Scotland's government said today it will raise taxes on higher earners and increase public sector pay as it tried to draw a contrast between its economic plans and those of Britain's national government.
The budget plan, set out by the pro-independence Scottish government, means 70 per cent of tax-payers in Scotland will not pay more than they previously did and 55 per cent would pay less than they would elsewhere in the UK, the government said.
"The 2018-19 budget will demonstrate beyond doubt where the Scottish government's priorities are: stopping UK cuts, protecting public services and unlocking Scotland’s economic potential," finance secretary Derek Mackay said.
By using its devolved tax powers differently to the tax stance of the UK government, the Scottish administration hopes to show voters than it can manage the country's economy and burnish the case for independence.
However, the ruling Scottish National Party does not have much room for manoeuvre - forecasts published along with the budget showed Scotland's economy is set to grow at persistently lower rates than the overall UK economy, which is also weak.
Annual growth in Scotland is only due to surpass one per cent in 2022, according to the forecasts.
Scottish voters rejected breaking away from Britain in a referendum in 2014, but 45 per cent of Scots continue to favour independence, according to polls.
Scottish First Minister Nicola Sturgeon has said another referendum should be held after Britain decided last year to leave the European Union, but she is not pushing for a quick new vote after the SNP lost support in a national election in June.
Thursday's budget plan offered public sector workers such as nurses, firefighters and teachers earning less than £30,000 ($34,206) a year, a three per cent pay rise, and those earning more than that a two per cent pay rise.
The proposals were more generous than a recent relaxation of a public sector pay cap announced by Britain's government.
Mackay said his income tax changes would make the tax system in Scotland fairer.
The higher and additional rates of income tax will be raised by one percentage point to 41 and 46 per cent respectively while the basic rate of tax will be frozen at 20 per cent.
Mackay also introduced an intermediate tax rate of 21 per cent, and a starter rate of tax of 19 per cent.
The lion's share of finances in Scotland, one of the UK's four nations, is decided by the UK government in London and the rest is decided by the devolved government.