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The next item of business is a debate on motion S5M-15907, in the name of Derek Mackay, on the Budget (Scotland) (No 3) Bill.
Before the debate begins, I am required, under the standing orders, to state whether any provision in the bill relates to a protected subject matter—that is, whether it modifies the electoral system or franchise for Scottish parliamentary elections. In this case, the bill does no such thing and therefore does not require support from a supermajority of members to be passed. The cabinet secretary will be relieved to hear that.
I invite all members who wish to speak in the debate to press their request-to-speak buttons as soon as possible, and I call on the cabinet secretary, Derek Mackay, to open the debate.
A majority for the budget tonight would be super. [
I am delighted to lead this debate on the final stage of the Budget (Scotland) (No 3) Bill. The budget ensures that we provide the necessary certainty that the country deserves and expects.
I thank all the Parliament’s committees for their deliberations, especially considering the process changes that we made following the agreement of Parliament. I confirm that I have responded formally to the Finance and Constitution Committee’s report on the budget.
This budget safeguards Scotland as best we can, using all the powers and resources at our disposal, with a clear focus on our priorities as a nation: education, the economy, the national health service, the environment and support for our communities, to name just a few.
Education—a top priority for the Scottish Government—benefits from more than £180 million to raise attainment in schools. We will transform early learning and childcare with a record £500 million expansion. We will continue our investment in skills and talent by investing more than £600 million in Scotland’s colleges, £1 billion in universities and £214 million on apprenticeships and skills for young people.
On health, the budget will deliver on our commitment to pass on health consequentials in full, increasing the health resource budget by more than £730 million—an increase of around £500 million in real terms. That increases the investment in social care and integration to more than £700 million. It also provides an additional £27 million directly for mental health services, which takes the overall funding for mental health to £1.1 billion.
Under the circumstances, the 2019-20 budget delivers a fair financial settlement for local government by providing more than £11.2 billion, which is a real-terms increase of almost £300 million.
As a matter of fact, the education budget in Dundee is going up. The education portfolio is increasing in real terms as well. Why is the shadow cabinet of the Labour Party adopting the Tory income tax plans, when the Scottish Government is rejecting them?
In total, overall spending power for local authorities next year will potentially be up to £620 million higher than it is currently. At the same time, we are protecting household budgets by continuing to protect a cap on council tax increases. Overall levels of council tax will continue to be significantly less than in Tory-run England.
On a cross-party basis, local government has lobbied for more discretionary taxes.
As I have just expressed, the Scottish Government is giving councils more money—a real-terms increase—and improved spending power of more than £620 million. If I had followed Tory tax plans, £500 million would have had to come out of public services to fund them. What about the calamity of Brexit? Think of what that would do to our public services.
We have listened to local government on a cross-party basis—that even included Tories demanding a power that they now say should not be transferred to local government. What hypocrites there are in the Conservative Party.
I have reached a deal with the Greens to take forward our empowerment agenda. On local tax reform, we will see the empowerment of local authorities, supporting local democracies to develop local solutions. We will convene cross-party talks to replace the current council tax and publish legislation by the end of this parliamentary session to implement any agreement.
On the agreement to support new powers for local authorities, we will formally consult on the principles of a locally determined tourist tax and introduce legislation that would permit local authorities to introduce such a levy, if they consider it appropriate in their circumstances.
We will also support an agreed amendment to the Transport (Scotland) Bill that would enable councils wishing to use such a power to introduce a workplace parking levy. The use of such a power will be entirely an individual choice for each local authority and, as has already been noted in this chamber, in Tory-run England and in Wales, where councils already have the power, Nottingham is the only council to have used it. As I understand it, neither Glasgow City Council nor the City of Edinburgh Council—those councils perceived to be most likely to deploy the levy—are intending to promote it in the financial year 2019-20. How about this? Rather than focus on what is not happening in 2019-20, maybe the Conservatives should focus on what is happening in 2019-20.
This budget delivers a competitive package of business rates measures to help our businesses grow, prosper and be successful; it delivers the most generous business rates relief package anywhere in the United Kingdom, worth more than three quarters of a billion pounds, with capped poundage increases below inflation, ensuring that 90 per cent of properties in Scotland pay less than in other parts of the UK; and it continues the growth accelerator to provide a further competitive advantage for Scotland’s businesses.
Our economic action plan sets out the measures to build a strong, vibrant, diverse and dynamic economy, which includes an ambitious national infrastructure mission, the national investment bank and investment of more than £5 billion of capital funding in our infrastructure. We are investing £1.7 billion in transport and connectivity and £180 million towards city and regional growth deals; establishing an £18 million advanced manufacturing challenge fund; boosting town centres with a new £50 million capital fund; and investing a record £826 million in housing, delivering affordable homes in communities across Scotland.
This budget expands the use of our new devolved social security responsibility powers to create a system that is based on dignity and respect, with a total forecast expenditure of £435 million in 2019-20. It delivers real action to tackle poverty and support families on low incomes, investing more than £100 million to directly mitigate the worst impacts of UK Government welfare cuts, including mitigating the bedroom tax in full.
On the subject of tax, as approved by the rate resolution this week, the budget ensures that 55 per cent of Scottish taxpayers will continue to pay less than they would if they lived elsewhere in the UK, with Scotland continuing to be the lowest and the fairest taxed part of the UK.
Before I ask Parliament to approve the budget later this afternoon, I must draw attention to the work of the chief economist that was published today. The UK chancellor’s budget was constructed on the basis of an orderly Brexit, as was the Scottish budget. With just over a month to go before Scotland faces being dragged out of the European Union by the UK Tory Government, we face the real and increasingly likely possibility that the UK will crash out without a deal. The Scottish Government continues to believe that the best outcome for the UK and for Scotland is to remain in the EU. The choice is not just no deal or the Prime Minister’s deal—in fact, the Prime Minister’s deal would make Scotland poorer as well. The UK Government is systematically damaging our economy: austerity by choice, Brexit by design. Any form of Brexit damages our economy and our people.
Even though investment decisions have already been impacted, our economy has so far proven to be resilient, with gross domestic product growth and record low unemployment. That economic success is now at risk from the increasing Brexit uncertainty and, in particular, the no-deal scenario. Today, the chief economist in the Scottish Government has published a report, “No Deal Brexit—Economic Implications for Scotland”, and it is important that the people of Scotland know that it shows that a no-deal Brexit would lead
“to a major dislocation to the Scottish economy” and that it
“would be expected to push the Scottish economy into recession during 2019.”
The report says that there is the potential for the economy
“to contract by between 2.5% - 7% by the end of 2019, depending on the way in which a No Deal Brexit outcome evolves.”
Such an economic slowdown would be expected to result in unemployment in Scotland rising from its current record low level and potentially soaring by 100,000 people. That would be an economic shock on the scale of the 2008 financial crisis. Scotland should not have to pay such a heavy price for the incompetence of the Conservative Government.
Remember, outside number 10 Downing Street, the Prime Minister said that there was a choice: her deal, no deal or no Brexit. We will take no Brexit, thank you very much. The choice that Murdo Fraser offers is a false choice. The Tories are asking the people of Scotland how much damage they would like to come upon them. That is what the Tories, through their gamble and their recklessness, have taken us to. It is appalling and the economic credibility of the Tories is about to be shattered before our eyes. A no-deal Brexit is not just a hypothetical; it is impacting on our economy now and it must be avoided at all costs. That is what happens when we leave the economy of Scotland in the hands of the Conservatives.
Of course I am working on an economic response in the event of a no-deal Brexit, but we in this Parliament will have no choice but to revisit our spending proposals and priorities, to limit the economic harm that is being imposed on Scotland by Westminster. With the best will in the world, devolution and the current limited powers will not be enough to mitigate the economic catastrophe that is coming our way.
There are new converts to the notion that Westminster is broken, including some of its own members. I just wonder what took them so long to realise it. In sharp contrast, Scotland’s Parliament must show leadership, stability, consensus and compromise, and, importantly, it must deliver.
This Parliament is at its best when all parties engage constructively, and surely the nation’s finances and the decisions that we make on our public services deserve serious engagement. After all, decisions are indeed made by those who turn up. This year, unionist parties might have been in the room, but credible budget alternatives were absent, with the Liberal Democrats and the Tories putting their constitutional obsession before public services and those in the Labour Party too busy arguing among themselves. It was only the Greens who engaged constructively.
The passage of today’s budget provides £42.5 billion of investment in our public services and economy to the benefit of the people of Scotland. By approving this year’s budget, we make investments for the here and now while building for our future and safeguarding Scotland.
I hope that this will be a turning point for the Opposition, who would gain so much more for their constituents by working with us on the budget. Our Parliament in Scotland can offer the modern, progressive style of politics that is focused on the common good and the opportunities and challenges that we face together. That is why I have striven to deliver stability, sustainability and economic stimulus and why I am so proud to commend this budget to the chamber today.
That the Parliament agrees that the Budget (Scotland) (No.3) Bill be passed.
Oh, do not worry, Mr Lyle—I will come to you very soon.
When the finance secretary introduced his budget to Parliament at stage 1, just three weeks ago, I described it as a pay more, get less budget. That description still holds, but it does not do justice to what has turned into an omnishambles budget. For the past three weeks, this budget deal has faced criticism: criticism for a lack of transparency; criticism, because of the tax hikes that are being introduced, which will hit the poorest families the hardest; and criticism because of the cuts in local government services that are being handed down, which will mean that families across Scotland will be paying more in tax at the same time as the services that they depend on are being reduced.
Let me start with transparency. Both the finance secretary and the First Minister told Opposition parties throughout the budget process that every penny in the budget had been accounted for. However, we now know that there were additional Barnett consequentials amounting to £148 million from the UK Government that the finance secretary was given notice of on Friday 25 January, some six days prior to the stage 1 debate in this Parliament.
No doubt, when Patrick Harvie and the Green Party negotiated an extra £90 million for local government, they thought that they were getting a good deal. Little did they know, I suspect, that Mr Mackay was holding back another £54 million to put into the Scotland reserve. It does not say much for the Green Party’s negotiating skills, but it says even less about the transparency of the Scottish Government’s budget process when it gets an extra £148 million thanks to the UK Conservative Government and it keeps that information to itself.
Murdo Fraser is well aware—as am I—that the money is not simply being put into the reserve but is being used to move things from one financial year to the next, to ensure that a much-needed teacher pay settlement will be funded nationally. Is Murdo Fraser saying that that teacher pay settlement should not be funded?
Mr Harvie could not answer my very simple question: did he know about the extra money or not?
The lack of transparency in the budget has also been criticised by one of the Scottish National Party’s own economic advisors. The economist Richard Marsh, who is a member of the expert group that is advising the Scottish Government on economic modelling and statistics and a researcher for the SNP’s sustainable growth commission, has gone so far as to report the Scottish Government to the UK statistics watchdog, saying that the budget presented confusing data that buried key facts. He also said that strict clarity guidelines had been breached for political reasons and that figures in the budget were misleading. The numbers in the Scottish budget report were, he said,
“arranged in a way to persuade the reader of the merits of the Scottish Government’s narrative around the budget”.
It is time for the finance secretary to reflect on how his budget information is presented to Parliament when even his own Government’s advisers are criticising the way in which it is being put forward. If he really wants the Opposition parties to engage seriously with future budgets, he needs to stop the practice of getting extra money and not telling Parliament about it, as he should.
It is not just on grounds of transparency that the budget has been criticised. The growing income tax gap between Scotland and the rest of the UK, which breaks an SNP manifesto pledge, has been attacked by business organisations. The Confederation of British Industry Scotland has warned that the divergence in income tax will be a major issue for companies that are keen to attract the best talent. The Scottish Chambers of Commerce has warned that it could take years to repair the damage caused by higher taxes. The Federation of Small Businesses in Scotland states that the tax changes in the budget
“will erode the small business community’s trust”.
The greatest criticism of the budget relates to the ludicrous plans for a new car park tax. It is a tax on which we have been given virtually no detail, despite being asked to vote on the budget package in a couple of hours’ time; a tax that could cost workers £500 a year; a tax that will be regressive and hit the poorest hardest; and a tax on which, by the finance secretary’s own admission, no economic analysis has been done.
