Income Tax Increase (North Ayrshire)

– in the Scottish Parliament on 7th February 2018.

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Photo of Jamie Greene Jamie Greene Conservative

5. To ask the Scottish Government how many people in North Ayrshire will see their income tax increase in 2018-19. (S5O-01768)

Photo of Derek Mackay Derek Mackay Scottish National Party

Scottish income tax data and forecasts are not produced for local authority areas. Overall, however, 70 per cent of Scottish taxpayers will pay less income tax in 2018-19 than they did this year, for a given income. Nobody earning less than £33,000 will pay more income tax next year.

Photo of Jamie Greene Jamie Greene Conservative

In the absence of any answer, perhaps I can help the cabinet secretary out. Analysis of his tax plans shows that up to 24,000 hard-working people in North Ayrshire will see their income tax rise this year. Contrary to what the First Minister said last week, they are far from Scotland’s richest and wealthiest. In fact, many will be deeply disappointed by this.

Given that local Scottish National Party constituency MSPs were elected in 2016 on a specific manifesto promise not to increase income tax, do the cabinet secretary and his colleagues owe people an apology for breaking that promise?

Photo of Derek Mackay Derek Mackay Scottish National Party

We will invest more in public services, and we will turn a Tory real-terms cut to resource budgets into growth—including growth for the health service. Jamie Greene is one of those politicians who consistently demand that more money be spent in their regions but who want to raise less at the same time. Incidentally, the median salary in North Ayrshire is £23,352, which shows that—just as in the rest of the country—the majority of taxpayers there will pay less, not more, under the tax plans that I have proposed. Some of the money from the tax changes will be invested in local government. Overall, local government nationwide will benefit from the deal with the Greens to the tune of £150 million. North Ayrshire, which the member mentioned, will get £4.2 million extra, and that was opposed by Jamie Greene.

Photo of Ivan McKee Ivan McKee Scottish National Party

I was going to ask the cabinet secretary how many people in my constituency of Glasgow Provan will see their income tax reduced as a consequence of the budget, but clearly we do not have the data available at constituency level. However, I expect that there will be far more winners than losers. Does the cabinet secretary agree that injecting cash into lower-income households will have a far greater economic multiplier effect as a consequence of such households having a higher propensity to consume, thus helping to grow the Scottish economy?

Photo of Derek Mackay Derek Mackay Scottish National Party

I agree. The Scottish Fiscal Commission has provided evidence on that, and we also produced modelling for the discussion paper last year, so I think that that is correct. Incidentally, the issue with data is not the Scottish Government’s doing. Her Majesty’s Revenue and Customs collects income tax in Scotland, so if members want to see data enhancements, it will be for HMRC to provide analysis by either constituency or local authority.

Photo of James Kelly James Kelly Labour

Figures from the recent end child poverty coalition report reveal that, in North Ayrshire, nearly 30 per cent of children live in poverty, with the figure being as high as 36 per cent in the Irvine West ward. Does the cabinet secretary agree that such figures are unacceptable? Rather than rhyming off a list of excuses as to why he cannot take action on child benefit, should he not seriously look at how to use the powers of the Parliament to alleviate those concerning figures?

Photo of Derek Mackay Derek Mackay Scottish National Party

No, I do not think that those levels of poverty are acceptable, which is why we are taking a range of actions to tackle them. We could do even more if we had welfare powers that we do not have. The Labour Party was not particularly supportive of getting those powers over the decades in which it had the opportunity to do so.

I say again that the alternative budget that was put forward by the Labour Party is totally incredible. It does not stack up, it does not raise revenue and it calls on us to use powers and mechanisms that are not currently in place.

Let us unite around tackling poverty, but let us do so in a credible way, which is exactly what the Government proposes to do.