 Ugh, freudio! The next item of business is a statement by Derek Mackay, on support for business and the economy. The cabinet secretary will take questions at the end of the statement, so there should be no interventions or interruptions. I urge all the members who wish to ask a question of the cabinet secretary to press the request to speak buttons now. I'm pleased to make a statement to Parliament today on the support that the Scottish Government is providing to business and our economy. As everyone across this chamber is aware, in common with England and Wales, a revaluation of business rates is taking place. This is the first revaluation since 2010 and takes account of the changes in property values during the economic recovery. It is conducted by independent assessors appointed by local government. In December, I announced a range of actions that this Government will take from April 1, if the budget is passed later this week, to minimise the impact of the rates revaluation, respond to concerns raised by business organisations and ensure a competitive system of business rates in Scotland. Firstly, to reduce the impact of bills overall, I confirmed plans to reduce the poundage, the rate at which the tax is paid by 3.7 per cent. Secondly, we looked at what more we could do through the small business bonus scheme. Over the past nine years, the small business bonus scheme has provided over £1.2 billion of support for our small firms, keeping them going through the recession, enabling them to expand and create jobs. We could have opted, as some have suggested, to reduce the small business bonus so that more businesses pay rates, using the extra cash to support transitional relief for larger firms. The Government chooses not to do that. Small businesses are the lifeblood of Scotland's economy, and we are committed to helping them. To help small businesses, we are extending the small business bonus scheme to provide 100 per cent rate relief to business premises with values of up to £15,000. Last year, 80,000 premises benefited from 100 per cent relief, and from April 1, a further 20,000 business premises will benefit, bringing the total number of premises that pay nothing at all to 100,000. That is almost half of all rateable properties. A further 3,500 premises, with a rateable value of between 15,000 and 18,000, will benefit from a 25 per cent discount on their bills. That is the best package of support for small businesses in the UK, and it is one that I am proud to deliver. Together, that package of support, along with other existing reliefs, means that more than half of all premises in Scotland will pay absolutely no rates at all in the coming year. In addition, I took a further step in the budget. I listened to concerns about large business supplement and focused its impact on the very largest premises. I increased the threshold for payment from £35,000 to a rateable value of £51,000, meaning that 8,000 premises that would have been liable for the supplement, including as a result of the revaluation, will no longer have to pay that higher rate of tax. By extending small business bonus, reducing the poundage rate and restricting the scope of the large business supplement, we are cutting business rates by £155 million in 2017-18. Indeed, the combined impact of those measures that I have put in place will result in seven out of 10 business premises in Scotland paying no rates at all or receiving bills that are either the same or lowering in the coming year. In total, reliefs in excess of £3 billion will be available over the 2017 revaluation period, around £660 million for next year. Seven out of 10 premises is better or no worse off, and in most cases paying nothing at all is a good deal for Scottish business. However, notwithstanding all that, I recognise that in any revaluation the bills for some will increase. I understand that it is difficult for those who face increases. In seeking to provide as much help as possible, the challenge for the Government is to find a balance that supports the economy, invest in public services and employment. Some argue that there should be transitional relief, which works by restricting the reduction in bills for many properties where their value has fallen in order to support those whose values have increased. With examination of such a scheme, we know that the biggest beneficiaries would be the very large utility companies. For example, a similar scheme to that last applied in Scotland would mean that £33.00 every pound transferred in a transitional scheme from smaller businesses would go to utilities. We would take money off medium-sized businesses in sectors such as retail and offices to reduce the bills of the largest, richest companies in the land. I cannot, in good conscience, take that route, and I do not believe that anyone in this chamber, if they look beyond cheap political point scoring, realistically wants that to happen. However, I want to do more to help, and in recent weeks we have been examining how best to do that. It has become clear that there are some sectors and regions where the increase in rateable values is out of calta with the wider picture of the revaluation. The average rise across the hotel sector would, without action, be a 37 per cent rise in bills subject to release. That is significantly more than the next highest sector. Hotels and pubs also point out that their rateable value is assessed by reference to turnover, setting them apart from other sectors. Similarly, I have heard the concerns of businesses in Aberdeen City and Aberdeenshire in the office sector in light of the downturn in the North Sea economy. I have listened carefully to the renewable energy sector, where the cuts to subsidies by the UK Government puts their continued development at risk. I have listened and decided that we will act nationally to tackle the impact as follows. I can confirm to the chamber today that we will now offer a new national relief that caps increases for hotels at 12.5 per cent. Because we recognise that we must maintain fairness between hotels, pubs, cafes and restaurants, that will apply across those businesses too. That will benefit around 8,500 premises and provides proportionately more support to the sector in Scotland than is available in the rest of the UK. For Aberdeen City and Aberdeenshire, we will also lift the pressure on office premises by again applying a 12.5 per cent cap next year, benefiting more than a further 1,000 premises. For the renewables sector, we will offer a package of reliefs, including rolling forward current rates relief of up to 100 per cent for qualifying community renewables projects and new-build schemes and lower the eligibility threshold related to community profit share schemes from 1 megawatt to 0.5 megawatt. We will cap rates bills increases at 12.5 per cent for small-scale hydro schemes up to 1 megawatt and also offering a new 50 per cent relief for district heating schemes. Those support schemes must operate within the EU guidelines, within the maximum support that is limited by stated de minimis to around £170,000 per business. However, that restriction will affect only the largest properties or chains. To further support the hospitality sector, I have discussed those issues with Ken Barclay, who is conducting a review of the business rate system and who will report his findings in July. He has confirmed that his group is aware of the issues that are raised by the hospitality sector and is actively engaging with the sector. The Government will consider his report carefully and where we can act swiftly, we will. I have worked with Aberdeenshire and Aberdeen City councils, as well as others, to help them in using the power that we gave councils to offer rates reliefs locally. Despite Tory opposition, Aberdeenshire councils have proposed a £3 million local rates relief scheme, and I know that Aberdeen City is set to debate proposals later this week. Other councils, who are considering local schemes, now know that the Scottish Government has provided extra local government funding at stage 1 of the budget bill, and we have acted on key sectors impacted by the revaluation. We acknowledge that there will remain some hard cases where individual or highly localised impacts present a challenge. By acting nationally, council resources have been freed up to provide support where local or individual challenges remain. Any local authority that wishes to offer a local relief or discretionary assistance scheme will have the full support of that Government in developing its plans. I have placed information and spice this afternoon that sets out those changes. That Government is ensuring that, in light of the independent revaluation of non-domestic premises in Scotland, we are maintaining a highly competitive regime, which will ensure that 100,000 small business premises, half of all in Scotland, pay no rates at all. Around a further 3,500 premises will benefit from a 25 per cent discount, 8,000 fewer large firms will pay the large business supplement, no restaurant, pub, hotel or cafe will see their rates will increase by more than 12.5 per cent on 1 April. That additional support is injected into the north-east economy to recognise the impact of the oil and gas downturn. Our renewable sector has the full backing of this Government, and we will take early action on receipt of the Barclay report to ensure that the rate system is fit for purpose. Overall, seven out of 10 businesses in Scotland will pay the same or less next year than they currently do, with more than half paying nothing at all. That total package of support of rate relief is worth more than £600 million, and I commend it to the chamber. There is a lot of interest in this item. If members can keep their questions and the answers as succinct as possible, we will make progress. Murdo Fraser I thank the cabinet secretary for advance sight of his statement. For weeks, the finance secretary has been denying that there is an issue with business rates revaluation. For weeks, he and his colleagues have refused to act, despite all the evidence facing them. At last, he has been forced to come to this Parliament and offer some relief to some of the many businesses that are affected. We all have examples of businesses that are affected, I know, if hotels in Perthshire face increases of hundreds of thousands of pounds in their annual bills. To the extent that the statement today addresses concerns in the hospitality and renewable energy sectors and in the north-east, we welcome what is proposed. It is all too typical of the actions of a Government that, time and time again, falls asleep at the wheel and only wakes up when it crashes the car into the wall. Three weeks ago, the finance secretary found £185 million, £60 million of which came from the business rates pool, to buy off the Greens so that they would support his budget. Can he tell us today, firstly, how much the total package of measures announced will cost and is that figure higher or lower than the £60 million that he had lying in the business rates pool? Secondly, given that he is always telling us that there is no spare cash in his budget, where have those additional sums come from? Thirdly, is the cap on increases for one year only or is it for the next five years? Lastly, is he open to providing additional help to other sectors beyond hospitality and renewable energy and outwith the north-east if they can demonstrate the hardship that this revaluation is causing them? I raised at the point in draft budget the early actions that this Government would take on business rates as the evidence from the revaluation was unfolding. I think that the only people who have been asleep at the wheel are the Conservative parties who have not just ignored the issue but who are now set and they are not even aware of this, who are now set to oppose the actions that this Government will be putting in place to support businesses across this country. The Tories have opposed those actions. I understand that I read a headline in relation to business rates that MPs are revolting. I will let you think about that, but what the headline was referring to was Tory MPs revolting against their own Government for what has happened south of the border, where there is a Tory-inspired transitional relief scheme in place. What that transitional relief scheme in place south of the border has done has meant that those bills that should be coming down are held artificially high to pay for others, deeply unpopular south of the border. Myrddol Fraser has said that his budget demands publicly. If that was such an issue for the Conservatives, why didn't he raise it during the budget negotiations when I was delivering for business and supporting business through the revaluation? It remains the case that, although the Tories oppose this SNP Government delivers for business and delivers in lowering the poundage, increasing small business bonus, taking further out of large business supplement. However, in terms of our further actions at local level, councils have been working proactively with me to address those local and regional issues, and even there the Tories have opposed support packages for the range of sectors that Myrddol Fraser has mentioned. The hospitality sector has a justifiable case because the level of their proposed increases through revaluation and also the methodology used on turnover to arrive at their values. It is fair to deliver a package to support that sector while supporting all businesses by lowering the poundage. The money in terms of the resource that this is estimated to—well, I know that the Conservatives are obsessed with money—we are trying to support all business and you are not interested in that. The estimated package should be around £30 million to £40 million. In terms of non-domestic rates, as Myrddol Fraser is well aware, we are addressing the forecasts within the NDR pool balance, and those adjusted forecasts can be accommodated within that. There is no impact on businesses. This is actions that the Government believes are absolutely right to take. We will promote the small business bonus scheme and the additional reliefs and caps to support our economy and businesses at this time, while the Tories simply oppose measures that we have designed to deliver in good time, well in advance of the start of the financial year and as a consequence of the constructive and positive engagement that I have had as finance secretary in the Scottish Government. I think that the cabinet secretary would want to know that Alex Salmond was indeed the revolting MP. Could I welcome the cabinet secretary's statement and the complete turnaround in the Government's view of the crippling rates increases for businesses up and down the country? I have to say that I am positively dizzy with the speed of the U-turn, but I welcome it nonetheless. At a time of increasing economic turmoil, businesses in my constituency and across Scotland tell us that the rates rises would have led to job losses, and that is not something that any of us want to see. The proposals to cap at 12.5 per cent will be welcome relief to the many businesses affected, but forgoing revenue, which according to SPICE is £60 million and not the £30 million to £40 million that the cabinet secretary outlined, will cost in another part of the budget. Can the cabinet secretary tell me what he did not really fully answer to Murdo Fraser? Is this package simply for one year and we face that cliff edge next year? If it is not new money, which the cabinet secretary said it was not, that is clearly underspend. Is he expecting more or is this money simply from the back of his sofa? I suspect that there are more smoke and mirrors from the cabinet secretary, but what about the NHS? It is having to pay at least £30 million extra in business rates against a backdrop of the most breathtaking cuts. What assistance is the cabinet secretary going to provide for our NHS? First of all, Jackie Baillie will be well aware that it is this Government that is proposing an above inflation increase to the national health services as a consequence of our draft budget, and that is more than the Labour cap party committed to during the course of the Scottish Parliament elections. I have made the point about transitional rates relief, how that does not feel like the appropriate measure, but what we are doing by putting in place a cap is the right balance that supports businesses without punishing others. It is a fair point that has been made about stopping any job losses in our country. That is why the range of actions that we have taken are the appropriate range of actions. When I launched our business rates policy, it was in Paisley and the business that I visited will now fall into the category where they pay no rates at all as a consequence of the expansion of the small business bonus. Their plan was to employ new workers and apprentices as part of that trade, and I think that that is very welcome. In terms of the timescales that I am more than happy to cover, as Parliament knows, the Tories do not want to hear the answer, that is because if you were in power there would be no support at all with the chaos that is going on south of the border that the chancellor is trying to fix. In terms of what is happening in Scotland, this very worthwhile package of measures, we take the budgets year to year. It is a one-year budget, but in the context of revaluation, generally being over a five-year period—revaluation lasts for five years—we are waiting for the Kim Barclay review, that will inform further decisions. That cap for 12.5 per cent that I have referred to in the statement is certainly for this financial year, and we will consider any further issues around methodology, revaluation and other matters when we receive the Kim Barclay review. I think that it is right to do that, and then we are better informed with the actual evidence to determine what the right way forward is for the next and future financial years. I have been very generous with the amount