The Scottish Government has claimed that the tax is a localist policy, but it has already taken the decision centrally to exempt NHS buildings, despite the fact that not all NHS workers are actually employed in NHS buildings. As we have pointed out, general practitioners’ practices employ large numbers of staff but are not classed as NHS properties. When asked about the policy in the chamber yesterday, the Cabinet Secretary for Health and Sport did not even seem to know what it was: she said that NHS workers would be exempt, which directly contradicts the finance secretary’s position. In this shambolic Government, the left hand does not know what the right hand is doing. I will give way to any member of the SNP front bench who can tell me whether GP buildings are exempt.
There is no answer. SNP front benchers do not have a clue about their own policy.
I thank the member for his compliment. The answer is that we have not yet started the process. The Rural Economy and Connectivity Committee will be doing a consultation, and it will be this Parliament, not the Government, that makes the decision.
I am not sure whether Jeane Freeman is in the chamber, but she told us yesterday that GP practices would be exempt from the policy, whereas Mr Mason is now telling us that SNP members do not know. They need to make up their minds.
If NHS buildings are to be exempt, why not exempt local government workers? Why not exempt teachers, social workers, police officers and emergency service workers? For that matter, why not exempt those in the private sector who may well be on lower pay than their public sector equivalents? At the weekend, the First Minister suggested that councils could rule out the car park tax and protect their local residents, but that completely misses the point that tens of thousands of workers commute every day by car from one council area to another.
Today, every Conservative council group leader in Scotland has pledged not to introduce the car park tax. It is time that the SNP did the same, but SNP-led councils such as City of Edinburgh Council and Glasgow City Council are already talking about introducing the charge. Adam McVey, the leader of City of Edinburgh Council, has suggested that the charge should be paid not by employers but by employees. Does Mr Mackay agree?
An intervention is supposed to mean my asking a question and Mr Fraser answering. This is my question: are the Conservatives who are against the workplace parking levy the same Conservatives who come to me demanding power over local discretionary taxes so that those in local government can make decisions for themselves?
I do not blame local councils that have had their budgets slashed by the finance secretary for knocking on his door to complain about it.
Even SNP members have complained about the regressive tax. John Swinney once warned that a workplace parking levy would lead to people simply parking their cars in nearby residential areas—he was right. Bruce Crawford and Fergus Ewing are on record as having opposed such plans in the past. Nor should we forget that, much more recently, Richard Lyle told a committee of this Parliament:
“I am not for your parking charge levy, and I speak on behalf of thousands of motorists who have been taxed enough.”—[
Official Report, Environment, Climate Change and Land Reform Committee,
13 November 2018; c 59.]
There speaks the voice of reason on the SNP back benches—it is time that Government ministers listened to him.
In reality, there was no need for those tax increases, because, for this year’s budget, the Scottish Government has had more money from Westminster, with the block grant increasing in real terms by some £520 million as against last year according to the Scottish Parliament information centre. In addition, according to SPICe, the Scottish Government’s overall budget is up in real terms compared to when the Conservatives first came to power in 2010—not that anyone would think so if they listened to the Scottish National Party. Nevertheless, this budget delivers not just tax hikes but a slashing of the core grant to local government that, according to SPICe, amounts to some £230 million in real terms.
We have seen it in our local newspapers every day this week: as councils across Scotland set their budgets, they are having to reduce teacher numbers, cut the length of the school week, lay off school crossing patrollers and close libraries and leisure centres. They are making cuts in the real services that people across Scotland depend on. The finance secretary may be in denial about such things happening, but they are happening on his watch and he must take responsibility for them.
I would give way, but I cannot because I am in the last minute of my speech.
We should have had a budget that focused on growing the economy, which increases our tax revenues. Every 20 new additional rate tax payers we attract to Scotland generate at least £1 million in extra tax revenue. An extra 2,000 additional rate tax payers would give us a minimum of £100 million annually extra to spend on public services. A 1 per cent increase in Scottish productivity would deliver £2.3 billion extra in GDP and £400 million in tax revenue. That is how we get more money for public services—with an expanding economy and rising wages.
What a pity that, instead of going in that direction, we have an SNP Government that would rather hike up taxes for working families, penalise the poorest with a regressive car park tax and, at the same time, slash our public services. At decision time tonight, the Parliament should reject the omnishambles budget.
Scottish Labour will oppose the budget. The SNP has ignored the calls for a fair budget, has awarded tax cuts to high earners and has imposed cuts on councils. That will reduce jobs, close services and hit vulnerable people hardest.
The debate on council funding has been central to the budget process. The cabinet secretary and SNP members of the Scottish Parliament are kidding themselves on if they think that there are not going to be any cuts to council services. The reality is that there will be £230 million in cuts across the country. We can trade figures back and forward, but the real test is the decisions that councils on the ground are considering.
Let us take Dundee City Council. There, there will be a £3 million cut to education services, which will include a reduction of 26 teaching posts. What does that say about education supposedly being the number 1 priority of the Government? In Clackmannanshire, the cut in funding to Clackmannanshire Citizens Advice Bureau Ltd means that it faces closure, and support for food banks there is also being reduced. Vulnerable people living in that area are the ones who will be hit. In Moray, services including library services will be slashed, and there is a proposal to close swimming pools.
The reality of the budget is cuts, cuts and cuts. That is what is happening all over the country.
Members should just listen to me. Under Mr Mackay’s proposals, a lawyer on £90,000, a chartered accountant on £100,000 and a chief executive on £120,000 will all pay less tax. That is why workers who fear loss of their jobs have been demonstrating on the streets of Dundee.
Labour proposes a top rate of tax of 50p, which the SNP previously supported but then stepped back from. We would also extend tax being raised in the higher band, which would raise a significant amount and would mitigate the crisis that we see in the country and address issues including child poverty.
It should shame every MSP in the chamber that in this country some kids leave for school in the morning having not had a proper breakfast. That is an absolute scandal and it is why Labour proposed raising child benefit by £5. That proposal was supported by charities and churches. It was even given some support by Kevin Pringle in
, and he is someone who carries some weight with SNP MSPs.
The Government has also failed to mitigate the two-child cap. That is a horrendous Tory policy that is being imposed from Westminster. We had an opportunity to do things differently in this Parliament, but we have failed.
On rail services, passengers continue to suffer delayed and cancelled trains. We have seen today that the performance figures for ScotRail have plummeted to their lowest-ever level. That is why Scottish Labour demanded a fares freeze, but that is another demand that was ignored by the Scottish Government. It is time that the Government started listening to the concerns of rail passengers. The Government should strip Abellio ScotRail of the contract and give us a fares freeze and a publicly owned railway.
One of the changes from the first stage of the budget was the introduction of the proposal for the workplace parking levy. It is clearly a flawed proposal.
As the First Minister will be aware, her Government has carried out no economic assessment of the workplace parking levy policy. The Government is proposing to introduce it at stage 2 of the Transport (Scotland) Bill and, therefore, to limit proper scrutiny of it. It is a flawed policy and it will be rejected by workers across Scotland.
What Parliament needed was a budget that would have used fair taxation to stop the cuts and to tackle poverty and inequality. What we have is a budget that will cause a crisis in Scotland’s communities. The budget lets people down. We will oppose it at 5pm.
Just a few weeks ago, I took part in a public meeting at Whitehill secondary school in Dennistoun, in which people from the Labour Party, the SNP and the Conservative Party, and a great many local people, debated the impact on that community of the proposed closure of their pool, at a time when community and leisure centres across the city were all threatened. We all know the scale of what was under consideration before the budget agreement, which has secured not only new money but new flexibility for local councils.
This afternoon, as Glasgow City Council debates its budget, my colleagues on the council are able to put forward a balanced budget proposal that will save all the libraries, sports facilities and community centres and will protect budgets for schools, including for additional support for the children who need it most.
I will give way in just a moment.
The Glasgow City Council budget proposal also includes new measures including a climate emergency fund to save money through energy saving and cutting waste, and it proposes investing in renewable energy, Glasgow crossrail and active travel. That would not be possible were it not for the agreement that we have reached.
I have time for one intervention: I give way to Mr Findlay.
Is the cabinet secretary telling the truth when he says that there will be no cuts to any council’s budget because of the deal that the Greens and the SNP have struck? If there are to be no cuts, why are councils around the country, from Shetland to Dumfries, debating lists of cuts that are thick as you could find?
I am certainly not accountable for the words of the cabinet secretary, but I say to Mr Findlay, as I have said before—[
If Mr Findlay is willing to listen, I say to him that I have not pretended that the process has resulted in a perfect budget. We know that councils face rising demands for services, inflation costs and, in the case of Glasgow, the cost of historical decades-long failure by the previous administration to meet the equal pay bill.
My colleagues on the City of Edinburgh Council are proposing a budget that would boost care for older people by an extra £9 million, proposes an £80 million programme for new high schools, and suggests a measure that my Glasgow council colleagues suggested—a climate emergency fund.
Councils around Scotland are in a far stronger position to meet the challenges that they face as a result of the work that has been done. I do not pretend that the budget will solve every problem, but it is a vast improvement. I say again to all political parties that the process would have been better if every political party in Parliament had engaged positively and had put forward proper constructive and costed proposals, as the Greens tried to do.
The reaction to the workplace parking levy would be funny if it were not so dismal. It is a proposal that has in the past been legislated for down south by a Labour Government, used by a Labour council, proposed by Scottish Labour councillors, supported by Lib Dem MSPs and councillors, and voted for by Tory councillors. Their having all decided that it is an intolerable policy when the Greens propose it, but not when they have proposed it, is a mark of shameless political opportunism. It comes in the week after young people in Scotland and around the world took radical action to demand urgent responses on air pollution and climate change. Some people appear to be losing the plot over as trivial a thing as the workplace parking levy policy. It is not even in the budget; it will never be in a Scottish budget, because it is about giving power to councils so that they—the local decision makers—can decide whether it is in the local interest.
I finish with an appeal across the political spectrum. We now have the opportunity to do something radical to decentralise fiscal power in this country, which the Scottish Parliament should have done much earlier in its 20-year history. We have the opportunity to start devolving non-domestic rate reliefs, to give new tax powers and environmental levy powers to councils and—if all political parties take the opportunity—finally to scrap the broken and unfair council tax that creates so much injustice in our society.
I only hope that all politicians will step up and take that opportunity to ensure that we get better improvements, year on year, as a result of the changes that we have negotiated this year.
This is shaping up to be the worst of Scottish budgets. We can tell that the SNP agrees, because its MSPs have spent so much of the past fortnight talking about which bits of the budget they do not support. In the stage 1 debate, I said that Patrick Harvie had sold out local government for the vice-convenership of the car park working group, but I may have spoken too soon. The entire SNP has run a mile from the proposal, so it looks like Patrick Harvie is going to be doing it all by himself.
The SNP has lost any pretence of financial competence. I have yet to see any evidence that the tax change that was implemented last year has driven people out of the country, but the tax burden has to be managed with care, as we do not want to see falling revenues as a result of adverse behavioural change. However, I think that the SNP has lost its senses as its record is now five new taxes, none of which was in the SNP manifesto, and two broken tax promises in just one year. If people think that taxes will rise at every budget and over a range of areas, this country will get a reputation for being high tax and we might see the result in falling tax revenues.
The Greens have been bought very cheaply. It turns out that the extra money for councils was already available. There was £123 million of October consequentials and £148 million of January consequentials. There was hundreds of millions of pounds of underspend this year, plus the hundreds of millions of pounds of underspend next year that the Government’s track record all but guarantees. There is also the increased tax receipts from the public sector pay increases and the £54 million put into reserves. The Greens did not get all the money that was available, but they said to councils, “We have closed your £237 million funding gap with £90 million cash and permission to cut adult social care by £50 million.” That was quite astonishing. Then the Greens said that they do not expect councils to cut their social care but that they had still closed the gap. It never added up and is a clear trick.
In addition, local government finance reform has been delayed until the next session of Parliament, meaning yet more talks on top of all the other talks that we have had that have amounted to nothing.
Not just now.
