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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 15 July 2025
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Displaying 893 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 18 February 2025

Craig Hoy

Good morning, cabinet secretary. I want to start my questions by looking at tax. It has been confirmed that there will be no change to income tax rates in the budget, although it will freeze the upper rate thresholds, which is effectively a tax rise for many Scots. Why, at this point in time, has the Government decided not to raise tax rates, which, to a greater or lesser extent, has been your policy in recent budgets?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 18 February 2025

Craig Hoy

Do you consider that a more complex system has higher compliance costs and that those are passed on to businesses and individual taxpayers?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 18 February 2025

Craig Hoy

In the past, HMRC has expressed concern in relation to your policy and whether people are trying to find legitimate ways to reduce their tax bill, including individuals incorporating. The Chartered Institute of Taxation’s Scottish technical committee has said that the problem could become more acute as a result of the national insurance increases that have been levied on employers in the recent UK budget, which could lead to false self-employment and employers trying to get people off their books or out of PAYE, which could result in more people incorporating. In those circumstances, the Scottish Government loses that tax revenue. How concerned are you that the combination of the national insurance increase and your legacy tax policies could result in the Government losing revenues through personal incorporation, for example?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 18 February 2025

Craig Hoy

It appears that there is a debate within your party and the parties that are supporting the budget—I do not think that it will be a surprise when I say for the record that the Conservatives will not support the budget—about what happens next on tax, particularly for higher earners. In determining not to raise tax rates, what modelling analysis did the Scottish Government undertake in order to come to that position? Will you share that analysis with the committee?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 18 February 2025

Craig Hoy

As part of your strategy, will you take cognisance of comments from organisations such as Scottish Financial Enterprise, which have real concerns about the direction of travel and, in particular, the behavioural responses to the tax measures that you have introduced in recent years? What further investigations and work will you do on behavioural responses through the tax strategy?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 14 January 2025

Craig Hoy

Fine. Another labour-related cost is the unexpected—I think that that is probably the best description—national insurance increase that has been imposed by the Labour Government, which appears to be costing the Parliament £2 million this year. The issue is playing out throughout the public and private sectors and is a considerable concern to both. How concerned are you that the increase is adding significant costs to the budget for the forthcoming year? Are there are ways in which you can make further savings—in relation to labour or, more broadly, throughout the rest of the Parliament—to make up for that unexpected expenditure?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 14 January 2025

Craig Hoy

You mentioned the different situation in the Welsh Senedd. In the Scottish local government arena, the Scottish local authority remuneration committee is looking at potentially raising councillors’ salaries. Anybody who has been a councillor will realise that it is a very tough job and that the remuneration is perhaps not sufficient. That means that council leaders in some local authorities in Scotland will be earning the same as MSPs. The differentials seem to be quite a contentious issue throughout the public and private sectors. Do you anticipate that the closing of the salary gap with councillors will have consequences for on-going discussions about MSP pay?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 14 January 2025

Craig Hoy

Let us turn to business taxation. In its submission, the Scottish Retail Consortium is critical of what you have described as the prospect that councils will be given more revenue-generating powers and wealth taxation. Indeed, the SRC says that that is “somewhat ominous”. Can you give some indication of what those additional revenue-generating powers and wealth taxation might be?

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 14 January 2025

Craig Hoy

It is more to do with the principle in the sense that it makes it more difficult for independent analysts and Parliament to examine the Government’s public spending priorities when the figures continue to change throughout the year.

Finance and Public Administration Committee

Budget Scrutiny 2025-26

Meeting date: 14 January 2025

Craig Hoy

I am sure, however, that you would concede that setting things out in that way makes year-on-year comparisons tricky.