Taxation Policy

– in the Scottish Parliament at on 22 February 2024.

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Photo of Maggie Chapman Maggie Chapman Green

3. To ask the First Minister what the Scottish Government’s position is on whether successive changes to national taxation policy in Scottish budgets will support the redistribution of wealth and help sustain vital public services. (S6F-02825)

Photo of Humza Yousaf Humza Yousaf Scottish National Party

In short, yes, they will. Our changes to income tax in Scotland have made it more progressive. That approach means that we have an additional £1.5 billion from income tax to invest in 2024-25 compared with what we would have had if we had matched United Kingdom Government policy, which Douglas Ross advocated at the time. That £1.5 billion is being invested in public services in an effort to offset the huge impact that Westminster austerity has had on the availability of public spending. If we had further powers, such as those that are needed to tax wealth effectively, we could do so much more to build on our progressive tax system and, of course, further protect public services in Scotland.

Photo of Maggie Chapman Maggie Chapman Green

We all have too many constituents who are struggling with grinding poverty, for whom public services are a lifeline. I am proud that tax changes that the Scottish Greens have championed—tax changes that mean that the better-off pay more and the people on lower incomes pay less—mean that £1.5 billion more is available for those services. Politicians who promise tax cuts must be honest about what services they would cut.

The Scottish Trades Union Congress has argued—and the First Minister has just recognised—that Scotland can and should do more to use tax powers to redistribute wealth and to make the case that taxation is a public good. How does the First Minister plan to build that consensus for progressive taxation as a force for good?

The First Minister:

As I have said, the Government is absolutely committed to progressive taxation. I thank the STUC and others for the contribution that they have made. The Deputy First Minister engaged with a number of stakeholders in relation to our progressive taxation plans, and we will continue to have such engagement with stakeholders, including the business community and the people of Scotland, on our progressive taxation plans. Poll after poll tells us that the public support public service investment that is backed by progressive taxation.

Douglas Ross stood up in the chamber and urged the Scottish Government to follow the disastrous Liz Truss budget. He needs to have the humility to say how wrong he was. When Anas Sarwar says that he will cut taxes for the highest earners, he needs to be honest about what public services he will cut. In the round, his tax plans will reduce revenue by £561 million. Will that mean that he will scrap the Scottish child payment, free prescriptions and free bus travel, or will it mean, as his finance spokesperson hinted just this week, that he will end up scrapping free university education?

We will continue our commitment to progressive taxation and to the social contract in Scotland, which provides that there are no tuition fees for higher education, and which provides widespread access to bus services, free prescriptions and a host of other benefits. Of course, we will seek common cause with others, such as the STUC, who believe in progressive taxation.

Photo of Colin Beattie Colin Beattie Scottish National Party

The Scottish National Party Scottish Government’s progressive tax plans help to deliver a strong social contract and to ensure that additional targeted funding is available to protect people and our vital public services. Meanwhile, Scottish Labour’s priorities appear to be elsewhere. Last weekend, it seemed to indicate that it now supports cutting income tax. Can the First Minister provide an update on what assessment the Scottish Government has made of the impact that that could have on Scotland’s public finances and the Scottish Government’s ability to fund public services?

The First Minister:

We know that, if we had followed the Conservatives’ budget proposals, we would have had £1.5 billion less to spend. We know that, as a result of Anas Sarwar’s tax policies, in the round, there would be about £561 million less to spend on investing in our national health service, education, justice services and social security.

Anas Sarwar has made the point that people who earn, for example, £30,000 pay more in Scotland. They pay 94p a month more and, for that, they get free university education and the most generous childcare offer anywhere in the UK, they do not have to pay a single penny for their medicines, and they get free personal and nursing care and a range of other benefits. That is why poll after poll shows that the public are supportive of progressive taxation if it is used in the way that we are using it, to invest in our public services.

If Labour wants to continue to offer people such as Anas Sarwar a huge tax cut, which would end up reducing the revenue that we had to spend on public services, it must have the honesty to say what public services it would cut.