DEREK Mackay will today admit the SNP Government’s plan to end the one per cent public sector pay cap is heavily reliant on the UK Treasury.

The Finance Secretary will tell his party conference in Glasgow that the cap will end next year “come what may”, but the size of the rise will depend on funding from London.

“If our budget continues to be cut, we will only be able to go so far on pay,” he will say.

He will demand Chancellor Philip Hammond stands up to right-wingers in the Tory cabinet to unlock investment in public sector pay and services.

He will cite examples of how austerity is squeezing funding for public services in Scotland, with a 9.2 per cent real terms cut to Holyrood’s budget in a decade.

He will say: “In Scotland we know that high-quality public services rely on dedicated hard working public servants. We will continue to work with Trades Unions to deliver an affordable settlement that recognises the cost of living.

“Unlike the Tories and unlike Labour in Wales, come what may, we will lift the 1 per cent pay cap.

“But if our budget continues to be cut, we will only be able to go so far on pay. That is why the Chancellor should lift the cap across the UK, and fund the pay rise that people deserve.”

Mr Mackay’s predecessor as Finance Secretary, John Swinney, yesterday suggested the Scottish rate of income tax would have to rise in next year’s budget to help pay for services, as the SNP faced “inevitable” compromises with other parties wanting higher tax rates.

Asked how the SNP government intended to pay for its commitments, he told BBC Sunday Politics: “We have to put the resources in place.

“We've opened up a debate about tax policy which will inform the budget process that the Finance Secretary brings to parliament in December and clearly we want to engage with other parties and the public in Scotland about the right choices to make on tax.

“We have to face the inevitable issues that come from being a government that does not command a majority in parliament.

“We've got to come to an agreement with others about how we take forward our policy agenda and that is exactly what we're going to do on the issue of tax.”