To ask the Scottish Government whether it plans to reassess its tax policies, in the light of reports from some businesses that higher taxes are having a negative impact on recruitment, including in the most recent Fraser of Allander Institute survey on Scottish income tax. (S6O-03764)

Tax policy for 2025-26 will be announced as part of the Scottish budget, and we continue to monitor closely the impact of our tax policy on the wider economy.

Since the introduction of Scottish income tax, in 2017-18, more taxpayers have come to Scotland than have left, with net inflows averaging almost 4,200 people per year. The latest available data, from 2021-22, shows that net migration of taxpayers was positive across all tax bands, with taxable income increasing by £200 million as a result.

Highly skilled workers are essential to building the kind of high-growth economy that Scotland deserves, but many firms admit that they are struggling to attract and retain talent. Does the Cabinet secretary agree that the greater income tax burden that is being placed on higher earners in Scotland has led to warnings from various quarters that some taxpayers are considering moving away? Indeed, the Deputy First Minister, Kate Forbes, recently admitted that the situation is being “kept under review” and acknowledges how easy it is for taxpayers to shift.

As I said in my original answer, data shows that the net migration of taxpayers across all tax bands was positive on the number of people coming to Scotland, which has increased taxable income by £200 million.

The real-time, pay-as-you-earn tax data for 2023-24 suggests that growth in PAYE income tax receipts in Scotland outperformed that in the rest of the UK, with tax receipt per head figures growing at the fastest rate since data has been available. On top of that, as I mentioned earlier, the Royal Bank of Scotland’s growth tracker reported Scottish business confidence at an 18-month high.

Those are figures and facts that the Scottish Tories do not like to hear, because they do not seem to ever want to hear or say anything positive about the Scottish economy. That does the Scottish economy, our businesses and our hard-working workforce a great disservice.

The SNP Government’s decisions on income tax since the devolution of powers are estimated to have raised around £1.5 billion more in 2024-25 than would have been raised if we had had UK rates and bands. That vital funding can be used to support our public services and deliver the Scottish child payment. Does the Cabinet secretary share my concerns about the impact that it would have on our ability to support our public services and tackle child poverty if we were to follow the Tories’ ill-judged plans for tax cuts?

The simple fact is that, if the Tories—or Labour members, for that matter—want the rates and bands of the UK Government to be matched, they need to set out where the £1.5 billion of cuts in current spending would fall. Modelling that was published in February estimates that the Scottish Government’s policies will keep 100,000 children out of relative poverty in 2024-25—policies such as the Scottish child payment, which are possible because of our progressive income tax model. It is incumbent on Opposition parties that are calling for lower taxes and, at the same time, higher spending to explain how slashing social security spending and investment in public services will make Scotland a better place.

That concludes portfolio questions on finance and local government.