of time given to open speakers and replies. We have got very little time left, so I can ask all the subsequent members who have a question, cut the preamble, just ask a question, and then we might get an answer if you just ask a question. Question 1, Gillian Martin. Thank you, Presiding Officer. On behalf of the businesses in Aberdeenshire that I represent, I welcome the cabinet secretary's announcement today. This is yet another example of the Scottish Government stepping in to provide support for the north-east, and I thank you for working so closely with me and my SNP parliamentary and council colleagues in this office that, as he has provided assistance for offices and hotels in the north-east, the Aberdeenshire and Aberdeen councils should use their money to offer support to other sectors who might be affected by the revaluation. Can I just ask members, when I see cut the preamble and get to the question, please follow my advice. Cabinet Secretary. I think it's a very fair and helpful point to now draw attention to the fact that there are 32 local authorities. A number of local authorities are proposing to take action on local rates relief schemes, and I think they should be encouraged to do that, because there will be local circumstances that could be addressed by councils using the legitimate powers and funds to help to address local issues. Three councils are doing that or intend to do it. Others could follow, and I think that it's a helpful suggestion right across the political spectrum to take local solutions to sometimes what are local issues in addition to the national package that has been outlined this afternoon. Liam Kerr was followed by Ben Macpherson. Last week, just over 10,000 businesses in Aberdeenshire were facing crippling business rate increases. To Zae's decision, according to the finance secretary's own figures, benefit 1,961 of those. So what comfort can he give to the other 8,000 businesses in the north-east, which, even after these emergency measures, are still going to cut staff or close their doors due to this? Or is he seriously saying that councils will have to do all the heavy lifting when he has just cut their budgets? Of course, we need to make the point that an extra £160 million is a consequence of parties who did engage constructively with the negotiation processes and ensured that local authorities have that resource at their disposal. If there was a transitional rate relief scheme, many businesses, including in the north-east, who would be expecting their rates bill to go down, would be sustained artificially high. We are not doing that. We are putting a cap in place to support particular sectors and a particular area of the north-east, which I thought that Liam Kerr would have been more welcoming of. He asked what other measures are in place, small business bonus, lowering the poundage for every business in the country, and I have drawn attention to the local rates relief schemes that can work around those schemes to ensure that we can helpfully cover other sectors, individual areas or individuals, where that might be the appropriate thing to do. I say again that some councils have engaged constructively in that, and I welcome that engagement across the political spectrum. However, it is shocking that the most noises come from the Conservatives, and those who have opposed us most on what we have been doing, to help has also come from the Conservatives. Ben Macpherson will be followed by James Kelly. There are a large number of businesses in my constituency that will pay no rates at all next year due to the expansion of the small business bonus scheme to cover 100,000 properties across Scotland if the budget is passed on Thursday. Therefore, to make sure that the full benefit of this policy is realised across the country, will the cabinet secretary agree to write to all eligible businesses to inform them of the new threshold and to encourage them to take up the small business bonus and benefit from the rates relief that they are entitled to? Ben Macpherson is right that there are many businesses that should be aware of the eligibility criteria for relief. It would be the right thing to do to make all businesses aware of the relief that they might be entitled to so that they can enjoy the support package that is on offer. Indeed, some of those who have been concerned about their rateable values have been under the false impression that they would not benefit from relief, so it is a good idea to do that and to make all businesses aware of the support that they could have. James Kelly, to be followed by Andy Weyman. Thank you, Presiding Officer. I want to ask the cabinet secretary for the third time. What other areas of the budget is he raiding in order to support the announcement that he has made today? Can he be precise about the figures and where the money is coming from? I have attended the finance committee and the local government committee and tried to take people through the non-domestic rates issue. Further information could be made available. No area is adversely affected as a consequence of that decision. It is covered through the non-domestic rates, bringing the pull-in to balance, and I have been able to accommodate that within the forecast and the profiling. Andy Weyman, to be followed by Mary Evans. Four brief questions, cabinet secretary. Does the cabinet secretary agree that we need more scrutiny in general over the non-domestic rating regime? Two, will the cabinet secretary be laying a statutory instrument to that effect? And when? Three, does he agree that future reform should include returning a significant element of both rate setting and relief scheme design to local government? And fourth, can he confirm that there will be no change to the local government settlement as a result of those changes announced today? Briefly, Presiding Officer, on those four, in terms of scrutiny of non-domestic rates, of course, the Government is working in partnership with the finance committee and other experts in the field to look at budget setting, timetabling and other matters. I welcome that, and yes, in essence, that could be considered as part of that review. In terms of the legal technicalities, it would require a statutory instrument, so I propose to lay that sooner rather than later, so that, of course, it is in effect before the start of the new financial year. I have covered the point around budget review group looking at the issue, and, as I say, I am happy to confirm that there will be no negative impact to the local government settlement as a consequence of that. The numbers, as is outlined in the budget in relation to spend, continue to be the case. Mary Evans, followed by Dean Lockhart. The cabinet secretary mentioned the Berkley review. Can he confirm that the review is taking a route and branch look at the rate system and that, if it recommends that he can take actions quickly, it would alleviate the pressure on businesses that he will do so? Yes, I have discussed that with him. I am looking specifically at those and other issues, and yes, the Government will act as swiftly as we can on his recommendations. Dean Lockhart, followed by Willie Rennie. I also thank the cabinet secretary for confirming that this is a temporary one-year sticky plaster solution in classic S&P style. I welcome the new 50 per cent relief for district heating schemes. However, the cabinet secretary will be aware that those cuts will not help those who generate their own electricity, such as many local whisky producers, a vital sector in the economy. As a result, will he undertake a review of business rates for those who do on-site generation? I welcome Dean Lockhart's welcome of what I have proposed this afternoon. I said that I will outline further information on the details of the relief schemes through SPICE, and that information will be available if Mr Lockhart wants me to look further at other measures and schemes that are unhappy to engage with the member. Willie Rennie, to be followed by Stuart Stevenson. I thank the minister for an advanced copy of the statement. The last time the Government bungled the rates through valuation, we recommended a cap of 12.5 per cent, but at that time his Government voted against it alongside the Conservatives. When I met the minister for budget talks, he said that he had no money to spend, so can I try again where on earth has he found this money? Instead of muddling through, would he not be more sensible to have a moratorium on any increases until the Barclay review has been concluded? Again, what I was able to explain to Willie Rennie is that non-domestic rates are most certainly complex. I can give further information on the profiling of it. I have covered how there are forecasts, and I do not know why the Conservatives think that this is so funny. A lot of businesses were very keen to find out how the Government was supporting them, and I think that we will welcome a number of measures that have been outlined today. In terms of Willie Rennie, I think that the capping is the right decision in circumstances, not transitional relief. I have outlined how non-domestic rates financing has a work, and I certainly believe that capping is appropriate as opposed to transitional relief for the reasons that I have given. I will also learn from what has happened through this revaluation and hear from Ken Barkley and what further recommendations he will make. I am happy to engage in a cross-party way to see how we take the issue forward to ensure that we get the balance right. Stuart Stevenson, to be followed by Daniel Johnson. Can I welcome that there are 972 businesses in Murray and Aberdeenshire who will benefit from today's announcement, adding to the 9,608 premises that will pay no more in rates in the coming year than in the past year? However, in relation to appeals on valuation, is the minister minded to follow the example of the UK Tory Government that is making appeals in England more difficult than they were previously as a response to the crisis there? No, I do not have any proposals to introduce a charge as is the case in England. However, I think that appeals boards will have to look at their capacity issues to ensure that they can manage appeals appropriately. That is a matter for them, but I have no proposals to introduce a charge for appeals, which is what the Conservatives have done. Daniel Johnson, to be followed by Richard Lochhead. I refer members to my register of interests as a company director with retail interests in Edinburgh. We still lack clarity after a number of questions. Could the minister please tell us whether it is £30 million to £40 million that is implied by those measures or £60 million as spice sets out? Where is this money coming from? Is revenue being cut from elsewhere, or is there yet another round of underspend that the Cabinet Secretary has found? No, it is certainly not a spending cut. I will read out exactly and see if that assists with the Labour Party. As we have laid out at stage 1 of the budget, we are continuing to update the profile of the Scottish Government contribution that is required to bring the non-domestic rates pool into balance. That process has allowed us to meet the estimated cost of the additional support package that was announced today, and on checking it is £44.6 million to be absolutely accurate. Richard Lochhead, to be followed by Rachel Hamilton. I also thank the cabinet secretary for being in the hospitality industry's white night and for greatly helping my constituency. However, in terms of other setters in particular, does he also agree that the assessor should fast-track the appeals process for businesses that are facing increases of hardship? Can he and his colleagues in the Scottish Government contact the UK Government to ensure that they are taking steps, given that yesterday's caterer magazine reported that 2,000, roughly 2,000 hotel companies in the UK face insolvency due to Brexit. We need a cut in 2018 and other measures urgently. Mr Lochhead is right that the assessors and appeals panel should consider their workload very carefully. I cannot direct them in that, but I would certainly encourage them to consider their workload, to handle the issues sensitively and to look at the support for business as they manage the appeals that they will receive. There is another opportunity to remind businesses who believe that they have the wrong values to appeal those so that they have the correct values in what is essentially an independent process. However, the actions that the Government can take I believe that we have taken to ensure that we have a competitive rate regime in our country. Rachel Hamilton, to be followed by Ash Denham. I draw members' attention to my register of interests, and members will be aware that I am a business owner. Why now, after months of anxiety and worry within the hospitality industry, has the Scottish Government at the 11th hour admitted that it had the power to help at all but refused? Does Derek Mackay believe that a cap of 12.5 per cent for just one year goes far enough to stop job losses and closures in pubs, hotels and restaurants? I would again make the point to Rachel Hamilton what we are doing is more than the Conservatives have chosen to do at a local level, more than they are choosing to do at a UK level. You are opposing to support what we are trying to do to support the hospitality sector, but Rachel Hamilton fairly asks why now. There is more information that has emerged through the valuation process that informs decisions. I think that that is an appropriate response to take, looking at the evidence, engaging with businesses, engaging with local authorities to get the balance right in advance of the budget. The question is now not for the Government but to the Conservative Opposition. Are you going to oppose that very generous package of relief to support businesses at this time? The cabinet secretary has listened to business like those in the hospitality sector in my constituency of Edinburgh eastern, who faced disproportionate rate rises. He has acted and that is very welcome. Would he encourage the Tory Government in Westminster, which is currently being accused by its own backbenchers of misleading businesses over the rate rise in England, to take the same constructive approach? Obviously, I watch very closely what happens south of the border. I am happy to share information and the reliefs that we have in place, but I think that we have the package right for Scotland, one that supports business and takes a closer look at the issue through the Barclay review, and then we can consider the findings in a very methodical and helpful way. Thank you, Presiding Officer, and I refer members to my registered interest. Presiding Officer, an issue that was raised before this U-turn was businesses having to destroy premises rather than face punitive empty property rates of 90 per cent. Will the cabinet secretary recognise that he is destroying Scotland's balance sheet unless he addresses it? Presiding Officer, I feel that my package of reliefs is comprehensive, but I do not know if it is comprehensive to cover every element of Mr Burnett's interests. I think that in fairness, all rates of reliefs should remain under review to make sure that we get the balance right to support business and make sure that our interventions are the appropriate ones informed by the evidence through engaging with business. As I have said, the Ken Barclay review, which will report the summer round about July, should help inform that debate. In a cold-lighted day, maybe we will look at all that evidence. There is a different way to do certain things, but I am certainly sure that the delivery of the manifesto commitments around small business bonus and a range of other actions are correct in the circumstances. I thank those members and the minister for their attempt at brevity and getting through that statement. We now move on to the next item of business, which is a debate on motion 3912, in the name of Derek Mackay, on the Scottish rate resolution. Members should note that I will put the question on the motion immediately following the conclusion of the debate, which will be at decision time, but it is not exactly before decision time, but it will be at 5.15 today. Presiding Officer, this is a historic day, a day when the Scottish Parliament votes to set all rates and bans for income tax in Scotland for the first time in over 300 years. Those powers expand on the limited income tax rate setting powers that we had last year and allow the Scottish Government to make better decisions to support the people and economy of Scotland. It is important that the Parliament understands that in so doing, if we fail to set the rates, then we put at risk the collection of some £11.9 billion in Scottish income tax. Let us be clear that this is serious business about the Scottish people looking to us to act responsibly to secure the best possible outcome for them. Parliament should be aware that I have written to the Presiding Officer about the procedural connection between the motion for the Scottish rate resolution and the budget bill. The effect of rule 9.16.7 of the standing orders means that stage 3 of the bill cannot begin until the Scottish rate resolution motion is agreed by Parliament. No party won a majority mandate at the Scottish Parliament election, however, the greatest proportion of the electorate supported the Scottish Government's vision for the next five years. While I looked to seek support from other parties to get the £17.18 budget approved, I have been determined to stay true to our income tax proposals, not only because I believe that they are supported by a vast number of the Scottish electorate, but also because I believe that they deliver the best outcome for the Scottish people at this time. The clear vision that we set out for income tax last March remains, as stated, to protect low and middle income taxpayers whilst asking those who earn the most in Scotland to forgo a significant tax cut