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The next item of business is a debate on motion S5M-21113, in the name of Kate Forbes, on the Budget (Scotland) (No 4) Bill at stage 3.
Before the debate begins, I am required under standing orders to decide whether any provision of the bill relates to a protected subject matter—that is, whether it modifies the electoral system and franchise for Scottish Parliamentary elections. In my view, no provision of the Budget (Scotland) (No 4) Bill relates to a protected subject matter. Therefore, the bill does not require a supermajority to be passed at stage 3.
I call the cabinet secretary, Kate Forbes, to speak to and move the motion in her name.
As this is the final stage of the Budget (Scotland) (No 4) Bill, I a m sure that everybody is delighted to be nearing the finish line. I know that all communities will be grateful for the certainty that the bill will give when it is passed at 5 o’clock today, subject to its being agreed to by Parliament.
I would like to thank all subject committees and political parties for their deliberations on the budget. I fully appreciate that the challenge that was faced in ensuring that there was appropriate scrutiny within a shortened budget process meant that everybody had to participate in a slightly different way, and I recognise the value that everyone has added to the process.
In particular, I thank the Finance and Constitution Committee for its carefully considered report on the budget, to which I responded on Tuesday, and for its recognition that the Scottish budget is managing significant uncertainty and that the fiscal framework presents challenges for the Scottish Government and the Scottish Parliament. I agree, which is why I am continuing to press the United Kingdom Government for urgent change to give this Parliament the fiscal firepower that it needs to meet the challenges that we face, not least that of the economic fallout of Brexit.
This budget is one that delivers for all of Scotland: it delivers stability and certainty; it delivers investment in our economy and our public services and in tackling child poverty; and it delivers on our commitments to respond to the global climate emergency. All of that contributes to our collective wellbeing, guided by the national performance framework, and recognises that, for Scotland to become
“a more successful country, with opportunities for all ... to flourish”,
we must make progress on delivering our national outcomes—our economic outcomes, our social outcomes and our environmental outcomes.
Taking a wellbeing approach means prioritising investment for the greatest impact on improving lives across Scotland now and creating the conditions to ensure the wellbeing of future generations. Crucially, that includes addressing deep-seated inequalities. What we choose to measure really matters, because it drives political focus and public activity. We need to look beyond narrow gross domestic product measures if we want to have an inclusive society and a sustainable future. Economic growth will remain an important objective of the Scottish Government, but to build the kind of country that we want, that growth must be sustainable and its benefits must be widely shared.
As we look ahead to the challenges of the climate emergency, increasing automation and an ageing population, the argument for a broader definition of what it means to be successful as a country becomes more compelling. That is why, in 2018, the Scottish Government took the initiative to establish a new network, the wellbeing economy Governments group, which brought together as founding members Scotland, Iceland and New Zealand. Its purpose is to assemble like-minded countries to challenge the narrow focus on GDP and to shape a vision for enhancing wellbeing through our approach to the economy.
The circumstances of the budget have been challenging, and it is important that we all recognise the risks that have been created by the UK Government and its delayed spending plans. Members will be well aware that we faced an unprecedented context for the Scottish budget, with significant uncertainty being caused by the UK Government’s decision not to hold its budget until 11 March.
The context for next week’s UK budget is, of course, now also being influenced by the response to coronavirus. Although our most immediate concern will always be the direct risk to people’s health, over the year ahead, the economic and fiscal impacts will be important factors for our public services, our economic output and public spending. The Cabinet Secretary for Health and Sport provided a substantive update to Parliament on Tuesday, and constructive engagement is taking place with the UK Government and other devolved Administrations to support an effective overall response. For my part, I am engaging constructively with UK and devolved finance ministers on the fiscal and budgetary implications. Last week, I raised Covid-19 with the Chief Secretary to the Treasury, and I will discuss the issue again with him and my counterparts from Wales and Northern Ireland next Tuesday.
We will also work across Government and with delivery partners to assess the potential cost implications within Scotland. Although the Scottish budget includes significant increases in funding for health and local government and a range of support and reliefs for businesses, it will be important to keep those matters under close review.
