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Earnings growth is at 6.6 per cent—Scotland had the highest earnings growth in the UK last year—and a lot of that will go into taxes. Fiscal drag, which the UK and Scottish Governments are implementing, has also brought in huge amounts of money. It seems that that is bringing in vastly more than the £82 million from the tax rate increases. Is the increase in tax rates more ideological than practical, given that other measures appear to be bringing in about 20 to 25 times more than that?

When I was first elected in 1999, I was on the Social Justice Committee, which did an inquiry into long-term funding for the third sector. That was more than 20 years ago, and we came to much the same conclusions as you came to just now. The issue is still hanging over us.

I was a councillor in 1995, at the time of the local government reform, and I remember how expensive that was.

Does anyone else want to comment on tax, capital allocation and resource prioritisation, or any other aspects of the budget?

So far, everyone has body-swerved the issue of taxation. I will ask Keir Greenaway about that, as the GMB’s submission is the most virulent on the issue.

The GMB welcomes the introduction of a new income tax band,

“as this will collect more money from higher earners”.

However, it added:

“this goes nowhere near far enough to plug the gap in Scotland’s public finances.”

Do you believe that the gap should be plugged solely by increases in taxation or that there should be a combination of additional grant funding from the UK, for example, and taxation? How would you pitch that?

The STUC talked about raising up to £3.7 billion. The Scottish Government’s increases in taxation would, on paper, raise £200 million. However, when behavioural change comes into play because, for example, people might decide that they will not do an extra shift if they are paying a marginal tax rate of 69.5 per cent, the actual amount that would be brought in is about £82 million. One of my concerns about the STUC document was that it did not seem to take that behavioural change into account. What is your view on behavioural change and how it would impact on the amount that can be raised—not on paper, but the actual amount that the Scottish Government would have available to spend—given the effect that the increase would have on some people’s behaviour?

I am sorry. Why did I call you Howard?

Yes.

That is fine. I was just looking for clarification on that.

Does anyone want to comment on taxation at all, for or against, or to talk about the Scottish Government’s capital priorities? I touched on housing, which was discussed at some length in the previous evidence session. Where can capital be spent? For example, I mentioned previously that the police are getting a 12.4 per cent increase in capital, whereas there is a 30 per cent decrease for housing. It would be interesting to hear what people have to say about that.

Okay, who wants to go first with their final comments?