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Will the member take an intervention?

It is an aspiration—

At the start of my statement, I set out the performance of the Scottish economy. Allied to the action that we are taking to grow the Scottish economy and, therefore, the tax base is the fact that we have positive net in-migration to Scotland, across all tax bands. That is something that we want in order to continue to grow the tax base, because we recognise its importance.

We do not intend to introduce any new bands or increase the rates of Scottish income tax for the remainder of this parliamentary session, and we commit to uprating the starter and basic rate bands by at least inflation. We will maintain the higher, advanced and top rate thresholds at their current levels, and we will continue to deliver on our pledge to protect lower-income households, ensuring that more than half of taxpayers pay less than they would elsewhere in the UK for the remainder of this session.

The SFC has confirmed that, as a result of those decisions, our income tax policy will raise an additional £52 million in 2025-26, and it estimates that Scotland’s income tax policy will raise a record £20.5 billion in total for the Scottish budget in 2025-26—that is £745 million more than it forecast for the Scottish budget last year. Members should make no mistake about what that means: more money for nurses, general practitioners, teachers and the police as a direct result of the decisions that we have taken on tax.

A full-time public sector employee in Scotland earned, on average, around £1,250 more than the UK average in 2024. If members across the chamber wish to recognise the hard work of Scotland’s vital public sector workers, they need to support our income tax policy, which raises the revenue required to agree fair public sector pay settlements.

Let me set out what that means in practical terms. Our progressive approach to income tax policy underpins the entire budget settlement that we have been debating in the Parliament this month. It includes continuing to support the most generous social contract in any part of the UK, which includes things like free prescriptions and free higher education and support such as the Scottish child payment. It also supports the revitalisation of our NHS by delivering a record £21.7 billion of funding for health and social care, including an increase of £2 billion for front-line NHS boards. Finally, it will enable us to capitalise on new green technologies that will provide future prosperity across the country by funding the expansion of our offshore wind capacity to the tune of £150 million next year.

Those are just some examples of the investments that the proposed income tax policy that I have set out today supports. It is important to remind members that those positive changes will go ahead only if the Parliament votes for the Scottish rate resolution today and for the budget overall.

The Government is clear on what its priorities are: we are choosing to invest to eradicate child poverty, to grow the economy, to tackle the climate emergency and to provide high-quality and sustainable public services. That is why I ask members to vote to ratify the proposed changes to Scottish income tax in 2025-26.

I move,

That the Parliament agrees that, for the purposes of section 11A of the Income Tax Act 2007 (which provides for Income Tax to be charged at Scottish rates on certain non-savings and non-dividend income of a Scottish taxpayer to be charged above the personal allowance), the Scottish rates and limits for the tax year 2025-26 are as follows—

(a) a starter rate of 19%, charged on income up to a limit of £2,827,

(b) the Scottish basic rate is 20%, charged on income above £2,827 and up to a limit of £14,921,

(c) an intermediate rate of 21%, charged on income above £14,921 and up to a limit of £31,092,

(d) a higher rate of 42%, charged on income above £31,092 and up to a limit of £62,430,

(e) an advanced rate of 45%, charged on income above £62,430 and up to a limit of £125,140, and

(f) a top rate of 48%, charged on income above £125,140.

On the point about cutting budgets, will Michael Marra explain the policy that was set out by his leader, Anas Sarwar, to raise the higher rates threshold to £50,270, which would cost more than £700 million? How would he pay for that? Would that be achieved through spending cuts or by an increase to the basic and intermediate rates of tax?

I agree with Kevin Stewart that that coalition of concern, as he describes it, is very important to keep the pressure up on the UK Government and the Treasury. As I set out in my answers, the hike in employer national insurance contributions places a higher burden on businesses, the public sector and the third sector and is fundamentally a tax on jobs that will impact the Scottish economy. My concern, particularly around commissioned services, is that the hike will impact on the public sector at the end of the day, and that is not acceptable.

I am not aware of any outcome of the meeting that Stuart McMillan refers to but, to provide some certainty for councils in Scotland, I announced an additional £144 million for local government, which is equivalent to a 5 per cent rise in council tax. That still clearly leaves a shortfall, and I repeat my call to the chancellor to fully fund the costs of the Labour tax rise, which will harm services and the third sector. As I said earlier, I will raise the issue further with the Chief Secretary to the Treasury when we meet next week.

Jackson Carlaw makes some important points, but does he agree that, in these circumstances, what is important is not just the actions of the Government? Does he recognise how different the Opposition is in the Parliament now compared with that during the period that he has cited?

Before I come on to that, I put on record that we will publish further research on the impacts of income tax policy on businesses and competitiveness in Scotland in this year.

The larger public sector with better paid workers means that we have more nurses, teachers and police officers. I think that it is a good thing that we have more front-line staff who are able to treat us, keep us well and keep us safe, and that—

I think that the evidence was from the Joseph Rowntree Foundation and other organisations. In the discussions that ministers had with those child poverty organisations, they kept coming back to the point that mitigating the two-child cap was the main thing that could be done. Since then, further evidence has been provided—by, I think, the Fraser of Allander Institute—that we might, in fact, have underestimated the number of children who would be lifted out of poverty through the work on the two-child cap.

I commit to our doing so, and I am sure that the Minister for Parliamentary Business will assist us in that process.