Scottish Government Draft Spending and Tax Plans 2019-20

Part of the debate – in the Scottish Parliament on 12th December 2018.

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Photo of Derek Mackay Derek Mackay Scottish National Party

That was an offer from Murdo Fraser on the budget that I would like to refuse.

Our budget from 2018-19 to 2019-20, excluding the health uplift, to which I will return, has a real-terms reduction of £340 million for public services in Scotland. That is the outcome of the chancellor’s budget.

Through our tax position, we are restoring the amount by which the Conservatives short-changed the health service when they took £50 million away from it. Our tax decisions restore that amount, taking NHS funding to record levels.

Of course, the chancellor’s budget does nothing to undo the £2 billion real-terms reduction since 2010, which has had such a damaging impact on our public services.

I wonder whether Murdo Fraser has been discussing the position on tax with Ruth Davidson. Ruth Davidson said that we should forgo tax cuts so that we could invest in the health service, but in her absence the Tories have changed their minds.

I will take no lectures from the Conservatives on the performance of the economy. The Scottish economy is outperforming the UK economy, with higher GDP growth, lower unemployment and more international exports from Scotland.

Of course, if I were to follow the Tory income tax plans, we would have to cut Scotland’s public services by half a billion pounds. That would mean that there would not be £1 billion more for local government; there would be £0.5 billion less for our public services. Those would be the consequences if I followed Murdo Fraser’s plan.

We are investing in innovation, internationalisation and the infrastructure of our country, while the Tories deliver economic self-harm.

Murdo Fraser talked about what businesses are asking for. Right now, businesses are asking us to invest in skills and infrastructure and a competitive tax regime, and that is exactly what we are going to do—with Scotland having the lowest tax in the UK for small and medium-sized businesses. We are the lowest-taxed part of the UK and the fairest-taxed part of the UK.

Yes, the business community is speaking out today, and this is what it is saying. The British Chambers of Commerce said:

“The utter dismay amongst businesses watching events in Westminster cannot be exaggerated.”

The Federation of Small Businesses said that the chaos makes planning ahead “impossible”. Small firms are crying out for some certainty. I will take no lectures from the Conservatives on the economy of our country.

We are aspirational. We are building the country that we seek. We hear talk about tax divergence and divergence between pay packets in Scotland and pay packets in England, but if I were to follow the Tories’ planned cuts to public expenditure, many of those people would not have a job, because of the cuts that the Conservatives would have us deliver.

This is a fair and progressive budget for the people of Scotland, which I am sure will deliver stability and stimulus for our country.