Meeting of the Parliament 05 February 2020
I would be absolutely delighted to do that. I will pass them across the chamber to the finance minister right now.
The two areas that we view as priorities for the budget are measures to grow the Scottish economy and support for vital public services. We will assess any budget proposals from the SNP Government against those priorities.
Let me deal first with the question of income tax. Over the past two years, as a consequence of the finance secretary’s nefarious deals with the Green Party, Scotland has become the highest-taxed part of the United Kingdom, with everyone who earns more than £27,000 per annum paying more income tax in Scotland than they would in the rest of the UK. To put that in simple terms, it means that public servants including police sergeants, senior nurse managers and principal teachers now pay more tax than their counterparts south of the border—in some cases, more than £1,500 a year more.
The SNP will argue that the tax increases are justified because they are supporting better public services. However, the reality is somewhat different. That was confirmed in the evidence that Mairi Spowage, who is the deputy director of the Fraser of Allander institute, gave to the Finance and Constitution Committee just last week. She confirmed that the additional tax that has been raised by the changes to rates and bands has been offset by reductions in income tax more generally, because of slower overall income-tax growth in Scotland than in rest of the UK. She said:
“Looking ahead, the effect of the higher tax rates in Scotland is broadly cancelled out by the fact that the outlook for wage growth in Scotland is slower than in the rest of the UK.”—[Official Report, Finance and Constitution Committee, 29 January 2020; c 12.]
In other words, if we were to grow the Scottish economy at just the same rate as the UK average and if we were to grow income tax receipts at the same rate as the rest of the UK, there would be no need whatever for the income tax differentials, and we would raise the same amount of money.
The evidence from the respected Fraser of Allander institute gives the lie to the notion that better public services in Scotland can be supported only by higher tax rates. In reality, the same outcome can be achieved by growth in the economy and tax take.
Willie Rennie (North East Fife) (LD) rose—
Patrick Harvie (Glasgow) (Green) rose—