Meeting of the Parliament (Hybrid) 25 February 2021
This is like a blast from the past—the debates of yesteryear, when we used to argue about tax rises and whether we would get extra revenues or whether there would be a massive cut to public services as a result. It is great to be back in such an atmosphere—we often forget about the debates that we used to have.
However, we should remember that, at the last election, the SNP did not propose a tax rise but then went on to increase it—unlike the Scottish Liberal Democrats, who were honest about the election. We said that we should put a penny on income tax, which would be a modest rise for a colossal return that we could invest in education, and we followed through on that view later.
We should also remember that the Conservatives were dead against any tax rise. Murdo Fraser corroborated that today. However, it is quite interesting that he is not proposing to reverse the tax rise. So appalled is he by it that he has decided to leave it alone. I have seen no proposal from the Conservatives to reverse the tax rise. In fact, I remember having a debate with Jamie Greene during the election campaign in which he was unable to say whether he would cut the tax or reverse it. That is how confused the Conservatives are about whether they support it or not.
Nevertheless, we have moved on slightly. This year, it is important that we have stability. I do not think that the public have any appetite at all for tax increases at this time. Consumer confidence is really fragile and we need to make sure that, in the middle of the pandemic, when people’s personal finances are tight, we give them the support that they need. To be frank, when we are borrowing such colossal sums of money, any tax rise would be just a drop in the ocean in comparison. There is no appetite for tax rises, and that is why we will support the Scottish rate resolution today.
There is also a wider lesson that we need to learn. Budget debates in the Parliament have changed. In previous years, we debated with the thought in our minds about who would benefit from extra funds or be affected by a cut in services. That was almost our sole interest. Now, we are at least thinking about the taxpayer’s pocket and we have to balance those two considerations much more effectively. That is why our debates on budgets and rate resolutions are much more rounded and considered. We think about all the different interest groups in our considerations, which makes this a much healthier place. In the past, we just argued about where the extra money would go or where the cuts would be made. That has changed, and it is a healthy change.
There is another argument, although it will take longer for us to make the proper assessments in this area. When we introduce tax rises, we need to make sure that their intended effects follow. We need to measure the impact and the outcomes for individuals and examine any behavioural change. Many claims are made about changes that would result from a tax rise, and we need to measure all that. That will be difficult because the pandemic has intervened, but I believe that, as a discipline, we should test the impacts and examine the claims that are made about behavioural change.
As far as I saw, we did not have mass behavioural change in the pre-pandemic period. We did not have people exiting Scotland to go somewhere else because of modest tax rises. However, that trust is fragile. We need to be careful when we make decisions about taxes so that we maintain the taxpayer’s trust and confidence.
17:03