The Greens used to say that council tax was unfair; it is so unfair that they want it to go up this year and become even more unfair. The inventor of the plan for the parking levy, John Finnie, tweeted the wrong information about the Nottingham scheme; he said that you pay only for the 11th car parking space, but that is not true—you pay for all 11. The budget has a list of policies that they do not understand, cuts that they cannot hide and taxes that they are putting up when they promised that they would go down. What a budget this is turning out to be!
It could have been different. We offered to work with the SNP. We have done it before in previous years when we voted for the budget—SNP members remember. Despite the SNP’s opposition, we secured extra support for early education and childcare, for colleges and for school meals. We have been prepared to work with the SNP.
However, with the First Minister travelling the world to tell all about her plans to break up the United Kingdom in the wake of the break-up of the European Union, it is no surprise that we might be just a little bit concerned. There is no way we could support the budget of a Government that is determined to drive forward yet another divisive independence referendum. We asked for a cessation so that we could work together on this budget, but the SNP could not even agree to a short cessation, such is its obsession.
We have successfully harried the Government to invest in mental health services, but the Government is now playing catch-up and we remain unconvinced that the funds that have been announced will feed through to real change quickly enough.
Last year, we said that mental health spend should rise to a total of £1.2 billion but, a year later, the figure is still £100 million short. That £100 million could fund schools, the police and new health professionals in the NHS. We need a budget that puts teachers at the centre of our developing economy in the years to come, and a proper and fair deal for local government is also important.
This year, we could have worked together on the needs of local government, on the funding of mental health and on support for teachers, but Derek Mackay declined. This weekend, I am sure that the finance secretary will be taking down his Catalan flag from his flagpole in Renfrew. It turns out that the Catalan pro-independence parties have insisted on a dialogue on independence as the price for supporting the Spanish Government’s budget. Who says that we are not allowed to put independence and the constitution at the heart of the budget debate?
We will not support a Scottish Government that will use the budget as a stepping stone to independence and the economic damage that that would bring. The budget could have been very different if it was not for the one-track mind of the SNP and its sidekicks in the Greens.
After the stage 1 debate a few weeks ago, I had hoped that members would be in a more mature and reflective mood today and that they would be prepared to discuss and debate the big budget issues of the day on how best to grow our economy and make Scotland fairer. I for one will not be quoting poetry at Mr Mackay, because he is the only man I know who takes it as a compliment when a woman quotes “Tam o’ Shanter” at him.
Instead, over the past few weeks, we have heard a heavy dose of hysteria—hysteria about 32 local authorities in Scotland getting the same power on workplace parking that 326 local authorities in England have. Despite English local authorities having had that power since 2000, and despite local government in England having suffered a 17 per cent real-terms reduction in its budget in the past four years, only Nottingham City Council has used the local power.
Of course, the Tories and others will not let the facts get in the way of some good old-fashioned scaremongering. Their campaign is about reducing the debate about a £42 billion budget to the lowest common denominator. Their tactics are about diminishing debates in our Parliament to those of a parish council in an episode of “The Vicar of Dibley”. We should be debating where power lies, what other decisions should be made at a local level and how we improve local democracy and accountability.
With 36 days until Brexit, we have heard all the faux outrage about the First Minister daring to put a foot outside Scotland to represent our future economic interests, when we run the risk of our GDP falling by 7 percentage points. At best, that is playground politics; at worst, it represents a poverty of aspiration.
I have listened carefully to what the Tories and others have said about taxation. What interests me is that we never hear the Conservatives bemoan the fact that Scottish taxpayers pay twice to insulate the most vulnerable in our society from the harshest of Tory welfare austerity. Our citizens pay for the Scottish and UK social security systems, and they have the right to expect fairness, dignity and respect from both Governments.
There is a serious point about the role of mitigation, and I want to address the point that Mr Findlay has raised, although it is regrettable that the Labour Party has not produced a costed alternative budget on how best we could use our resources and powers in this Parliament.
As we have heard, the Labour Party advocates a £5 increase in the near-universal child benefit, but I would rather give an extra £10 to £20 to the children who are most in need. According to the Institute for Public Policy Research, that would lift 40,000 children out of poverty, as opposed to the 10,000 to 15,000 children whom Labour’s proposal would affect. The challenge for Labour and for folk such as me, as well as the Government, concerns where we would get the £250 million for the annual cost of such a measure.
Can we please start to lift the level of the debate about how we get weans out of poverty, as opposed to confining our horizons to mitigation? Mitigation prevents a step backwards, but it does not enable a step forwards. We in the Parliament need to recognise that mitigation comes at a cost. The United Nations rapporteur on extreme poverty—not a man to mince his words—said:
“mitigation comes at a price and is not sustainable.”
To be frank, it is outrageous that one Government has to use its resources to protect its citizens from another Government’s actions.
I will therefore always argue for more powers for this Parliament. I say to Mr Rennie that I will always campaign for independence. However, I will never demur from the debate about how best to use the powers and resources that are currently available and I will never shirk from the hard work of building consensus about the best ways to grow our economy and make Scotland fairer.
The questions of the day are not about car parking charges but about how we reform our public services, given that resources are never infinite but needs always are; about how we ensure that young people in the current generation are not the first to be worse off than their parents; about how we welcome new Scots from the EU and beyond; about how we pay for the social democracy that we want; about how we end poverty; and about how, for our economy’s sake, we step out of the short-term political cycle and have the courage and guts to plan and invest for the long term.
That is what a budget debate in the Parliament should be about. The budget process is for grown-ups; in these difficult times, it is about finding the basis of agreement to provide stability. That is what we are all elected to do and it is rightly what the country expects us to do.
In the rate resolution debate earlier this week, the SNP declared that its tax proposals were based on the key principles of being progressive and protecting low-paid workers, raising additional Government revenue and supporting the economy.
However, once we look beyond the SNP spin, it becomes clear that the budget delivers on none of those so-called principles. The reality is that the budget is regressive and will serve only to penalise low-paid workers. Everyone in Scotland who earns £27,000 or more will have lower take-home pay than their friends and colleagues in the rest of the UK. That means that ordinary, hard-working people such as nurses, police officers and teachers have to pay for the SNP’s high-tax, low-growth agenda.
The budget delivers higher council tax bills for low-income households across Scotland. Many families will face an increase of more than £500 a year.
Worst of all, the budget introduces a new tax—the car park tax—which could cost low-paid workers an extra £500 a year. Organisations across Scotland have—rightly—warned that that tax will be deeply unpopular and regressive. It is not based on the ability to pay and it will hit the lowest-paid workers most.
I will do so in a second.
I highlight to John Mason that, yesterday, Unite the union warned the SNP that the tax will penalise workers
“just for turning up to work”.
The Scottish Food and Drink Federation has warned that
“full-time workers on lower-level wages would fall below the National Living Wage if they have to pay this ... Car-Park Tax”.
Does Mr Lockhart at least accept that the parking levy is not in the budget? The proposal still has to go through the parliamentary process, when we will examine all the details.
Mr Mason should know that, as part of the budget negotiation process, his party agreed with the Greens to introduce that unfair tax.
If SNP members think that increasing the tax burden on low and middle earners, increasing council tax bills and imposing a tax on workers who park their cars at work is fair and progressive and will protect low-paid workers, they are clearly out of touch with the hard-working people of Scotland.
The SNP has also declared that the budget will raise additional Government revenues to support public services. It is true that increasing the tax gap with the rest of the UK will in itself raise £68 million in revenue for the next financial year, but that has to be seen in the context of total forecast income tax revenues for next year being revised downwards by £660 million by the Scottish Fiscal Commission. Now that Scottish income tax is under the control of the SNP, we are seeing the real negative budgetary consequences of Scotland’s economy growing at just half the rate of the rest of the UK.
The Fraser of Allander institute has made it clear that
“the new Fiscal Framework puts an explicit burden on the Scottish Government to secure growth rates at least equal to the rest of the UK.”
It goes on to say that if Scottish income tax revenues grow just one third of a per cent slower than UK levels, the Scottish budget will be short by £250 million. However, that is exactly what is being forecast by the SFC and the Office for Budget Responsibility—slower income tax revenue growth in Scotland compared to the rest of the UK, which will significantly reduce the budget available for public spending in Scotland.
The member will welcome, then, the fact that the Scottish economy grew faster than the UK economy as a whole last year. What is his opinion on whether Brexit will help us to grow the economy or hinder that?
For nine of the 11 years that the SNP has been in power, the Scottish economy has grown more slowly than that of the rest of the UK and the SFC is forecasting five more years of stagnation under the SNP. I think that that is the answer to the minister’s question.
By increasing the tax gap with the rest of the UK, the budget will only make that worse. The Chartered Institute of Taxation has warned that
“Taxpayers will now take steps to relocate away from Scotland” or incorporate their business and take themselves out of Scotland’s tax base. The finance secretary must recognise that, under the fiscal framework, the priority must be to increase Scotland’s tax revenues relative to the rest of the UK. This budget does precisely the opposite and will create a vicious cycle of ever higher taxes having to be imposed on a declining tax base in Scotland.
The SNP has also claimed that its tax policy will support Scotland’s economy. Every leading business organisation in Scotland disagrees. The CBI has warned that Scottish businesses will be unable to compete with rivals across the UK in the event of a further divergence of tax rates. The Scottish Chambers of Commerce has told the SNP that
“The sooner politicians realise that supporting economic growth rather than hiking up taxes is the route towards increasing revenues, the quicker Scotland will prosper” and the Federation of Small Businesses has told the SNP that its latest tax increases will erode the trust of the small business community. We have a straight choice here. We can either believe the SNP saying that higher taxes will grow the economy, or we can believe every leading business organisation in Scotland saying that higher taxes will damage economic growth. It is clear which side of the argument is correct.
After 11 years of SNP Government, we are already seeing the longest period of low growth in Scotland for 60 years. This budget will only cause further damage to Scotland’s economy, as forecast by the SFC.
By introducing the deeply regressive car park tax, the budget also shows the people of Scotland that this is a tired Government—a Government out of ideas, out of touch and fast running out of time. That is why we will vote against the budget at decision time.
It is an honour to contribute to the debate. I am delighted about the £180 million for the attainment challenge fund, and I highlight the budget line for the £120 million that will go directly to headteachers.
I am sure that the chamber will join me in congratulating teachers, staff, pupils and parents in Renfrewshire, and Renfrewshire Council officials, on their outstanding work and their achievement, announced this week, of significant year-on-year improvements in listening, talking, reading, writing and numeracy, with the attainment gap closing across all measures. In Renfrewshire, there are incredibly challenging circumstances for some of our young people, so we should be incredibly proud of teachers, pupils and staff in Renfrewshire for that achievement. I hope that the Parliament will show its appreciation. [
The debate has been characterised by a great deal of heat but not a great deal of light. Many speakers have noted that we are marking the 20th anniversary of devolution, which promised a new kind of politics and a new kind of Parliament—a Parliament where the architects of our electoral system envisaged that all parties would have to work together. Nowhere is that more necessary than in setting a budget.
Unfortunately, many of the debating points do not seem to stand up when confronted with reality. In the previous speech, Dean Lockhart spoke about the different rates of growth between Scotland and the rest of the UK. He quoted SFC figures and he is perfectly entitled to do so, but we need to drill down a bit further.
For example, if we look at the GDP per person differential between Scotland and the rest of the UK, it narrows. If we look at the per capita working age GDP in Scotland and the rest of the UK, the difference in the forecast of the SFC disappears completely. Why is that the case? It is a demographic issue. We have an older population and we face a significant challenge in growing our population so that we can fund our public services. That will be made incredibly difficult by Brexit.
There are challenges for the Scottish Government and there are challenges for us in this Parliament in continuing to make Scotland an attractive place to live. However, when we have a Prime Minister who, as Home Secretary, was the architect of the “hostile environment”—a Prime Minister whose former Cabinet colleague stated on national television last night that she believes the Prime Minister to have an immigration problem—that is deeply concerning. Indeed, as Angela Constance mentioned, mitigation may be able to stop us taking a step back, but we will never be able to take a step forward when powers over immigration are held in London and are exercised by someone with the views and values of the Prime Minister.
