the London-centric UK economic model has failed Scotland, and how with all the tools of an independent nation we could improve productivity, participation and population growth, and seek to match the performance of the world’s most successful advanced economies.

Over the past two years, the arguments for independence have only strengthened. We face Scotland being taken out of the EU, against the wishes of the Scottish electorate, and a UK Brexit policy which will damage exports, jobs and make us all worse off. With independence, we instead have the opportunity to ensure that the wishes of the Scottish people are respected, and harness our economic strengths to build a fairer and more equal society.

8.         What was the first job you had, i.e. paper boy at school or work during the summer holidays, and were you always treated fairly?

My first job was working in a local corner shop at the weekends. I was treated well, but the fair work agenda has certainly moved on since then!

9.         What’s your approach to your own finances, generous with the cash or a bit of a spendthrift?

My approach to my own finances is the same as my approach to Scotland’s finances: competent, responsible and balanced.

Under the direction of this administration, the Scottish Budget has consistently delivered resources to build a fairer, more prosperous country and to put the progressive values of this government into action.

The UK Government’s austerity approach is the wrong choice for Scotland and for individuals in Scotland. Rather than continuing his programme of cuts to public spending and tax cuts for the wealthiest, the Chancellor should invest the available fiscal headroom in vital public services and economic stimulus.