Meeting of the Parliament

Meeting date: Tuesday, March 13, 2018

Official Report 786KB pdf

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Topical Question Time

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Scottish Income Tax Rate (Military Personnel)

To ask the Scottish Government what assessment it has made of the effect of the Scottish income tax rate on military personnel. (S5T-00975)

The Scottish Government’s income tax policy means that everyone who earns less than £26,000 will pay less tax than they would for the same income elsewhere in the United Kingdom—the lowest rate of tax in the UK. Everyone who earns less than £33,000 will pay less tax in 2018-19 than they did in 2017-18, for a given wage.

Military personnel who are resident in Scotland for income tax purposes pay income tax at the same rate as all other Scottish taxpayers. The definition of a Scottish taxpayer is determined by UK, not Scottish, legislation, and is implemented by HM Revenue and Customs.

We are fully committed to supporting the armed forces community. Service provision differs in various parts of the UK, and Scotland continues to be an attractive place to live, work and do business in, with access to many services that are not available elsewhere in the UK, such as free school meals, free personal care, free prescriptions and eye tests and, in many cases, free university tuition.

The issue here is that military personnel devote their lives to service and will be posted where that takes them. Those who are based in Scotland and earn more than £26,000—70 per cent of men and women in the service in Scotland—will now pay more than those on a similar wage elsewhere in the UK. Before the decision was taken to raise income tax for those service personnel, was there any discussion, consultation or engagement with the Ministry of Defence?

I notice that Alexander Stewart has completely ignored the fact that those on the lowest wages in the military—the ones who earn up to £26,000—will pay less under our proposals. It would be refreshing to see the Tories expressing concern about lower-paid people for once, rather than those on higher incomes.

Secondly, I wrote to the Secretary of State for Defence nearly five weeks ago on this issue and I have yet to receive a response, apart from a press release by the Secretary of State for Defence having a go at the Scottish Government. That is no way in which to have the dialogue that Alexander Stewart says he is interested in.

If the Conservatives are genuinely concerned about the pay of the armed forces, why have they not lifted the public sector pay cap? That is the easiest way to deal with the issue of pay in the armed forces.

I have listed all the ways in which Scotland is an extremely attractive place for armed forces personnel to be, such as free prescriptions. It is also true to say that council tax in Scotland is, on average, more than £400 less in Scotland than it is in the rest of the UK. Those are reasons why people in the armed forces are attracted to come to Scotland—that is what we want them to be, unlike the Conservatives. Perhaps we would not have the recruitment crisis that we are facing, along with the failure of the UK Government to complete its pledge to have 12,500 armed forces personnel in Scotland by 2020, if the Conservatives looked after the armed forces across the whole of the UK.

I am thankful that the UK Government will now act. The Secretary of State for Defence, Gavin Williamson, has said that he will urgently review the situation after pressure from Scottish Conservative MPs. It is surely good news that the men and women who keep us safe will now face no financial penalty for being based in Scotland. Will the cabinet secretary join me in overwhelmingly welcoming that point?

The letter that I sent to the Secretary of State for Defence said that the Scottish Government was perfectly willing to discuss the issue. We also made it very clear that we will not countenance any move by the UK Government that disadvantages the lower paid—those earning below £26,000—who should also factor in the concerns of Alexander Stewart. He asks about parity between armed forces personnel and welcomes what he says is action by the UK Government—as I understand it, it is not action but a review—but will the UK Government take action to protect the interests of the 10,000 or so service personnel elsewhere in the UK who will pay a higher rate than they would pay in Scotland? Will the UK Government be even handed? We will wait to see what the review says.

It is very important that we have taken action. We have the fairest and most progressive tax policy in the whole of the UK. We are looking after those on the lowest incomes and doing some of the work that the UK Government should be doing to attract people into the armed forces in the first place, because there is a recruitment crisis, which goes back to the failure of any Conservative MSP in Scotland to talk about the base review and to challenge the UK Government, even when many of their English counterparts were doing so. Even when the wife of one of the Ministry of Defence ministers is challenging the UK Government on the closure of a base in her constituency, there is not a word from the Conservatives about the base closures in Scotland. It is the Scottish Government, not the Tory party, that is the friend of the armed forces in Scotland.

Does the cabinet secretary agree that it follows from the logic of the Conservative argument that, if we make a special case not to increase the tax on some higher earners in the armed forces, we should also prohibit their access to things such as free prescriptions and tuition fees, which have already been referred to, or does he agree with me that those serving in our armed forces deserve all the benefits of living in Scotland for which we all collectively pay?

I agree with Christine Grahame that the Scottish Government has always been clear in its ambition that income tax should be fair and progressive. There is substantial support in the armed forces for that position. We take that position while supporting the delivery of vital public services and enabling investment in the economy. We firmly believe that everyone who lives in Scotland should be treated equally and fairly in the benefits that they receive and in the contributions that they make. The people I speak to in the armed forces in Scotland are very happy in Scotland. They wanted to come here, they are happy to be here and many of them stay here after they have finished their service in the armed forces.

Does the cabinet secretary agree that the Conservatives are displaying utter hypocrisy? Their concern for the financial wellbeing of service personnel is laid bare by their overseeing of a £1,000 real-terms cut in wages since 2010 and their introduction of childcare changes, which will leave servicemen and servicewomen who move within the services, or join the armed forces in the future, £456 a year worse off?

I agree with Graeme Dey. I think that the UK Government should follow the Scottish Government’s lead and match our commitment to provide a progressive approach to public sector pay, which protects those on the lowest incomes and delivers a fair deal for public service workers in Scotland. It is interesting that not a single Conservative MSP or MP in Scotland has called for the UK Government to lift the public sector pay cap for our armed forces personnel.

