United Kingdom Budget

– in the Scottish Parliament at on 23 November 2017.

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Photo of Ash Denham Ash Denham Scottish National Party

4. To ask the First Minister what the Scottish Government’s response is to the autumn budget. (S5F-01753)

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Yesterday’s budget provided few measures to grow the economy, tackle inequality or invest in public services. The announcements in relation to the North Sea and ending the VAT obligation on police and fire services are certainly welcome, albeit long overdue.

However, as I have said, our block grant for day-to-day public spending has been cut by more than £200 million in real terms next year, and by 2019-20, our discretionary budget will have been reduced by £2.6 billion in real terms over the decade.

Although the budget provides some consequentials, more than half of those are financial transactions, which the Scottish Government cannot spend on front-line public services and which have to be repaid to the Treasury. Overall, the budget contained little to help Scottish households, businesses or public services.

Photo of Ash Denham Ash Denham Scottish National Party

I note the real-terms cut to Scotland’s revenue, which is a real disappointment. Yesterday, revised Office for Budget Responsibility growth figures underlined the fact that Tory austerity is failing. On top of that, average wages are set to fall and taxpayers will pay through the nose for Brexit. When Scotland badly needs growth in our economy, is it not time for real investment with no strings attached and more powers for this Parliament to grow our economy?

The First Minister:

I agree that the more power that we have in this Parliament to take our own decisions, the better it will be for people the length and breadth of our country.

The Resolution Foundation is reporting this morning—this is a serious point that I know the Tories will not want to listen to, but they really should—that average pay will not return to its pre-crisis level until 2025. That will be 17 years after the pay squeeze began. In the budget yesterday there was not one single extra penny confirmed to help lift public sector pay. That is the priority that we see the Westminster Government attach to the living standards of people across our country.

We will use next month’s budget to put forward an alternative approach that allows us to invest in our public services and also allows us to protect those who are on the lowest incomes in Scotland from the impact of the Tory cuts that are biting so hard.

Photo of Murdo Fraser Murdo Fraser Conservative

The chancellor announced yesterday that the Scottish police and fire services can now reclaim VAT, thanks to pressure from 13 Scottish Conservative MPs in Westminster. [

Interruption

.]

Will the First Minister now accept that that was a mess—

Photo of Murdo Fraser Murdo Fraser Conservative

—entirely of the SNP’s own making. It went in to the police and fire services mergers with its eyes fully open, fully aware of the consequences of its actions. [

Interruption

.]

Photo of Murdo Fraser Murdo Fraser Conservative

Will the First Minister now take the opportunity to thank the Conservative chancellor for clearing up the SNP’s mess for it?

The First Minister:

I increasingly love it when Murdo Fraser gets to his feet. It is like Christmas come early every week. I remind the chamber what one Murdo Fraser—I assume that he is the same one we have just heard from—said about a police and fire VAT refund, not eons ago but just a matter of weeks ago. On 31 October 2017, Murdo Fraser got to his feet in the chamber and said:

“there is no justification for a VAT refund”—[

Official Report

, 31 October 2017; c 77.]

for police and fire services. I think that it was really, really cruel of his Tory colleagues at Westminster to prove him so completely and utterly wrong—but then, he is often completely and utterly wrong.

Yesterday, the Tories were forced to concede that they have been wrong all along on this issue. The argument is that it was all because the SNP pursued a policy of a single police force. Do members know the flaw in the Tories’ making that argument? The Tories also proposed a single police force. The argument that it is all a mess caused by SNP policy kind of falls apart when we see that the Tories had exactly the same policy all along.

The fact is that the Tories knew that they were in the wrong and in an indefensible position, but refusing to do the right thing until they thought that they could somehow wring some party political advantage out of it just shows how small-minded and partisan the Tories are. It reflects really badly on them.

My final point is this: having conceded that it is wrong to take VAT out of the pockets of our emergency services, it is not enough just to fix it for the future. Let us have back the £140 million that has been nicked from our emergency services.