Meeting of the Parliament 14 December 2016
I absolutely welcome the fact that we are finally able to have this debate, but if we take the logic that the Conservatives have to offer, through the laughable Laffer curve and all the arguments that we have heard from Murdo Fraser about it, no jurisdiction within the UK would think it permissible or advisable to have a higher tax rate than any other part of the UK. The logic of what Murdo Fraser is arguing for is in essence a locked-in race to the bottom. The Conservatives will not support any additional revenue generation, which means that they will support every single penny of the cuts that the chancellor has in store from now till the end of this Parliament. To hear Murdo Fraser lauding the wisdom and judgment of Alex Salmond—something that, I have to say, I would never do in the way that we just heard a few minutes ago—simply underlines the absurdity of his position.
The SNP’s plans involve a very modest increase in revenues. It now appears that, in light of the increases in inflation that everybody is predicting, that increase in revenues might be eroded. It might be even less than the SNP has been predicting. If the SNP is unwilling to shift from that manifesto position, which was written many months ago, it too will bear responsibility for the bulk of the cuts that are to come, in particular those at local government level. I remind Mr Wheelhouse that it is not only the party in Government in this chamber that has to live with the consequences of decisions that are made here. Everybody in Scotland will be living with the consequences. Local councillors—our colleagues in every political party across Scotland—will be living with the consequences, if we hand on the kind of cuts to local government budgets that are being predicted under SNP plans to date.
The other three political parties in this Parliament have all proposed ways of raising additional revenue, beyond the approach that the SNP has put forward. The proposals have varying degrees of fairness and would result in varying degrees of redistribution.
That brings me to my next point. Beyond tax principles and the tax revenues to come, there is a need for progressive taxation. The UK Government’s budget has had a deeply regressive effect. It takes a significant amount of income away from the poorest third of society. I remind Mr Fraser that those are the people whose pockets are being picked by the UK Government; they will be significantly worse off as a result of not just tax but benefit changes. The very minor adjustments in the autumn budget statement will not reverse that impact.
Meanwhile, the UK Government will give the richest third in society a significant increase in income. Everyone who earns above the higher rate threshold will be £178 a year better off, due partly to the change in personal allowance and partly to the change in the higher rate. It means 15 quid a month in the pockets of people on salaries like ours—people like MSPs and cabinet secretaries, for whom the extra money will make no difference at all to the quality of our lives. That extra money—even that modest sum—could make a massive difference to many people who are struggling to get by.
The Scottish Government could change course. It has the ability to recoup some of the money and ensure that higher-rate taxpayers do not get the benefit of the changes to not just the higher-rate threshold but the personal allowance. If it uses the higher rate, it can recoup money from wealthy people and generate revenues that are needed for the public services on which people—in particular, the poorest people in our society—depend.
There is worse to come in the years ahead for the poorest people in our society, unless we act. It would be scandalous, particularly at a time when those of us on high salaries are all preparing for our cosy Christmases at home while other people are struggling to get by and facing the festive season with nothing, if we did not take action with the powers that we now have to redress the injustice that has been done to date.
I look forward to hearing the case that is made for the other amendments—I do not have time to address them. I say again, if we do not see some compromise from the Scottish Government, I regret that we will have failed to seize the historic opportunity that is before us.
I move amendment S5M-03063.4, to leave out from “not” to end and insert:
“have access to high-quality public services; notes that the SNP’s manifesto proposals on tax make no significant changes to current income tax rates and thresholds; supports a tax system that will challenge inequalities in wealth and income; agrees that people earning below the median should pay less, while high earners should pay more than at present, and supports a long-term tax shift from income to wealth, where inequalities are greater.”
15:17Motions, questions or amendments mentioned by their reference code.
- S5M-03063.4 Taxation Motion