Thanks to the surprising decision by the Scottish Government, our valiant armed forces are obliged to pay a higher rate of income tax than people in other parts of the country. As I hope the whole House would agree, the MOD sees armed forces personnel as a national asset, so we have introduced mitigation payments for eligible personnel to offset the unfair burden placed on our valiant soldiers, sailors and air personnel.
I am grateful to the Minister for his response and, indeed, for the Government’s policy of ensuring that our brave armed forces men and women are not left out of pocket by the SNP Scottish Government’s bad decision to put up Scottish taxes—it has become known as the “nat tax” in Scotland—but I believe the damage has already been done. I have received anecdotal evidence from the spouses of armed forces men and women who are now not coming to Scotland because they fear paying higher taxes in Scotland if their spouses are serving there.
My hon. Friend is absolutely right that this issue affects not just those in uniform for whom we have responsibility, costing the MOD £4 million a year, but their spouses, partners and so forth. We are pleased to say that around three quarters of those partners, spouses and so forth are in employment—that is on a par with the civilian sector—but that means that they, too, face that tax burden if they move to Scotland.
As a member of the Defence Committee, I welcome the Secretary of State to their new post.
It has now been a year and no payment has been made, so as the Minister is not paying so-called mitigation to armed forces personnel, will he say how long it took to pay the £17,000 golden bye-bye to the former Secretary of State?
I will not get drawn into the second part of the hon. Gentleman’s question, but I will clarify the first part. [Interruption.] If he can hold on to his seat for a second, I will answer the first part. It is a retrospective payment, and because the taxes have gone up even more, we have now increased the amount from £1,500 to £2,200. Taxes in Scotland are going up.
But of course about a third of armed forces personnel based in England, notably the lowest paid members of the armed forces, are paying more income tax than their counterparts in Scotland. Will the Minister give some information to the House on what plans there are to mitigate the lowest paid armed forces personnel in England?
There is a question later on armed forces pay, and I will touch on that matter then. Let me make it clear: we see our armed forces as a national asset. If they are to be based in Scotland, they should not have to feel that they need to question whether they should go there because of the increased taxes that they will face.