1. To ask the Scottish Government what consultation it undertook with Her Majesty’s Revenue & Customs regarding any potential negative impact of diverging tax bands and rates from the rest of the United Kingdom. (S5O-01634)
The Scottish Government and HMRC have worked closely—and continue to do so—to implement the income tax powers that were devolved in the Scotland Acts of 2012 and 2016. The Scottish income tax implementation projects will ensure that HMRC’s systems will be adapted to accommodate income tax policy as agreed by the Scottish Parliament. HMRC has been clear that it will be able to implement the Scottish Government’s proposed income tax policy proposals for 2018-19.
As the Scottish National Party’s deputy House of Commons leader, Kirsty Blackman, pointed out, Scots do not give two hoots about independence. However, they do care about the SNP’s new tax bands, which could see Scottish pensioners paying hundreds of pounds extra just to access their pension savings.
Is the cabinet secretary happy that his budget will reduce the quality of their hard-earned retirement?
I want to talk briefly about the constitution. First, the Tories were against devolution, then they were for devolution. They were against tax-raising powers, and now they are for tax-raising powers—as long as we do not use those them. That is the current position of the Conservative Party.
The budget that I have proposed will ensure that Scotland will become the lowest-taxed part of the UK for the majority of taxpayers. It will result in a tax reduction for the majority of taxpayers, while raising resources for our valued public services and giving the best deal anywhere in the UK.
On the specifics, it is the case that, in setting out the use of our tax powers, the budget will deliver a fairer country. However, there are some areas, including pension arrangements, that we do not have control over. Reliefs and interpretation remain at Westminster. In designing a system that is based on a progressive approach, even people who take a lump sum from their pension will be treated in a fair and progressive fashion. Pensioners with a lower amount will also enjoy the benefits of a progressive taxation system.
Does the cabinet secretary agree that being able to set our own tax bands and rates allows the SNP Government the flexibility to help to protect Scottish public services from damaging Tory cuts to Scotland’s budget, and that the point of devolution—which Bill Bowman has clearly missed—is that we do what best suits Scotland’s needs rather than sticking with a one-size-fits-all solution, which some Tories would dearly love to impose at the behest of their bosses in London, regardless of the adverse impact on Scotland?
Kenny Gibson is exactly right. [
Interruption
.] The Scottish Government is able, because of the powers that we have under devolution, to take a £211 million real-terms cut to our resource budget for 2018-19 and invest in our public services by delivering on the key tests that I set out for income tax and policy. Those include using the system to deliver a more progressive taxation system, to protect lower-income earners, to protect and invest in the economy, and to invest in our public services, thereby turning a real-terms reduction at the hands of a right-wing Brexit-mad UK Government into real-terms growth for Scottish public services.