Another key area with regard to growing our economy is productivity, a challenge that has received much commentary within the Parliament and from many thinkers outwith the Parliament. With the Presiding Officer’s permission, I wish to quote from a recent article in the respected
, the Economic and Social Research Council’s journal. It is an interview with Philip McCann, who is Professor of Urban and Regional Economics at the University of Sheffield. He makes some interesting remarks regarding productivity in the UK. The interviewer writes:
“The first and most striking difference between the UK and other nations, says McCann, is the massive variation in economic productivity between its regions and nations. These different levels of productivity in turn drive levels of affluence and influence social conditions, and are regarded as a key determinant of economic success.
McCann’s message is that amongst the industrialised economies, the UK has ‘some of the world’s biggest inter-regional differences in productivity.’ He has examples to make the point. ‘On some measures the UK has bigger productivity variations than the whole of the Eurozone. It has regions that are less productive than many parts of the Czech Republic, Slovakia, the Baltic states and the former East Germany. And almost half of the UK population today lives in areas that are poorer than West Virginia or Mississippi in the US, where British TV companies go to make documentaries about poverty.’”
To suggest that the challenge around productivity is exclusively an issue for Scotland and for the Scottish Government does not stack up. We have to be a bit more mature in how we discuss productivity and a range of other measures.
There is much else to add but something that is worth while bearing in mind is what McCann articulates regarding these variations within the UK:
McCann then goes on to praise the work of the Scottish Parliament and how it has enabled a more “data-driven” approach. He highlights how smaller territorial units with a population of about 4 to 5 million are able to address issues of productivity far more effectively.
Those are some of the things that we have to take on board. We can come into the chamber—and I am as guilty of this as the next person—and engage in cheap politics and exchange blows and get progressively more irascible as a debate progresses, but ultimately, that will not make a difference for the people we are sent here to represent.
What makes a difference for the people we are sent here to represent is the money in the attainment challenge fund: money that will go into schools in my constituency and that is enabling headteachers such as Jacqui McBurnie at St Anthony’s primary in Johnstone to deliver such outstanding results that it has become the first Scottish school to receive a UK literacy school award.
I hope that around next year’s budget—and in the conversations about next year’s budget that will start imminently—we can take a more mature and constructive approach—
There are some things in the budget that I agree with—the introduction of a new best start grant for low-income families, the wider eligibility criteria for funeral expenses and the carer’s allowance supplement, but it could be better still.
On the whole, the budget does not meet the challenge that Scotland faces to protect public services.
Scottish Labour members will oppose the budget as it stands, because we believe that it will further entrench austerity in our communities and mean much deeper cuts to our public services. The pressure on local authorities and services has never been greater or so acute.
I do not remember a time when local authorities were more hard pressed for funds or when communities faced such cuts to basic services, with headteachers writing to parents about unprecedented cuts. Life is hard for many people who are struggling to make ends meet and who have been utterly shafted by a decade of wage stagnation, rising prices and job insecurity.
One in four children in Scotland lives in poverty, yet the Government has repeatedly rejected the calls of the Labour Party and a broad range of the third sector—including the Child Poverty Action Group—to top up child benefit to lift children out of poverty. Meanwhile, we remain in the dark about what the proposed income supplement will look like. Analysis by the Fraser of Allander institute shows that 0.1 per cent of the Scottish budget is targeted at low-income families with children.
The effects of child poverty have been discussed in this Parliament on many occasions and should not be underestimated. CPAG states:
“Children from higher income families significantly outperform those from low income households at ages 3 and 5. By age 5 there is a gap of ten months in problem solving development and of 13 months in vocabulary.”
“Three year olds in households with incomes below £10,000 are two and a half times more likely to suffer chronic illness” than children in other households.
“As well as being harmful to children and families child poverty has a wider cost for society. A 2013 study estimated that the high levels of child poverty in the UK are currently costing the country at least £29 billion a year. This includes the cost of policy interventions, long term losses to the economy, lower educational attainment and poorer mental and physical health.”
Labour analysis shows that a top-up to child benefit of £5 a week could benefit a total of more than 270,000 families across the country, who would see their household income topped up by at least £520 per year. It is wrong to say that income does not matter to low-income families. Hard cash makes a difference. If you want evidence for that, look at the Labour Government’s introduction of working tax credits in 2010, which has lifted tens of thousands of people out of poverty. Do not tell me that hard cash does not matter—it does.
I will say a few words about the tax on work. In a moment of complete madness—in my opinion—the cabinet secretary for finance offered the Green Party the prospect of devolving to councils the power to introduce a workplace levy on car parking without any consideration of the detail, of who it would effect or, indeed, of its objectives.
Part of the deal is to legislate for the levy. However, so far, I have not heard one word in defence of the substantive case for the levy—all that I have heard is who said what to who. Frankly, I am not interested in that. The Labour group in this Parliament is opposed to the devolution to councils of the power to introduce a workplace parking tax, and I am personally immovable on the issue.
I will in a minute.
There is zero understanding if you think that the levy is a realistic prospect for working families and the 44 per cent of adults who do not pay income tax because they earn less than £12,500 per year. Cabinet secretary, it is far from scaremongering to ask why you would risk introducing a policy that will tax people to go to work. I will take your intervention now.
My intervention relates to something that Pauline McNeill said some moments ago. However, the point is that Pauline McNeill says that the Labour group in the Parliament opposes the workplace parking levy, but the Labour Party in local government is campaigning for such discretionary taxes.
I sought to intervene on a point of detail. In relation to the commitments that Pauline McNeill is asking for, can she tell me how the Labour Party intends that they would be funded?
Rather, cabinet secretary, it is for you to tell us why you support the policy of a workplace parking levy, which you seemed reluctant to do.
Let us take the argument a little bit further. There is already talk of exemptions from the proposed levy, but so far there has been no talk of exemptions for low-paid people, who in Scotland’s largest city, Glasgow, can still not get a reliable bus or train to work. It beggars belief that three pages of the budget are devoted to public transport but there is to be no revolution in the bus industry. In fact, the Government cannot even make the trains run on time.
A child could see that investment ought to be put into public transport before such a levy is even considered. That indicates that the policy has not been thought through. You have already lost the argument. I challenge the SNP and the Greens: will you conduct a public consultation?
Let us find out what the public think about such a tax on work. I am confident that the public will tell the SNP and the Greens where to go.
Like Unite and Unison, I ask the Glasgow MSPs in the chamber whether they will back the proposed tax on work. I invite all the Glasgow MSPs who will back the workplace parking levy to put their hands up.
Presiding Officer. [
It is a pleasure to have the opportunity to speak in favour of the budget proposals of the Scottish Government, which I believe show that the Government is pursuing a progressive agenda despite the financially difficult background. That background has been caused by two things: the failed austerity agenda of the Conservatives and the complete economic failure of the previous Labour Government. The legacy of that Labour Government was, “There is no money left.”
We know that it must be a difficult budget if we look at the actions of the three Opposition parties. The Tories do not want to play a serious part in the process because they know that their proposition of a £0.5 billion tax cut and more spending for everything does not add up. That is why they have not come up with a budget proposal. Labour is simply incapable of coming up with a budget proposal. I was approached by a Labour councillor, who asked me whether I would lodge an amendment to the budget bill. I presume that he did so because he felt that he could not get an amendment past the Labour group in the first place.
I turn to the lonely figure of Willie Rennie, who wants everyone else to give up on what they believe in before he will even have a discussion about the budget. Even his former colleague Margaret Smith described that position as bizarre and stupid. That is why the Liberal Democrats have had no input into the budget.
When I spoke in the stage 1 debate on the budget bill, I made the point that the national context is extremely difficult, given the austerity squeeze, which has resulted in the slashing of the Scottish budget by the Tory Government by more than £2 billion over the past decade. I also mentioned the financial consequences of Labour’s disastrous private finance initiative projects. That led to the usual outcry from the Labour Party, which is desperate to avoid any responsibility for the size of the challenge that local authorities face. Last year, the Labour debt legacy that local government inherited was £434 million nationally. Thanks to contracts that were signed under the Labour Executive, those debts will continue to have to be paid for decades to come.
In Clackmannanshire, which has been mentioned by Richard Leonard and James Kelly, three high schools were built because the Labour Party chose to go for PFI. That decision saddled Clackmannanshire Council with debts of around £8.5 million this year, which is 17 per cent of its education budget. Those debts must be met before it can spend a penny on schools. Neither the citizens advice bureau nor the schools that were mentioned earlier will close if the SNP has anything to do with it; of course, I cannot speak for the Labour Party. The situation in Stirling Council, whose area I also represent, is little better. Last year, its debt repayments totalled £11.7 million, or 14 per cent of its education budget.
The reality of that legacy has to be faced by councils as they try to set their budgets. That process is also taking place against the background of the Tories’ failed austerity agenda and their pernicious welfare and benefit reforms.
Patrick Harvie mentioned the increasing demand on councils and public services. That is certainly not helping matters in my constituency. Unfortunately, this Parliament does not yet have the powers to implement—right across the board—fairer policies that have dignity and respect at their core. However, it can and it does mitigate some of the worst excesses of the unfair Tory welfare policies in order to provide relief from at least some of their appalling consequences.
The Tory MSPs might want to listen to this part of my speech. I am happy to give way to any Conservative member who is willing to say that they are committed to the mitigation of the bedroom tax. The Tories have today clarified their position on the bedroom tax by saying that it does not exist, but if they want to come forward and say that they support the mitigation of up to £650 on average per year for 70,000 families—that they support it now and beyond 2020-21—I am more than happy to hear from them.
The silence that we are hearing from them will be greeted with real concern by people across Scotland, because it means that they are willing to take away that mitigation of the bedroom tax and impose that Tory tax, which was supported by the Liberal Democrats when Willie Rennie’s party was in office but which apparently does not exist, on the people of Scotland. We heard some absolute bunkum from Dean Lockhart when he expressed concern for hard-working, poor families in relation to the tax proposals. That mitigation is a huge benefit of £13 million a year for 70,000 families.
In addition to that, there are benefits for carers. Pauline McNeill mentioned the best start grant. If the Tories get the chance, will that go as well? These are the real things that affect people in Scotland.
Angela Constance was right to say that we do not have all the powers to deal with the situation and that a sensible argument must be had about how we can properly address child poverty and rising poverty levels with a Government at Westminster that is willing to play its part. That is not happening just now.
The bedroom tax is appalling. It was first considered by the Labour Party, under Andrew Adonis, but it has been taken to new levels and it is a real bind for the people who have to pay it. It is perhaps not the most obvious tax, because it has been mitigated, as the First Minister said earlier. People are sometimes unaware of that, but they will certainly be aware of the fact that, as we have seen today, the Tory party wants to take away the mitigation and impose that burden fully on families in Scotland.
Will the Tories support the people in Scotland or will they continue to support their London masters? This week, we have seen the destruction and dissolution of Westminster, with previously Labour and Tory MPs sitting down and shaking hands on the same benches. Not one of the Tory MSPs has said what they think about the view of those Tory MPs who have left that the Tory party is in the grip of the European research group and the Democratic Unionist Party and has abandoned every principle that it had. Those Tory MPs are willing to speak up about it, but not one Tory MSP will speak up about the biggest threat to the welfare of families in Scotland, which is a hard Brexit—or any Brexit at all. When will they find a spine and speak up for the people of Scotland? When will they find a spine and propose a proper, responsible amendment to the budget?
In my time as an MSP, I have not seen such a negative reaction from members of the public to any budget proposal such as the reaction that we have seen to the SNP car park tax. The First Minister has not had the opportunity to speak to many Scots recently, but it is important that, in the coming weeks, SNP members and ministers start to listen to the growing concerns over the impact that the SNP car park tax will have on businesses, workers and the economic attractiveness of our country.
Let me make some progress.
The Cabinet Secretary for Finance, Economy and Fair Work has already admitted to Parliament that there has been no consultation on the proposed new tax. That is not great for councils when they look to take the tax forward.
As each day passes, SNP ministers seem to dig themselves into ever deeper holes—deeper than some of the worst potholes on our roads. Nicola Sturgeon claimed that people who did not live in areas where the tax is to be imposed—which now seems to be Scotland’s major cities—would not be affected. That is just not true.
