Official Report 331KB pdf
Party Leaders
14:09
Income Tax
The internationally respected Institute of Chartered Accountants of Scotland has just stated that Scotland’s income tax is overly complex and is making our economy less competitive. That mirrors Reform Scotland’s policy position as set out in our recent manifesto. Will the First Minister now graciously accept that we have won the argument on tax?
Has Nigel Farage paid the tax on his £5 million?
Mr Flynn, I was asking the First Minister to be gracious. I do not expect that from you.
Will the First Minister now implement Reform Scotland’s plan to cut six income tax bands to three and, further, to reduce each band by 1p below the rate in England?
That is a daring and bold attempt by Lord Offord to get me to accept his point of view, but I am afraid that I will resist the temptation. If I were to accept his point of view, I would have to accept swingeing cuts in public expenditure, and I have no intention of doing that.
It is early days in the seventh session of the Holyrood Parliament, but in all the preliminary debates so far there has been one dominant theme—just referred to by the First Minister—which is the demand to spend more money. If the First Minister wants more money for public services, does he accept that he will raise more tax revenue if he cuts tax rates to allow the economy to grow?
I do not accept that model, because the reality is that doing what Malcolm Offord wants me to do would have to involve significant, immediate reductions in public expenditure, which would be enormously damaging to people who rely on our public services.
Mr Offord is correct that these are early days in this session of Parliament. As he knows, my party’s manifesto set out a willingness to do a number of things on tax. We set out that we would not increase the rates or the number of bands, and we gave an absolute commitment that the majority of taxpayers in Scotland would pay less in taxation than taxpayers in the rest of the United Kingdom. That is our sustained position, and it is important that we deliver that.
We also said that, over the course of this session of Parliament, we would look for opportunities to simplify the tax system. As Mr Offord may have picked up from the comments that I made publicly at a Confederation of British Industry event a couple of weeks ago and at the Prosper conference this morning, I lay the heaviest emphasis on the importance of the Government taking measures—which we will take—to encourage and motivate growth in the economy. If we have a strong economy, we can have strong public services. That is the social democratic contract that I deliver to the people of Scotland.
It is well proven around the world that too-high taxes drive away the highest taxpayers. We have a live example of that today: Nicola Sturgeon is a very wealthy Scot who has cut her tax burden by paying herself through dividends, thus avoiding pay as you earn and national insurance, and is now moving to London to enjoy lower English taxes.
Does the First Minister agree that that point proves that Scotland’s record high taxes are driving away our most talented Scots? Why on earth did she leave before at least hearing the First Minister’s cunning plan for a second independence referendum? Is it simply that she does not want to inhabit the same country as Stephen Flynn?
I think that she would be much happier to live in the same country as Stephen Flynn than she would be to live in the same country as Malcolm Offord and Reform.
I refer Malcolm Offord to an assessment of his tax plans. The Institute for Fiscal Studies describes Reform’s taxation and spending plans as “not fiscally credible”. That is essentially a summary of what I have just said to Malcolm Offord. His tax plans will have the effect of dramatically reducing the investment available for public expenditure. I am all for a vigorous debate in this Parliament about the priorities that we have to take forward, but I have listened to some of Mr Offord’s colleagues over the past few days and weeks and I have heard a number of calls for more expenditure to be undertaken. I heard the other day that there should be more money for local government and the health service. We cannot have a realistic debate about priorities if Reform is saying, on the one hand, that we should cut taxes by £2 billion and, on the other hand, that we should spend more on health and local government. Those two statements are completely and utterly incompatible, which is why the IFS says that Reform’s plans are simply fiscally incredible.
Scottish National Party Finances
Yesterday, John Swinney and the Scottish National Party Government were held in contempt of court for failing to be open and transparent with the public. As that was happening, John Swinney finally admitted that the £600,000 that his party raised from members of the public explicitly to spend on a referendum campaign had been used for other expenses. A new police complaint is believed to have been lodged last night.
A specific website was created and it was made explicit that people were donating to a ring-fenced independence campaign fund. The same promise was made in letters, social media posts and media interviews. To quote one example:
“SNP: All the money raised on #ScotRef website is ringfenced to fight a future independence referendum”.
That was clearly a lie. Will the First Minister now apologise to all the members of the public whose hard-earned cash his party took on false pretences, and will he, unlike Nicola Sturgeon, fully co-operate with any new police investigation?
What I said yesterday was nothing different from what the Scottish National Party said in 2021, so I think that Mr Sarwar needs to do a wee bit of a check of his press cuts before he tries to put that into his comments. I do not think that it will be a surprise to members of the public that the Scottish National Party and John Swinney believe in Scottish independence, that we raise money to deliver Scottish independence and that we have every intention of delivering Scottish independence.