The Labour Party used to attack the council tax freeze, and now it is accusing us of giving local authorities more freedom to determine how to increase it. What is fair is ensuring that local authorities can use those levers to determine how their resource is spent.
To come back to the budget, it will be important to keep matters related to it under close review, not least because we might have an update next week, with the UK Government’s budget. We need to ensure that we are as well equipped as possible to respond to the potential challenges that lie ahead.
I return to our wider approach. The delayed UK budget meant that we had to use the Conservative general election manifesto as the basis for our assumptions on consequentials, and use provisional block grant adjustments that are based primarily on economic forecasts from March 2019. In setting the budget, the Government has taken a prudent and carefully measured approach that is based on the best available information. The Government is leading action to provide certainty for local government and other vital public services. I have made a judgment call. I believe that it is the right one, that it protects Scottish interests and that the range of risk factors has been carefully considered. The country needs certainty, the people of Scotland need this budget and we must deliver for them.
On reflecting on the circumstances under which we are setting the budget, I am certain of the need to bring forward early updates to the fiscal framework. The Finance and Constitution Committee and the Scottish Fiscal Commission have highlighted that the Scottish budget faces the prospect of significant reconciliations in coming years. It is obvious that the borrowing and reserve powers that are available to the Scottish Government are insufficient to manage the volatility that is inherent in the fiscal framework, and I am seeking immediate changes to those powers from the UK Government. The powers must be reviewed in full as part of the wider review of the fiscal framework that is due to take place in 2021 and 2022. In that review, I will seek to ensure that the fiscal framework is fair, effective and transparent, in line with the Smith commission’s principles.
Increased devolution and the fiscal framework have fundamentally changed the context for the Scottish budget. More than ever, we need a more strategic approach. I am pleased to share with members that I have written to the Finance and Constitution Committee and the Scottish Fiscal Commission to announce my intention to publish the medium-term financial strategy on 21 May 2020. The MTFS is an integral part of an improved Scottish budget process, and is a good example of Parliament and Government working together.
Given the circumstances in which we have found ourselves this year, the MTFS will be an opportunity for us to reflect on the implications of the UK budget and to take stock of the Fiscal Commission’s forecasts for the next two budget years. It will also be an opportunity to make the case for the changes that we need to make to the fiscal framework if we are to be able to manage the new levels of risk and volatility.
The passage of the Scottish budget today will provide almost £50 billion of investment in public services and the economy to benefit the people of Scotland. In approving this year’s budget, we make the investments for Scotland now and for our future. Parliament is at its best when all parties engage constructively. The public finances and the decisions that we make about our public services deserve serious engagement. That is why I invite all members to support this budget, and I am proud to commend it to the chamber.
That the Parliament agrees that the Budget (Scotland) (No.4) Bill be passed.
As the cabinet secretary noted, we are in the final lap of the budget process. As we approach its culmination, I thought that it would be appropriate to begin by reflecting on some of the positives of the past couple of weeks. I welcome the fact that the cabinet secretary sought to engage with all parties, including the Scottish Conservatives, in the process. I also welcome the fact that she has accepted some of our budget asks, including additional funding for councils and extra resource funding for our police. Those are positive developments but, sadly, that is where the good news ends. In terms of both process and substance, I suggest that the budget has been deficient.
I will first consider process, and forgive me if I dwell on the matter slightly longer than might be expected, but the technicalities matter here. I acknowledge that the cabinet secretary introduced the budget in difficult circumstances, and I accept that it is a draft budget, which is always subject to small tweaks here and there. That does not negate the lack of transparency on what money was ultimately available in her negotiations with other parties. In many respects, that is simply a repeat of what happened with Scottish National Party budgets of the past.
The cabinet secretary presented her budget and repeatedly stated that every available penny had been allocated, much like her predecessor used to do. In her statement to Parliament, she said:
“In allocating those resources, we have used every fiscal lever that we have to the fullest extent. Every penny is accounted for”.—[
, 6 February 2020; c 76.]