As Pauline McNeill outlined, parts of the budget are welcome, but this is not the budget that will deliver anything for Scotland. I will take credit for the things that we forced the Government to do, but this is not the budget that will help our country move forward.
It is interesting that the cabinet secretary did not want to talk about his car park tax, for which it is hard-working families across my Lothian region who will pay the price. Many of my constituents who live in West, Mid and East Lothian drive to their work in the capital and will be the very people affected. Last year, car journeys to Edinburgh were undertaken by 12,381 commuters from West Lothian, 10,316 commuters from Midlothian and more than 10,000 commuters from East Lothian.
Many people who live in West, Mid and East Lothian but who work in Edinburgh have looked to take advantage of cheaper house prices—
Mr Briggs may be very happy to see that vast volume of traffic flooding into Edinburgh city centre every day, but does the Conservative Party have any proposals for actually tackling the pollution and climate change crisis that the current short-sighted and unsustainable approach to transport policy is causing?
Patrick Harvie said that the policy is “trivial”. It is not a trivial policy; it will impact on everyone in Scotland, including businesses, general practitioners and care homes. Patrick Harvie has not explained that impact. Maybe he did not think through the policy; maybe it was not his policy—maybe it was suggested by the cabinet secretary for votes. We do not know.
I am proud to represent Edinburgh and the Lothians. Our capital remains a vibrant and successful city, but SNP ministers are increasingly risking that. Edinburgh and the south-east have outperformed the rest of the Scottish economy. Last year, the region was the only part of our economy still growing. I know from speaking to businesses across my region that they increasingly feel that the finance secretary and the Government are taking the economy of Edinburgh and the Lothians for granted.
The budget demonstrates the increasing deficit and debt levels that Government spending is building up. Last year, the deficit was more than £13.4 billion, which is equivalent to 7.9 per cent of our gross domestic product, while the UK rate was 1.9 per cent. Scottish Government debt has hit £1.5 billion this year as SNP ministers borrow the very maximum on the nation’s credit card.
It used to be said that, as night follows day, a fundamental truth of any Labour Government was that it eventually ran out of other people’s money. It now seems that SNP finance ministers have joined the same club.
No, I have only two minutes left. I have dealt with three interventions from SNP members—and one from Patrick Harvie, which is maybe the same thing.
The fundamental fact is that the SNP-Green budget will hit small-town Scotland and hard-working Scots who play by the rules and who are trying to get on and build a better life and future for themselves and their families.
Last year, Murdo Fraser famously lamented the budget deal struck by the finance secretary and the Greens when he somewhat cruelly said that Derek Mackay had done a deal with the “lentil-munching, sandal-wearing watermelons”. Looking at the 2019-20 budget in the round, it is clear from what we have seen over the past few weeks in the latest SNP-Green budget that the lentils have fermented, the sandals have snapped and the watermelon is truly rotten.
We had an opportunity to deliver a budget for jobs and growth for our country and constituents; all that we have got from SNP and Green members is a tax on small-town Scotland. I think that they will pay the price in 2021 for all their new taxes.
More than half of councils plan on dipping into their reserves this coming year and three quarters will increase council tax by the maximum amount in 2019-20. Children’s services and education is the number 1 financial pressure for the second year running, ahead of adult social care, which is still under severe demand pressures. Cuts are increasingly visible, with half of authorities feeling that cuts are now “negatively affecting relationships” with local communities. Eight in 10 councils say that they are not confident in the sustainability of local government finance. Indeed, one in 20 councils are concerned that cuts are so deep that they will struggle to deliver the legal minimum level of services, and 80 per cent have no confidence in the current funding model.
“Now more than ever we need a thriving, resilient local government sector to weather the storm of national uncertainty, but years of chronic under-funding has left local government on life support.”
No, those comments are not about Scotland. They refer to English local authorities and were made only last week in
Public Sector Executive by Local Government Information Unit chief executive Jonathan Carr-West.
Richard Watts, chair of the Local Government Association’s resources board, said that the “State of Local Government Finance Survey 2019” illustrates the “severity of the challenges” after a 40 per cent cut in UK Government funding for English councils, emphasising that the upcoming spending review will be make or break for vital council services.
Speaking for the Convention of Scottish Local Authorities, Tory councillor Gail Macgregor told the Local Government and Communities Committee that, due to funding cuts, local government is
“collapsing in England and Wales.”—[
Official Report, Local Government and Communities Committee
, 9 January 2019; c 15.]
While asking for more resources and fundraising powers, Councillor Macgregor failed to say how much additional funding COSLA sought, or where it would come from. Neither did any Opposition MSP. Today, we have Tory MSPs bleating about alleged cuts in Scotland, while a UK Government, to which they display dog-like devotion, eviscerates local authorities south of the border. The hypocrisy is simply breathtaking.
Meanwhile, Labour MSPs will be disappointed that the budget does not includes Labour’s manifesto commitment to introduce workplace parking charges. However, it allows for an amendment to the Transport (Scotland) Bill, which would give local authorities the choice of whether to introduce a parking levy—a power that Labour, Liberal Democrat and Tory councillors asked for, but which their parties now criticise.
Could the member clarify whether he is saying that the job losses, the public service cuts and the closures across Scotland are all alleged, rather than a reality that far too many communities are going to have to experience?
Labour’s absence of memory is unbelievable. I was a Glasgow councillor when Labour cut 9 per cent from the city budget and 3,500 jobs in one year. This budget increases local government funding but, as we know, Labour is in truly dire straits.
Once, Labour councillors covered the plains like the buffalo. When I was re-elected to Glasgow City Council in 1995, they numbered 77, and I was the sole SNP councillor. These days, sightings of Labour members are becoming increasing rare, with 4,674 of them in Scotland chucking the party last year, which is an 18.2 per cent fall. The impact of Richard Leonard’s leadership is similar to that of the black death on a medieval town. With eight of Labour’s MPs resigning this week so far—it is only Thursday—project Corbyn has hit the rocks. What to do? Having a credible alternative—any alternative—to the budget would be a good start. However, as they go the way of the dodo, in order to prevent extinction, Jackie Baillie, Neil Findlay, Johann Lamont and James Kelly could perhaps form part of a captive breeding programme. Who will be the silverback though, one wonders? Members of the public could pay to gawp at, but not feed, them.
—Labour’s then finance spokesperson,
Andy Kerr, that he could not carry his own group. Ultimately, Labour did, at the second attempt—for fear of an election—back that budget. However, that showed that even negotiating an agreement with Labour is no guarantee that it will deliver. No doubt that is why Labour does not even bother to engage and moans about whatever the SNP proposes, but rarely about a UK Tory Government that has imposed austerity. That has made Labour increasingly marginalised—
I urge Labour to back this budget and come to the table with an open mind and some positive suggestions next year, although I will not hold my breath. It is funny how Labour members are always deaf to the 28,000 local government jobs that have gone in Wales under Labour’s administration. Mr Corbyn says that that is because of UK Government cuts, but ignores the UK Government cuts to this Parliament.
What about the Lib Dems? One is always suspicious of any party or country with the word “democrat” in its title, like Vladimir Zhirinovsky’s Liberal Democrats in Russia, the People’s Democratic Republic of North Korea or Democratic Kampuchea. The famous five, who are led by a leader who is incapable of taking interventions, tell the SNP, which has 62 MSPs—
Thank you, Presiding Officer.
Willie Rennie and co need to participate. I know that they fear losing unionist votes to the Tories and Labour, but I am sure that their tactical voters will forgive them.
The budget strengthens Scotland’s stability in the face of Brexit uncertainty and takes our economy forward. It fully funds our economic action plan, improves the competitiveness of our business environment and will bolster growth. My constituents will benefit from the 3.6 per cent increase in NHS Ayrshire and Arran’s budget, to £720 million. Resource and capital that are available to North Ayrshire Council increase by £26.66 million, from £279.842 million to £306.502 million, which is a 9.5 per cent uplift.
We will introduce Frank’s law, which, shockingly, Miles Briggs—who campaigned for it—will now vote against. We continue to support young people to develop a workforce that has a skills base that is fit for the future by investing
£600 million in Scotland’s colleges, more than £1 billion in our universities and £214 million in apprenticeships and skills.
There are some, of course, who do not want Scotland to have an outward-looking economy and society and who would rather our First Minister stayed at home instead of discussing trade and future relations in France, addressing the Assemblée Nationale to set out Scotland’s vision for supporting EU nationals post-Brexit, or promoting Scottish business in North America. In this budget, this Government rejects an insular and indecisive Scotland that is reluctant to embrace the future for one that is open to talent from around the world, new opportunities and prosperity for all.
When we look back on this parliamentary session and the budgets that were agreed, we will remember them for their shameful attack on local council services. When SNP and Green MSPs rubber stamp the budget today, it will mean that across Scotland, in the days and weeks ahead, councillors of all political persuasions and none will once again have to wrestle with painful choices. Which of their communities’ services will they cut, and which of their neighbours’ jobs will they axe?
The debates that are taking place just now in council chambers up and down Scotland are not about which services to trim, but about which services to scrap. The undeniable fact about the budget is that local councils face a £230 million real-terms cut this year alone. That is not my figure—it comes from the independent Scottish Parliament information centre. Extra burdens have been landed on councils without the full funding to meet them and to fund existing services. That will mean cuts.
Let us end the myth that the cuts to councils have nothing to do with the Government’s decisions, and that it is somehow all someone else’s fault. The Scottish Parliament information centre has made it clear that between 2013 and 2018, the Scottish Government cut council revenue budgets by 7.1 per cent, while its own budget fell by 1.3 per cent. Just as austerity was the political choice of the UK Tories, attacking local council services has been the political choice of this SNP Scottish Government.
I would start by not going ahead with the tax cut that the SNP is proposing in the budget. The fact that people who earn £124,000 a year will be paying less tax this year than they paid last year is something of which anyone who is interested in progressive taxation should be ashamed.
For SNP members to pretend today that there are no cuts to councils is for them to close their eyes to what is happening in their own communities and to turn their backs on their own constituents. I would have far more respect for the SNP and the Government if they had the guts to stand up and admit that the choices that they have made will mean that local government will have to make cuts to many existing services. Anyone who denies that the cuts are being made is just not being honest with the people of Scotland.
I asked each council in my South Scotland region to tell me what the budget means for it. When I asked whether there would be cuts, every one of them said yes. SNP and Labour-run Dumfries and Galloway Council told me that it will have to make cuts and raise taxes to fill a funding gap of more than £15 million, and in SNP-run East Ayrshire Council, the gap is £8 million. In South Ayrshire Council it is £10 million, in the Scottish Borders Council it is £9 million, in Midlothian Council it is more than £7 million, in East Lothian Council it is more than £10 million, and South Lanarkshire Council still needs to find £11 million. I have looked behind those figures to see what the cuts will mean for people.
In all seriousness, I understand and respect Mr Smyth’s anger and wish that the budget was better—or, even, that it had achieved perfection. However, does he understand my frustration that a group of six of us have worked hard and knocked our pans in for months to find costed proposals to make improvements, while dozens of Labour MSPs have offered nothing in the way of constructive and realistic proposals for change?
When Patrick Harvie can be bought off with £90 million out of a £42 billion budget, it is no wonder that the SNP does deals with the Greens. I know that the SNP has no intention of doing a deal with anyone else, because keeping the independence coalition together is more important than keeping council services.
No. I have given way already, and I will probably not have enough time to give way again.
I have looked behind some of the cuts, and here is the reality. They mean redundancies in council jobs, including cuts to teaching and learning support posts at a time when a third of Scottish children are leaving primary school without the expected literacy and numeracy attainment levels. They mean the axing of leisure facilities, when a third of Scotland's school children are obese, and they mean the ending of lifeline taxi-card schemes for older people, when we have an ageing population. I could list more and more from the pages and pages of cuts that are set out in the reports that are sitting on the desks of councillors as we speak.
It is heartbreaking and it should shame every single one of us, but it is even more shameful that the SNP is demeaning its own councillors by pretending that the cuts do not exist. Enough is enough: it is time to stop the cuts and be honest enough to say that if we want high-quality public services, we have to use this Parliament’s progressive tax powers properly, instead of cutting taxes for the rich, as the budget proposes.
