New Scottish Budget is given the Green light as Derek Mackay agrees deals to secure crucial backing

Without a majority in Holyrood, the SNP needed at least one other party in the chamber to back them.

The Greens had initially seemed unlikely to be that party, as the Finance Secretary’s draft budget, published in December, proposed cutting Air Passenger Duty by 50 per cent before the end of this parliament, to increase the number of air routes coming to Scotland.

But after securing compromises on tax, as well as spending for local authorities and policing, Patrick Harvie and his five colleagues voted with the government. The final tally saw MSPs agreeing the general principles of the budget 67 to 59.

Opening the debate in parliament yesterday, Mackay welcomed the “constructive approach taken by the Green Party”.

“They asked me to consider changes to our proposals on income tax and to provide additional funding for local government,” Mackay said.

He announced additional resource funding and more capital funding for local services, which would be given to councils. In addition, he announced there will be no increase in the threshold for the 40p higher rate of income tax in Scotland – with this raising £29 million.

The change means taxpayers in Scotland will pay 40p income tax on earnings over £43,000 after Mackay gave way on plans to raise this threshold in line with inflation to £43,430. The UK Government plans to raise the threshold south of the border to £45,000. The minister also announced a further £25m for police reform, and an extra £35m for Scottish Enterprise.

“This Budget is putting the programme for government into effect, but I also believe it responds to all sides of this chamber in a reasonable and constructive way,” he said.

The Greens came in for pelters from the rest of the chamber. Tory MSP Murdo Fraser said the Finance Secretary adopting the left-ish policies of the Greens would lead to Scotland becoming the highest taxed part of the UK.

He added: “What a pity, what a tragedy for Scotland that he chose to throw in his lot with the lentil-munching, sandal-wearing watermelons on that side of the chamber.”

Scottish Labour leader Kezia Dugdale said the move was “astonishing and deeply disappointing” and had more to do with independence than it did with cuts and services.

“Let’s not kid ourselves, this isn’t the Greens’ responsibility to Parliament shining through,” Dugdale said. “It’s the responsibility they have put on themselves to do nothing which might jeopardise the prospect of a divisive independence referendum.”

Dugdale said the Greens had “abandoned any claim to be a party of the progressive left”.

Scottish Lib Dem leader Willie Rennie agreed, saying his party would “no longer listen to lectures from Patrick Harvie about austerity and compassion after today’s concessions.

“Today is a big missed opportunity," he said. "It is a missed opportunity to have a Budget that will turn this country into a more liberal and economically strong country.”

Harvie, one of two MSPs who walked away from the SNP budget in 2009, almost forcing an election, said it was the Greens who managed to negotiate “the biggest Budget compromise in the history of devolution in Scotland’’.

He said: “I am very clear that the Scottish Government has given far less ground than I think they should, far less ground than I think they could on taxation. The reality though is £160 million additional [funding] going into the un-ringfenced local government allocation.”

In a statement he claimed the Greens had “achieved more in a single budget than the Labour Party has in a decade of opposition”.

The budget debate now moves on to the committee stage, but Mackay confirmed a deal had been agreed for “all stages”.