In the Finance and Constitution Committee, she said:
“When I say that I have deployed every penny on the face of the budget, I mean that I have deployed every penny”.—[
Official Report, Finance and Constitution Committee,
12 February 2020; c 40.]
One week later, she said:
“My key line is that we have deployed every penny”.—[
Official Report, Local Government and Communities Committee,
19 February 2020; c 40.]
In anyone’s mind, that is a clear and unequivocal position. Yet, if we fast forward to the stage 1 debate last week, miraculously, an extra £173 million appeared from nowhere. How can any committee of the Parliament do its job of pre-budget scrutiny when the figures that it is looking at can change at whim?
I do not accept that for one minute.
For example, how can the Local Government and Communities Committee do its job properly when allocations that it must scrutinise can change to the tune of almost £100 million? I am not talking about the merits of that funding, simply the procedure by which it happens. I will give some other specific examples. As was noted yesterday during the debate on the rate resolution, there is a major concern surrounding the near £1 billion budget black hole that is facing the Scottish Government over the next three years in terms of budget reconciliations. That is not simply a question of the fiscal framework; it is an issue that has been bubbling away for some time.
As the Scottish Fiscal Commission notes in its forecast, the Scottish Government has chosen to borrow resource funding for the first time to cover the £207 million-worth of reconciliations for this year. That means that a future Scottish Government will be saddled with the debt and decisions of the current Administration. We also know that, in next year’s budget, the Scottish Government will have to find an estimated £555 million-worth of reconciliations, and a further £211 million-worth the following year. In total, that is almost £1 billion to find, plus borrowing to be paid back.
The cabinet secretary is still borrowing the money; she still has to pay it back.
Next year, the cabinet secretary may well have to deal with a far more challenging financial picture, and I contend that she will have to commit to a more transparent and flexible approach if she is to gain the support of any party in the chamber.
I will turn to the £173 million deal with the Scottish Green Party. The funds for that are shrouded in mystery. We have a curious reprofiling of non-domestic rates, in respect of which, with some creative accounting, we seem to be producing money from income that is not yet earned, and shuffling that money from year to year. Quite apart from the large £670 million increase over the next three years for hard-pressed businesses, it is yet another example of how the Government is scrambling about to claw out extra cash.
What is even stranger about the reprofiling is that the Government knew about that source of cash not just three weeks ago, when it appeared in the draft budget, but last year, when Derek Mackay planned to reprofile £100 million for his budget. Why could the cabinet secretary not have been open earlier about that source of funds?
Sorry, I want to carry on.
Further consequentials from the United Kingdom Government also form a major part of the deal’s funding. We know that, in terms of the block grant, the Scottish Government’s budget from the UK is rising by more than £1.5 billion this year in real terms—that is the Scottish Government’s own estimate. It is higher in real terms than it was when the SNP took over in 2007. The fiscal transfers from the UK to Scotland are worth a union dividend of nearly £2,000 for every individual in Scotland.
The cabinet secretary has said again and again that there is uncertainty and a lack of clarity around consequentials from the UK Government. How can she complain about uncertainty around consequentials when she has already done a deal with the Scottish Green Party that is funded by additional consequentials?
I turn to some of the broader points in the budget. I endorse what the cabinet secretary said about coronavirus and the need to keep a watching brief. Scottish Conservative members will do what they can to assist in that.
Most political parties chose to engage in negotiations with the cabinet secretary during the budget process. We approached those negotiations in good faith, with serious, reasonable requests. Our position on tax was debated at length yesterday, and I do not intend to repeat the points that I and others made then. However, we also called for £15.4 million specifically for drug rehabilitation beds. That figure was not plucked from thin air. We backed calls from Faces & Voices of Recovery UK, which said:
“If the Scottish Government are serious about tackling drug deaths, £15 million for drug rehabilitation beds is the absolute minimum we expect from this budget.”
Since the Government came to power, the number of beds has fallen dramatically and, as everyone knows, drug deaths have increased dramatically in that time, so we remain bitterly disappointed that that specific commitment was not accepted.