at a time of continued UK Government austerity. As a result of constructive budget negotiations with the Scottish Green Party, the amended income tax proposals in today's resolution stays true to that principle. The cabinet secretary has argued in the past that it would be wrong to give a significant tax cut to the highest earning 10 per cent of the population by following the UK approach on the higher-rate threshold. Is he not privately, in his heart of hearts, quite pleased that we persuaded him not to give any tax cut to that richest 10 per cent of society? I will tell you what I am privately and publicly pleased about. It looks as if the budget is going to be passed this week with the right package of measures to support our country. Today, I am asking the Scottish Parliament to agree a Scottish rate resolution for the tax year 2017-18, which freezes all income tax rates, maintains the higher-rate threshold at £43,000, protects those on low and middle incomes, and ensures that 99 per cent of taxpayers will pay no more compared to £1617 on the same income. That brings in an additional £107 million to be invested in public services in 2017-18. That is an additional £107 million, which supports a budget that will, if passed on Thursday, protect our NHS with record investment, deliver a living wage for social care workers, continue free tuition, expand early years provision, support efforts and energy efficiency, increase house building and support local services. I remain convinced that, at this time, those proposals are the best approach to take. This Government will always be mindful of the impact that taxes may have on individuals. Tax powers are not a political toy, and they have an impact on individuals that we must consider very carefully. We are a Government that recognises the importance of growing the economy, whilst raising sufficient revenue to fund further investment in our vital public services. Future revenues for the Scottish Government will be driven by both our policy choices and, of course, by the relative growth per capita on our tax receipts. That is just one of the reasons why we continue to invest in Scotland's economy and its workforce to improve prospects for economic and employment growth. We will not back income tax decisions that would cause any impediment to that. Tax should be progressive, and that is why it would not have been right to have had a significant tax cut for the highest Scottish earners at a time of Tory austerity. However, income tax policy should not undermine its own aims and, especially at this time, should deliver the revenue that it sets out to raise. That is why we did not seek to raise the additional rate of tax. Both UK and international evidence suggests that a Scottish additional rate higher than the rest of the UK could significantly undermine Scottish income tax revenues, and the First Minister has directed the Council of Economic Advisers to keep that policy under review. However, we also recognise that those earning the lowest incomes around 40 per cent of Scots do not pay any income tax, and so the income tax system cannot help them directly. Instead, we are delivering alternative policies to support those on the lowest incomes. For example, the council tax system, the rates paid by those in the four highest council tax bands E, F, G and H, will be adjusted in a move that will generate £111 million a year whilst protecting those on low incomes in those bands. The reforms will also provide additional support to families on low incomes across all council tax bands by extending the relief available to households with children. That benefits up to 77,000 low-income families by an average of £173 per year, supporting an estimated 140,000 children. Our land and buildings transaction tax is more proportionate to the house price and means that the tax is fairer as it is based more closely on the buyer's ability to pay. Over 90 per cent of home buyers will pay less tax compared to UK stamp duty or will pay no tax at all. Beyond the tax system, we remain absolutely committed to the living wage. As such, in 2016, Scotland remained the best performing of all the four UK countries with the highest proportion of employees paid, the living wage or more at 79.9 per cent. There has rightly been significant debate over how this Parliament uses our new income tax powers. Significant debate, however, has led to little consensus. The Conservatives have reverted to an anti-devolution position. Others want to experiment with every tax leaver in an almost careless and reckless fashion, but those extreme positions do not serve the Scottish taxpayer well. Our position is that a time when the UK Government has cut the Scottish discretionary block grant by 7.4 per cent in real terms since 2010-11 and remains committed to imposing further austerity at a UK level is now not the time to add to the burden of low and middle-income taxpayers as Labour would. That is why. Willie Rennie In that context of a difficult financial settlement, is he not just a little bit disappointed that he has not taken the opportunity of the new powers that he has in his hands to invest in good public services such as education and mental health? As a consequence of the budget that I am proposing, we will invest an additional £900 million towards the public services of Scotland. I do not think that it would be right to increase the basic and the higher rate of tax, because that does not end austerity. It just passes austerity on to those people and some of the less well-off in our society. That is why we have chosen to freeze the basic rate of income tax for 2017-18 and over the course of this Parliament. However, now is not the time to be giving away a substantial tax cut as the Tories would. By asking those higher-earning Scots to forgo a tax cut, additional revenue will be raised to support our vital public services at this time. Daniel Johnson Does it confirm that the amount raised by that measure will be a mere £29 million? Well, our position on income tax through the block grant adjustment raises an additional £107 million. In terms of divergence for less than the cost of a weekly prescription in England, Living in Scotland ensures access to NHS that is properly funded, gives families access to increasing amounts of free childcare, means that young people pay no tuition fees and there is no prescription tax on ill health, and that our older generation is able to benefit from free personal care for the elderly. Furthermore, where we to match the proposals of the rest of the UK as the Conservatives suggest, the Scottish Government's budget would need to lose an additional £107 million, leaving the question where instead would this money come from and what public services would the Conservatives cut to pay for that. Others in this chamber have suggested that we need to impose a far greater tax burden on the people of Scotland. However, the budget that I am proposing already delivers, above the inflation investment in the NHS, protection of public services that are free at the point of use, including free prescriptions, the support of our policy on free personal care, free higher education, no business rates for 100,000 small businesses, as well as additional investment in reducing the attainment gap and doubling of free childcare. I remain convinced that our income tax proposals strike the correct balance between protecting low and middle income tax payers but still raising unnecessary additional revenue. What other parties must consider at this time is that, if the Parliament was to fail to pass a Scottish rate resolution, the consequences of Scotland's budget would be severe. The motion protects those on lower incomes, delivers additional funding for our public services, makes economic sense at this point in time, and that should be a position that supports all those with Scotland's interests at heart, right across the chamber. I move the motion in my name. It is indeed a historic moment in the history of devolution. For the first time, the Scottish Parliament has control over the rates and bans of income tax that is payable by Scottish workers. This substantial new power has been delivered by a Conservative Government at Westminster, strengthening this Parliament as part of the devolved structures of the United Kingdom and proving that Conservatives in government keep their promises. I do not think that it will come as a surprise to anybody in this chamber or outside it, Deputy Presiding Officer, when I say that we will be opposing the rate resolution today. We believe that the Scottish Government has made the wrong choices when it comes to income tax. The Scottish National Party plans to create a tax differential between Scotland and the rest of the UK, which will mean that some 374,000 people in Scotland will pay more tax here than if they lived south of the border. Contrary to the claims made by some on the Scottish National Party benches, we are not talking just about the wealthy. I will make this point and I will give away. The finance secretary told the Parliament on 2 February that those changes would affect just the top 10 per cent of earners, but that figure is incorrect. The true figure is 14.6 per cent of income tax payers who will be affected more than one in seven. That figure includes train drivers, nurse consultants and some teachers who are hardly super-rich. Indeed, there are many thousands of households with two adults and children. Just one adult is working, the other has childcare responsibilities, and the one worker in the household earns just over £43,000, which therefore represents the entire household income. Those are not wealthy individuals. Those are not individuals with spare cash at the end of the month, and yet those are the individuals that the SNP is targeting with their proposals. Yes, I will give way to Mr Harvey. Patrick Harvie. I am grateful, just in relation to that one hypothetical scenario. Does Murdoff Fraser accept that someone who is earning just above that threshold will barely pay a penny more in tax, because there is only the element of their income above the threshold that pays more? I am sure that Mr Harvey will be aware of that. First of all, it is not a hypothetical situation. I know plenty of people in those circumstances, the one who is earning just above the higher rate threshold, and there, if they are earning £45,000, they will be paying an extra £400 a year as a result. I am not surprised that the Greens back those plans. Of course, they would like to go further. I do not agree with Mr Harvey, but at least he has a principled stance on it. It seems to me that the SNP are caught right in the middle here. They talk left, they talk the language of higher taxation, but in fact they are afraid to go there because they know what the electoral consequences would be. If the SNP's plans were bad enough when they were introduced, they were made even worse, with a grubby budget deal that was stitched up with the Greens, which increased the tax differential still further. In the long run, it will be both the Scottish economy and the Scottish public finances that will lose out. For we know, it is the performance of the Scottish economy that sets the overall size of the Scottish budget. We know that Scottish GDP growth lags behind the UK as a whole. We know that unemployment here is higher, that employment rates are lower and that business confidence is substantially lower. The danger of having higher taxes in Scotland compared to the rest of the UK is that it simply entrenched economic underperformance. The SNP might not want to listen to us on those points, Deputy Presiding Officer, but it should listen to the voices of Scottish business. The Scottish Chambers of Commerce said that creating a tax differential between Scotland and the rest of the UK would set a dangerous president. The Institute of Directors in Scotland said that those plans would send the wrong message and have a negative impact on the Scottish economy. A taxation disparity, they said, between Scotland and the rest of the UK is not good news for business when competing for talent. John Mason said that, in Switzerland, among the cantons and in the United States, among the States, there are lots of tax differentials and it does these countries no harm whatsoever. I am very disappointed with Mr Mason, because I remember the time that he used to argue for lower taxes and cuts in corporation taxes. He seems to have a complete change of direction. Unlike Mr Mason, I think that we should listen to voices in the business community who are telling us of their concerns about the tax route that his Government is going down. There will be those on the SNP benches. We heard that from Mr Mackay just a moment ago, who argue that higher taxes are justified because there are better public services in Scotland, they would claim. They will quote the examples of free personal care, free university tuition and free prescriptions. Will they not tell us when making those points that all those benefits existed before the tax differential was created? All those benefits exist because of the Barnett formula, which ensures that public services in Scotland are funded to the tune of £1,200 for every man, woman and child in Scotland relative to the rest of the United Kingdom. What does the SNP want to do to the Barnett formula, which pays for all those services that they value so highly? They want to tear it up. They want to take us out of the United Kingdom that provides a very funding settlement that pays for the services that they champion. Those tax rises are the wrong choice. They are bad for Scotland, they are bad for Scottish families and, in the long run, they will hurt Scottish economic performance and the public finances. Perhaps, even worse than that, we found out three weeks ago that they were not actually necessary at all. Three weeks ago, Mr Mackay came to this Parliament and told us that, in order to fund his budget deal with the Greens, he found an extra £185 million down the back of the sofa. A good rummage under the cushions and the best part of £200 million was produced in order to buy off the Greens and get his budget deal through Parliament. The total being raised by creating this income tax differential is £107 million, substantially less than the £185 million that the SNP had lying spare. A £125 million underspend plus £60 million from the business rates pool. To make matters worse, we have heard even in the past half hour from the cabinet secretary that he has come to this chamber and produced, as if from nowhere, another £40 million. He accuses other parties, Presiding Officer, of having a magic money tree. There is no one as magical as Mr Mackay when it comes to producing money out of nowhere to get himself out of a budget pool. There was no need whatsoever for those tax rises. Mr Mackay could have funded all his original spending plans without raising a single penny extra in income tax. The SNP is taking the taxpayers of Scotland for fools and they will not easily forget it. We on the benches will not always be arguing for keeping taxes the same as the rest of the UK. There are circumstances in which we will argue for lower taxes for Scotland to give us a competitive advantage, which is precisely why we are arguing for lower air passenger duty in Scotland to help to grow the economy and to grow tax revenues as a result. I am pleased that the SNP benches share our ambition in relation to air passenger duty. It is just such a pity that they cannot apply that principle to income tax as well. We believe that it is foolhardy. At the time of Scottish economic underperformance, to send out a message that Scotland is the highest tax part of the United Kingdom, we should instead have a Government taking measures to grow our economy and grow our tax base. It is much to be regretted that it is growing in the other direction. I agree with the two previous speakers that today we in this Parliament make history by setting income tax rates in bands for the first time. That is not something that we should take lightly as there is a great responsibility on each of us in making such decisions that have a significant impact on the people of our country. There are, it seems to me, some key considerations for us as parliamentarians in reaching those decisions. The impact on household incomes, the impact on our economy, the impact on public services and the impact on inequality in Scotland. Those are the key considerations for my party in approaching this motion today. In looking at household incomes, we must ensure that taxation is fair based on the ability to pay and on the principle that you pay according to your means so that those who are able to pay more do so through a fair and progressive taxation system. It was a fellow pfeifer, Adam Smith, who said, and I quote, that the subjects of every state ought to contribute towards the support of the Government as nearly as possible in proportion to their respective abilities. So, in a time when we need investment in our economy, when we need investment in our country's greatest asset, its people, I would suggest that asking the top 1 per cent of earners in this country to pay a 50p top rate of taxation is not unreasonable. Everyone benefits in society as a whole will benefit from the return on that investment. Crucially, it is fair, it is just and it is the right thing to do at a time when we have a massive skills gap in our economy where we have an unacceptable gap in the levels of educational attainment between the poorest and the richest, and when we have growing inequalities and health up and down our country. John Mason, I thank the member for giving way. Does he not think that immediately to jump to a 5p difference with England would be a rather risky jump? Does he not think that it has to be lower to start with? I will expand on that. Now is not the time to invest, and whilst the SNP seems more interested in what the Tories have to say, I would say that the Tories are wrong. They are wrong when they