4. To ask the Scottish Government what impact it anticipates that its taxation policy, including in relation to businesses, will have on the strength of the economy. (S6O-02271)

A strong economy is vital to ensuring that the benefits of our tax policy choices are fully realised. That is why we launched our national strategy for economic transformation—NSET—in March 2022 to create a greener, fairer and more inclusive wellbeing economy.

Alongside that strategy, our new deal for Scottish business will provide an opportunity to discuss how our tax policy can support businesses and our communities and grow the Scottish economy.

We will continue to prioritise a fair and progressive approach to our tax policy and will carefully consider the impacts of our policies on taxpayers, households and businesses.

Scottish businesses face a real struggle. Despite the business rates revaluation, Scottish retail, hospitality and leisure businesses still face tax bills that are thousands of pounds higher than their English counterparts because the Scottish National Party refuses to provide the same discount as is available down south.

Does the minister accept that the lack of business rates discount makes it harder to do business in Scotland than elsewhere in the United Kingdom, especially when the base poundage rate is only 0.1p lower than the rate in England?

I thank Pam Gosal for highlighting the basic property rate, which is, indeed, lower in Scotland, in response to the number 1 ask of business organisations ahead of the budget, which was that we freeze the poundage.

Decisions around non-domestic rates and non-domestic rates relief are taken in the round at budget time and are set in the context of the priorities that we undertake to deliver through the budget.

I note that around half of RHL properties pay no rates because they fall below the threshold for the small business bonus scheme, which is the most generous of its type in the United Kingdom.

Following on from questions that were raised earlier, I would be keen to hear from the Conservatives where they would choose to obtain that funding from, if they wish for provision of further relief for that particular sector in future budgets. Where would the corresponding budget reduction be?

We commit all our consequentials in sum to the priorities that we set out in the budget. If members wish to see tax cuts, that will cost money; if they wish to see more money for local government, that will cost money; and if they wish to see further relief on non-domestic rates, that will cost money. To govern is to choose, and that is nowhere more apparent than when we set budgets.

As the Conservative Government in the United Kingdom is entitled to set its policies, we are entitled to set ours, in this Parliament. If the Conservatives, as an Opposition party here, want to engage constructively, I will be more than happy to do so, but they cannot just ask for spending: they must also identify where the corresponding reduction would be.

The Deputy Presiding Officer:

Again, we need greater brevity, particularly in responses. There are two supplementary questions; if members are brief, I will fit them both in.

We are aware of the significant impacts of Tory tax policy on the economy, especially following the disastrous mini-budget last October. What assessment has the Scottish Government made of the impact of those decisions on Scotland’s economy, and can we agree that business and our economy more generally would be better served by full fiscal powers lying with this Parliament?

Persistent high inflation and the cost of living crisis are causing unprecedented drops in living standards. Brexit and the fiscal instability that has been brought on by UK Government decisions have made the problems worse.

I accept entirely that we are operating within broad local economic challenges, but a hard Brexit—which was a clear policy choice by the UK Government that is now supported the Labour Party—is inflicting untold damage on our economy. It is compounding the impacts that all countries are facing, and ultimately it is a consequence of reckless decision making by the UK Government. If we want to find ourselves in a position in which we are no longer subject to decisions that are taken against our interests by Governments that we did not vote for, I am afraid that the only means to achieve that is Scotland’s becoming an independent country.

A change that would benefit our struggling high streets would be to bring down the higher rate of non-domestic rates in line with England, so when will we see that change?

We have taken action following the Barclay review to move towards that. We introduced the intermediate property relief a number of years ago, which significantly reduced the number of businesses that are subject to the higher property rate. We have increased the threshold from £95,000 to £100,000 most recently, and, as per our manifesto commitment, we are committed to achieving that parity over the course of this parliamentary term.