We also backed the call from the Convention of Scottish Local Authorities for £117 million to make up for the cuts to the capital allocation for our cash-strapped local authorities. Even after the agreed budget deal, Scotland’s local authorities have stated explicitly that the agreement only makes good the underfunding of new and existing commitments, and does nothing to address inflationary or demand pressures. According to COSLA, the settlement still represents a 2 per cent, or £205 million, cut in real terms in revenue funding for local government.
We made reasonable demands, but the cabinet secretary chose instead to do a deal with the Greens. Never before in the history of the Parliament has an Opposition party asked so much for its support, and happily received so little in return.
To sum up, we cannot support the budget. It is another pay more, get less budget. It underfunds our public services, especially councils. It fails to tackle Scotland’s drugs crisis. Most of all, it does not meet the priorities of the people of Scotland. I urge the Parliament to vote against it later today.
This year, Scottish Labour entered into discussions with the Scottish Government in the hope, if not in the expectation, that we could push the Government to invest in Scotland. After 13 years of mismanagement, our country and citizens desperately need real change. The money that the Government has wasted on vanity projects and poor decisions, had it been invested properly, would have helped build our economy. Instead, the Government squanders the public purse and it refuses to invest. It refuses to increase income tax for the wealthy and it cuts services to the poor. Poverty is on the rise and it will not abate without action from the Government.
We will be voting against cuts of over £200 million to the public sector, which will damage every family and reduce more people to poverty. We cannot vote for a budget that does that.
The Government boasts of not increasing income tax but, as James Kelly has said, it heaps inflation-busting rises on to the regressive council tax, which it promised over a decade ago to abolish—a promise that it reiterated to the Greens in last year’s budget negotiations, and for which the Greens backed that budget.
We are still holding talks about the council tax, which we agreed to take part in again more in hope than in expectation. Our fears have been confirmed. Those talks are not about replacing the council tax; they are about simply tinkering with bands and revaluation. It is clearly a process of treading water to keep the Greens satisfied. Frankly, it is a waste of our time, and we need to re-evaluate whether those talks are worth proceeding with. The Greens must see that, yet they have fallen for the same old trick again, only this time with young people’s free bus travel. They have been sold short. The same ploy was used when promising sustainable ferry funding for the northern isles, which was another sop to mislead parties to back the budget. Frankly, those promises were a waste of the very breath that was used to make them. I know that the SNP does not like that, but it is the truth.
We asked that the Government provide young people under the age of 25 with free bus travel. That policy would have helped young people become more independent while making family travel more affordable. It recognised that young people are more likely to be low paid, and it would have helped them get to work and gain the experience that they require to earn higher salaries. In addition, it would have helped us all by forming among young people the habit of using buses, which would have been good for them and the planet.
Instead, the Greens settled for talks about introducing free bus travel for young people aged 18 and under. That short-changes young people because, on past performance, it is highly unlikely to happen. However, if it does happen, it will end around the time when young people can hold a driving licence, so the policy could, in fact, have the impact of encouraging them to buy a car. That wrong-headed compromise will incentivise the very behaviour that we seek to change by encouraging young people towards the car rather than away from it.
We wanted fair funding for local government, but it is now facing a £205 million cut in real terms. How does that counteract dropping educational standards? How does that provide additional support for children with learning difficulties? How does that provide care in our communities, where we can keep people well at home instead of their being held prisoner in hospital, to their distress and at greater cost to the public purse? That is totally irresponsible—and yet it continues.
We asked for a budget that dealt with climate change and was tested against the national performance framework, yet what we have is smoke and mirrors. The Fraser of Allander institute said:
“it is disappointing that the government has not done more to produce comparable numbers for previous years, as the failure to do so inhibits scrutiny of spending changes, and does little to improve overall transparency”.
The cabinet secretary said that this is a budget for wellbeing but, frankly, with the Government’s promises, I am not willing to take its word for it. We cannot track through the budget document where it would improve wellbeing, so we cannot see that it is a wellbeing budget. What is clear, however, is that the cuts that the budget makes to local government will damage the wellbeing of people who depend on those services.
