Meeting of the Parliament

Meeting date: Tuesday, June 25, 2019

Official Report 1233KB pdf

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Topical Question Time

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Income Tax

To ask the Scottish Government what its forecast is for income tax growth in the coming years. (S5T-01728)

The Scottish Government does not produce its own income tax forecasts. The independent Scottish Fiscal Commission publishes its official forecasts of Scottish income tax receipts twice per year, and has done so since December 2017. The SFC forecasts annual income tax receipts of £11.5 billion in 2018-19, growing to £14.6 billion in 2024-25, which is an increase of £3.1 billion.

Scotland collects its own income tax, which means that it is more dependent on its own economic performance. The Institute for Public Policy Research suggests that if the tax projections are correct, the Scottish economy could lose £1.8 billion over the next five years through income tax growth that is weaker than in the rest of the United Kingdom. Despite £360 million of income tax rises in 2019-20, increased income tax growth in the rest of the UK means that the Scottish Government’s budget will be £5 million worse off than it would have been under the previous system.

Without hiding behind a Brexit bush, can the cabinet secretary tell the chamber how the Scottish Government will fill the tank of an economy that is running on empty?

The member raises a number of issues. Scotland’s economy is performing well: it has record low unemployment, record high employment and a strong performance on productivity, exports and a number of other economic indicators.

There might be cyclical or distributional issues when it comes to income tax growth. I have explored thoroughly with the Finance and Constitution Committee the fact that there might well be deepening inequality in the rest of the UK, where more higher-rate taxpayers’ increases are going further, and that might well have a negative net impact on Scotland’s income tax rates because of the arrangements in the fiscal framework. However, our economy is growing strongly. If we want to support that on-going economic growth, we need to avert Brexit, because it would have a damaging impact on the whole of the UK, not just Scotland. We want to have a sustainable growth agenda.

I point out that the benefit of having a devolved income tax system is that we can make decisions for ourselves. For example, we have decided to have a more progressive income tax system, in which 55 per cent of Scottish taxpayers pay less than they would have done if they lived south of the border. Those 55 per cent of taxpayers are at the lower end of the income distribution rather than the top end, whereas it is those at the top end to whom the Conservatives seem to want to pander.

The Scottish Fiscal Commission and the Fraser of Allander institute have noted that Scotland’s net tax position is worse because of the downward revisions to Scottish earnings growth, despite the fact that Scottish taxpayers are paying £500 million more in income tax compared with their counterparts in the rest of the UK. Does that mean that the cabinet secretary will have no choice but to increase taxes further, leading to hard-working Scots having less money in their pockets, and to less growth and less revenue, which will ultimately lead Scotland further into a black hole?

No, it does not mean that at all. The reality of the income tax reconciliation is that it is down to forecast error at the hands of the Scottish Fiscal Commission and the Office for Budget Responsibility. That issue will be addressed. At the moment, we are talking about forecasts of forecasts. Once we have outturn data, we will know exactly what the position is. At that point, we will be able to more deeply understand the issue—which might be distributional—of the potential growth in higher-rate taxpayers in the rest of the UK compared with Scotland.

The factual position is that income tax is going up year on year. We will collect more in income tax, but we face issues such as the block grant adjustment and UK rates potentially going up more. Those are among the issues that have been addressed by the SFC.

The truth is that the Scottish economy is doing well. The economic indicators are strong. Income tax will be going up. We want to further stimulate growth, but the SFC and the Fraser of Allander institute say that our economic success story is threatened by Brexit, which can still be averted.

Rachael Hamilton’s question was partly about the position of taxpayers. Scotland has a more progressive tax system. The structure is fairer, as are the decisions that we have taken. If, for example, there is a Boris Johnson premiership, it is perfectly clear that the funding will go towards tax cuts for the richest 10 per cent in society. That is unfair and will continue austerity. The Scottish Government will not be making such a choice, because it is not the choice of the Scottish people.

Three members wish to ask a supplementary, so I hope that they will all be quite succinct.

