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Chamber and committees

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 18 February 2025
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Displaying 905 contributions

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Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

In my view, honesty is a primary responsibility of the Government. This Government needs to be honest about what it is proposing, but I do not believe that it does that in the motion. The maths is simple: the £5.2 billion is considerably more than the additional costs that it is incurring through the national insurance increase. If it cannot do the maths, maybe the SNP is not fit to be in government, and maybe it should make way for people who are.

I move, as an amendment to motion S6M-16488, to leave out from “recognises” to end and insert:

“welcomes the record £5.2 billion of additional funding for Scotland delivered as a result of the UK Government’s Autumn Budget; agrees with the STUC that the additional positive measures that are set out in the draft Scottish Budget 2025-26 are ‘dependent on UK Government funding’; regrets that the fiscal changes called for by the Scottish Government would significantly reduce the level of funding available to Scotland’s public services; understands that the First Minister has publicly advocated for a cut to Scotland’s budget of £636 million; regrets that the Scottish National Party administration’s failure to grow Scotland’s economy has negatively impacted the level of funding available in the Scottish Budget over many years; understands that decisions around the level of staffing in Scotland’s public services are devolved to the Scottish Government, and calls on the Scottish Government to ensure that the record funding delivered by the UK Government reaches the frontline services that need it most.”

16:15  

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

Given that the minister raised the point about options, if it is not going to be employer national insurance contributions that are raised, what is it to be? Is it personal income tax, personal national insurance contributions or value added tax, or will he reject the £5.2 billion block grant increase that has resulted from that tax measure?

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

The manifesto said, “taxes on working people”. The reality of the fiscal context was that there were difficult decisions to be made. This is not a magic bullet for public sector reform but, with one in six Scots on NHS waiting lists and with attainment falling in schools, we need additional public funds—although I also argue that we need reform and that we must modernise delivery of public services.

I am not going to stand here and say that the decisions were easy, because they were difficult. The choices that the Labour Government had to make to fix the foundations of the economy were not cost free. As someone who was an employer before coming to Parliament, I understand the difficulty that the measure will cause for employers who have to make payroll payments every month. I understand that, but the measure was necessary.

I also note that, although larger employers are being asked to contribute more, those who employ five people or fewer will benefit because the increased thresholds will remove altogether 57,000 SMEs from making national insurance contributions.

It is also important to note the international context. The rate of employer contributions puts us absolutely in the middle among countries in the Organisation for Economic Co-operation and Development. In Germany, employer contributions are 15 per cent higher than they are in this country and those in France are double what ours are.

The decision was not easy and was not one that the UK Labour Government wanted to make, but it was necessary—which brings me to the question about what SNP members are proposing as an alternative, because that is not clear. They reject the fiscal measure of increasing employer national insurance payments, but they also voted against the windfall tax and against changes to the loophole for people with non-domiciled status.

What would the SNP do differently? What fiscal measures would it take? This may be where we need to exchange stern looks. What would the SNP do? Would it increase personal income tax? That is not something that I would advise at this time, when people are struggling to make ends meet and to pay their monthly utility bills. Would SNP members increase employee national insurance contributions? That would have exactly the same effect. Would they put up VAT, which is the most regressive form of tax and the one that hits the poorest people hardest?

We have heard no alternatives from the SNP. The only contribution has been from the First Minister, who suggested that the UK Government should raise UK income tax to match levels in Scotland. It seems that the First Minister, who helped to negotiate the fiscal framework, has forgotten how it works. According to the Fraser of Allander Institute, that would reduce the amount of money that would be available to the Scottish Government by £636 million.

The SNP is not only calling for changes to national insurance contributions. In addition, SNP ministers and members have proposed almost £70 billion of additional public expenditure in the lead up to the budget without having a single idea about how to pay for that. There is no spending decision that the SNP is not in favour of, but it is without a single proposal about how it would pay for them. At the general election, the SNP called for an increase in borrowing to pay for additional public expenditure, but without any credible plan for how to deliver that.

There is a parallel with that—Trussonomics. Unplanned borrowing leads to financial chaos and to the instability that members on the Government benches are all too keen to criticise the Conservatives for.

Frankly, SNP members need to inject a little bit more honesty into their arguments. When it comes to passing their budget, they often charge members on the Opposition benches who have come forward with proposals for additional expenditure with saying how they would pay for it. Where would the money come from? What else would they cut? Those are the questions that I pose to them. If they do not want to increase employer national insurance contributions, what would they cut? They do not want to increase tax and, I presume, they do not want to increase borrowing. Are they saying that we should reject the £5.2 billion from the block grant that the measure delivers?

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

I am in my final minute.

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

If we listen to Craig Hoy, it is as though the previous 14 years did not happen. Therefore, I will start where, I hope, there is some agreement with members on the Government benches. The fiscal inheritance that was left by the previous UK Conservative Government was nothing short of a disaster—debt at 100 per cent of gross domestic product, a £20 billion fiscal black hole and record low investment. After 14 years of chaos and division, the public realm was simply crumbling and public services were in urgent need of investment.

It was in that fiscal climate that Labour had to make a series of difficult decisions in the autumn budget, in order to end the era of austerity and provide billions of pounds of investment in public services. That budget included a record-breaking settlement for Scotland, with an additional £5.2 billion both this year and next, which is the largest settlement for the Scottish Government in the history of devolution.

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

On a point of order, Presiding Officer. I apologise for making sedentary interventions, but I point out that pointing at members in a slightly confrontational manner is not necessarily entirely parliamentary either. I seek your guidance on that point.

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

The member is quite correct—it combines both those aspects; that is why the OECD refers to it as the tax wedge. Will she also acknowledge that, at current levels, we are still competitive with other OECD countries—we are mid-table—when it comes to the tax burden and the tax wedge to which she refers?

Meeting of the Parliament [Draft] Business until 17:46

Community Wealth Building

Meeting date: 18 February 2025

Daniel Johnson

I thank the minister for prior sight of the statement.

Although I found the statement to be interesting in terms of context and examples, it is short of practical steps on how the Scottish Government will seek to implement community wealth building.

I agree with him about public sector procurement and SMEs. However, the reality is that, since 2016-17, the proportion of Scottish public sector spending with micro-operators has fallen from 7 per cent to 4.7 per cent. What practical assistance will be provided to SMEs to bid for public contracts and ensure that they win them? Likewise, what capital will be made available to grow the sorts of organisations that the minister is talking about? Will that become a core mission of Scottish Enterprise and the Scottish National Investment Bank?

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

Those are the choices.

Meeting of the Parliament [Draft] Business until 17:46

Employer National Insurance Contributions

Meeting date: 18 February 2025

Daniel Johnson

I hear what the member is saying. I presume that she is arguing for a wealth tax, but does she not recognise that there is an in-year financial problem that needs to be addressed? If it is not going to be addressed through national insurance contributions from employers, what is her alternative proposal?