Our final ask was to invest in further and higher education. We face a changing workplace with robotics and digitisation. Our existing workforce, and young people who are coming into that workforce, are ill prepared, yet our education standards are falling and budgets have been cut. That does not augur well for our economy, and this is a timid response from Government when we need a response that prepares our workforce for the brave new world.
The cabinet secretary referred to the fiscal framework that was negotiated by the SNP, and which means that our budget will be cut by £200 million this year and will face a black hole of up to £1 billion over the next three years. That is mismanagement on a unprecedented scale. [
.] The Government has wasted £198 million on delayed discharges since Jeane Freeman took office; it is wasting £1.4 million on the sick kids hospital every month, without one child receiving care there; and it could have replaced the whole ferry fleet for the money that it is going to squander on two ferries that will never sail. It has consigned 33,000 people to the dole—[
.]—yet this is a Government that thinks that it can negotiate independence. [
I start by thanking Kate Forbes, because it is fair to say that the spirit of compromise that she brought to the negotiating table in her first-ever budget rescued negotiations with the Greens this year. I am sure that it will not be her last deal with the Greens in Parliament.
From next year, more than 700,000 young people and their families across Scotland will benefit from free bus travel for under-19s. The policy is so bold and transformational that Opposition parties are still rubbing their eyes in disbelief. They cried, “Fake news! It doesn’t exist!”—but it does.
I was just coming on to Mr Fraser: I will let him intervene in a minute. Even he will be able to leave his beloved classic car in the driveway, quietly rusting away, while he gets a cheap family bus ticket to the next climate strike in Perth.
Sadly, I have to tell Mr Ruskell that I am probably too old to benefit from his policy.
I have a serious question for him. Perth and Kinross Council, which is in the area that we represent, currently spends £7 million a year on school transport to carry pupils who live more than 3 miles away from their school to school. Will the council be able to save that money when his new policy is introduced?
Absolutely. Schools and youth groups around Scotland that organise trips will be able to use scheduled public transport services and will be able to benefit directly from the policy. Of course, Perth and Kinross Council will get an additional £2.6 million as a result of the budget deal, which will ensure that cuts that have been proposed by Perth and Kinross Council can be taken off the table and reversed.
I need to make progress.
As well as benefiting Mr Fraser, the policy of free bus transport for under-19s will tackle poverty and isolation and will give young people the mobility and freedom that they need in order to access learning and job opportunities—not to mention the social benefits. That is why the Poverty Alliance has warmly welcomed the policy, and has noted that affordable public transport is essential in
“loosening the grip of poverty on people’s lives.”
The measure will make school trips cheaper, and so widen educational opportunities. Furthermore, buses will be busier and footfall on them will increase, particularly in rural areas, which will make services more viable. The policy will be transformational and will build the case for even more public transport to be free. Maybe one day we will even be as wild as Luxembourg and make all public transport free.
The Scottish Greens are, of course, the party of local government. We want strong and well-funded councils that provide valuable services, and which fairly raise revenue locally using a wide suite of new powers. Since the beginning of this session of Parliament, the Scottish Greens have delivered more than £0.5 billion in total for local services. Across Scotland now, councils are making decisions about where to invest those vital additional funds. For example, Glasgow City Council has, in the past week, confirmed that the Green budget deal means that the Blairvadach outdoor education centre has been saved.
Members are welcoming that. I hope that North Lanarkshire Council follows suit and saves the Kilbowie outdoor centre.
As I pointed out to Mr Fraser , as a result of the budget deal, councils that are in the process of approving damaging cuts, including Fife Council, now have sufficient funding to go back and reverse the cuts. Tory austerity might not be over, but we in the Green Party will not rest until we have restored democratically accountable powers to councils to protect the services that we all value.
I am not claiming that. I am saying that we have made a significant contribution; we have closed the £95 million gap that COSLA identified. As Graham Simpson knows, in order to fix the problem we need a new fiscal framework for local government, and we need to restore powers. I thought that the Tory party was the party of localism, but it appears that the Tories do not want to give powers to local councils to restore investment in local services.