One of the points that the IPPR makes is that promoting wage growth would boost tax revenue—an increase of 1 per cent in wages would add £750 million to tax revenues. That is particularly relevant when there are 470,000 people in Scotland not being paid the living wage. Is it not now time for the Scottish Government to change procurement legislation to make it mandatory for anybody who works under a public contract to be paid at least the living wage?

We are working within the law to ensure that as many people as possible are paid the living wage. I get advice on what is legal and what is not, and we are doing everything that we can within the law to support the living wage. It is good news that more people are paid the living wage in Scotland than in any other part of the United Kingdom, but of course everyone should be paid at least that.

We have a focus on the living wage and the fair work agenda. Tackling inequality is really important—it is one of the issues that drives the reports that we are hearing about. Inequality is getting deeper in Scotland than elsewhere in the United Kingdom, which is having an impact. Those at the top are being paid disproportionately more, while we are trying to bring those at the bottom of the structure up.

I absolutely agree with James Kelly about the minimum level. It would be better if we had devolution, control and power over employment law and setting the minimum wage in Scotland. However, in the absence of that authority and those powers, we will do everything that we can as a Government to encourage payment of the living wage by those from whom we procure services, as well as more widely.

Central to the operation of the fiscal framework is the relative economic performance of Scotland and the rest of the UK. Productivity is a key driver of wage growth and income tax receipts. Will the cabinet secretary outline how Scottish productivity growth compares with that of the rest of the UK?

The latest statistics show that, in 2018, Scotland’s productivity grew by 3.8 per cent, compared with 0.5 per cent in the UK as a whole. Further, since 2007, productivity in Scotland has grown by 10.8 per cent compared with 2.7 per cent in the UK as a whole.

All Governments face some degree of uncertainty from fiscal forecasting, because there will always be a risk of forecasting errors. The Scottish position now is that we have forecasts from the Scottish Fiscal Commission and the Office for Budget Responsibility; we have two separate sets of fiscal forecasts by separate bodies with separate methodologies. Is it not increasingly clear that the absurdly complex fiscal framework has left Scotland with compounded economic uncertainty in exchange for half measures on fiscal autonomy?

That is a good description of the complexity of the system. There is an easy remedy for the complexity of devolution: Scottish independence.

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Specialist Mental Health Support (Children and Young People)

To ask the Scottish Government what its response is to reports that children and young people who attempt to take their own lives have to wait weeks for specialist mental health support. (S5T-01733)

The Scottish Government is committed to ensuring that children and young people get access to the mental health support that they need, and recognises the distress that is caused to children, young people and their families by any delay in accessing mental health support.

Children and young people are a particular focus in the suicide prevention action plan that was published in August 2018. I have established a national suicide prevention leadership group, which is chaired by the former deputy chief constable, Rose Fitzpatrick. The membership of the group is broad, and includes representation from the health and social care, justice and third sectors; local authorities and the Convention of Scottish Local Authorities; and clinical professionals, young people—importantly—and people whose lives have been affected by suicide. The Scottish Government is working with the NSPLG to ensure that all the actions of the suicide prevention action plan consider the needs of children and young people.

In June 2018, the Government tried to sneak out an audit report on rejected referrals to child and adolescent mental health services, which found a belief among patients that unless the situation was serious enough, the individual would not be seen. Nine months ago, Audit Scotland published a report on CAMHS, which found that young people were not getting appropriate care until they reached crisis point. This weekend, it was reported that a teenager who had already tried to take her own life had to wait a further four weeks to be seen. Given the urgency and seriousness of the situation, does that sound like adequate progress to the minister?

Long waits for CAMHS treatment and support are unacceptable, which is why we set out in the 2018 programme for government a £250 million package of measures to support positive mental health and prevent mental ill health.

We also formed the children and young people’s mental health task force, and its delivery plan was published at the end of December. Next month, it will publish its recommendations on how mental health services can be improved for children and young people and their families.

It does not sound to me—or, I am sure, to many people who are listening—as though much progress is being made. One in four children and young people is still having to wait more than four months to be seen for their first appointment. Last month, during the statement on the NHS Tayside interim report, the minister refuted a suggestion from Miles Briggs that the issue of services not taking suicidal patients seriously was “widespread” across the country. Given the reports over the weekend, does the minister stand by that statement and is she, after a full year in the job, really so unaware of the issues on the ground?