say that we cannot have a different tax policy from England. They are wrong in their assertion that increasing tax would damage our economy. Let us be absolutely clear what has damaged our economy is failed Tory austerity, and what has damaged our economy here in Scotland is the SNP failure to stand up to failed Tory austerity, choosing instead to use Scotland's Parliament as a conveyor belt for that failed Tory austerity. As Oxfam has so succinctly put it, the UK's current austerity programme threatens to solidify the UK's position as a country of growing inequality and poverty. It emphasises on cutting public spending as opposed to increasing taxes has already begun to increase the hardship faced for people on low incomes, while allowing the richest to bear a comparatively small burden of the pain. They go on to say that, as millions more are expected to be living in poverty and at risk of poverty by the end of the decade, the richest looks set to get richer. Is this really what the Greens stand for? Is this what the SNP stands for? Or will they join us today, reject this motion in front of us and bring forward a progressive approach to using the powers of this Parliament in the best interests of Scotland's people, Scotland's economy and, ultimately, Scotland's future? So every individual MSP in this chamber has that choice. The Tory SNP way, failed austerity, public services in crisis, lack of opportunity, low wages and growing insecurity, or a real recovery, growing our economy, investing in public services, investing in skills and jobs, giving every Scot the best chance in life. We have a chance, Presiding Officer, to shape the future provision of public services in our country. We have a chance to give young people a better future, investing in childcare, investing in education, in skills and investing in jobs. We have the chance to provide better care where it is needed. We have the chance to give those who have given all their life to our communities dignity and respect in old age. I say, choose investment, choose people, choose a stronger Scotland, vote against this motion today and stand up for Scotland. Thank you, Mr Rowley. Before I move to the open debate, there are five members who, if they wish to speak, better press the request to speak buttons now. Gillian Martin will be followed by Liam Kerr, Ms Martin. I welcome this debate today because it gives a chance for us to call it the ridiculous rhetoric around the Scottish rate of income tax perpetrated in this chamber week after week by the Tories. Every week, we hear from the Tory benches scary stories that people will leave Scotland in their thousands because the Scottish Government has refused to pass on the same tax cut to the riches in their society that the UK Government deem so necessary. Fundamentally, that assertion shows a lack of understanding of our citizens. The vast majority of our citizens are decent, hardworking, honest people who value their public services and do not have a problem with taking a tax cut in order to provide the investment into our public services. As I mentioned to Murdo Fraser's hypothetical family, you might want to mention to them that we are doubling childcare, so that second person can maybe get some free childcare and get back to work. Decent people do not upsticks and leave a country because they are asked to pay their fair share of taxes to keep public services going from which we all benefit. Hardworking people are not just those who earn a very high salary. Yes, Daniel Johnson. I quite agree with the member that we are right to make the argument for public services, we are right to make the argument for differential income taxes to pay for that, but why is the SNP Government being so timid in terms of limiting that ambition to simply not changing a threshold? Gillian Marr. I will come on to the other side of the coin later in my speech if you give me a couple of minutes. Hardworking people are not just those who earn a very high salary. That kind of rhetoric that we have all heard that claims that taxing higher earners a little bit more is penalising hard workers or people with aspiration is frankly offensive to everyone working hard for whatever wage they can earn, skilled or unskilled. We all work hard, we all aspire to live a life that is without financial hardship. The hardest working people are those who work for the minimum wage, who often have to have two jobs to get by, who are raising families as they work those jobs, who are struggling to make ends meet, who needs the highest earners to pay their fair share and who should have an income tax level that lifts them out of in-work poverty. The hardest working people are the middle-income workers who do not qualify for any kind of benefit top-ups but who still find it hard to cover their bills from month to month, never mind save anything. That those people will not only see an increase in their income tax and in many cases in their council tax is fair. Given the challenge in economic times, it is only right that 99 per cent of Scots will pay no more income tax than they did last year. We do not want to give the top 10 per cent of earners in Scotland a tax cut at the expense of others who find it harder to get through the month given an age of austerity in which we live is a moral choice. I am utterly convinced that most of that 10 per cent believe that it is a fair choice too and will not suffer any hardship as a result of the Scottish Government's decision. Honest, decent, hard working people want to pay their fair share. They do not want to hide what they earn in order to avoid taxes. They do not want special circumstances that make their tax bills disproportionate to those on lower incomes. What do we get with those taxes? We get the schools for the future programme, delivering new schools across Scotland. In my constituency alone, I have one new secondary school that is less than a year old in the Allen academy. One new primary schools foundation has currently been laid in Tarrif and plans are underway for a new Inverory academy. That is investment in public services, investment in people's education. People in Scotland also do not have to pay for prescriptions. We do not unfairly tax ill health. Young people do not have to pay tuition fees for college or university. We do not unfairly tax the right to be educated. We have a road infrastructure investment in my area of the north-east that is unprecedented and a promise of 100 per cent digital connection in Scotland by 2020. We are investing in Scotland. I, like all my colleagues here today, am one of the higher-rated earners, and I am happy to pay my fair share of tax for the kind of life that I want people in this country to have. If the people of Scotland did not agree with me, we would not have the Government that we have voted in last year for a third term. The Government has been given the responsibility for setting income tax. It could have chosen to reduce the tax burden on Scottish people and businesses, to encourage inward investment, to make Scotland a more attractive place for professionals, entrepreneurs and job creators to move to and base their families. Instead, thanks to their deal with the Greens, the SNP's budget will see 374,000 people paying more tax than they would if they lived south of the border. It is early, but yes, of course— Ivan McKee. The member said that tax is wider than income tax, and that the average council tax bill in Scotland is £400 lower than it is in the rest of the UK, which everyone benefits from. Liam Kerr. I thank the member for the intervention and for particularly bringing in council tax, which I assure him that I will come on to later, because I compare with the rest of Scotland, not necessarily with the rest of the UK. In the wealth of nations, Adam Smith said, there is no art which one Government sooner learns of another than that of draining money from the pockets of the people. Even he cannot have envisaged how quickly this Government would learn. However, let us leave aside the question of whether the Government deserves over half of people's income, regardless of how hard they work to earn that money. Let us leave aside that more than one in seven workers will be paying more income tax than their counterparts south of the border. According to Spice and the Fraser of Allander Institute, the Scottish Government's total budget is up in real terms from what it was in 2010-11 to 2017-18. We need to go back to base principles. You cannot tax your way to prosperity. If you raise taxes on people too high, they leave or cease producing wealth. Those are the workers who produce the wealth. It is not your money, it is their money, and the Scottish Government does not know better than the people who earn it how to spend it. I well recall Di Alexander, the chair of the Scottish Rural Poverty Task Force, saying to the economy committee just last year that if people save money on bills, they put it in their pockets, which they can spend on the local economy. When an innovator, an entrepreneur and an investor have an idea for a business, will she build that business in Scotland, where it will be punished for her success, or will she look south of the border? Would the member accept that a pound in the pocket of a poorer person is more likely to go into local services than a pound in the pocket of a richer person? Liam Kerr, I thank the member for the intervention. It is an interesting question, but one that I will not answer here simply because the member that asks it is the one that famously is not quite sure of the distinction between the national debt and a national deficit. If he does want to write to me afterwards, I will explain it in some detail for him. When a newly qualified nurse looks at where he would be best to base himself for a successful career, will he choose Scotland where, when he reaches a mid-senior level, he can expect the Government to take 40p out of every pound earned? Or south of the border, where he will not have to worry about that until earning at least 50,000. But if only it were just income tax. Across the north-east, we did not hear from Gillian Martin, but people are receiving letters informing them of the council tax that they have to pay next year. No, thank you, I am running out of time. You had your chance, Ms Martin. Informing over half of residents in Inverary or Ellyn where the majority of people live in banned e-houses or higher, that the tax on the home that they bought with a big mortgage in which to raise their family is about to rise? That is before any rises that the chronically underfunded local council may have to levy in addition. Murdo Fraser detailed how Scotland is underperforming the rest of the UK. The solution has been made very clear. The Scottish Chamber of Commerce said that the focus should be on growing the economy, not increasing taxes, and that creating a differential between tax bandings north and south of the border will set a dangerous precedent. Former MSP and RBS economist Gordon Wilson said that the best way to sustainably double revenue is to double the number of taxpayers in Scotland wealthy enough to pay it. The Institute of Directors said that the SNP's tax plans will have a negative impact on the Scottish economy. The Royal Society of Edinburgh were clear that, although there may be a political incentive to target higher earners, there should be a high level of caution exercised by the Scottish Government not to shrink its tax base. Johnston Carmichael warned that higher taxes in Scotland could see businesses move elsewhere. We recall that, when the 50p tax rate was reduced to 45p, it raised an additional £8 billion from additional rate taxpayers. However, Mr Mackay knows that. On air passenger duty, he claims that their proposed 50 per cent cut, quote, is a fundamental component of our efforts to boost Scotland's economy through generating sustainable growth. In 2012, Alex Salmond told business leaders that lower corporation tax would be, quote, the best available weapon to improve Scotland's competitiveness. What concerns me most is the direction of travel. It was the Greens who got this through, the Greens who want to tax everyone earning over 43,043 per cent of their income, 60 per cent for those earning £150,000 or more. They want to end the personal allowance for those earning £100,000 and bring in council tax proposals that would see band-age householders paying more than £7,000 a year. Some bedfellows. The member is not only in his last minute. I do not think that your card is in. You cannot tax your way to prosperity, but in an extraordinary irony, this Government appears to be about to tax it to austerity. We do not agree with the motion and we shall vote against it at 5.15 today. Thank you very much. Mr Kerr, I call Kate Forbes. We are followed by Daniel Johnson. I remind the chamber that I am the PLO to the Cabinet Secretary for Finance and the Constitution. Today's debate is not so much about tax as about the hard-working men and women in this country from Lerwick to Lockerbie, who go to work, earn a living and contribute part of their income to the welfare of our society through income tax. That contribution, that tax, is quite rightly paid in proportion to income levels and directly makes this nation the safe, educated, healthy and compassionate country that we call home. It is thanks to the teachers, cleaners and dinner ladies, to the accountants, the entrepreneurs and secretaries, the joiners, electricians and chefs, the doctors, nurses and therapists, the CEOs, board members and advisors, the men and women who get up and leave home in the dark, those who get home in the dark and those who are working so many hours, they do both. This nation would be crippled without them, not just because of the services that they provide but also because of the contribution that they make to our public welfare through income tax. There are many decisions taken in this chamber on an almost daily basis about how we spend money. In those debates, we, as elected members, should never lose sight that we are discussing the hard-earned income of men and women across this country, and there is a responsibility on us to spend it well. On that, I agree with Liam Kerr. It is not our money, it is theirs. James Kelly. I thank Kate Forbes for taking the intervention. She was talking about those hard-working CEOs, many of whom earn more than £150,000 a year. Do you think that it is right that they are not being asked to make an additional tax contribution when councils are going to have their budgets cut by £170 million as a result of Mr Mackay's budget? I thank the member for that intervention, because it allows me to make the point, which goes right to the heart of this entire debate, that our economy depends on the tax raised by people who are earning over £11,500. We do not think that people who are earning £11,500 should be paying more, which is what the Labour Party proposes. On that point, I agree with the member that those at the higher rates should not have their taxes cut as is being proposed south of the border. Those in the top 1 per cent are being asked to pay a little bit more. I hope that that answers the question and also lets me go right to the heart of this debate on tax. The thing is that, in the Holyrood elections, the people of Scotland delivered a resounding verdict on the party's plans for spending and raising revenue through income tax. Members in the chamber might make a lot of noise about their suggested alternatives to the Government's proposals, but those alternatives were soundly rejected in the ballot box and, for good reason, Murdo Fraser said that the SNP is stuck in the middle. I am quite proud to be standing in the middle in a position of common sense between two ludicrous positions on the left and the right of the chamber. On one side, the Tories are whinging that higher rate taxpayers are paying a little bit more tax than in England and Wales, not because of what the Government has done, but because the Tories and Westminster have actually cut taxes for the higher rate payers. On the other hand, as I have already said, the Labour Party is arguing that people earning as little as £11,500 a year should pay more. That is passing on austerity to the household budgets of the lowest income tax payers. Both positions, I believe, are grossly unfair, and it is only with pleasure. Is the member happy, then, that Highland Council, where she is from, is receiving £11 million cut or 2.7 per cent of its revenue funding from the Scottish Government? Is she happy to defend that? I am more than delighted that looking at how much extra Highland Council has before and after the additional £160 million that this Government has put directly to Highland Council. I am delighted that there is more funding going to Highland Council this year, and of course, it has just increased in its budget to take advantage of that extra 3 per cent in council tax. The two main reasons why, as I said, I am proud to be in this middle position is because most hard-working families are still struggling to make ends meet, and that is not the time for tax rises. Secondly, our public services are under pressure, and so it is certainly not a time to cut taxes for our higher-rate taxpayers, as is happening elsewhere in the UK. That is the first course of action, and it means that 99 per cent of adults will pay no more tax given their current level of income than last year, but that motion does ask higher-rate taxpayers to forgo the tax cut that was implemented elsewhere in the UK. Those in the top 10 per cent of earners who are being asked to pay a little more than they would in the rest of the UK, approximately £400 more, are still benefiting from services that are free at the point of access to higher education, personal care, prescriptions and other vital services. The cabinet secretary mentioned earlier that it has been 300 years since his parliament set the rates of income tax, and it is just under that since the birth of the slogan, no taxation