I will move on to other areas of the deal. There is a lot to get through.
We need safer streets to live in. For the first time ever, Scotland’s budget for cycling and walking infrastructure has reached £100 million. Cycling UK has welcomed that, and has said that it shows that
“Scotland’s ambitions to cut emissions and get more people active is not just hot air.”
That is real action and real investment.
If we are to reduce reliance on the private car, we need to make rail more attractive than road. That is why we have secured an additional £5 million funding to advance rail projects to the next stage. Vital projects such as the Milngavie line redualling and the Alloa to Dunfermline extension can now be taken to the next stage of development. Abandoned communities will be reconnected to the rail network and services will be improved beyond recognition.
As part of our deal, the Scottish Government has also agreed in principle to align investment decisions with climate targets—specifically, to review controversial plans to spend £120 million on a flyover at Sheriffhall. That is just the start, and the infrastructure commission’s advice must be heeded: every project that increases road capacity must be tested to destruction. There should be no public money wasted on projects that lock in congestion and climate change for generations to come, while sucking up all the money that is available for repairing roads.
I am delighted that an additional £25 million will be invested in making Scotland’s homes more energy efficient. That is a win-win-win: warmer homes that are low carbon and cheap to run. Critically, the cash that has been secured by the Scottish Greens will be given to councils to spend on the low-income households that most need it.
There is no doubt that we need to do much more to tackle the climate emergency, to deliver wellbeing and a strong economy and to end child poverty. The budget is a step in the right direction—bodies including the Poverty Alliance, the Children and Young People’s Commissioner Scotland, Friends of the Earth Scotland and WWF agree.
Every day that we are in Parliament is an opportunity to drive change for the good; there is no end point and no moment when we can say that the job is done.
The Scottish Greens will vote for the budget today; we will celebrate the wins, but we will stay hungry for the change that is yet to come.
This budget was inevitable. Just as night follows day—probably as certain as Stewart Stevenson making a speech later on about his ancestors—there was no doubt that this was an inevitable budget. Councils were always going to face cuts. That has been the Scottish Government’s approach to budgets for a number of years now.
I will not, just now. I had hoped that Stewart Stevenson would tell me about one of his ancestors. Alas, that will come later, I am sure.
Although the Government says that the budget is a generous deal, it is cutting £200 million from local government budgets. That is not generous. I suppose that it was inevitable that more money would be found, despite the protests from the new finance secretary. The Government said that there would be no more money, but later said that there would reprofiling of the non-domestic rates pool and that there were emerging underspends. It was either very naive to take an approach that included no money for flexibility to account for other parties’ priorities, or it was extremely reckless. It was rather naive even to suggest that in the first place.
It was inevitable that the Greens would back the budget. After their fabricated jig that has been going on for a number of years now, they have been duped by promises of a review about the possibility of maybe having free transport for young people. The council tax talks have been going on for a year now, which Rhoda Grant rightly alluded to, and have made little progress, with no proposition whatsoever being forthcoming from the Government. We need real progress on that—if it is not yet more duping of the Green Party.
The budget was inevitable, but some things have changed. Once, the Government could claim—it tried to claim—that it was competent on capital projects, but now it is wholly incompetent. It is mismanaging project after project: the Aberdeen western peripheral route is over budget, the ferries have doubled in cost, the farm payments information technology system is way over budget and the Aberdeen hospitals are the latest catastrophe in the mismanagement of capital projects. This is a Government that is not capable on capital projects, which is why we should be reluctant to endorse a financial strategy from it for the next financial year.
The Government has failed in a number of areas. In relation to councils, which I have already mentioned, the Scottish Government began the budget process without even baking into the budget the promises that it had already made on behalf of local government. Those were promises that were imposed on local government. Some of them were good. However, a Government should never propose to improve public services unless it is prepared to fund them in the first place. To start off with a negative is wholly irresponsible. The Government has made promise after promise. In the future, it should make funding promise after funding promise, rather than leave councils to pick up the tab.
