4. To ask the Deputy First Minister what the Scottish Government’s response is to the United Kingdom budget. (S5F-01019)

The Chancellor’s statement confirmed that the Scottish Government faces a £2.9 billion budget cut over the 10 years to 2019-20. Although the limited consequentials that were announced yesterday are welcome, they do not represent an end to austerity. Recent analysis by the Institute for Fiscal Studies suggests that the UK Government’s austerity will continue well into the next decade. The budget provided no support for low-income families, who face deep cuts to their incomes as a result of the chancellor’s cuts to social security and who will bear the brunt of the costs of Brexit. We will continue to do everything that we can to boost the economy, tackle inequality and provide high-quality public services, but yesterday’s budget does little to support those aims.

The Presiding Officer:

I call Liam—I am sorry; I mean Bruce Crawford.

Ian somebody? I do not know who that is.

We all welcome the additional £350 million of funding for the Scottish budget as a result of the Chancellor’s announcement yesterday, albeit that that is over three years. However, does the Deputy First Minister agree that we should not let that welcome news blind us to the real and hard reality that Scotland’s budget will face a real-terms cut of £2.9 billion as a result of 10 years of a Tory Government that the people of Scotland did not vote for? That £2.9 billion cut will do untold damage to the economy, to vital public services and to the cause of equality in Scotland. It is obvious that the Labour Party in Scotland would prefer to have that Tory Government than to have Scotland take control of its own affairs.

Mr Crawford makes an important point, as he always does. UK austerity is cutting the funding that is available for Scottish public services. Moreover, the UK Government’s austerity measures are cutting the incomes of some of the most vulnerable in our society. The latest Office for Budget Responsibility forecasts show that, by 2021, real average earnings will still be below the level that they were at in 2007, which represents more than a decade of lost growth. The Treasury’s distributional analysis demonstrates that low-income households will see larger cuts to their incomes than virtually everyone else, except the richest households, as a direct result of the UK Government’s policies over this Parliament. That is the consequence of UK Government policies in Scotland.

The Chancellor’s budget decisions will deliver a welcome additional £145 million in Barnett consequentials for next year. Given that a lot of the consequentials arise from money that the chancellor is allocating to English councils to address business rates rises, how much of the additional money that will be at the Scottish Government’s disposal will it allocate to councils such as those in north-east Scotland that want to set up local rates relief schemes?

That question is a bit odd, because the Conservatives in Aberdeen City Council and Aberdeenshire Council voted against the business rates relief schemes that were proposed. That is the first point about Mr Kerr’s question.

The second point is that the Conservatives have been arguing that the consequentials provide our opportunity to cancel the removal of the tax cut for high earners. That was Murdo Fraser’s proposition, and he and Mr Kerr are sitting cheek by jowl in the chamber. The Conservatives are trying to spend the same money twice.

Maybe that is something to do with sitting on the Opposition benches, because that is what Labour members used to ask us to do when I was the finance Minister and they were sitting where the Conservatives are, in second place. Labour used to ask us to spend the same money twice and, now that the Tories are the second party, they are asking us to spend the same money twice.

The finance secretary will continue to do what he is doing magnificently. He will make decisions that sensibly steward the public finances, and there will be wise investments in the future of the Scottish economy.