Middle-class taxpayers in Scotland are set to be hundreds of pounds a year worse off under plans for a rise in National Insurance (NI) contributions in Philip Hammond’s Budget.

The move by the Chancellor, outlined in the Budget small print, wipes out almost half the £860 a year of proposed income tax cuts and will claw back around £2 billion for the Treasury.

It also emerged that the change would mean workers north of the Border on salaries of £50,000 face paying an extra £30.41 in NI a month without saving anything in income tax.

This will add to pressure on Derek Mackay, the SNP finance secretary, who yesterday rebuffed calls to cut income tax for middle-class Scots in light of the Budget and said he would follow a “fairer and more progressive path” instead.

Mr Mackay is facing calls to lift the higher-rate threshold next April after Mr Hammond announced he was raising it to £50,000.

Unless Mr Mackay changes Scotland’s income tax regime, the Budget will see Scots earning £50,000 pay around £1,000 more in 2019/20 than their English counterparts.

The Scottish Greens, who were critical in passing the last two SNP budgets, have warned they will not back “a tax-cutting budget for the wealthy”.

Mr Mackay’s hostility to Philip Hammond’s tax cuts for the well-off coincided with turmoil inside the UK Labour party after John McDonnell accepted them. 

Despite only one in seven people benefiting from the higher-rate change, the Shadow Chancellor said Labour would not reverse the tax break if they were in government.

“We’re not going to take money out of people’s pockets. Simple as that,” he said.

The Scottish Tories say the Scottish block grant will rise £381 million, or 1.25%, in real terms next year, giving Mr Mackay ample scope to cut income tax.

Scottish Secretary David Mundell said the widening tax gap with England could be ruinous for the Scots economy.

He said: “With one breath the SNP say they want to attract people to come to Scotland and then they follow it up by making Scotland the highest-taxed part of the UK.

“In my view that is a disastrous approach. It leads to a reduction in revenue and people voting with their feet.”

Mr Mackay told MSPs he would set out his intentions in the draft Scottish Budget on December 12. But he gave a strong hint he would not ape Mr Hammond.

He said: “I take some pride in the fact that I have been a finance secretary who has ensured that we have the fairest income tax system in the United Kingdom. The majority of people in Scotland pay less tax, and Scotland is the lowest-taxed part of the UK. 

“The Tories have once again chosen tax cuts for the richest people in society, but we will choose a fairer and more progressive path.” 

Mr Mackay also attacked the Budget, saying the Tory government
had given the Scottish health service by £50m less than promised, while cumulative austerity measures meant the Scottish budget in 2019/20 will be £2bn lower in real terms than in 2010/11.

Scots currently pay income tax at 41p in the pound between £43,340 and £150,000, while in England the rate is 40p and the threshold is £46,350.

From April, the threshold in England will rise to £50,000.

If the Scottish higher rate tax threshold is unchanged, someone earning £50,000 in Scotland would pay £9060 in income tax, £1560 more than an English equivalent. 

The SNP has already promised not to increase the higher rate threshold by more than inflation.

The UK Office of Responsibility said on Monday that meant a Scottish higher rate threshold of no more than £44,539 next year, meaning up to £5,461 being taxed at 21p more in the pound than south of the border. 
Tory MSP Murdo Fraser said Mr Mackay was “the new Eeyore in town”, complaining about being short-changed despite getting an extra £950m over three years.

He said: “The SNP must stop the shroud-waving and act. When even Labour’s John McDonnell agrees that taxpayers deserve a break, surely it’s time for Derek Mackay and Nicola Sturgeon to listen. Scotland needs a competitive tax regime and the Scottish Conservatives will be demanding that the SNP delivers.”

Green MSP Patrick Harvie said: “Instead of a budget to repair the harm done by austerity or respond to the climate emergency, we saw a budget which once again gives the biggest tax cuts to the richest 10% and continues the reckless pursuit of an unsustainable economy.

“Derek Mackay must resist delivering a tax-cutting budget for the wealthy, otherwise he must know a deal with the Greens would be impossible.”

At Westminster, SNP leader Ian Blackford also downplayed tax cuts north of the border.

“Fifty per cent of the benefits that will come from the tax cuts are going to the top 10 per cent, so this is not about fairness,” declared the Highland MP.