The Government has also failed the police. We have heard repeatedly about leaking roofs, fungus growing in police stations, the broken down cars and—[
The Cabinet Secretary for Justice should listen to this very carefully. We have heard repeatedly about the stress and strain that ordinary hardworking police officers are under. Remember: one in three police officers turns up to work mentally unwell. We should be funding the police force properly. We should not be asking them to look after us and keep us safe while failing to fund them.
This Government centralised the police when it did not have to. The Government ended up with a VAT bill of its own making. That is why the Scottish Government cannot be trusted to manage Scotland’s police. The justice secretary should be ashamed of himself for making that intervention.
The Government has failed—[
Thank you, Presiding Officer. These are important matters and they deserve to be considered incredibly carefully. It is a matter of trust in the Government. The Government has failed our public servants repeatedly and should be ashamed for doing so.
I will not, just now.
The islands of Orkney and Shetland were promised two whole years ago that their interisland ferries would be funded in full. A package of £16 million was the price. The islands are still £5 million short—two years later. Yet again, that is a promise that was made by the SNP Government that was not kept.
The Government has failed on the councils, the police and the ferries. It has also failed by keeping money back from public services. We all know that there will be no independence referendum this year, but the finance secretary has told me that she is keeping money back for that possibility. That is not something that we should be doing when our police are short of money, when councils are short of money and when ferries in the northern isles are short of money.
The Government has the wrong priorities. Only when it has the right priorities will the Scottish Liberal Democrats support the budget.
In the stage 3 debate on the budget, I am going to try to bring at least a bit of what I hope is reasonable perspective to the deliberations—albeit, on this occasion, through SNP eyes.
Let me begin by looking at the settlement for the coming financial year—with the caveat that we will not know the actual numbers until the UK Government sets its budget. As the Scottish Parliament information centre says in its budget briefing:
“the total budget will grow in cash terms by 14.4% in 2020-21 (12.4% in real terms). This large increase reflects the devolution of Social Security spending responsibility as well as a new budget line for Farm payments (which were previously EU income). With both of these areas stripped out, the growth in the Scottish budget is 4.9% in cash terms and 3.0% in real terms.”
So, yes, there is a 3 per cent real terms increase, but that figure includes both capital and resource spending.
Although those figures tell the story of the next financial year, they do not reflect the longer-term picture in real terms. That picture tells a very different story. Scotland’s discretionary resource budget allocation is now 2.8 per cent—£850 million—lower in real terms than it was a decade ago. That tells us that the 2019 spending round has not ended a decade of austerity in spending on front-line services other than in providing some relief to health services.
I do not know how closely each member was listening to what the Cabinet Secretary for Finance was saying during last week’s stage 1 budget debate. I was certainly listening very carefully, and I will quote just one small part of the finance secretary’s speech, which I believe was of particular significance. On the funding of additional commitments, she said:
“That is not without risk, forced as we are to set our budget in advance of the United Kingdom Government’s budget and with very little clarity on the block grant adjustments.”—[
, 27 February 2020; c 68.]
The cabinet secretary mentioned that risk again today, and I congratulate her on the candid nature of that statement.
The budget is not without risk, and it is entirely possible that it might not work out as planned, because Kate Forbes has been required to set it in the most unusual of circumstances. She has had to set a budget without a great deal of the relevant financial information, data and policy direction that should have been available from the UK Government. I think the right balance has been found between meeting the extra demands that have been placed on her by the Opposition and exercising budget responsibility, but let us make no mistake: the risk is there.
Despite that, the Opposition parties—apart from the Green Party, of course—would have had the finance secretary increase that risk with their long list of demands for additional public spending commitments. I am glad that Kate Forbes has been prudent, has seen off those demands and has not created an even greater risk to the Scottish budget. If the projections and assumptions that the Scottish Government has had to make do not match the decisions taken by the UK Government in the forthcoming budget, let us remember that it was the Opposition that cried out for even more public spending.