without representation. Well, there is representation within this parliament, elected last May on manifestos that were clear and accessible to the electorate, and the Government is sticking to our SNP election promises. We have the largest mandate in the parliament and the most popular policy on tax, and we will stray too to our manifesto. Thank you very much. We call Daniel Johnson. We follow about Ivan McKee. Mr Johnson, please. Thank you, Presiding Officer. Budgets are about choices. Choices about what we want to spend our money on, choices about what we want to invest in, choices about the future of our country, and in that there are two distinct facets. There are choices about where those tax revenues should be spent and invested, and choices that we now have in this parliament about how and where to raise those taxes. With those alternative choices, there are also alternative priorities. You can choose, as the Tories have been setting out, that you should minimise taxation, that there should be no different levels of tax in this part of the United Kingdom compared to others, or you can take our review, which says that real competitiveness, real growth, needs strong public services, needs investment and needs infrastructure. As Keith Forbes has just said, the SNP seemed to be stuck in the middle. Even Murdo Fraser was damming the Government by faint praise because they were essentially holding most of its income tax powers absolutely static. Indeed, the sole change in terms of threshold will only mean a £400 difference to higher earners. It will only raise £29 million in addition to the draft budget, and against a budget of £30 billion, that £29 million is only 0.1 per cent. That is the size and scale of the ambition from the SNP Scottish Government. The Parliament was founded on the principle of making different decisions and different sets of priorities. On this historic day, when we finally get to choose our own tax rates and set our own priorities, the SNP Scottish Government is choosing not to use them. We do not know what the behaviour change is going to be, and it is better to be cautious in the first place. Daniel Johnson I agreed with the member the previous time that he intervened when he said that differential tax rates were more than plausible within a single economy. I agreed with him that time, not this time, because the reality is that the SNP chooses not to use its tax-raising powers, but pursues a line of argument in thinking that it takes credit for forcing councils to raise their taxes. It talks about funding being available, extra money from a hypothetical increase in taxes that they do not control. Since 2007, the Scottish Government has made a virtue that they have crowed about freezing council tax. They want credit then and threaten councils with cuts to their revenue grants if they raise council tax, but now they want credit for forcing them to raise council tax. They cannot have it both ways. It would be like the UK Government taking credit for hundreds of million pounds of additional revenue from the taxes that they were controlled, because 3 per cent on top of income tax, LBDT, landfill tax, would raise £375 million. We do not praise the UK Government for £375 million in additional hypotheticals, because that would be ludicrous, ludicrous in much the same way that the Scottish Government has taken credit for council tax increases. However, let us look at what the Scottish Government has chosen to do. It is very clear when you look at the level 2 budget lines. There is £169 million less going to local authorities from the Scottish Government. Those revenue grants are the largest proportion of funding to local government. Council tax only makes up less than 20 per cent of council revenue, so when we talk about the total resources available at extra funding, those masks reel cuts to the main source of income to local governments. That is why it is so disappointing to hear the Greens time after time trot out the same lines at the start of the debate. They talked about progressive taxation being a red line, and yet now they trumpet that extra funding, which turns out to be just less cuts. Those cuts have real impacts. Since the SNP came to power, we have seen £1.5 billion taken from our communities and stripped from our local services. After SNP member dismissed those cuts as local inefficiencies and the decisions that councillors make, the people employed by councils have nothing to do with them and everything to do with local councillors. We see those impacts. We see them in our roads filled with potholes because councils cannot afford to maintain them. We see them in our hospitals because people cannot get home because care packages are not available. We see them in our classrooms with battered textbooks and insufficient resources in them. The reality is that 44 per cent of local government spending goes to education. The budget is about future growth. Future growth is built on public services and there is no more important public service than education. The reality is that 1.5 billion pounds worth of cuts have resulted in 4,000 fewer teachers, 800 fewer teachers in maths and science alone, and 1,000 fewer support staff have fundamentally led to a cut in the future of our country. That is indeed a historic day. It is also a historic missed opportunity. That was an opportunity to make a different set of decisions to show how we value our public service, show how we can invest in them to our future, rather than simply passing on Tory tax plans with a little bit of a tweak, with no change in rates, a tax system that is simply no more progressive than the one that is inherited. The party over there used to believe in using the levers available to it to make a different set of decisions for our country. It is a shame today that the reality is that they believe in leaving well alone and do not have the courage of their previous convictions. Ivan McKee followed by Gordon Lindhurst. Thank you, Presiding Officer. While the debate today marks an historic step forward in the powers of this Parliament, we should not forget that key taxes and levers of economic control are still determined elsewhere. Scotland's Parliament is still denied for now the right to set income tax rates for dividends or for savings income—a point that I will come back to later—and we are denied for now the right to control most levers that can stimulate the economy, including corporate taxation. However, in the limitations of the powers that we have, this Government has brought forward a budget that is balanced and fair and is reflected in the Scottish Rates resolution. It conforms with the manifesto commitments on which we were elected last year. It takes into account the principle of the ability to pay protecting law. James Kelly. Can I just ask whether you elected on a manifesto commitment of cutting council budgets by £170 million? Ivan McKee. As Mr Kelly well knows, the total amount of money that is spent on local services is significantly more than it was last year. There are a number of things that are not included in his calculations, and it would be good for him if he did. They include everything that is relevant to that, including the attainment fund of £120 million and £2 million plus of which he has gone to my own proven constituency. The budget takes into account the principle of the ability to pay protecting low and middle income earners and asking those in the top 10 per cent of earners to forgo a tax cut. It uses the tax leavers that we have to generate and the revenue that we require to fund our public services essential to... On you go. Anna Sarwar. Taking an intervention, this week Glasgow City Council set its budget, and within that budget there was a £53 million cut that was imposed by the Scottish Government. Will he utter a single word of opposition to cuts to the communities that he is supposed to represent? Ivan McKee. As Mr Sarwar well knows, more than £20 million is going on as a result of the attainment fund. There is more money going on in account of the social care fund, and of course there is money to be raised from the increases in the bans and the higher rate council tax, which has got an impact on the revenue to Glasgow City Council as well. He knows that fine well. That budget is based on sound economic principles. Of course, in able to understand correctly and evaluate the tax measures that are proposed in that budget and the impact on overall tax revenues, it is necessary to remind members of the conceptual underpinning of, dare I say it, the Laffer curve. Laffer is most well known for codifying the principles that not all increases in tax rates generate additional revenue. It also very clearly states that not all reductions in tax rates generate additional income. That applies in the same way that, while counterintuitively a price reduction may increase profits for a business, it is very far from the truth to say that that is always or even often the case. Hence, the downward slope of the Laffer curve for values of tax rates below optimal. Were that not the case, and if we followed Mr Fraser's logical extension, then maximum tax revenues would occur at the point where tax rates actually equaled zero, which of course is a complete nonsense. Fire to grass with that point reinforces the Conservative Party's lack of credibility in understanding those economic matters. Our task as policy makers is to understand where we are on that curve and to legislate accordingly, balancing maximising tax revenues along the principle of portionality and the ability to pay. The decision to maintain the basic tax rate at 20 per cent ensures that we do not penalise those on lower-average earnings in the way that the Labour Party would. That is fundamental to our protection of those income groups, not to make them pay twice for UK Government Tory austerity. Indeed, with the commitment over the course of this Parliament to raise a point at which earners start to pay tax to £250 higher than they will apply in the rest of the UK, this Government is taking steps over time to make Scotland the lowest tax place in the UK for basic rate taxpayers who constitute by far the majority of taxpayers in Scotland. The decision to freeze both rates and bans for higher rate taxpayers not choosing to follow the UK Government's high on inflation threshold increases provides additional revenue and does so by asking those who can afford to pay more, the top 10 per cent of income taxpayers to do so to the tune of less than £8 a week. I have mentioned previously that it is not true to say that this Parliament now has powers over all income tax. Legislating on savings and dividends income remains outside of our power for now. That is important to recognise because that is an impact on our ability to tax the additional rate taxpayers because, in the case of that, given where we are and given our lack of power over those taxes, we are at the point of the laugh or inflection at the moment with regard to the 50 per cent tax rate and that is why it does not make sense to increase additional rate tax at this particular point in time, although that door is open should circumstances change. I would now like to turn my attention to the narrative building up around comparative tax burdens across this island. The inability of some to understand that income tax is not the only tax that is astounding. Data clearly shows that council tax levels in Scotland are £400 lower than those across the rest of the UK, offsetting any relative indifference in income tax bills due to higher rate thresholds. That is before we consider the benefit to 100,000 small businesses of the small business bonus and the substantial financial benefits of pre-fee public services to those living in Scotland, including fee higher education, personal care and prescriptions. In conclusion, it is important to recognise that what the budget does is to maintain a balanced, effective, fair and proportionate tax policy that meets the objectives of maximising revenue for public services while protecting the pay packets of low and average earners. The Scottish Government's budget ensures that the people of Scotland continue to benefit from the best deal on tax and public services anywhere in the UK and that Scotland continues to be an attractive place to live, work and do business. Deputy Presiding Officer, as Winston Churchill once famously said, for a nation to try to tax itself into prosperity is like a man standing in a bucket, trying to lift himself up by the handle. This Government seems oblivious to that statement of the obvious, and its handle on the economy is set to snap if it ignores the warnings dished out from industry experts. To those watching, Derek Mackay might seem less like a knight on a white horse coming to the rescue of the country from the measures that he himself has imposed, rather more like a cartoon character sitting in a sailboat blowing hot air into the sail but refusing to pick up the oars and simply willing the boat on. Or perhaps this Government has had enough of experts. That must have been the prevailing feeling of those who watched a stakeholder after stakeholder commented on the finance secretary's budget proposals. Reference has already been made to the Scottish Chambers of Commerce, to the Institute of Directors in Scotland and to those who work hard to keep the wheels of our economy running smoothly. Those who have warned of the consequences of failing to incentivise living and working in Scotland. Rather than seeking to increase revenue, this budget seems to single out and negatively target success. Has the minister forgotten so soon the hard lesson of the land and buildings transaction tax, where revenue forecasts have had to be revised downwards? Instead, it appears that he simply discounts the warnings against bringing an ever greater number of middle-class earners into the higher tax threshold. People who have been mentioned already, such as police officers, senior teachers and nurses in two seconds, people who were never expected to fall within such a tax bracket and who are being pulled out of it in England as a result of a UK Government budget fit for the realities of today. I will give way at this point to the minister. Derek Mackay Can I thank Gordon Lindhurst for taking the intervention and ask him where does Gordon Lindhurst think that the cuts should fall to pay for the £107 million that he would lose from our tax position? Gordon Lindhurst? The minister seems to find money when he wishes to, down the back of his sofa. The magic money tree, as it is being called. The Government's approach tells a tale about the way that it believes that it should govern this country by making it the highest tax part of the United Kingdom. The Scottish Conservatives reject that approach. We have all seen that it does not work. We need a Scottish Government that is on the side of hardworking families and businesses. However, the SNP Government thinks the opposite, as if, because of what it tries to sell as a generous approach to prescriptions, personal care and education, Scots get the best deal within the UK. The Government is like a rabbit running into the headlamp of an oncoming train, taking money from hardworking families and deciding for them how to spend it. I agree with Kate Forbes that it is not our money and that the people of Scotland are growing tired of this Government thinking that it knows what is best for them. I will give way to Labour. Alex Rowley. I thank Mr Lindhurst for giving way. Do you accept that, in order for our economy to grow, we have to invest, train in skills and opportunities so that we will have a high-skilled workforce that companies will want to come to Scotland? If you do agree, how do we pay for that? We have to invest by creating an environment where the people who will create jobs and who will bring business to Scotland want to come here, not by putting up a sign saying that the highest tax part of the UK closed for business. Maybe this Government could learn a thing or two from its own people about tax. The chair of the SNP's growth commission himself appears to have understood within the recent past the link between attracting people to Scotland and generating revenue as a result. The comment of the former First Minister has already been referred to when he conceded that lowering corporation tax would be the best available means for an independent Scotland to improve its competitiveness. We know that a budget fix with the Green Party is liable to cost more than it raises for the Scottish Government, for we know that simply increasing tax, particularly in those who will create business and bring workers to Scotland, is liable to decrease the amount of tax intake. We have an unnecessary tax grab since the finance secretary found the extra £185 million nest egg. It seems that, if there is such a sofa, there are carelessly left millions of pounds down the back of it. The difficulty is that, with Scotland's economy lagging behind the UK as a whole, tax revenues are dropping. The point is that we do not want a finance minister who appears to be heedless of realities, such as the little tyrant of the Scottish High Street. We need proper forward planning, not simply sticking plasters to respond to the real concerns of business when their rates are hiked, as a businessman told me, just this week. He was looking at, until those measures were announced, more than 100 per cent tax rise in his rates bill. I leave that with the Government. I listened to the ministerial statement on non-domestic rates and what I heard was glowing praise for the best possible Government position from their backbenchers and outrage and anger at the worst policy imaginable from many Opposition party MSPs. I suppose that it is no surprise that there has been an element of this debate that follows pretty much the same dynamic. I think that the only surprise to me is that we have not heard a second showing for Murdo Fraser's unique powers of mixed metaphor. Perhaps Mr Lindhurst is trying