Scots budget talks to continue on day of Holyrood vote
Scottish government secures budget deal with Greens
(about 14 hours later)
Talks to find a majority for the Scottish government budget are ongoing with hours to go until MSPs vote on it.
The Scottish government has secured a deal with the Greens to pass its budget proposals ahead of a Holyrood vote.
Finance Secretary Derek Mackay has been negotiating with opposition parties in a bid to find support for his plans, which include major changes to tax.
Finance Secretary Derek Mackay had been in negotiations with opposition leaders to find backing for his plans, which include changes to the tax system.
Talks with the Greens and Lib Dems are expected to continue on Wednesday in the run-up to the vote to seal a deal.
A spokesman for the Scottish Greens said they had secured "significant additional funds" as part of the deal.
Mr Mackay said his budget would provide "stability, sustainability and stimulus" for the economy and services.
Mr Mackay will inform MSPs of the details from about 14:50 ahead of the stage one vote.
However, the Greens said they were looking for "significant amendments to the budget as it stands" before a deal could be struck.
The Greens said they had secured a "substantial package" of funding in exchange for their support, including cash for councils, low-carbon capital investment and a contribution towards a "fairer pay settlement for public sector workers".
As a minority government, the SNP needs one opposition party to at least abstain to get its budget plans through Holyrood.
Scottish Greens co-convenor Patrick Harvie told BBC Scotland: "We believe Derek Mackay is going to announce changes to the draft budget that will be enough for us to say we have protected local services, protected public sector pay and achieved a shift on local carbon investment and other priorities.
Neither the Scottish Conservatives or Labour are considered potential partners by Mr Mackay, who ridiculed Labour proposals set out on Tuesday as unworthy of serious consideration.
"That is the kind of results that you get when you sit down and negotiate properly, bring positive, constructive ideas to bear."
Talks with the Greens and Lib Dems are ongoing, with hours to go until the stage one vote on the budget bill.
The Greens had previously indicated they could only support the budget if an additional £157m was given to councils.
'Significant amendments'
Anomaly addressed
SNP members supported a non-binding Green motion in the chamber earlier in January which called for protection for public services, "a fair pay increase for public sector workers" and investment in "low-carbon infrastructure".
It is understood that an anomaly in Mr Mackay's original income tax plans that would have seen those earning £50,000 actually pay less tax rather than more will be addressed as part of the deal.
However, co-convener Patrick Harvie said this must be reflected in the details of the budget offer, saying: "While the discussions have been constructive and professional, it's clear that there must be significant amendments to the budget as it stands, and we urge the finance secretary to take our proposals forward.
Talks had also been held with the Lib Dems, who were seeking more support for education and health along with financial backing for ferry services in Orkney and Shetland, but an agreement could not be reached.
"If he decides not to accept the changes we have proposed, it's unclear where else he will be able to seek support for his budget."
However, BBC Scotland political editor Brian Taylor said he expected more money for the ferries to now be included in the budget regardless - which could be enough to win the backing Lib Dem MSPs Liam McArthur and Tavish Scott, who represent Orkney and Shetland respectively.
The Lib Dems, meanwhile, are seeking funding for education and mental health, along with support for ferry services in the northern isles.
The agreement between the Scottish government and the Greens covers all three stages of the budget process, meaning Mr Mackay now has backing for his plans in full.
Leader Willie Rennie said the budget "needs to do more to meet the long-term needs of the economy".
Talks went down to the wire, with Green co-convener Patrick Harvie revealing he had stayed in contact via wi-fi even while taking part in a finance committee session about Brexit on Wednesday morning.
He said: "It should invest in people through education and mental health. We have a fully costed plan to make that happen.
The minority SNP government needed the support of at least one other party in the Scottish Parliament in order to pass its budget.
"We have yet to hear how the SNP are going to change the budget to make sure that the promised pay rises for public sector workers are fully funded. The current plan from the SNP will mean cutbacks in councils and health boards."
The Greens also backed last year's budget after securing a package worth a total of £220m in extra spending, including £160m for local authorities.
'Fairness for taxpayers'
Mr Mackay said his proposals for the forthcoming financial year would "reverse Tory cuts, deliver support for the economy and increase health spending by £400m".
Mr Mackay said his proposals would deliver "investment in our public services, increased support for our economy and fairness for taxpayers".
And he said the budget would provide "stability, sustainability and stimulus" for the economy and services.
He said: "Our tax proposals will safeguard the lowest earning taxpayers and, overall, when coupled with our spending decisions, will protect and grow the economy.
Mr Mackay's draft budget, which was published in December, outlined plans for a new tax band of 21p for those earning more than £24,000.
"It ensures that 70% of individuals will pay less tax than they do now for given incomes, with 55% paying marginally less tax than they would if the lived elsewhere in the UK.
The higher rate of tax would be increased from 40p to 41p and the top rate from 45p to 46p, while a starter rate of 19p in the pound would also be introduced.
"This is therefore a budget that provides the investments we need to meet the challenges of today and the opportunities of tomorrow. It is with this in mind, that I call on parliament to support this budget in order to give stimulus, sustainability and stability to our economy and public services."
Mr Mackay said the move to a five-band income tax system would mean no one earning less than £33,000 in Scotland will pay more tax than they do now.
Scotland currently has three income tax bands - a 20p basic rate, a 40p higher rate kicking in at £43,001 and a 45p additional rate for earnings over £150,000.
But the Greens had urged him to go further in order to raise more money for public services.
Mr Mackay has proposed redrawing the system by adding a 19p "starter" rate and a 21p intermediate rate, while adding 1p to the higher and additional rates, creating a five-band system which would see many Scots actually pay less tax than they do now.
The Conservatives and Labour have put down amendments for the stage one debate of the budget bill, with the Tories noting regret over tax increases and Labour saying the changes "do not raise enough revenue or redistribute enough wealth".
This would raise an extra £164m directly, rising to £366m when combined with threshold changes from previous years.
'Radical alternative'
Labour wants to go even further by adding a sixth band, in the form of a 50p top rate of tax for earnings over £100,000, and redrawing the thresholds of the other higher rates.
Finance spokesman James Kelly said this was a "radical alternative" for "real change, not more tinkering" - but his figures were dismissed as "fantasy" and "riddled with blunders" by Mr Mackay.
The Labour MSP has put forward an amendment for the budget debate saying that "proposed Scottish income tax rates do not raise enough revenue or redistribute enough wealth to tackle poverty, ensure that local services are properly resourced, nor provide the funding for a public sector pay rise".
The Scottish Conservatives meanwhile accuse both the SNP and Labour of "hammering" hard-working taxpayers.
Finance spokesman Murdo Fraser said "these parties should be seeking to make Scotland a low-tax, high-wage economy which is attractive to investors and skilled workers across the world".
He has put forward an amendment for the stage one debate proposing that parliament accepts the budget, but "regrets proposals to increase tax for 898,000 basic rate taxpayers, which breaks an SNP 2016 manifesto pledge".
