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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 31 March 2025
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Displaying 1492 contributions

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Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

But we also have high earners, and 0.8 per cent of all Scottish taxpayers pay 18 per cent of all Scottish tax, so we already have a significant, if small, group of people who pay a huge amount of tax. Surely the Government’s ambition should not be to increase that.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

What is the Government’s position on the Fraser of Allander Institute’s Scottish business monitor? I presume that you have read that as part of your analysis of tax behaviour. Its last quarterly report, showed that 34 per cent of Scottish businesses reported that tax divergence was having a “fair” or “significant” effect on their business, including on their ability to recruit and retain people, on demands on wage pressures, and on an overall perception of Scotland’s competitiveness and inward investment. The number of businesses that felt that was significantly higher in particular sectors. You talked about the financial sector, but let us look at the construction sector, where nearly one third of businesses said that higher taxes had a significant effect on their ability to recruit and retain people in Scotland.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

Data is key.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

That is a very long answer that has not answered my question. You are using completely different language from that in the Audit Scotland report, but I can only use the language that the Auditor General has used. I appreciate that you are explaining the question.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

That is really helpful.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

I will interrupt you in the interests of time—it has been a long session already. My questions are about economic performance differentials in Scotland. I am hearing that the economy in London is different from that in Edinburgh. We understand and accept that. We understand that the block grant adjustments alter the amount of money that the Scottish Government gets and that different regions of the UK will have different economic activities. However, I am trying to understand the bigger picture.

Are there issues? Is there, as the Audit Scotland report highlighted, an underwhelming economic performance in Scotland relative to that in the rest of the UK, and does that affect how much money the Scottish Government has to spend? That is the underlying point that I made in the original question. It is not a trick question; I am just using the data that is in front of me.

Let us look at this financial year. The SFC has done some work on the 2025-26 forecast. It estimates that £1.676 billion in additional revenue will be generated through tax divergence in Scotland. That is great and I am sure that the Government will say that it is bringing in extra money. However, the SFC forecasts that it will result in only a net £837 million in cash to the Scottish Government, so that is about half.

Scottish taxpayers are paying more in tax but that is not generating the same amounts of money for the Government to spend on public services as we all want it to do. Is that because of relative economic performance differences between Scotland and the rest of the UK?

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

Is it not a source of concern to you that 80 per cent of the potential tax take that could be achieved by having a different tax policy in Scotland is being lost to behavioural changes? You mentioned some of them—tax planning and early retirement—

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

That is good. You mentioned the Fraser of Allander Institute, which does some good independent analysis. I got the impression that the research that you have done on tax divergence seemed to demonstrate that it is having no, or very little, effect on behaviours. Is that the Government’s position?

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

Good morning. I will start by looking at an area of the report that we have not covered, which is Scotland’s overall economic performance relative to that in the rest of the United Kingdom. For your information, that sits on pages 19 to 23 of the AGS report.

I will start with a question for the Scottish Government. Perhaps you can talk me through exhibit 3, which is the table on page 20. According to the Auditor General, between 2017 and 2023, the cumulative additional tax paid by Scottish taxpayers due to tax policy differences was £3.36 billion. The net increase to the Scottish budget is displayed not far away from that figure, and it is only £629 million. Why is that the case?

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Jamie Greene

What do you mean by “behaviours”? I am just getting my head around that. It is not a trick question, by the way; I am just trying to understand the table.