Draft Budget

– in the Scottish Parliament on 21st December 2017.

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Photo of Richard Leonard Richard Leonard Labour

2. I wish the Presiding Officer, members of the Scottish Parliament and the people who send us here a very merry Christmas and a peaceful 2018.

One week on from the publication of the Government’s draft budget, we now know that lifeline local services, local jobs and local wages are being hammered yet again by the Scottish National Party Government. We also know that, under the Scottish National Party, the Scottish Fiscal Commission forecasts that our Scottish economy will face “subdued” and “sluggish” economic growth, “slow” productivity growth and “slowing” employment growth for the rest of this session. Is the Scottish Fiscal Commission simply talking Scotland down?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

Our budget is based on the estimates and the forecasts of the Scottish Fiscal Commission. Interestingly, the forecasts that the Scottish Fiscal Commission make around growth are based, among other things, on two key factors. The first of those factors is Brexit—I see that the Tories do not like that—and the second is concerns about lack of population growth. If Richard Leonard is concerned about those things, as he should be and as I am, that makes it all the more strange that he has appointed a Brexiteer as his Brexit spokesperson, when he should be getting behind this Government to argue for continued single market membership.

It would also make a lot of sense for Richard Leonard to back this Government in calling for greater powers over immigration for this Parliament, so that we can focus on growing the Scottish population and do not find ourselves at the mercy of the anti-immigration rhetoric and policies of the Conservative Government.

There may be some common ground that we can develop if Richard Leonard is prepared to have the courage of his convictions, or what at least I hope would be his convictions.

Photo of Richard Leonard Richard Leonard Labour

The Scottish Fiscal Commission’s prognosis for the Scottish economy is not just based on Brexit. It is based on oil and gas contraction, low productivity, demography and low private sector investment. No matter how many times ministers say that the fundamentals of our economy are strong, it is clear that they are not. They are weak.

Research and development, as announced yesterday, has grown but is far too narrow, with just 10 businesses accounting for nearly 40 per cent of all new business research and development. Our export base is far too narrow, with just 15 businesses accounting for 30 per cent of all our international exports. We have witnessed rising levels of bankruptcy, falling levels of business investment and the SNP’s own key economic target—raising Scotland’s gross domestic product growth to the United Kingdom level by this year—is not met. The target of matching the GDP growth of small independent European Union countries by this year is not met. What will it take—

[

Interruption

.]

Photo of Kenneth Macintosh Kenneth Macintosh Labour

Please hold on a second, Mr Leonard. Will members please listen to Mr Leonard’s question and stop interrupting?

Photo of Richard Leonard Richard Leonard Labour

My question to the First Minister and to the people on her benches is this: when will she snap out of her complacency? [

Applause

.]

The First Minister:

That is a sight that I never thought I would see—Richard Leonard beaming at all the applause that he is getting from his friends on the Tory benches.

Richard Leonard is right on one thing. Scotland’s growth rate is not yet matching that of other small, independent countries. I wonder why that is. If Richard Leonard wants to join me in supporting Scotland becoming a small, independent, successful country, I would welcome his conversion.

Let us get back to reality. Right now in Scotland, the unemployment rate is close to an all-time low, and the employment rate is close to an all-time high. Richard Leonard mentioned business research and development. We have now seen that exceed £1 billion for the first time. Growth in business research and development is outstripping that across the rest of the UK. We have closed the productivity gap with the rest of the UK, although we need to close it with our other European competitors as well.

That is why the budget that Derek Mackay set out last week included so many initiatives to support economic growth, from the initiatives to make sure that we are the most competitive part of the UK on business rates to the initiative to capitalise a new national investment bank, to increase even further investment in research and development.

If Richard Leonard does not think that all that goes far enough, here is an invitation to him: between now and the next stage of the budget, Richard Leonard and Labour should come forward and tell us what further investments they want us to make in the economy. That would be a novelty for the Scottish Labour Party.

Photo of Richard Leonard Richard Leonard Labour

Beyond all the rhetoric and oratory—[

Interruption

.] Beyond all the rhetoric and oratory of the First Minister, there is the loss of real jobs in the real world. If things are so good, the First Minister should try telling that to the workers of the Airdrie Savings Bank, of RBS and of Kwik-Fit Insurance Services. She should try telling that to the workers of Doosan Babcock, of Ethicon and of Tannoy, who have lost their jobs this year.

The First Minister should also try telling that to the workers at Amazon, who it is reported today are being forced to meet unrealistic targets this Christmas, to try to avoid redundancy in the new year. This is a company to which the First Minister handed over millions of pounds of taxpayers’ money—[

Interruption

.] She should be laying down the rules.

What Scotland’s economy needs is real and radical change. It needs a Government with an industrial strategy to stimulate growth, and it needs a Government that is prepared to stand up to big business. Will the First Minister accept, once and for all, that she is presiding over an economy that is not serving the people of Scotland? Will she accept that the people of Scotland demand real, radical and urgent change to her economic strategy?

The First Minister:

It is hard to know where to start after all that, but it is good to see Richard Leonard enter so enthusiastically into the spirit of the pantomime season in his question.

Let me try to insert a few facts into the debate that we are having. First, the last Labour Administration gave Amazon more money than this Administration has done—that is fact 1. Fact 2: Richard Leonard talked about RBS and Airdrie Savings Bank, which are important institutions, but has it really escaped his notice that, just like the regulation of employment and most of the macro powers over the economy, banking regulation is reserved to the United Kingdom Government and is not a responsibility of the Scottish Government?

Has it also escaped Richard Leonard’s notice that the unemployment rate in Scotland right now is not just close to a record low but lower than the rate in the rest of the UK? [

Interruption

.] Richard Leonard is shaking his head at that. It is a matter of fact, which he might care to research before he next comes to the chamber.

Despite the limited powers that we have over matters that relate to the economy, this Government always stands up for workers. The member should ask the workers at Dalzell, for example, who would not be in a job right now without the intervention of this Government. He should ask the workers at Ferguson’s shipyard, who would not be in a job right now, or the workers of BiFab, who would not be in a job this Christmas without the intervention of this Government—because while Richard Leonard was having wee photo-shoots outside BiFab, I was making sure that we saved the company from administration and kept the workers in a job.

That is real action, to be compared with the empty rhetoric of Richard Leonard and the Scottish Labour Party.

The Presiding Officer:

We have a number of constituency questions.