in his best to follow in that stead what a tyrant does with sticking plasters. I am not quite sure. I have fully understood that. The reality is that I agree with a great many of the criticisms and the analysis that the SNP's tax position is too timid and is not impressive, is not ambitious. I disagree with those, such as Mr Fraser, who, incidentally, I need to thank once again for inspiring a new line of Scottish Green Party merchandise. I will bring him a Green Party watermelon badge for the stage 3 debate on Thursday if he would like one. I am keen to promote the idea that people will be paying more tax in Scotland. Tax rises was a phrase used several times. I regret that that is not happening. I think that people like me and everybody in this chamber should be paying a bit more tax than we pay this year in the next financial year, and that is not going to happen. Talking about forgoing a tax cut that the UK Government is pursuing, I think that we need to forgo that kind of language. I do not think that we need to forgo the thinking that compares tax policy in Scotland with tax policy south of the border. I think that we should be comparing ourselves with the country that we want to be, not with our nearest neighbour. The reality is that, while the position from the Scottish Government is somewhere in between that glowing praise and that outright condemnation, it is certainly not the ambitious and creative approach to tax policy that I would like to vote for, so I will not be voting for it. I will not block it because of the consequences of taking that action. Daniel Johnson asked us all to consider the consequences of the way that we vote here. He is right. We should do it. Let me suggest the consequences. If the Scottish Greens were suddenly to be overcome with a fit of peak and decide to throw out £160 million for local councils, if we voted against the rate resolution, that would result in the budget failing. What would happen immediately, perhaps within the hour, is that in 32 council headquarters around Scotland, 32 chief executives would go into 32 leaders' offices and say, look, you need to dust off that bunch of cuts that we were able to avoid implementing last week because the Scottish Government's budget has just fallen, and that extra £160 million will not be available to us. I know that the position is not perfect in local government, and I wish to goodness that it was better. If perhaps the Labour Party had taken a more constructive approach, it would have achieved as much as we have achieved and reversed even more of the cuts. I give way to Mr Johnson. Daniel Johnson? I hear much of what Mr Harvey says, but the reality is that it is not £160 million, but £29 million in addition. The rest is underspend that has been found elsewhere. The reality would be, surely, that they would come back and negotiate. Is that not the reality of the Greens' position? Is it that they have given way for £29 million and undersold their own hand? The budget amendment clearly puts an additional £160 million into the local government allocation. I had never suggested that all of that is coming from income tax. I have never suggested that, but that is what is available to local councils and that is what they would lose if we were to change our position on today's debate. Derek Mackay said that there has been significant debate on the new tax powers, but that that has led to little consensus. I certainly think that it has led to little movement from the SNP. That is undeniable. I do not think that it is enough for the party and government to complain at the lack of consensus from others. The SNP, in being asked to justify its position repeatedly, just seeks to heart back to a manifesto that it knows did not gain majority support or return them a majority in this chamber. However, I want, in justification for this, more than merely a reference, a page number and a paragraph number. I want reasons that I can understand. In asking the cabinet secretary for finance for those reasons, I think about the closest we got was that that just about feels right. That was a line that he used in committee. That simply is not good enough. I agree with the criticism of the policy of raising the basic rate. Raising the basic rate would increase tax being paid by low and middle earners, and I do not think that that is justified. However, there is also no reason to keep only one basic rate from that personal allowance level right up to the higher rate threshold. There is no reason that we need to be limited in that way. We should be more creative and the Greens propose that. We will continue to do so. I know that there are concerns over the possibility of tax avoidance at the additional rate—the very top rate. I would say to the cabinet secretary that there is mixed evidence on the likelihood of tax avoidance. If he wants to be in a more robust position in making that argument in future, I would like to know what additional research the Scottish Government will commission to find out how it can achieve additional tax income from those who are genuinely the very, very wealthiest of the wealthy in our society without creating incentives for tax avoidance. However, at the higher rate, there is no such evidence that there would be a tax avoidance, a behavioural effect from additional revenue being generated from the higher rate. It is undeniable that, in future, including at local government level and at national government level, we will have to use all of our tax powers in a more creative way. That debate is only going to get more difficult as this session of Parliament wears on, not just because of the expectation of higher inflation, which will reduce the public spending power and give rise to justifiable demands for a more generous pay settlement in the public sector, but deeper cuts coming down the line from UK level, as well as highly dubious proposals for tax cuts to APD from the Scottish Government. That debate is going to become even more difficult in future years if the Government is unwilling to revisit its dogged refusal to shift from a status quo tax position. Greens, as I say, will not block the rate resolution tonight because that would endanger something even more important. However, as the debate goes on on this issue, we are going to have to see more credible position from the SNP in future years. I call Willie Rennie to be followed by Marie Todd. We have just had an interesting explanation from Patrick Harvie about what he is going to do this evening. It probably is one of the most highly principled abstentions the world has ever known, but his party is letting this budget through. He is responsible for that budget and he needs to own it rather than skulking behind an abstention and believing that that absolves him from any responsibility. The Greens have made little impact on this budget. In what must go down as one of the worst negotiations, the Greens conceded even before the SNP had offered them a single penny, feeling sorry for them, Derek Mackay threw them a few crumbs from the table. It was worth a total of £82.82 extra tax for MSPs like me. Patrick Harvie wanted to charge me an extra £2,000 worth of tax, but now I am going to pay an extra £82 a year. That has set ramification through my household. You will not believe it. People are very worried in my household about where we are going to find that extra £82. That is the radicalism of Patrick Harvie. He should be embarrassed that he is supporting this budget and he should be embarrassed for one other thing, too, that he promised us that we would have a greener and bolder Parliament. He said it often throughout the election campaign, but look at this budget deal with the Greens. There is not one single environmental programme that has been funded as a result of their changes. That is not greener and bolder. That is grey and timid, and Patrick Harvie should be ashamed of what he has agreed. I will take an intervention. I am grateful for Mr Rennie finally giving way. Can he, in justifying the idea that there are £160 million of additional funding for local councils, which I remind him that is responsible for many of the most important local environmental services in Scotland, give an example of any budget concession that comes anywhere close to that in the entire history of devolution? What has his own party achieved in the budget negotiations, not a penny? Willie Rennie said that with a straight face. As we have discovered today from the statement earlier on, Derek Mackay had that money already. He was always going to spend that money. He had no intention of distorting that money. Patrick Harvie never negotiated that extra money. Derek Mackay had it in the first place. That is why Patrick Harvie has been duped by the finance secretary. However, Derek Mackay must be a little bit embarrassed about today. He must be a little bit uncomfortable. I am sure that he is a man who has attended many, many marches and protests, demonstrations and heated debates about powers for this Parliament. The opportunity that would be presented, if only we had a few more powers that we could mark out that new brave world, to do it the Scottish way, a different way, different from the rest of the United Kingdom. However, what have we discovered today that he just wants to follow exactly what the Conservatives are really doing down south? Timidity. By and large, by and large, what the Conservatives are doing at Westburn. No change, really, on income tax. A little bit extra, not very much more, but the reality is that he is following. That is not the brave new world. I thought that Derek Mackay was campaigning for all those years. He must be disappointed that he is not being able to take the new powers that he has in his hands, to do something different, something braver, something bolder that this Parliament deserves. It is a missed opportunity. We have Brexit coming down the track, as they repeatedly remind us. Brexit, the challenge, the economic challenge from Brexit. We have also seen the slipping down the international rankings of our education system from one of the best in the world to now just average. Just average, that is not really the brave new world that I wanted Scotland to be. We have also had large numbers of people. 643,000 people will be off sick from work because of mental health problems in their life. 643,000, but yet we have a mental health service that does not meet that need. That has an economic impact worth millions and millions of pounds. Both of those, the education impact but also the mental health impact, is something that we could have done something about with this budget. We proposed a significant increase in mental health services. That would help the economy, it would get people back to work, it would mean that businesses would have the skilled workers that they needed. It would also undo the damage that his Government has done to the college sector. 150,000 college places slashed affecting mature students, women, part-time students who are deprived of the opportunity to retrain as part of a lifelong learning ambition for the country. That has affected the economy because businesses do not have the workers, the skilled workers, that they need. We hear about it every day. I reject the budget, the rate resolution today. I do not think that it is matching the opportunity that this Parliament has. I also reject the Conservatives' belief that the only way to grow the economy is to have a race to the bottom, to have ever lower tax. They have now joined in on air passenger duty in a race to the bottom. On income tax today, it is broadly the same, not much similar. We heard before, a few years ago, long forgotten perhaps by those now in charge of the SNP, that they wanted to have a race to the bottom on corporation tax. Anything that George Osborne was going to do, the SNP would match it and even more on air passenger duty, on corporation tax. They are going to do the same on air passenger duty. That is not the way to grow the economy. The way to grow the economy is to invest in people, in the skills and the talents of the people who live here, that will be a magnet for companies to come and set up their businesses here, to grow, to create opportunity, to grow the tax base so that we can invest even more in public services and the wellbeing of the country. That is the vision that I would rather see this Government adopt, rather than the timidity of this grey and timorous budget. I think that Darren Mackay probably believes that too. I call Marie Todd to be followed by Alison Harris. Thank you, Presiding Officer. I quickly remind the chamber that I come from Ellipoll, the most enterprising village in the whole of Scotland, according to the FSB. The rate resolution comes at a time of growing uncertainty, against a backdrop of Tory austerity, Brexit and high inflation. It is vital now more than ever that Scottish taxpayers are given stability in these uncertain times, while also ensuring that enough money is raised through a fair tax system to properly fund our public services. That is what we have been presented with today. 99 per cent of Scottish taxpayers will pay no more in tax than they currently do, and that provides much-needed stability going forward. The lowest-paid taxpayers will pay less in tax by the end of this Parliament through the new zero-rate band. In fact, the only people who will have to pay more are those earning around £123,000 a year, and even then, they only have to pay on average less than £10 per month more than they currently do. That is a tax system that provides both fairness and stability in these uncertain times. Patrick Harvie. I am grateful. I have tried on a few occasions to get an explanation from the SNP about why they remain attached to the notion of increasing the personal allowance, effectively through an extra zero band. Why is that, which benefits high earners as well as low earners, more preferable than progressive tax rates? Why do we not do that instead and make sure that the benefit goes to those who really need it instead of to everybody? It would be very hard for me to argue that an increase in tax allowance, which is given universally to everyone, is a bad thing. It is a great idea. Let us tackle the myth about Scotland being the highest tax part of the UK head-on. Only a fool would look at income tax in isolation, and the people of Scotland are not fools. Looking at the combination of income tax and council tax together, we know that we pay less in Scotland than in the rest of the UK. Scotland is a great place to live and do business. If you are a taxpayer in Scotland, you get more for your money, a much better deal than anywhere else in the UK. Perhaps that is why the Tories think that we pay more. Scottish taxpayers get free prescriptions, while taxpayers in other parts of the UK continue to see the cost of their medicines rise. That is because our Government has made the decision that everyone should be able to access the medication that they need. I am very grateful to Mary Todd for giving way. Would she acknowledge that the Barnett formula funds Scotland to tune the more than £1,200 per head of population higher than the rest of the UK? Is it any wonder that the services can be afforded given that funding settlement? I am absolutely delighted that we can fund those universal services, which I think anybody would support. Our students receive a free university education without the burden of tuition fees because our Government has decided that family wealth or personal finances should not affect whether or not somebody attends university. Family wealth should not affect life chances. Now, through the most recent budget, the Government will be able to deliver on providing an extra £304 million to the NHS, an extra £120 million to tackle the poverty-related attainment gap in our schools and, most recently, an extra £160 million for local councils. I have heard Murdo Fraser—this is the intervention that I expected—express concern that higher taxes will prevent much-needed doctors from choosing to work in Scotland. I assure Mr Fraser that, having checked with my medical colleagues, they choose to come and live here because of the quality of our health service, the quality of our medical research and education and the universal opportunities for their children. High-quality public services make us an attractive place to live and do business. Very few of us live and work in isolation. Most of us are part of a family and a community. If you have one child going to university, you will save £9,000 a year by living in Scotland. If you have one parent needing personal care, you could save more than £10,000 by living in Scotland. If you need to cross a fourth road bridge in your daily commute to Edinburgh, you will save more than £500 a year on bridge tolls by living in Scotland. All those myths being pedalled prove that the Tories just can't be trusted with Scottish taxpayers' money and with public services. In England, they have created absolute chaos with their ideologically driven austerity policies. Their policies of tax cuts for the rich and privatisation have failed to serve ordinary people. They have resulted in the greatest increase in inequality since the days of Margaret Thatcher. Costs have risen. Wages and working conditions have fallen and the public services are in crisis. When the Lib Dem supported the Tory Government in coalition down in Westminster, that Government's ruthless and brutal cuts in welfare were described by the UN as grave and systematic violations of disabled people's rights. More recently, it has been revealed that cuts in prison staff have contributed to the current crisis in the prison system. The situation in which prison staff simply cannot keep control of the prisons is what Tory austerity does, and we do not want it here. Time and time again, the Tories come to this chamber and demand more money for public services, more for the NHS, more for infrastructure and more for education. They think that they can stand in this chamber