5. To ask the First Minister what the Scottish Government’s response is to a recent poll that found that more than a third of people in Scotland would consider relocating if income taxes were increased further. (S6F-02130)

The Scottish Government is proud to have the fairest and most progressive tax system in the United Kingdom. Consideration of behavioural changes is a vital part of our tax policy decisions. Our evaluation of the move to a more progressive tax system in 2018-19 found no evidence of significant behavioural change, including in relation to cross-border migration.

That should come as no surprise, because our social contract with every citizen goes significantly beyond the provisions in the rest of the UK. It includes free prescriptions, free higher education and support for more than 400,000 children who are eligible for the Scottish child payment. We will continue on that path of progressive taxation and there will be robust analysis behind any changes that we make to the tax system.

Scottish Chambers of Commerce, the Federation of Small Businesses, the Chartered Institute of Taxation, the Institute for Fiscal Studies, Archangel Investors Ltd and D J Alexander Ltd are just some of those who are warning of the dangers of widening the tax differential with the rest of the UK. Sandy Begbie, of Scottish Financial Enterprise, is warning of the resulting effects on Scottish productivity and economic growth.

Will the First Minister give a categorical assurance that he both accepts and understands the widespread and serious concerns among the business community and that the future tax policy of the Scottish Government should be fully focused on making Scotland the most competitive part of the UK rather than the most highly taxed part of the UK?

The First Minister:

What is fascinating is that, in that question from Liz Smith, she did not mention a single anti-poverty campaigner in the list that she gave. Why would she not do that? Of course, if we want to invest money in tackling poverty, we have to have the money to be able to do so. That is why progressive taxation, which allows us to increase revenue to spend on tackling poverty, is so crucial.

However, I would say to Liz Smith that of course we will listen to those organisations that she listed—I have met many of them already—and we will continue to listen to them where we possibly can. We will have robust analysis behind any decision that we make about taxation.

I do not see and have never seen a conflict between growing the economy—something that is front and centre of the prospectus that I published in the first couple of weeks of being First Minister—and ensuring that we have a progressive tax system so that we can invest in anti-poverty measures.

We will continue to make those careful balanced decisions in relation to taxation and we will make sure that we are informed by robust analysis and evidence from many of the organisations that Liz Smith mentions, as well as from the Scottish Fiscal Commission. However, if we had listened to Liz Smith and the Conservatives and given tax cuts to the wealthiest, we would have much less money to spend on things such as free prescription charges, ensuring that higher education is free and, of course, that game-changing Scottish child payment.

Data shows that, regardless of tax rate changes, Scotland continues to attract more working-age people from the rest of the UK than move in the other direction—about 20 per cent more annually. Although I know that the Government will do the due diligence and sensitivity analysis for any proposed tax changes, I make the point that a modest increase in inward migration from the rest of the UK to Scotland could significantly increase tax revenues by hundreds of millions of pounds to spend on public services in Scotland and support Scottish businesses with skills to tackle the challenges that they face. What is the Scottish Government doing to proactively attract more workers from the rest of the UK to live and work in Scotland?

The First Minister:

Ivan McKee makes an excellent point

. [

Laughter

.] I am not sure why the Conservatives are laughing—

The Presiding Officer:

Thank you, members!

The First Minister:

They do not like to listen to the facts. The facts that Ivan McKee has presented are absolutely right. We have seen a modest increase in inward migration from the rest of the UK, which is an important point. Scotland’s record on inward migration from the rest of the UK dispels much of the hysteria from the Conservative Party on the impact of our tax policy.

However, it is important to recognise what more we can do, which is why we are committed to establishing a talent attraction programme and a migration service for Scotland. That will help us to build on the success that we have already had in this space. The talent attraction and migration service will improve Scotland’s ability to attract and recruit workers from outside Scotland with the skills that our economy needs. It will support international workers in the migration and relocation process and will ensure, where we have the levers over pay and terms and conditions, that we are embedding fair pay and ensuring that our staff are some of the best paid in the UK. We are doing that in the national health service, where our staff are the best paid anywhere in the UK. I hope that that helps to attract them to Scotland. We will put progressive taxation and fair pay at the heart of everything that we do in the Scottish Government, in stark contrast to the approach that has been taken by the Conservatives in England.