There are really serious questions here. Peter Murrell has pled guilty to embezzling £400,000. It has now become clear that he did much of that by falsifying receipts, on many occasions pretending that they were for legitimate business costs.
Political parties, like businesses, are able to claim back VAT on purchases relating to operating costs. That means that fraudulent purchases recorded by the SNP using phoney receipts may have been included in any reclaimed VAT. For example, the £124,000 camper van that was recorded in the system as a van would be subject to 20 per cent VAT; the £3,000 robotic lawnmower that was recorded as legal fees would be subject to VAT; and the ridiculous luxury egg poacher that was recorded as an ethernet cable would be subject to VAT—all potentially illegally reclaimed from HMRC.
Today, we have written to His Majesty’s Revenue and Customs, asking it to launch a full investigation into the potential defrauding of the public purse. Would the First Minister welcome that investigation, and will he launch his own audit so that we can make sure that any misused public money can be recouped?
Let me help Mr Sarwar out with an update on information. The issues in relation to Peter Murrell’s admission of guilt about the embezzlement of Scottish National Party funds have potential implications in relation to the payment of taxation. That is why the Scottish National Party has already opened up discussions with His Majesty’s Revenue and Customs on exactly that point. In making sure that we deliver the highest standards of financial governance, which are exactly what I preside over, we are proactively taking those forward, at our own request, with His Majesty’s Revenue and Customs.
I thank John Swinney for accepting that there could potentially have been illegal reclaiming of VAT from HMRC, which means potential misuse of public money that should not have been claimed, because of the fraudulent receipts issued by Peter Murrell. However, that also demonstrates that this is the biggest political and financial scandal in the history of the Scottish Parliament, and it goes far beyond the crimes of Peter Murrell. John Swinney will not get away with taking the same approach—a culture of secrecy, cover-up and deflection—that led to the situation in the first place.
Operation Branchform dragged on for almost four years. It consumed huge amounts of police time, cost the taxpayer at least £2.7 million and raised profound questions about transparency and accountability at the heart of Government. It has brought further scrutiny on the dual role of the Lord Advocate, it has raised issues for the governing party of the country about the misuse of £600,000 of supporters’ money, and now there is an acceptance that there has been a possible defrauding of public money and HMRC.
We must have a question.
My question is this. It is beyond doubt that there should be a parliamentary inquiry. Will John Swinney finally back that inquiry, or will it require further arrests for the public to get the truth?
In the course of that rambling explanation from Mr Sarwar, he said that there has been an extraordinary amount of time and resource spent on a police investigation. There has been, and there had to be, because my party was the victim of criminal embezzlement by somebody who was trusted in my party. That investigation had to take place. Mr Sarwar now wants to have another investigation; I presume that he did not like the outcome of the last one because it did not suit the priorities that he is setting out.
Last night, I convened a meeting of my party’s national executive committee to ensure that we could take the action necessary to address the implications of Peter Murrell’s conviction. We agreed unanimously to act to secure the party’s interests by instructing our solicitors to begin action in court to recover the money that has been stolen from us. We have significantly improved our financial procedures and controls over the past few years. I have taken strong action to ensure that we have effective financial management in the Scottish National Party and we have put in place measures to ensure that we have the highest standards. We have had a police investigation. There can be no higher and more forensic investigation than a police investigation. Therefore, I do not support the establishment of a parliamentary inquiry, because we have had an investigation and it convicted somebody for embezzling from my party’s funds.
Conversion Therapy Ban
This week marks the start of pride month. Pride is not just a celebration of our LGBTQ community; it is a protest. It is clear why protest is still needed. A decade ago, the United Kingdom consistently came top of the list for LGBTQ rights in Europe, yet we have fallen to 22nd place today. That is primarily the result of the vicious wave of transphobia that has been unleashed in recent years, but the attacks on our whole community are escalating.
One of the many shameful stains on the UK’s record is its failure to ban the form of torture known as conversion therapy. The First Minister promised a ban on so-called conversion therapy in Scotland within a year of the election if the UK Government failed to introduce a bill. As things stand, Labour has repeatedly promised to introduce a bill but has failed to do so. During this pride month, will the First Minister take the opportunity to confirm that he will fulfil his promise to LGBTQ Scots? Will his programme for government include a ban on so-called conversion therapy?
First, let me associate myself with the substance of Mr Greer’s comments on his concern about the erosion of the position of members of the LGBTQ community. I express my solidarity with them to ensure that their rights are protected at all times and that they are asserted.
On the question of a ban on conversion therapy, my party’s manifesto said that, first, we would embark on dialogue with the United Kingdom Government to establish its intentions and to seek a common purpose. Simita Kumar, the Minister for Equalities, has sought that dialogue with the United Kingdom Government. We will update the Parliament on the implications of it as they relate to the specific question that Mr Greer has put to me.