Patrick Harvie says that this budget does not cut taxes, but the UK budget does. The Government could reverse its decisions. It has the power to do it.
At a time when the SNP is savaging local services, it is indefensible that a person who earns £124,000 will pay less income tax this year than they paid last year. Most higher-rate taxpayers, including people who earn more than £100,000, will get a tax cut of £140, while our schools and our care services for the elderly face cuts to their services, which are the very fabric of our communities.
Astonishingly, between the draft budget and the final budget that is before us today, a deal was done and the choice made not to increase progressive taxation measures such as the top rate of income tax, but instead to increase regressive taxes on the poor. Councils face raising council tax by nearly 5 per cent and, of course, there are now plans for a new car parking tax on workers. I accept that fiscal measures have a role to play in protecting our environment, but the car parking levy will be a regressive measure under which the company boss will pay the same as the company cleaner. The exemptions that the Government proposes mean that a chief executive or health board member who is on a salary of £100,000 will not have to pay the levy, but a carer who works for a charity and is paid the minimum wage will. No wonder Unison states:
“This seems to devalue the contribution council workers make, as they too, like their health service colleagues, deliver vital services”.
No wonder GMB calls the tax
“an attack on the take home pay of our members”, while Unite calls it
“a desperate attempt to absolve the government from the funding crisis they have presided over.”
The budget could have been an opportunity for progressive politics and a chance to stop the cuts to council services. The SNP and the Green Party are good at the rhetoric about ending austerity, but the budget shows that they are all talk—and ordinary workers and services are paying the price.
I will vote for the budget today. I urge members of all parties to do so and to put an end to their oppositionist and ill-thought-out reasoning for voting against it. Every budget is challenging: as Patrick Harvie said, no budget is perfect, whether it is in Parliament or in a local authority. How could it be, when every politician wants more money to spend on a variety of items, but the pot of money is not bottomless?
Given that this is once again a Parliament of minorities, as it was apparently intended to be, it is surely incumbent on all the parties to put forward genuine proposals, to enter genuine dialogue and to try to get some of the wins that they want. Unfortunately, the hapless Tories and the hopeless Labour Party have once again proved themselves to be failures at improving the budget. And then, there are the Lib Dems.
Here are just some of the reasons why I will vote in favour of the budget tonight. Some 55 per cent of income tax payers here will pay less than they would in the rest of the UK, while 99 per cent will pay the same as or less than they paid last year. The budget will deliver a whopping £729 million extra for health and care services. It will provide £180 million for improving attainment, including £120 million to headteachers to close the attainment gap, in respect of which Tom Arthur spoke about the successes of Renfrewshire Council.
The budget will also provide more than £5 billion of capital investment, including more new homes for my constituency of Greenock and Inverclyde, like those in Slaemuir in Port Glasgow, which the Minister for Local Government, Housing and Planning visited only a couple of months ago, or the 200 new homes at the site of the former St Stephen’s high school in Port Glasgow that passed through Inverclyde Council’s planning process last week.
All those measures, and many others, come in the context of the continuing Tory obsession with austerity, which has caused Scotland's resource block grant to be slashed by £2 billion in real terms since 2010.
Can you explain how you justify a disproportionate cut to local government that will mean losses of jobs and public services across Scotland, including, as far as I am aware, in your constituency? How on earth can you describe that as a fair budget that you will be happy to vote for at 5 o’clock?
First of all, what Johann Lamont said is not true. Secondly, I will come on to local government in a wee minute.
The fact that the SNP Scottish Government is still managing to introduce the measures speaks volumes for the excellent way in which Derek Mackay is doing his job as finance secretary. Instead of greetin and girnin from the sidelines, the Opposition parties should be thanking Derek Mackay for a budget that will deliver for our country. They should also be asking what more they can do to stop their head offices in London from working against Scotland and our budget.
The Scottish Government will continue to spend almost £100 million mitigating Tory welfare cuts, including the bedroom tax, which, to her shame, Michelle Ballantyne claims does not exist. Murdo Fraser touched on that £100 million in his comments. I say to him that the £100 million that Mr Mackay is putting into mitigation could be put into something more progressive for the nation, but it is needed to mitigate the worst of the Tories’ obsession with cuts. I give Michelle Ballantyne the opportunity now to stand up and apologise to the 80,000 Scots who are affected by that callous policy.
Right. Okay—so, it is removal of a subsidy and not a tax. Yet again the Tories prove that they do not understand what is going on in the real world, on our streets and in our communities in Scotland.
The £100 million is additional to the investment in food banks, which has increased from £1.5 million to £3.5 million. Food banks are another consequence of a brutalist Tory regime that has no heart, no compassion and absolutely no clue about the real world. Just think: if the Scottish Government had extra money to spend it could invest it in many ways, rather than having to spend it solely on mitigating Tory cuts.
Only last week, the UK Secretary of State for Work and Pensions, Amber Rudd, admitted for the first time that universal credit has driven people to food banks. If the Tory UK Government can finally admit that its policies are leading people to destitution and food banks, why cannot the Tories in Scotland admit it? I give the Tories another opportunity to apologise to the people of Scotland for their obscene policies and to say whether they agree with Amber Rudd.
The silence says it all.
Time and again, Parliament hears requests and demands that the Scottish Government spend more money on a wide range of issues. Miles Briggs has regularly done so: he has campaigned for Frank’s law and increasing the carers allowance. The budget delivers on those requests. Will Miles Briggs vote against that at five o’clock tonight?
In October, the Tories demanded that the Scottish Government ensure that all Barnett consequentials that result from increased health spending go direct to the NHS and social care. The budget delivers that, and even exceeds it. Are the Tories seriously going to vote against another one of their own demands?
I n October, Monica Lennon claimed credit for Labour when the First Minister announced that there will be access to school counselling services. The budget delivers that. Are Labour members seriously going to vote against one of their own demands?
On Monday 4 February 2002, Labour-led Inverclyde Council and the Labour and Liberal Democrat Scottish Executive cut £4 million from the budget.
When the budget process began in the Parliament on 31 January, my colleague Murdo Fraser set out why the context of the debate was so crucial, particularly in terms of the prognosis for economic growth and employment in Scotland, the gap in income tax rates between Scotland and the rest of the UK, and the responses of business and investors. Since stage 1 of the budget, those issues have been hotly debated in the Parliament, which is only right. However, it is also important to listen to what people outside the Parliament are saying—I will come to that in a minute.
First, let me start with what we heard earlier, which is that one of the Scottish Government’s own economic advisers complained that the budget data was presented in a confusing format. He also said that the narrative around it was designed to sway opinion in favour of the Scottish Government’s interpretation of the data, rather than the data being presented on a wholly objective basis. That makes the scrutiny of the budget difficult.
Economy and Fair Work saying, in evidence to the Finance and Constitution Committee, that he had not undertaken any individual analysis of the proposed car parking tax, just as Pauline McNeill pointed out earlier. He suggested that it was something to do with the deal with the Greens.
I will not, if Mr Wightman does not mind.
The cabinet secretary will come to regret that, because neither of those signs points to a Scottish Government that is intent on providing the Scottish people with maximum transparency about the implications of major policy announcements.
Liz Smith said that she would turn to what the outside world thinks about the Scottish budget. How would she respond to those in the business community who have said, according to media reports, that it is important that the budget passes in order to give Scotland the necessary resources to get on with the job? They did not want to be in a position where the budget could not pass, which would have been the case if I had been left to negotiate only with the Conservatives.
The cabinet secretary has succeeded in uniting the business community, industry, at least half the public of Scotland and many SNP members against the car parking tax, so I will not take any lectures on that.
We have been accused of being hysterical, and all kinds of other things, about this car parking tax, but, unfortunately for the Scottish Government, this policy is not about the real devolution of powers to local authorities in the way that it thinks it is. The policy is unravelling before the Government’s eyes. The tax is a Scottish Government policy. The brokerage of the deal with the Greens, the implementation and the exemption for workers using NHS buildings, were decided by the Scottish Government, not by local authorities. Mr Mackay says, “Never mind,” because it would be up to local authorities to consider further exemptions. However, it turns out that there are a whole lot of complexities and complications about those other possible exemptions, which have been explained very well by some members this afternoon—complications that have been caused by central Government. I say to Derek Mackay, please do not tell the Scottish Conservatives that we are being inconsistent; it is the SNP that is being wholly inconsistent over the policy, and I think that most of Scotland agrees with me about that.
It is not just in relation to the budget that we see this issue. In education, we have had the same dilemma about whether policies are taken at central Government level or whether they are devolved to local authorities. We were told in 2017 and in 2018 that the school governance bill was a flagship bill to devolve power to headteachers because they are
“best placed to take decisions”—[
, 3 October 2017; c25.]
in their own schools.
I could not agree more with that, but suddenly the bill was scrapped, and the status quo endures.
We were told that the new regional improvement collaboratives were to be a further devolution of power, yet many of the people involved in them are complaining constantly that they are at the behest of central Government and the education agencies telling them what to do.
When it comes to pupil equity funding—a very good initiative, as Mr Arthur rightly pointed out—it seems that a headteacher is not quite as free to spend the money as he or she originally thought, because his or her ideas have to be considered by a local authority first.
I personally do not agree with the tax at all, because of the basis on which the SNP has set it out. I take huge exception to the fact that the SNP is pretending that this policy measure has been devolved to local authorities when no such thing has happened. It is the Scottish Government, at central level, that has been setting the parameters of the policy, and that is what people do not like.
I will finish on two points. I still cannot get into my head why the cabinet secretary believes that he is able to refute the evidence from the chancellor’s announcements in October last year that he has an extra £950 million in the Scottish block grant. He tries to tell us that he has less money. I do not understand that, and I do not think that many other members in the chamber do, either. He has not explained why he thinks that increasing the tax burden in Scotland will deliver the economic growth and investment and all the jobs that we need to have to ensure that Scotland can flourish in the future. On that basis, I will be voting against the budget.
I speak in support of the budget. It is a very reasonable budget, given the circumstances. The uncertainty of Brexit is damaging both for businesses and for individuals. Confidence in Scotland and throughout the UK is at a low ebb. The UK is not in a good place economically and we have to do the best we can with what we have.
On Tuesday, we focused on income tax. I am comfortable that we are being more progressive, while trying not to provoke serious behaviour change, such as rich taxpayers leaving the country. I am also comfortable that we are aiming to free up local authorities to introduce more local taxes that might suit them, such as the tourist tax and the parking levy. Longer term, I support a replacement for the council tax, which would be a challenge for us all to agree on but which is achievable.
On the expenditure side, we are trying to be fair to various sectors, but none of us in here or out in the real world can get all the money that we would like. If we give more to local government, that means less for health; if we spend more on preventative healthcare, that means less for hospitals and reactive drugs; and if we spend more on primary schools, that means less for secondary schools. I am disappointed that Conservatives and members of other parties do not seem to understand that simple arithmetic.
A few issues have been mentioned during the debate so far, and certain themes and points have come up a number of times. One of those is the parking levy, and we need to get a few facts about that into the public domain.
Murdo Fraser was the first member to mention it, and he knows, as we all do, that there is a legislative process. The Government will have to consult, the committee—in this case, the Rural Economy and Connectivity Committee—has said that it will definitely consult, the amendment will have to be examined and debated, and we will have stages 1, 2 and 3. We have a long way to go on the issue. The Government and the Greens have put forward a plan, which will be consulted on at committee, but it will be the Parliament that decides the way ahead for it. It is nonsense for members to suggest a lot of details about the levy when it has not even been consulted on.
Let me finish this part of my speech and I will come back to Jamie Greene, if he wants.
It has been suggested that the parking levy is automatically unfair—although we have not even discussed the details—but we must remember that many workplace parking places are for directors and top-paid people in city centres. In Glasgow city centre, for example, it is not the council’s cleaners who have parking places; it is the councillors, directors or such people. In the Scottish Parliament, for example, the car park downstairs, as I understand it, is generally used not by the cleaners or the security people but by MSPs and, potentially, top-paid workers.
I agree that we need to consult and that there can be exceptions but, on the whole, the parking levy will hit the highest-paid workers.