today and demand that the Government cuts taxes on the richest in Scotland and that no one would notice. The people of Scotland are not daft. To spend more money on public services you need to raise more money. The Tory argument quite literally does not add up. The reality is that those very same public services are those that the Tories would be jeopardising with their tax cuts for the rich. It is absolutely not just the taxes that attract people to a country. People want to be healthy, educated and happy, and in Scotland we are investing in our citizens through investing in healthcare, education, infrastructure and other programmes. In that way, we will create the right environment for people to flourish and see the increase in productivity that this country needs. The rate resolution that is moved in this chamber today will enable HMRC and employers to know the correct figures to apply to the Scottish taxpayers for the tax year that is commencing on 6 April 2017. At last, it will enable businesses to finalise their 2017 payroll, addressing concerns that have been raised by the Institute of Chartered Accountants of Scotland and the Association of Certified and Chartered Accountants, that late changes to thresholds introduced barely a month before the new rates come into effect could lead to mistakes being made on the IT systems. However, for hundreds of thousands of Scots, those new figures are going to bring about increases in personal taxation, and for many of those taxpayers, there will be the additional increases that they are facing due to the changes in the multiplier of the council tax bans, causing a snowball effect of higher taxes that are going to create real concerns for many people. Councils are being forced to cut local services, while council tax increases are imposed on modest homes in bans E and F, often owned by young people starting out in the property ladder or pensioners who have downsized. Freesing the higher rate threshold for paying the 40 per cent rate of income tax at 43,000, including personal allowances, as opposed to the UK rate of 45,000, opens up a differential of bans between Scotland and other parts of the UK, which will lead to Scots having to pay what I have heard described as only £400 extra. I suspect that this is only the start, the tip of the iceberg. A cut-off at 43,000 affects hard-working families. Looking at those who are self-employed, such as joiners, painters and hairdressers, many who will be on the borderline between the basic and higher rate bans, do they believe that they are getting the best deal for taxpayers in the whole of the UK? I suspect not. Instead, they will feel that any incentive that they had to work hard has been reduced. Many will feel that staying under the 43,000 threshold is actually best for them, hence ultimately reducing the Government's tax take. Also, with regard to auto-enrolment and pension schemes, if employees are caught in this band differential paying more tax, they may have to think very carefully about whether they can afford to remain in the scheme, especially as their contributions will be rising as we progress through future tax years. Has the Government thought through the difficulties and confusion that additional financial burden will cause those employees? I do not think that it has. The Government seems happy to make life harder for Scottish taxpayers, many of whom, particularly those at the margin, face falling over a cliff edge into very choppy financial waters. Conservative said at the time of the budget that it was bad for jobs, bad for local government, bad for those who aspire to work hard, bad for producing the level of economic activity that Scotland so badly needs. We knew at that time that making Scotland the highest tax part of the UK was not the way to get the revenue and economic growth to provide for good public services. Talented people will be taking home less than their counterparts in England and Wales, thanks to decisions made in this chamber. Since the budget, many others have given their views, and although we have heard them already quoted today, I would like to repeat some of them. Claire Mack of the Scottish Council for Development and Industry, who in December highlighted to the finance committee here in Hollywood—Rood Haven. Growth is the key element. The growth rate of about 1 per cent is about a third of the rest of the UK's rate, and closing that gap is critical to the country's economic health. The steps that the finance secretary made with regard to taxation, causing a disparity with our closest neighbour, has also drawn concern. Chartered accountants such as Johnston Carmichael have warned that higher taxes in Scotland could see jobs move elsewhere in the UK. The Scottish Chamber of Commerce said that creating a differential between tax bandings north and south of the border will set a dangerous precedent, and that the SNP Government should instead be focusing on growing the economy as the most sustainable route towards increasing revenues and thus public sector spending. The Institute of Directors has said that the tax plans would send the wrong message and would have a negative impact on the Scottish economy. The SNP's Government response is to close their ears and disregard the views of all those professional groups. The SNP Government might think that higher taxes are justified under the banner of better public services using free personal care, free university tuition and free prescriptions as its example. Can I reiterate that all those benefits existed before this tax differential was created because of the Barnett formula? Freezing tax bands, forcing large council tax rises on modest homes and a double whammy of hits in the pocket that will suppress growth and cause our country to fall further behind our friends and neighbours in the rest of the UK? I am proud to present a party that trusts people with their own money rather than a party whose budget has earned such concerns from so many professional bodies. The rate resolution move today will penalise Scots for living and working in their own country and, as we have heard previously, brought in tax rises that are entirely unnecessary and all inflicted on them by the SNP Government. I am also a member of ICAS and you will quickly gather that there are different views within that organisation. I guess that there comes a limit to what new can be said on this topic as the last day backbench speaker. We have a basic divide in this chamber between those who want better public services and are happy to pay the tax for them and those who want lower taxes and would happily cut public services as a result. On top of that, we have the question of redistribution of income and wealth and also the question of how far we can be different from our near neighbours such as England and Ireland and whether people will move between countries if the tax rates are different. A number of those issues create attention among themselves. I am happy to say that I would be one of those who is comfortable with raising tax in general a bit in order to get better public services. However, I am also very aware of the concern that raising tax too much could lead to some higher rate taxpayers moving to England. That would mean less tax and poorer public services. I do not think that any of us want that, but I think that that is the risk with Labour's proposal of a 5P differential. I do not think that Alex Rowley answered my previous intervention. The whole question of how different we could and should be from England differs with the different taxes. On landfill tax, we do not want waste tourism, so it seems that we are really constrained to staying almost exactly the same as they are down south. On the other hand, property taxes can be allowed to differ a fair bit, as property cannot be moved around very much at all. I am grateful to Mr Mason for giving way. In election after election, he stood on a manifesto committing to cutting co-operation tax in Scotland below the UK rate. If he has changed his mind on that, what has led him to that decision? I think that I would like us to take us to a slightly deeper level, which I think is where our party is. The Tories would say, as I understand it, that all tax cuts are good, all tax rises are bad, and Labour seems to be saying the exact opposite. What we are saying is that we need to look at each tax and at each rate. There are some things that we can safely rise, and we will raise more tax. There are some things that we could reduce, and that will really boost the economy. We are looking at a slightly more nuanced approach than I hear from either of the two extremes in this chamber. As I said, we cannot really touch land-filled tax, property tax, income tax falls somewhere in the middle, and we really do not know how sensitive people's behaviour is going to be to differences between Scotland and England. As I suggested before, we had evidence at the previous finance committee that we can have differences between the Swiss cantons, which are not that far apart from each other and yet people do not actually move. We probably can assume that we could be one or two pence different from the UK and that it will have very little impact. How do we get the right balance between those different factors? It seems to me that a key principle in that is to move gradually as we make changes and as we move away from the English position. By making Scottish income tax slightly different from England, we can see what, if any, impact there is on behaviour and then next year we can take that impact into account. That seems to me a wise approach. In that respect, I am comfortable with the Scottish Government's proposal to have a slightly different band from England, and that has been pushed slightly further, of course, by the Greens. I do think that, longer term, we should have a much more fundamental change to the system. Firstly, we should be combining income tax and national insurance, because they are both effectively tax and income, and it would greatly simplify things for employers, employees and the HMRC if we could combine them. It would also mean that we could do away with what I think is a horrendous 32 per cent marginal rate, which low earners face immediately when they start paying both tax and national insurance. Following on from that, I would like us to look at a much more graduated approach with rates of say 10 per cent, 20 per cent, 30 per cent and so on, so there would not be the huge jump that there currently is from zero to 20 and 20 to 40. However, we cannot do everything with just income tax, and there is also a problem with people incorporating as a business, so they pay corporation tax rather than income tax for the purpose of reducing their overall tax bill. Again, in the longer run, I think that there is a strong argument for income and corporation taxes being much more aligned and, thus, cut down on that avoidance, and obviously that would require devolution of corporation tax. We had the end of the whole question of redistribution, and the question of can income be redistributed just by using income tax, or do we also need to tackle high and low wages? I think that most of us agree that we support a living wage and so try to bring things up at the bottom. Similarly to that, the question of can wealth be redistributed, presumably not just by income tax but we would require devolution of inheritance tax to do that. I accept that a lot of members in the chamber may not be happy with the word redistribution, but I think that a lot more members are uncomfortable at the widening gap between the richer and the poorer in our society, and that affects both income and wealth. A final factor that we need to take into account is that council tax is rising for many people probably by 3 per cent and for people in the top bands by another £517. Therefore, on the assumption that it is better to do things gradually, we are probably going as far as we are wise to this year when you take all the taxes together. It seems to me that it is clear that even looking at tax on its own, there are so many factors that need to be balanced out in order to get a sensible solution. Once we look at expenditure as well, the picture becomes more complicated. Every party in here says that they want more spending on that service, yet, bizarrely, the Conservatives want lower taxes as well. I think that we need to be honest with the electorate and that, broadly speaking, better services mean more taxes, and lower taxes mean poorer services. I think that we can engage like that with constituents and, just this week, in fact, I had a constituent who said to me, thanks for your swift and informative response in relation to mental health funding for children. Personally, I would happily pay an extra 1 per cent income tax if it would mean easing funding, but I fear that I am in a minority. I think that that is the kind of debate that we need to have with our constituents. Finally, I would reiterate one of my bugbears that is that the UK should be setting its budget first and Scotland should be second. Once we are clear what its position is, local government follows on from that. I think that the finance committee with Mr Crawford will be looking at that area. I look forward to supporting the Government motion at 5 p.m. I now move to the closing speeches and I call on James Kelly around six minutes, please, Mr Kelly. Thank you, Deputy Presiding Officer. I want to start by agreeing with Derek Mackay, because this is a significant day for the Parliament. We have substantial tax-raising powers that have been passed down to us, and we therefore have to agree these rates in a motion today. That is quite a substantial decision that we have to take as a Parliament. We should therefore understand the consequences of that decision, as Daniel Johnson quite rightly outlined. The consequences of that decision, if we set the rates as put forward by Mr Mackay, will mean £170 million of cuts to local councils. It is not just the cuts that are being proposed in this year's budget, it is a cumulative effect of those cuts of £1.5 billion since 2011. When people look in their local communities and see their library under threat of closure or their play-scheme under threat of closure or care packages being undermined, they should look at the decision that has been taken today. If Parliament votes at 0.25 p.m. to pass that motion, it is a lost opportunity to tackle those issues in our communities. There has been some discussion about powers that Ivan Mackay complained that we have not got enough powers and the Parliament should have more powers, but it strikes me time after time that I have watched ministers and first ministers on that front bench stand up and answer questions and be saying, if only we had more powers in this Parliament, we could deal with those issues. Here we have those substantial tax-raising powers, and it strikes me that the SNP Government has gone weak at the needs, at the opportunity of using them and standing up to defend local communities. Derek Mackay complained about the reduction in the block grant, but what is the point in complaining about that reduction in the block grant if he will not use any of the levers at your disposal to raise more money and to give you more money to allocate into your budget? In addition to that, we seem to see contradictory positions playing out on the SNP benches. Niaw Gillian Martin outlined a position where she thought people would be prepared to pay more tax, which was at odds with the situation outlined by Derek Mackay. John Mason, in his different contributions, seemed in one hand to say that you can have different tax rates in different countries and that it would not impact on behaviour, but then argued against that position. We had Kate Forbes give us the example of CEOs who do not have to pay any more tax, but at the same time we heard Diana Starwan in an intervention talk about the £53 million of cuts in the council budget in Glasgow. I have to say that I am totally puzzled by the Greens approach to that. Patrick Harvie and the Greens have consistently argued that there should be action taken in terms of top-level taxpayers. Patrick Harvie outlined that position in his speech to the chamber, but it seems that when it came to the budget negotiations when Derek Mackay brought forward those £220 million, effectively £190 million, that was a slush fund, and only £30 million was raised through additional measures for taxation. That strikes me that the Greens were bought off very cheaply. I do not understand that you can take a position where you outlined that you did not think that the tax changes were enough. You were unhappy with them, you could not vote for them, but you were going to abstain to allow them to go through. Surely it would be better to reject the motion before us and to get to a position where we can produce a more robust package. I say again that if we were to do that, Anna Sarwar and his colleagues would not just be talking about £53 million, they would be talking about £70 million of cuts in Glasgow, but I am sorry that we have puzzled Mr Kelly in securing this budget concession. I remember that he voted for that budget amendment when it came to committee as well, but can he tell me if we had taken the same approach of demanding a perfect budget and demanding it now, what would it achieve, because the Labour Party does not seem to have achieved very much coming out of this process? James Kelly? What strikes me about your approach, Mr Harvey? Surely it would be better to vote against the motion that is on the table tonight and then reopen the negotiations. Instead of the £53 million of cuts that Anna Sarwar was outlining, there might be the opportunity by using the progressive powers of taxation to diminish the level of cuts further and produce budgets that can defend local communities. I think that the opportunity for us tonight at quarter past five is that it is a time to be bold as a Parliament. It is the time to look at the powers that are