I thank the First Minister for his solidarity. I and the Scottish Greens want to see a UK-wide ban on that form of torture, but the UK Government has made the same promise over and over and it has still not introduced such a bill. Should it fail to do so again, I will expect to see it in the Scottish Government’s programme for government in September.
Turning to a different matter entirely, during the election campaign, I was pleased to meet people from across the Highlands and Islands who are now saving a fortune thanks to the £2 bus fare cap that the Scottish Greens secured through negotiations with the Scottish Government. For example, someone commuting from Elgin to Inverness is now saving £17 a day on that journey.
Expanding the £2 cap nationwide was in the Green and SNP election manifestos—in our case, it was set out as a transitional step towards the provision of universal free bus travel. Given that school holidays are coming up, families are looking for affordable days out and the cost of petrol is skyrocketing, expanding that cap should be a top priority for the Government. Does the First Minister agree with the Scottish Greens that more families should be able to enjoy £2 bus fares this summer?
I agree with that proposition, which is why it was in the SNP manifesto. It is being progressed as part of the Government’s early actions. We are very pleased with the progress that has been made on the bus fare cap in the Highlands and Islands. It is providing real benefits for individuals in our communities there, and I want to see families in other parts of the country benefit.
During the election campaign, my party made it clear that our priority was to roll out the proposal, although I have to be candid with the Parliament that it will take us time to do so. Our priority was to roll it out across the Strathclyde transport area in the west of Scotland, and then to take the practical steps that will be necessary to implement our manifesto commitment.
As a West Scotland MSP, I welcome the First Minister’s prioritisation of Strathclyde Partnership for Transport, but families across Scotland should be able to benefit from the cap as soon as possible.
Making bus travel cheaper is only half the picture, though. Forty years after Thatcher privatised the bus network, many communities just do not have the bus services that they need. Fares have gone up, but routes have also disappeared, which leaves people isolated and holds our whole economy back. At the same time, a handful of private bus company owners have become obscenely rich. Some have made so much money from being bus company operators that they can afford to set fire to a pile of their cash by writing £100,000 cheques to the Scottish Labour Party.
The Scottish Greens proposed bringing our bus services back into public ownership through a bond scheme, but the SNP’s manifesto was silent on the ownership question. Does the First Minister not agree that it is time to end the failed experiment of privatisation? Will he work with the Scottish Greens to bring our bus services back under public control?
I have always prided myself on giving avuncular advice to Mr Greer. All I can say is that I think he touched a raw nerve with his comment about bus operator donations to the Labour Party. When he made his point about free travel in the west of Scotland, I kept thinking that he looked as though he was eligible for the under-22s bus pass into the bargain.
To be serious, I am very sympathetic to Mr Greer’s points. There are a number of good examples of bus transport being in public ownership—the city of Edinburgh is a shining example, given its outstanding, high-quality bus service. I am full of admiration for the work that is being undertaken by Highland Council, in whose area many more services have been brought under public ownership and control. The legislative framework is in place to enable that to happen. We want to work with local authorities to advance such propositions, because they would be in the public interest.
We can make public transport more affordable and sustainable through the steps that we propose to take with the £2 bus fare cap. Along with the Deputy First Minister, I look forward to engaging with the Greens on the Government’s financial priorities.
Scottish National Party (Public Money)
Peter Murrell stole at least £400,000 from the Scottish National Party. He simply could not have done so without the protection of his wife, Nicola Sturgeon, and his childhood friend John Swinney. During the crime spree, the SNP was in receipt of more than £10 million of taxpayers’ money. [Interruption.] I do not know whether Stephen Flynn is cheering me on or heckling me—he is probably cheering me on, because he is keeping his eye on the prize.
Last week, in the chamber, John Swinney told me that no public money had been stolen, but Mr Swinney also spent years denying the disappearance of ring-fenced independence funds—until yesterday, when he suddenly changed his story. Is John Swinney still 100 per cent sure that Peter Murrell did not get his sticky fingers on any public money?
I stand by the comments that I made to Russell Findlay. He may have noticed a quote from the Electoral Commission last week, which said:
“The SNP receives policy development grants as set out in law. Parties have to report on their use of the grant, and have that grant expenditure independently audited. The Commission checks carefully that the grant is spent correctly. The SNP have provided those audits, we have checked them, and we have seen no evidence of misuse of policy development grant funds. If there is evidence of any misuse, the Commission will take appropriate action to safeguard public money.”
Those are the words of the independent Electoral Commission. The police have carried out an extensive investigation and have found nothing to substantiate the abuse that has come from Russell Findlay today. [Interruption.] Russell Findlay is complaining about Stephen Flynn barracking him, but he is just barracking me, so I suggest that Mr Findlay should learn some lessons from what he has gone on about in his contributions. Russell Findlay has spent years coming here, abusing me and—[Interruption.]
Let us hear the First Minister respond.
Mr Findlay, you should not heckle someone when they are trying to answer a question that you have asked.