I said that I will take an intervention when I have finished my point on parking levies.
To Dean Lockhart, I say that the parking levy is not in the budget. Yes, the Government has made an agreement with the Greens, but the Transport (Scotland) Bill will have to be amended and there is no certainty that that will happen.
Liz Smith made the point that the parking levy has not yet been studied in detail, and we are all agreed and open about that. She complained about the way in which the budget facts have been presented in a number of areas. However, would she also complain about some of her colleagues spreading conjecture as fact, for example by using a figure of £500 that has no basis in reality?
The committee has not come to any public arrangement as to how it will process the amendment, and it is not public information for the benefit of members in the chamber. If the amendment falls in committee at stage 2 or in Parliament at stage 3, and the deal that has been done between the SNP and the Greens is reneged on because of parliamentary processes, what effect will that have on next year’s budget discussions?
I will certainly not speculate on what will happen in next year’s budget, and the Greens are more than able to speak for themselves. However, as I understand it, they have asked for the Government’s agreement to introduce an amendment, and that is as far as it goes. As Mr Greene knows, the REC Committee is a fairly independent committee that will look at things logically and objectively. Both he and I will do that as part of the process and we will see where it takes us.
I fear that I will run out of time to look at the issues. I will mention another issue, which was raised in the debate by Labour.
The only clarity that we have had from Labour members is that they want to raise the 46p rate to 50p. They are taking a big risk in making a 4p jump, which would create a 5p difference between Scotland and the rest of the UK. We know that there can be behavioural change. I suggest that, if we are going to change the figure, we go 1p at a time and do not have a very large jump.
I will say something about manifestos. They give a direction of travel, but they are dependent on a party becoming the majority Government so that it can impose its decisions and directions. Minority Governments cannot impose their manifesto and need to compromise and get agreement with other parties—and that applies to all parties.
Overall, I am more than happy to support the budget.
Much as I accept the mathematical irrelevance of my position, I state at the outset that I will be backing the budget at 5 o’clock this evening. I will, however, offer a few thoughts in the hope that they might be well received—or, at least, received—for consideration in future years.
First, on taxation, I have long held the view that the step from £43,430 to £150,000 is too great, which is a point that I noted James Kelly making in the chamber on Tuesday. I asked SPICe to run some potential scenarios and it concluded that the introduction of a 44p rate at £75,000 and a 48p rate at £150,000 would realise an additional £120 million, which could be spent on priorities. Although that might not seem a huge sum in the global budget, I believe that it would address principles of tax fairness and open up potential revenue streams that could be utilised for various priorities, some of which members have highlighted in the chamber this evening.
I feel that we need to get away from the nonsense narrative that taxation somehow equals theft. Taxation is a means by which the state invests in services and support for communities, from which everyone benefits, regardless of their income. In fact, people who are on generally high incomes have tended to benefit disproportionately as a result of, for example, investment in education services and infrastructure services that support businesses. There is also investment in the workforce, who are educated and supported through taxation.
I recognise that the Tories support the concept of a small state, which is a valid philosophical position, albeit one with which I passionately disagree. However, I think that the Tories spend a bit too much time talking about how taxes should be reduced and not enough time talking about where they would disinvest in order to realise that vision of a smaller state. Perhaps they would benefit from sharing that vision more openly in the chamber, so that we could have a proper discussion about it.
We need to think seriously about how we encourage and promote greater collaboration and co-operation across the public sector and between the public, third and private sectors. There remain too many silo approaches and too many services where owning the spend equals owning the saving, so we should look at how benefits can be achieved across sectors. This Parliament had to legislate to ensure that health and social care integration took place, but legislation should not be needed to encourage greater collaboration. One means to address that could be to look at funding less on a sectoral basis and more on a geographical one and to use, for example, community planning partnerships as a means to encourage local budget setting and planning for priorities. I accept that that would require a radical shift in how we do budgets in Scotland that would involve much earlier starts for the process. However, if we truly want to encourage localism, it would be a good step to consider, not necessarily for next year but for future budget years.
We also need to consider how we best involve the people in our budget process. A number of years ago, I visited Malmö in Sweden as part of a Local Government and Regeneration Committee visit. The local authority there spoke highly of its citizen jury model, in which a selection of citizens chosen through the electoral roll and balanced for representation by gender and ethnicity are consulted on proposals and feed into the budget process. I believe that there is merit in exploring such an approach in Scotland, which could ensure that we hear voices beyond the perennially engaged. As we consider what the priorities of the Parliament should be, we could be informed of the priorities of the people through that process.
I do not necessarily expect those thoughts to go very far, but I hope that by putting them on the record, they might achieve at least some consideration by ministers in future years.
I am pleased to be able to speak in this important debate as a member of the Parliament’s Finance and Constitution Committee. I will focus my comments on a few key areas: the investment that this Government has made in our NHS, the protection afforded to workers through the rate resolution, and the uncertainty that Brexit has caused and, indeed, is continuing to cause for businesses and our economy.
I welcome that the budget delivers almost three quarters of a billion pounds—£729 million—extra for health and care services in Scotland, with a particular focus on mental health. That investment has allowed the Scottish Government to increase mental health funding to £1.1 billion and to increase mental health funding for young people by £12 million. The £12 million will provide about 350 school counsellors in Scotland’s secondary schools, which will provide young people throughout my South Scotland region with the opportunity to speak openly about their mental health with qualified professionals who can provide targeted and faster support for any problems that present themselves. I am also pleased that our higher education institutions will benefit from the provision of 80 additional counsellors over the next four years, and that an additional 250 school nurses will be in place by 2020.
I am pleased that the rate resolution that was agreed by Parliament on Tuesday will protect our middle earners. I spoke in the debate and focused on nurses, allied healthcare professionals, teachers and social workers, whose income tax will remain fair, proportionate and at the lowest levels in the UK.
Because of time, I will give a one-word answer: nuh.
When speaking in the rate resolution debate, I pointed out that nurses on a band 5 salary—that is 68 per cent of all nurses—will have their salary protected. They will be on the basic or intermediate rates of income tax, paying 20 or 21 per cent, which is the equivalent of about £4,425.50 per year—the lowest amount that will be paid in the UK.
On Tuesday, I highlighted the Scottish Government’s efforts to ensure that Scotland remains an attractive place for business, families and people. In the budget, the cabinet secretary has committed to freezing the higher-rate tax thresholds for higher earners—such as consultants, radiologists and surgeons—at £43,000 and at £150,000 for top-rate earners. Such professionals are absolutely needed in Scotland. Many of them are our EU citizens, who are welcome in Scotland but are being met with nothing but chaos, hostility and sheer disrespect from an out-of-touch UK Government.
It would be remiss of me not to mention the uncertainty that Brexit has caused for businesses and the Scottish economy. At the Finance and Constitution Committee’s meetings, we have taken evidence from numerous experts who have warned of the real risks of Brexit to businesses and our economy. One such example came from the OBR, which told the committee that it
“had a forecast prior to the referendum, assuming that there would be a vote to remain in the EU, that the economy would grow by roughly 4.5 per cent between the time of the referendum and now.”—[
Finance and Constitution Committee
, 9 January 2019; c 38.]
I always remember that figure, because it shows the extent of the damage that the Tories’ infighting on Brexit—this bourach of a Brexit—has had on the country and on our economy. However, I am pleased that we have a Government in Scotland that is working to mitigate the consequences, and I ask the Scottish Government to continue to do all that it can to protect Scotland from the UK Government’s Brexit chaos.
I am conscious of time, but I will briefly touch on other steps that the Scottish Government has taken in the budget that will benefit people across Dumfries and Galloway in my South Scotland region. The budget will deliver more than £435 million of direct assistance through social security interventions. Investment of £3.5 million in the fair food transformation fund will assist national projects such as FareShare, which provides communities across Scotland with unused food from the big supermarkets, including Asda, Tesco and Morrisons. The Cabinet Secretary for Communities and Local Government, Aileen Campbell, spoke about such work at portfolio questions earlier today.
The investment will help the staff and volunteers at Summerhill community centre in Dumfries, which I visited last week. Summerhill receives a weekly delivery from FareShare that is distributed to families and people across north-west Dumfries, from Lochside and Lincluden to Sandside, as well as to the Aberlour charity and the Summerhill community. The investment is an important support for the people in my area.
The budget provides record investment in our NHS, our schools, our social security system, our public services and our people and families. Fifty-five per cent of people will pay less in income tax than they would if they lived in other parts of the UK. Most importantly, in a time of Brexit chaos, the budget allows Scotland to remain an attractive place for people and families to come to live, work and study. I urge members across the chamber to vote for the budget at decision time.
Greens are pleased with what we have achieved in the budget. We have long argued that local government finance, powers and autonomy need to be substantially reformed and enhanced. We hope that securing a deal that begins the overdue process of strengthening local government’s fiscal powers will be seen in the future as an important turning point.
A fiscal framework, a three-year funding deal, the clearest commitment to date to scrapping the regressive council tax, new fiscal powers over tourism and workplace parking, and a budget that provides greater resource and flexibility for councils are achievements that we are proud of.
In a Parliament in which no party has a majority, a coalition must be built to secure support. Parliament has instigated a new approach to budget scrutiny, but how the budget is developed and negotiated is a quite separate matter that is substantially in the gift of ministers. As we have seen this year, there has been no shortage of outrage and opposition and no lack of colourful rhetoric about rescue deals, capitulation and betrayal—all accompanied by a distinct lack of serious engagement in budget negotiations.
In the future, I hope that we will do things better, and I will make a proposal to achieve that. In September 2019, the finance secretary should convene round-table talks to discuss specific proposals from his party and Government and from other parties. Such talks should be followed by further detailed discussion and negotiation after the UK budget.
Such efforts—they would be only efforts—could inform the draft budget that will be published in November or December. To build on whatever progress and trust had been established, detailed negotiations could then take place in Parliament about the budget bill. That might even involve parties publishing their proposals and submitting them to scrutiny by the Finance and Constitution Committee.
Such a process could ease tensions, build trust, allow red lines and aspirations to be properly assessed and tested and ultimately—although there is no guarantee, and parties would be free to rule themselves out of the process—increase the chances of having a budget for Scotland that was built on a shared collaborative endeavour.
Our communities deserve better than the budget. Scottish Labour cannot support an austerity budget that will inflict cuts on public services while delivering tax cuts to the wealthiest in our society. Instead, Scottish Labour wants a budget that will help to lift people out of poverty and build stronger communities with well-resourced public services.
We asked the Scottish Government to include our anti-poverty policies in the budget, but it declined to do so. The result is a budget that is a total disappointment from a Government that claims to be progressive and ambitious for Scotland.
As is fair for a finance secretary, I asked the Labour Party how it would pay for its proposals. I got no answers. Will Monica Lennon tell us here and now what any rate of tax other than the top rate would be under a Labour Government to fund the policies that she refers to? She has a last chance to explain Labour’s position.
The cabinet secretary is on his last chance, because what has been said is not true. James Kelly and Scottish Labour colleagues entered discussions in good faith but got nothing out of the cabinet secretary. What the cabinet secretary failed to talk about—[
]—I will tell him if he cares to listen. He failed to talk at all about child poverty. When we went into discussions, a t the front of our minds were the one in four children in Scotland who live in poverty—[
.] Front benchers might think that that is funny, but one in four children in Scotland live in poverty—[
I will make progress.
Derek Mackay said no to that. Maybe Aileen Campbell already knows the answer. That proposal could have been part of the budget. Even the SNP’s highly respected former special adviser, Kevin Pringle, described it as “a missed opportunity”.
Scottish Labour is sick of seeing our public services and workers struggle. We ask for more funding for public services because when they are properly resourced, all our communities are stronger for it. Instead, shamefully, this SNP budget will cut council budgets in real terms by £230 million, taking total cuts—
It is not wrong, cabinet secretary. That will take total cuts since 2011 to £1.5 billion. Derek Mackay spins those cuts as efficiencies, but let us make no mistake—they are devastating cuts that put lifeline services at risk. Every MSP in this chamber knows that to be true.
As James Kelly outlined, Scotland’s tax bands require progressive and fair brackets. Labour would make the richest pay their fair share, but the SNP tax plans are weak, rewarding higher earners with tax cuts.