there at our disposal, to raise more money so that we can defend our local communities, to stand up for local people and to make a real difference, because ultimately that is what the people send us to this Parliament to do, to make a difference. Do not let people down at quarter past five reject the motion on the table and reopen the budget discussions. I call Dean Lockhart. Much of the debate today has quite rightly focused on the SNP's new income tax policy, which makes Scotland the most expensive and highest tax part of the UK in which to do business and to do work. My colleagues have explained that this new tax policy will increase the income tax burden for over £370,000 hardworking people in Scotland, including police officers, nurses, consultants and teachers. At a time when the economy desperately needs more job creators, entrepreneurs and highly skilled workers, all of whom would expand the tax base and contribute to higher government revenue, those individuals will now pay higher tax in Scotland than other parts of the UK. The SNP's tax increase on jobs and take-home pay comes at a time when the economy is close to recession and it will further damage economic growth in Scotland. To better understand the challenges faced by the economy, Mr Mackay should really read the Labour market trends report published by the Fraser of Allander Institute last week. It makes clear the urgent need for Scotland to close the growth gap with the rest of the UK in order to avoid future reductions in public spending in Scotland. The Fraser of Allander report highlights the concerns that we have raised many times in this chamber. Scotland's growth is less than a third of the UK's. We are lagging behind the rest of the UK in all key indicators of employment, unemployment and economic activity. Employment levels are down 20 per cent in the past year and Scotland has the highest rate of economic inactivity of any region in the UK. It has not only passed a current performance that causes us concern. Based on the Scottish Government's own forecast for economic growth up to 2020, Scotland's economy has forecast to grow at a lower rate in every year than the rest of the UK. Deputy Presiding Officer, let me be clear that we are not talking down Scotland. We are highlighting the significant damage that SNP policies have inflicted on the economy over the past decade. That tax increase is just the latest example of the SNP's complete lack of understanding of how the economy works. Mr Mackay showed earlier today that he actually was listening to the Scottish Conservatives when he addressed some of our demands on business rates. Mr Mackay should also take heed of the recommendation set out in the Fraser Van der Report that closing the growth gap must be a key priority for the Scottish Government. That requires clear policy actions to boost economic growth and create jobs. He should also listen to business leaders across Scotland who are calling for clear action to grow the economy. The Scottish chambers of commerce have made it clear that growing our economy rather than increasing taxes will provide the most sustainable route towards boosting tax revenues and public spending going forward. As my colleagues have said, you cannot tax your way to prosperity. That is why we reject measures that will make Scotland the highest tax part of the UK. Indeed, as Murdo Fraser has said, where circumstances permit, we would also consider lower taxes to make Scotland more competitive and to expand the economy. That leaves the Scottish Conservatives as the only party in this chamber to oppose higher taxation in Scotland compared with the rest of the UK. We are the only party fighting to keep our economy competitive, the only party on the side of higher working families and the only party that will use tax policy as a means to stimulate the economy. It was not always this way. The SNP once agreed with our approach. In fact, in this very debate last year, John Swinney, in agreeing not to increase the tax burden in Scotland, said, that this Government is on the side of working people. We will not increase their taxes. We will protect household incomes. How things have changed? The SNP has now clearly marched to the left to join its comrades in the Green Party to deliver a high tax, anti-growth, pro-independence budget. Mr Mackay has sacrificed sound tax policy in order to keep the pro-independence vote together. We really shouldn't be surprised by this change. We really shouldn't be surprised by this change. After all, Mr Mackay is merely following the priority set out by the First Minister when she declared that the issue of independence transcends the issues of national wealth, the economy and balance sheets. The party that is supposedly stronger for Scotland has caved in to the demands of a party that received just 6 per cent of the votes. As a result, it has now placed the Scottish economy at a competitive disadvantage to the rest of the UK. That is an unnecessary and dangerous tax increase. Unnecessary because it turns out that Mr Mackay could have funded his spending plans without that tax increase. The magic tree of funding that somehow he is able to conjure up extra funding whenever it is required, not set out in the budget. Dangerous because it sends out a clear message that, under this Scottish National Party Government, Scotland has become less competitive. I conclude with the following quotation from the Scottish National Party website that explains its tax policy. It goes on to say that if just 7 per cent of top-rate taxpayers changed their tax arrangements, the Scottish Government could lose £30 million in revenues in a single year putting the funding of our public services at risk. We agree with that risk analysis. If you increase tax in Scotland, there is a danger that you will dilute the tax base and end up with lower Government revenues. For all of the above reasons, we will be voting against this resolution to increase tax in Scotland later today. I call on the cabinet secretary to wind up the debate. Cabinet secretary, you have got to quarter past, if you need. Thank you, Presiding Officer. First of all, this has been a very useful debate, lively at many points, but of course a significant and historic vote that will have this evening as we use the new powers of the Scotland Act to set the rates and bands of income tax. If I could gently say to Dean Lockhart that the Conservatives are going to have to do a bit better than just referring to the Mackay magic money tree as the answer to every economics and budget question that is posed to them by every other member in the chamber, this has been a serious debate from the Government's point of view in delivering stability and economic stimulus. The reason for that is that we recognise that there are challenges in the economy that we want to address. We have to raise the necessary revenue to be able to invest in our quality public services. We have outlined a range of actions through the draft budget and beyond that can support the economy and deliver that sustainable economic growth that is right for our country. However, it is important in having this debate that we now make the decision and move forward. Move forward to give taxpayers and indeed companies, but taxpayers the certainty that they require. I thought that Alison Harris made a very useful point in terms of the implementation of our tax proposition and that is why I have engaged with UK Government and HMRC to ensure that that decision will be appropriately implemented and I have been given reassurance around that because it is a fair point around the principles of putting that decision out there as quickly as possible. In the same way that Alec Rowley, to be fair, touched upon the Adam Smith principles of tax, proportionate to the ability to pay, certainty, efficiency and convenience as well. I think that it is right that we have this debate and we can make a decision. I do believe that the proposition that we are putting forward on income tax is the best deal for Scotland, the best deal on tax and services and absolutely delivering on our social contract in which we invest in things that are important to the people of Scotland, such as further investment in the NHS, free personal care, no prescription charges, free education and expansion of childcare, if I can just make some progress for the meantime. Investing in what we have described as a social contract and on the other side of the balance sheet on tax protecting low and middle income taxpayers, not passing on the Tory tax cut for the richest and also ensuring that 99 per cent of people are paying no more based on their current levels of income. I think that that is a very fair proposition. Another Conservative member, Gordon Lindhurst, raised the assumptions that I have made in the budget proposition and the estimates around income tax. Of course, they have all been overviewed by the Scottish Fiscal Commission, who have said that the assumptions that we have made are reasonable and set in the context of all the other, as many members have raised in the context of all the other tax powers, whether it is land and building transaction tax or council tax at a more local level. It is just not accurate to say, it is just not true to say that Scotland is the highest tax part of the United Kingdom when you look at everything in the round, even just in terms of tax, and then taking it together with the other social investments that we make as a country. Dean, you mentioned increased spending in the NHS in Scotland. I remind the cabinet secretary that, of the increased NHS spending in Scotland last year, some £380 million increased expenditure, £355 million of that came from Barnett consequentials. Would the cabinet secretary agree that the Barnett consequentials are essential in funding public services in Scotland? Cabinet secretary, you have heard me say before that our total budget will pass on Barnett consequentials for the NHS. Our position on the NHS is that we were offering more to the NHS than any other party in the Scottish Parliament elections, but the question for the Conservatives is where will you find the £107 million of cuts that you would have to find to be able to pay for just your income tax position before we get to anything else? Willie Rennie fairly raised being responsible in this Parliament. He also raised the important point about Brexit, that there are huge economic risks to Brexit that have to be faced by the UK. I think that that is right that we make the right interventions and understand the impact on our economy and understand the reckless actions of the UK Tory right-wing Government, led by the hard-right Brexiteers. In contrast, Patrick Harvie, who has worked constructively with this Government, said that we should build a country that we want to be, and I agree with that and use our powers so to do. Unlike the Labour Party, who, rather than ending austerity, simply want to pass austerity on to basic rate taxpayers and some of the least well-off in our society, albeit that the Tories are hammering the less well-off in our society, particularly in their welfare changes, our package feels like the right one to support a greater number of people. However, what the Labour Party is going to oppose is the Scottish rate resolution. It is not as they have described the process, we can go and think about it a bit more and just keep bringing it back. We need certainty in the system, certainty that Alec Rowley spoke about, so that councils and other public services, as Patrick Harvie has said, can get on with delivering quality public services. It is not just the £900 million in the draft budget that would be at risk. Actually, that rate resolution is about £11.9 billion contribution to our public services. That is what the Labour Party and others are putting at risk by opposing the Scottish rate resolution this evening. It is interesting, as I read of, more and more Labour authorities. Something of a trend is emerging. I just look with interest at local authorities that say that they did not have enough resources. Labour-led authorities are proposing to freeze the council tax. I just think that that tells a very interesting story about resources at a local level, recognising the extra hundreds of pounds of resources that are being put in by this Government to support local services. However, it is the Tories' position that is most interesting. The Tories have reverted to tight, which is to criticise and oppose devolution and divergence, of course. On the matter of council spending, the cabinet secretary agreed with me that it is quite rich to hear stories about the Labour Party about reductions in council budgets. When they are in coalition with the Tories in Stirling, when they have just introduced a budget with £3 million of additional spending in this financial year for the following next financial year? I agree with Bruce Crawford that there has been a great deal of hypocrisy from the Conservatives that have been exposed over the course of this debate, not least one Tory member after another talking about further spending commitments that they would like to see, while at the same time also wanting to cut tax. Not just general tax, but tax for some of the richest in our society. The Conservatives have spoken about the wrong choices. The Government believes that it is the right choices to raise the revenue to spend on our quality public services. On the other hand, the Conservatives believe that Westminster knows best, and we should just toe the line on this and every other matter on our finances and our tax position. The Government will not be passing on the Tory tax cuts. We are making different choices. There is a divergence because we believe in our public services in a fairer and a better society, whereas the Tory party squanders tens and hundreds of millions of pounds in their own pet projects. It is also true to say that when you look at council tax in terms of south of the border, council tax under the Conservatives has been rocketing while the Conservatives are in control south of the border. In contrast to what has happened in Scotland over the last nine years and from freeze to up to 3 per cent position in Scotland, while at the same time we have been able to invest in our public services. When the Tories talk about Governments putting their hand in people's pockets, we took our case to the electorate at the Scottish Parliament election. We secured a mandate to take forward our proposition, but I respect that I have to find consensus in the chamber for the right resolution and the budget to pass. That is what we have done—found the consensus to raise the necessary revenue to invest in our public services. However, it is quite shameless of the Conservatives to hammer the less well-off in society, particularly with your welfare changes. We have approached that position in a fair and a balanced way, in a way that supports our economy and gives certainty and tax decisions based on the ability to pay that will secure this evening £11.9 billion worth of investment for the public services of Scotland while getting the balance right. For all those reasons, 99 per cent of taxpayers paying no more on their current levels of income. No tax hike, no change to the tax rate, supporting those in low and middle income earnings and also to ensure that other measures will stay under review, such as the additional rate, to ensure that we do not jeopardise the income for our public services and continue to engage with taxpayers, businesses and others to ensure that we deliver the right kind of conditions for economic growth, whilst also delivering fairness. I suggest that we do not put at risk that £11.9 billion worth of investment in our public services. The chamber can use these historic new powers this evening as we build a fairer society in one in which we deliver a tax proposition that contrasts well for Scotland, opposing what the Tories have done in Westminster, but making the right decision for our tax powers in Scotland and our people of Scotland. It is with great pleasure that I move the motion in my name. That concludes our debate on the Scottish rate resolution, and we are going to move straight to the question on the motion. Before I put the question to the chamber, can I just advise members that under rule 9.16.7, we cannot move to stage 3 proceedings of the Budget Scotland Bill unless we have agreed a Scottish rate resolution? The question is that motion 3912, in the name of Derek Mackay, on the Scottish rate resolution, be agreed. Are we all agreed? We are not agreed. We will move to a vote and members will be cast to votes now. The result of the vote on motion 3912, in the name of Derek Mackay, is yes, 61, no, 55. There were six abstentions. The motion is therefore agreed. As the motion has now been agreed and the Scottish rate resolution has been agreed, we can move to stage 3 of the budget and stage 3 proceedings will take place on Thursday. The next item of business is consideration of motion 3889, in the name of Derek Mackay, on the appointment to the Scottish Fiscal Commission. I call on Derek Mackay to move the motion. The next item of business is consideration of business motion 4083, in the name of Jo Fitzpatrick, on behalf of the Parliamentary Bureau, setting out a revised business programme for tomorrow. I would ask any member who wishes to speak against the motion to press their request-to-speak button now. I call on Jo Fitzpatrick to move motion 4083. No member has asked to speak against the motion. I therefore put the question to the chamber. The question is that we agree motion 4083. Are we all agreed? We are agreed. There is one question at decision time today. The question is that motion 3889, in the name of Derek Mackay, on appointments to the Scottish Fiscal Commission, be agreed? Are we all agreed? We are agreed. That concludes decision time. I will now move to members' business in the name of Annie Wells on LGBT history. We will just take a few moments to change seats.