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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 4 May 2021
  6. Session 6: 13 May 2021 to 8 April 2026
  7. Current session: 14 May 2026 to 29 September 2026
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Displaying 54 contributions

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Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 16 September 2026

Liam Kerr

That is perfectly reasonable. Perhaps the committee can take that forward.

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 16 September 2026

Liam Kerr

Mr Borland, it is a slightly different area, but business rates have been mentioned by both of you a couple of times. Mr Begbie said earlier that the situation was a mess. Your submission picks up on the review of what we are calling “anomalies” that was announced in June, I think, following a revaluation in April. Some might say that that review—that planning—ought to have been done prior to launching any significant change. What would you say to that? Is there a general issue with launching change without fully working through the consequences?

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 16 September 2026

Liam Kerr

Good morning, Mr Begbie. I want to go back to behavioural change, which Michael Marra asked about. I also asked about it last week. You talked about mobility and said that there is no evidence that people are moving away. The Office for National Statistics says that 45 per cent of workers earning £50,000-plus, which I think is roughly the level that your members start at, work remotely or in a hybrid way, compared with around 8 per cent of those earning under £20,000. Apparently, the managerial and professional workforce, which you represent, is the most likely to do hybrid work.

Your submission says that the Scottish tax base is highly reliant on a small number of taxpayers. You say that you are starting to see behavioural change due to the different tax rates, so is there any evidence of that small number of taxpayers making choices about where to base themselves? If so—or in any event—what impact would that have on the economic agenda?

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 16 September 2026

Liam Kerr

Yes.

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 16 September 2026

Liam Kerr

I understand.

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 16 September 2026

Liam Kerr

Joanne Walker, I turn to Mr Marra’s questions about Mr Castro’s proposals to increase taxes on everyone, particularly middle earners, and reduce the higher rate threshold to £40,000. The Chartered Institute of Taxation has highlighted that someone earning between £43,000 and £50,000 in Scotland faces a combined marginal income tax and national insurance rate of 50 per cent, which compares with 28 per cent elsewhere in the UK. In practical terms, does that discrepancy risk discouraging people from taking additional hours, overtime and promotion? Are there any other behavioural changes that your organisation fears from that?

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 16 September 2026

Liam Kerr

I am very grateful. I come to Mr Castro—I see that you want to pick up on that question, and this might stimulate your response. In your submission, you specifically say, in relation to increasing the tax rates and reducing the higher rate threshold, that you are “accounting for behavioural responses” when you make your estimates. This committee has heard that there is a dearth of evidence on what those behavioural responses might have been. That rather begs the question: what evidence did your organisation use to account for those behavioural responses, and what behavioural responses did you find?

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 9 September 2026

Liam Kerr

I am grateful.

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 9 September 2026

Liam Kerr

To follow on from Michael Marra’s questions on bonds, the Scottish Government is also proposing a mutual investment model. Some might say that it looks rather like a private finance initiative or public-private partnership model, except that the public sector gets a share of the returns and holds an equity stake in the project.

I turn to Stephen Boyd. The IPPR has said that that model could lead to higher long-term costs. Can you explain that? Can it be designed in such a way that it provides value for money?

Finance and Public Administration Committee [Draft]

Pre-budget Scrutiny 2027-28

Meeting date: 9 September 2026

Liam Kerr

Good morning, panel.

Professor Bell, you state in your written evidence that it should be

“growth in earnings and employment, rather than simply higher tax rates”

that drive the economy. You suggest that we need to evaluate the

“increasingly large differences between Scottish and rest-of-UK … tax rates … according to their … behavioural effects on migration, hours … and the location of high-skilled employment.”

I have a few questions on that.

The Scottish higher-rate tax threshold is being frozen again, meaning that wage growth will pull more middle-income earners into the 42 per cent rate. The Scottish Fiscal Commission says that more than 26 per cent of Scottish taxpayers pay the higher rate or above, compared with about 22 per cent in the rest of the UK. To what extent is Scotland now relying on fiscal drag rather than genuine growth in earnings and the tax base? Is that situation sustainable?