On rail, as Colin Smyth said, we propose a fare freeze, because we are listening to the people of Scotland, who have made their voices heard about poor rail services, overcrowded trains and the unaffordable hike in fares. However, again the Scottish Government is not listening. Rail fares have increased, while ScotRail’s performance has plummeted. That is another missed opportunity to do something about the cost of living.
If we look at the big picture, and the big challenges that Scotland faces, Audit Scotland warns that the future of our national health service is not sustainable. We are not seeing the transformational change that is needed to reform and integrate health and social care. The Government needs to be transparent about the funding that our NHS actually needs. Chronic underfunding has pushed health boards to crisis. The Cabinet Secretary for Health and Sport’s local board, NHS Ayrshire and Arran, has been underfunded for years and faces cuts of more than £40 million next year. Surely the health secretary believes that her constituents deserve better than that.
The budget is weak and does not tackle the underlying challenges. It is not simply about more money for the NHS. Let us look at the facts. The rise in life expectancy has stalled. The death rate has begun to rise for people who live in our poorest communities. Health inequalities in Scotland are worsening.
Cuts to council services are shutting doors on the most vulnerable people in our community. That is not helping, cabinet secretary. The cabinet secretary has dismissed Labour’s progressive policies from the outset. Again, perhaps he should have listened to former adviser Kevin Pringle, who was right when he said:
“Poor people die younger, but the poverty that kills them lives on.”
The levels of poverty in Scotland are unacceptable. Our poverty-proofed proposals for the budget would have saved lives. When we have policies that tackle poverty, we tackle the causes of ill health. That is the issue that matters in this budget, or should have mattered to this Government.
There is record employment in the United Kingdom. There are more jobs in the British economy now than at any point in our history. Across Britain, the employment rate is up and the unemployment rate is down. At the same time, wages are rising. Youth unemployment is down and more disabled people in Britain are in work than ever before. The OBR forecasts that all of that is set to continue, with 800,000 more jobs across Britain expected to be created by 2023. That is what Conservative Government delivers.
Let me make some progress.
Meanwhile, in the SNP’s Scotland, we have slower growth, higher taxes and worse public services. That is Derek Mackay’s achievement and Nicola Sturgeon’s legacy.
What Scotland needs is a budget for growth; a budget that attracts jobs to the Scottish economy; and a budget that brings taxpayers to Scotland, not one that drives them away. [
What Scotland needs is a budget for business; a budget for the high street; and a budget that boosts the Scottish economy, not one that punishes it. [
.] Let me make some progress.
However, what we are getting from the SNP-Green alliance is the very opposite of what Scotland needs. We are getting higher taxes on workers; higher taxes on families; new taxes on jobs; and tax hikes that the SNP promised in the election campaign that it would not inflict on hard-working Scots. However, nationalist campaign pledges are not worth the paper that they are printed on.
These are not tax rises for the rich; everyone in Scotland who earns more than £27,000 will pay more tax than they would in England. In effect, it is a tax rise for teachers, senior nurses, police officers and firefighters. It is a tax rise for middle-income earners—a tax rise for ordinary, hard-working families. If someone earns £49,000, they will be paying a whopping £1,300 more every year in income tax in the SNP’s Scotland than they would be if they lived south of the border.
Is it any wonder that the FSB has said that the SNP’s latest tax rises will “erode the trust” of the small business community? Is it any wonder that the life sciences sector has warned that income tax differences between Scotland and England will hurt its ability to recruit the skilled workers that the Scottish economy so badly needs? Is it any wonder that the CBI has warned that
“income tax could become a major issue for companies keen to attract the best talent”?
The tragedy is that none of these tax rises is necessary, because the Scottish Government’s budget is already increasing by £0.5 billion in real terms this year.
None of those warnings is remotely surprising. However, what is shameful is that Nicola Sturgeon’s SNP is deaf to all of them. It does not care about growing the Scottish economy. All it cares about is pandering to the hard-left tax policies of Patrick Harvie’s Green Party. It is not that the Greens do not believe in growth—they are positively opposed to it. They are so vehemently anti-car that they probably think the invention of the wheel was a retrograde step and yet this small collective of unpopular politicians is the group that Derek Mackay chooses to do his budget business with. Where has this ill-fated alliance of nationalists and Greens led him? To the genius idea of the car park tax—so genius that it has been in several Labour Party manifestos.
Richard Lyle said:
“I am not for your parking charge levy, and I speak on behalf of thousands of motorists who have been taxed enough.”—[
Official Report, Environment, Climate Change and Land Reform Committee
, 13 November 2018; c 59.]
Well, quite—yet each of those great heavyweights of the SNP will be voting for that tax tonight. John Swinney, Bruce Crawford and Fergus Ewing will all be voting for something that they do not believe in and which they know is wrong. Why? Because appeasing the Greens is more important to them than sound public policy.
It has been claimed that this is not really a tax rise, but some sort of welcome empowerment of local authorities. However, this is not about localism at all. The Parliament’s devolved tax powers mean that we can vote to either raise or lower tax rates. If the SNP was serious about localism, it would grant the same powers—the same freedom of choice—to local authorities. However, the only power that is being given to councils under this proposal is a power to impose new taxes. We can choose to put taxes up or down, but under this proposal, councils can choose only to put up the tax. That is not localism.
To quote Unite the union’s Scottish secretary, Pat Rafferty, the car park tax is
“a desperate attempt to absolve the government from the funding crisis they have presided over.”
He goes on to say that
“if implemented, we would have the ludicrous situation where we would have local authorities taxing workers for turning up to work.”
However, we should not worry, because Mr Harvie thinks that an additional £500 per year in tax on low-paid workers is “trivial”—that is the word that he used this afternoon.
In a few moments, we will have the unbridled joy of listening to another budget speech from the cabinet secretary. Since he announced his hair-brained car park tax, a number of questions have emerged about it. We know that he did precisely no economic modelling of the tax before announcing it. We know that there was no impact assessment. We know that he did not think it through.
However, in the three weeks since the cabinet secretary announced the tax, he has had time to address the concerns that have been brought to his attention. So, will he answer any of the following questions about the tax in his summing-up speech? First, where employers pay the tax on behalf of their employees, will that count as a benefit in kind for the purposes of income tax? Secondly, does he agree that it is a regressive tax that will hit lowest-paid workers hardest? Thirdly, if NHS properties are to be exempt from the new tax—a decision that was taken centrally, by the way, which reinforces the point that this has nothing to do with localism—will GP surgeries also be exempt and, if not, why not? Fourthly, will teachers be expected to pay the tax for driving to work? Fifthly, if the tax is passed on to employees, will it be subject to VAT, further putting up the costs for workers?
Sixthly, and finally, if firms do not comply with this unwanted and ill-conceived tax, will they be fined, landing businesses in Scotland with even more costs, even more bureaucracy and even more expense? Those are six unanswered questions about just one aspect of Derek Mackay’s shambles of a budget.
That contribution from Adam Tomkins did a disservice to both Adam Tomkins and to the Parliament. The reason why I say that is that as parliamentarians we are being asked to vote on a budget of £42.5 billion for our public services, our economy and our people. That speech was about the workplace parking levy; it was a diversion from the reality that we are facing right now. This is the budget that we are being asked to approve, and that is where people should have focused their minds.
Among his references to economic indicators in the UK, it was remarkable that Adam Tomkins did not tell us that unemployment in Scotland is right now at a record low of 3.5 per cent, outperforming the rest of the UK. If the SNP Government is responsible, we will take responsibility for record low unemployment in Scotland right now. Our economic credentials are strong.
The fiscal commission that informs the budget and the debate was not mentioned by the Opposition at all. That commission told us what the real threat to Scotland’s economy is. It told us the reason for the subdued nature of economic performance, after the economy having outperformed last year. It told us that the greatest threat to Scotland’s economy is not the workplace parking levy but Brexit, which was not mentioned by Conservative members in their contributions today.
That brings me to the second paper that I want to speak about. I have to say that I am disappointed in the Labour Party, too. The chief economist has published a report that says that if there is a no-deal Brexit—which most of us agree is increasingly likely because of the actions of the Prime Minister and her red lines—the Conservatives will be taking this country towards a recession with their eyes wide open. What does a recession mean for people? It means 100,000 people unemployed, a contracting economy, business failure and that those who are most vulnerable will be hardest hit. That is what the Conservatives are taking us towards and they should be ashamed of themselves for that catastrophe.
I might appear dramatic; that is because I believe every word that I am saying. I am not that sure that the Conservatives feel the same way.
The alternative to a no-deal Brexit is no Brexit. We have set out compromises, but the UK Government has steadfastly refused to listen. It is willing destruction and negative impact on the Scottish economy. Even the Prime Minister’s deal would damage the economy.
If there is tax divergence coming, it is coming partly as a result of the actions of a right-wing, extremist Tory Government, which chooses, as an act of fiscal irresponsibility, to give—at this time, when our public services need support—tax cuts to the richest in society. We all know who the Tories really want to tax—they want new taxes for the poor. They want taxes on ill health in the form of prescription charges and on education in the form of tuition fees. People should not dare to be poor and to have more than two children in Tory-run Britain. What a disgrace the Tory party has become! If I followed the Tory tax plans, we would cut £0.5 billion from our public services instead of growing them, which is what our budget supports.
I am grateful to the cabinet secretary for bringing us back to reality. I say to him that
“care provision in Edinburgh is not good enough.”
Those are not my words; they are the words of Jeane Freeman in a letter that I received this morning. Before 5 o’clock, can Derek Mackay tell me how cutting £14 million from Edinburgh’s health and social care budget and £9 million from NHS Lothian will help my constituents who are desperately waiting for a care package?
The budget offers a substantial increase to social care, a record amount in health spending and a substantial real-terms increase in resource to local government. By opposing the budget, the Labour Party is opposing additional expenditure for those services in Scotland. That is what we are voting on tonight.
I want briefly to return to the Conservatives, whose many positions we have heard about. They want to raise less and spend more. I am finding out about council tax decisions at this point in time. Despite everything that we have heard from the Conservatives about council tax and other taxes, I understand that Tory-led Perth and Kinross Council is to increase council tax by 4 per cent. That is not what the Tories promised the electorate, and we have increased local government budgets. That just goes to show that, on so many matters, members of the Conservative Party can take as many positions as they like. There is no need for Conservative members to defect—they can take any position they like and stay in the party.
In all seriousness, I say to the Labour Party that it knows that it brought no credible budget alternative to my office. When he was asked to name councils whose budgets were going down, James Kelly ran away from his own question. It is no wonder that he did so. Let us take the example of Glasgow City Council. It is getting more resources from the Scottish Government. Of course, we are clearing up the mess that was left by the Labour Party when it denied justice to women regarding equal pay. Rather than taking the women to court, the Scottish Government and the SNP administration in Glasgow took them to justice, and those payments will be made.
I turn to Willie Rennie. The only thing that I am left with from his contribution on the budget is that he wants me to show him my flagpole. I do not have a flagpole; I have a patio. I will show him the patio, because it is on that that I stand: the budget is about firm foundations.
No, I will not take an intervention from Mr Rumbles. [
I might reflect on the language that I used in relation to Willie Rennie. It is a very interesting offer.
When it comes to the budget, we are proposing a £733 million increase in NHS resources—[
.] I am winding up.
That will increase the total spending in the NHS to £13.9 billion. There will be a real-terms increase for local government of £300 million. There will be £2.4 billion for education, enterprise and skills, and enhancing social security; and £5 billion on capital investment, supporting our infrastructure for now and the future. We are expanding the childcare of our country; providing real-terms protection for police resource budgets; and investing in the economy through the national investment bank. We are proposing a national infrastructure mission for Scotland; the most competitive package of non-domestic rates relief; more support for and investment in transport; a record investment in housing and a £50 million fund for the town centres of Scotland.
Murdo Fraser spoke about a parliamentary shambles and he speaks from authority when he talks about the shambles that is the Westminster Government. However, tonight in Scotland, we have an opportunity. Scotland expects us to deliver. This budget delivers for Scotland, and I encourage all members of the Scottish Parliament to deliver tonight and vote for the Scottish budget.