At the end of March, 26,740 children and young people were under the care of CAMHS services across Scotland. That is a testament to the amount of work that the CAMHS staff do in supporting children and young people at a time when they are feeling particularly vulnerable. However, there is much more for us to do. That is why I am looking forward to the recommendations from the children and young people’s mental health task force and to working with the Convention of Scottish Local Authorities to set out how we will address those recommendations. I am sure that Mary Fee will be interested to hear the response to that when we make a statement in September about the progress of the mental health strategy.

Figures released in May show that the Scottish Government is falling woefully short of getting anywhere near its target number of mental health workers. Despite a promise in the mental health strategy to recruit 800 additional workers by 2021-22, as of April this year, only 186 whole-time equivalents had been recruited. Can the minister guarantee today that the Government will meet that target?

We are reporting quarterly on the additional workers under action 15 of the mental health strategy. The most recent figures were published in May and further figures will be published in August. We are certainly keeping close track of those. We are working hard with our colleagues in health boards and integration joint boards to ensure that we get the workers in those key target areas as quickly and appropriately as we can.

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Dental Treatment (Waiting Times)

To ask the Scottish Government how it will reduce the reported long waits for in-patient and day-case dental treatment. (S5T-01738)

Our £850 million waiting times improvement plan will substantially and sustainably improve waiting times, including those for in-patient and day-case dental treatment.

Across Scotland, dental consultant vacancies are going unfilled and patients are left waiting. The British Dental Association described the figures acquired by the Scottish Parliament information centre and Scottish Liberal Democrats as “eye-watering” and it said that patients can effectively expect to wait much longer. The BDA said that those long waits are being driven by a failure on prevention and a failure to invest in the workforce. The most recent Information Services Division figures show a “noticeable drop” in national health service dental staff, down 14.7 per cent in the past five years alone. Can the minister explain why?

Two points were made about the BDA. One was on workforce, which I will come to shortly, and the other was on prevention. Prevention is an area where we are having substantial success across Scotland. The childsmile programme is making a real difference. It helps to make sure that children know how to brush their teeth properly and provides fluoride varnish applications. We will be announcing the next stage of that under the community challenge fund of the oral health improvement plan, and we will be announcing which projects will be taken forward that are aimed at reducing further the oral health inequalities among children.

On the other area, a challenge that we no longer have is people being unable to access an NHS dentist—very few people cannot access one. When this Government took over in 2007, huge numbers of people were unable to access an NHS dentist, and we have managed to turn that around. Sometimes, it is important to acknowledge progress where it has been made, so we should thank our dental colleagues for rising to the challenge and making sure that people can, in the first place, access NHS dental practices.

Last week, I had a chat with the BDA, and one of the challenging areas is the shortage of anaesthetic consultants, which leads to a number of the waiting times figures. Even there, since 2006, we have increased the numbers of anaesthetic consultants by 41.7 per cent—moving from 549 up to 778.

I am in no way suggesting that everything is rosy. I accept that some of the waits and more challenging cases are unacceptable, particularly when we are talking about children, who are often in pain. We need to continue to do better around that. We are making a difference, and the waiting times improvement plan is designed to make it even better.

I have a constituent who requires both in-patient and day-case support, but she is not getting any treatment. In 1995, Angela Mulhern fell victim to William John Duff. He performed a series of unnecessary and incompetent dental surgical procedures, which have caused tens of thousands of pounds’ worth of damage to her teeth and jawbone and left her in constant pain. Ms Mulhern underwent the treatment as an NHS patient yet the Scottish NHS has not even offered to carry out the necessary remedial work. Will the minister agree to meet Ms Mulhern and me?

I have no awareness of that case. If, in the first instance, Mr Cole-Hamilton writes to me about it, we can discuss how we should take that forward.

Four members wish to ask supplementary questions but we have little time this afternoon. I will be harsh and not take any of those questions. I encourage the members to submit written questions. I apologise to Monica Lennon, Miles Briggs, James Dornan and Neil Findlay.