Russell Findlay was denigrating my personal integrity and reputation. I point Mr Findlay to the outcome of the election, when the people of my constituency had the opportunity to reject me, having listened to everything that Russell Findlay and his sidekick piled out about me and my constituency. The Conservatives took another hammering in Perthshire North—not for the first time, but for the seventh time in this Parliament—so people do not listen to Russell Findlay and the Tories.
Dearie me—what a performance of crocodile tears. That was so sad. The SNP treats taxpayers with the same contempt as it treats its own members.
Former accountant Alastair Cameron joined the SNP in the 1960s, before half of that lot were even born, and he donated money to the party for years. He passed away a few months ago at the age of 89. His daughter Susan told me this morning that he would have felt betrayed not only by Peter Murrell’s theft but by those who did not stop Peter Murrell but facilitated and enabled his crime spree.
John Swinney has spent years defending every single indefensible SNP scandal, but all he has in response to this seedy crime spree is angry, fake deflection. John Swinney’s and Nicola Sturgeon’s complex web of stories is unravelling.
Please ask a question.
Does John Swinney not realise that his leadership is also unravelling because of his central role in this scandal?
What an absolutely pathetic spectacle to bring to the Parliament. My leadership was on the line in the general election on 7 May. It was paraded by every one of my political rivals—week after week, Mr Sarwar and Mr Findlay questioned my integrity, so it was on the line. The people of Scotland sent me here to lead this country and Government. I will lead with privilege and pride, and I will always serve the people of Scotland. Mr Sarwar and Mr Findlay will always remain on the back benches, and the people of Scotland have sent them out there with a ringing message that they are not listening to either of them.
Recall Legislation
The most regrettable aspect of this whole sorry saga around the Scottish National Party’s finances is the erosion of public trust and faith in politics that it creates. There are still big unanswered questions around all of this. That is why we need a parliamentary inquiry, but the Government is blocking one, just as it has blocked other measures to challenge bad behaviour.
For 10 years, Westminster has given people the right to sack criminal or corrupt MPs. It removed the likes of Margaret Ferrier when she endangered lives during Covid. We could have had such legislation at Holyrood, but the SNP blocked it just three months ago. Why does John Swinney think that people should not have the right to sack their MSPs when misconduct has been proven?
That is not my position. In the course of the past week, I answered a question from Graham Simpson about whether the Government would co-operate on the formulation of proposals on recall legislation. I gave Mr Simpson a positive answer. The Government is prepared to contribute to this process, but I have a debate in my mind about whether it would be appropriate for the Government to bring forward proposals that would affect the status of elected members of Parliament. I would much rather that such proposals came from within the Parliament. If it would be helpful, I would certainly bring forward proposals to enact a workable recall mechanism, because it is important that the people have the opportunity to recall members of Parliament who behave inappropriately.
I hope that that answer contributes to Mr Cole-Hamilton’s evaluation of how we make progress on these questions, because I want to make sure that the highest standards are applied at all times, which is what I do.
I heard the same warm noises from John Swinney in the previous parliamentary session, when there was a live bill in front of members that would have given effect to such proposals. He had the votes to push the bill across the line, but he instructed his party to vote against it.
Recall provides a solution for when things go wrong, but we can do more to ensure that the right people are in politics to begin with. I am a former youth worker and I have twice tried to change the law so that elected representatives are subject to the basic safeguarding checks for working with children and vulnerable adults. However, again, the SNP Government has blocked progress.
It is time to remove bad actors from public life. I cannot believe that the First Minister wants to go through any of this ever again, so will he stop standing in the way of efforts to clean up our politics?
I respectfully say to Mr Cole-Hamilton that it would help if, once I have given an answer to his question, he could perhaps change the script of what he was going to say. He just ignored everything that I said about recall, but he could have engaged in a substantive discussion about how we might take forward recall legislation.
The issue with the recall legislation in the previous session of the Parliament was that it was unworkable, and the Government cannot allow unworkable legislation to be passed. I am very happy to engage on this question, but I respectfully encourage Mr Cole-Hamilton to do likewise.
On the issue of protection of vulnerable groups checks, I am very happy to consider that. I do not want bad actors to be operating anywhere in our public services, and I extend that to members of the Parliament.
If Mr Cole-Hamilton wants to advance the issue, he should take a leaf out of the book of Mr Rennie, his next-door neighbour in the chamber, who suggested the other day that there are opportunities for us to make progress on shared objectives. I encourage Mr Rennie to counsel his colleague next door and give him some of the constructive advice that Mr Rennie is always sharing with me. I make it clear that I am not on a mission to destroy Mr Rennie’s career; I am here only to support him and to encourage good outcomes for the people of Scotland.
That concludes First Minister’s question time for party leaders. We will have a one-minute break in order to prepare for the next debate.
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