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Scottish Youth Theatre

To ask the Scottish Government what discussions it has had with the Scottish Youth Theatre regarding its future. (S5T-00972)

Scottish Government officials met the Scottish Youth Theatre yesterday—Monday 12 March—to begin to look at immediate options for the theatre company to continue operations. The Scottish Youth Theatre is due to meet the Cabinet Secretary for Culture, Tourism and External Affairs later this week to continue the discussions.

There is clear support for the theatre company, with more than 37,000 people having signed the online petition, and former students preparing to stage a peaceful demonstration in George Square in Glasgow today.

However, the Scottish Youth Theatre has been in this position before. Four years ago, the Scottish Government had to put together a package to secure the theatre company’s short-term future. Can the minister provide details of the rescue package four years ago, outline the possibility of such a package being awarded again and say whether consideration is being given to any transitional arrangements to end the current uncertainty?

I agree that there is a great deal of concern around the country and, indeed, the chamber with regard to the Scottish Youth Theatre: everyone recognises the value of the work that it does. As an education minister, I am absolutely committed to ensuring that our young people have the opportunity to develop their creative side, because it is very important to their emotional and intellectual development.

While recognising that, however, I must point out that Creative Scotland is legally at arm’s length from the Scottish Government, so we cannot intervene in its creative decisions. As I have said, Government officials had a meeting with the SYT yesterday, and the cabinet secretary will have a meeting tomorrow. I am sure that everyone will work together to find a solution.

I appreciate that the minister might be unable this afternoon to provide details about the grant that the Scottish Government gave the Scottish Youth Theatre four years ago, so perhaps she can write to me with them.

Creative Scotland and its regular-funding announcement have come under significant criticism in recent weeks, and the performing arts are in a precarious position, with options for support dwindling, local authorities being under significant pressure and commercial support for the sector contracting. The five national performing companies are currently directly supported by the Government and receive in the region of £23 million a year, and 184 organisations competed for the £33 million pot of regular funding from Creative Scotland. It is being argued that the Scottish Youth Theatre should be given status that is equal to the national companies. Will the minister commit to exploring that option?

I am sure that that will be one of the options that the cabinet secretary will explore when she meets the Scottish Youth Theatre tomorrow. The case has been being put for a number of years now that that could be a solution. I am certain that the cabinet secretary is likely to explore the option tomorrow.

I am pleased to hear that the cabinet secretary will explore the option of making the SYT a national theatre.

Janet Archer, who is the director of Creative Scotland, has stated that awards were made on merit. I cannot think of a better award being made than to the Scottish Youth Theatre for its work. I am concerned that Creative Scotland is only now, under pressure, pursuing other avenues of funding for the SYT, so I would like an explanation as to why that was not offered at the outset, given the SYT’s outstanding contribution. Moreover, I would also like to find out why the Scottish Youth Theatre did not receive RFO funding in 2014, and has not received it now.

As the First Minister indicated at last Thursday’s First Minister’s question time, the Scottish Government cannot dictate which organisations are offered funding by Creative Scotland; it is for Creative Scotland to explain who has been offered what, and when.

As part of its overall funding announcement in January, Creative Scotland stated that other funding routes are available to organisations whose regular funding applications were unsuccessful. We recognise that the potential closure of the Scottish Youth Theatre is of concern to many people, including members right across the chamber, which is why we are exploring all the available options with the SYT and with Creative Scotland.

I am sure that the minister is deeply concerned about the recent funding decision on the Scottish Youth Theatre. Such decisions stand to jeopardise this year of young people, the objectives of which include providing

“opportunities for young people to express themselves through culture, sport and other activities.”

How will the Scottish Government ensure that the decision on the Scottish Youth Theatre’s funding promotes the objectives and ambitions of the year of young people, rather than jeopardising them?

We are, absolutely, in the year of young people. Arts, culture and theatre are very important to the young people of our nation—to their wellbeing and, as I have said, to their emotional and intellectual development—so we want to ensure that theatre, and youth theatre in particular, can flourish not just in this year of young people, but generally.

The Scottish Youth Theatre does fantastic work, and the desire of all members is that it will be able to continue to do so. There are always difficult decisions to be taken about funding, although I point out that funding for Creative Scotland and for culture and the arts in general increased in the budget that we have just passed. Many organisations that previously did not get regular funding are now getting it, and we have managed to mitigate the impact of cuts in lottery funding.

Difficult decisions cannot be completely escaped, but we are absolutely determined to look at all options to protect, if we can, the work that Scottish Youth Theatre does, and to support, as far as we can, a healthy and vibrant cultural sector right across Scotland in this year of young people and beyond.

I am pleased that the Scottish Government is actively engaging at official and Cabinet levels on the issue. It is fairly clear that the Scottish Youth Theatre understands some of the issues that it faced in relation to the previous funding round and the scale of change in terms of governance, as well as the need to address issues such as inclusivity and to remove financial barriers to participation in its programmes. Those changes have been under way, but it should also be clear to all of us that the SYT will be unable to complete that process of change and improvement unless it has confidence that a long-term future lies ahead of it.

Does the minister agree that what is required is not just a stopgap or something that lets the SYT stumble on for a few more months, but something that gives it clarity that it can continue with its programme of improvement and transformation and become a better Scottish Youth Theatre, and not just continue as it is?

I agree with much of what Patrick Harvie has said. Scottish Youth Theatre has confirmed to Creative Scotland that it is not seeking a reversal of the decision on its RFO application, and I understand that it has said publicly that it recognises that the application could have been better.

The Government absolutely values and recognises the importance to Scotland of youth arts provision, which is why we are working with Scottish Youth Theatre and Creative Scotland to look at all the options, so that young people can continue to benefit from what the Scottish Youth Theatre has to offer.

I apologise to Joan McAlpine. I am afraid that we have run out of time for further questions.