We will all have to grapple with further risks in the future. In the next financial year, the Scottish Government and this Parliament will face around £555 million of negative income tax reconciliations because of how the fiscal framework works. To reach a budget agreement next year, when flexibility has all but been removed because of over £500 million of reconciliations before the budget negotiations have even begun, will be a real challenge.
First, to help the Parliament, its committees and the Opposition parties to navigate these difficult waters, I urge the Scottish Government to be as clear as possible about the scale of the challenge. Secondly, I ask the Government to clearly set out its strategy for tackling that challenge, so that the parliamentary committees can subject its proposals to appropriate scrutiny. Thirdly, I suggest that the Scottish Government enter into discussions with the Opposition at the earliest possible date in order to find agreement on the way forward, if that is achievable.
The Opposition parties need to play their part, too. They simply cannot go on asking for more and more additional public spending, because it is not going to be available.
I am in my final minute, so I will do a Willie Rennie and say, “Not at this stage, thank you.”
If we are going to enter into more spending commitments, we must have a more mature and responsible debate about where the money is coming from to fund such commitments and how the negative income tax reconciliations are to be managed. To do otherwise would mean that we would not be prepared to face reality and, more worryingly, would expose the Scottish budget to even greater risk than is necessary.
I commend the budget that Kate Forbes has brought to the Parliament.
One always tries to be scrupulously accurate in one’s contributions to these debates, but I fear that I made an error last week. In my contribution to the justice debate, I said that the SNP could give proper funding to the police, because the
“block grant will grow by more than £1 billion in real terms—a 2 per cent real-terms increase”.—[
, 26 February 2020; c 33.]
However, it appears that I was wrong. In fact, compared to 2019-20, the Scottish Government’s budget will increase by around £1.6 billion in real terms—and all thanks to the UK Government’s spending decisions. My “mea culpa” might lead Kate Forbes to review her own position, because on 6 February she said to Parliament:
“Every penny is accounted for”.—[
, 6 February 2020; c 76.]
Indeed, she told Parliament no fewer than 12 times that every penny had been deployed—even though, as Murdo Fraser pointed out at the time, very few people were entirely persuaded. Miraculously, she produced more than £170 million only days later.
The answer is simple. We would end the uncertainty, boost businesses, support workers and grow the economy—all the things that the SNP has failed to do for 13 years.
Despite maxing out the country’s credit card when we are poised to receive the largest block grant in years, the cabinet secretary will still not properly fund our public services or our cash-strapped local authorities. Yes, the block grant is going up. It is the largest in years, so let us imagine what she could have spent it on.
At stage 1, I heard John Mason brazenly defy Unison and say that it was perfectly legitimate to offer only £60 million to the police. Members should bear in mind that that is £36 million less than the £96 million that is coming to Scotland in Barnett consequentials from police spending. Oh, how the Cabinet Secretary for Justice crowed last Wednesday—but that was before the chief constable told the Public Audit and Post-legislative Scrutiny Committee the very next day that
“The budget figures that were announced yesterday will still leave an operating deficit in the Police Scotland budget for 2020-21. For revenue, the deficit is in the region of £36 million.”—[
Public Audit and Post-legislative Scrutiny Committee
, 27 February 2020; c 38.]
Wait—£36 million is exactly the same amount that the finance secretary is not passing on. But, hey; spending choices.
Kate Forbes could have put a mere £15.4 million of the £1.6 billion into drug rehab beds, to increase their number from the 70 that there are now back to around the 350 that there were when the SNP got in, which might have started to make a genuine difference to the record number of drug deaths in Scotland—but she did not.
She could have recognised that local authorities across Scotland will still see a real-terms cut of £117 million in capital spending, leading to their having to hike council tax and still make massive cuts—but she did not.
Instead, she bought off the Greens with a bus scheme that is allegedly worth £15 million—or did she? Let us look at what was actually offered: free bus travel for those aged 18 and under,
“subject to the completion of the necessary preparations, including research and due diligence”.
That ability to promise without promising borders on art. If I was back lecturing at university, I would put that wording in the negotiating skills section of the chapter titled “How to offer the world while committing to absolutely nothing”.
In an extraordinary irony, if we do, indeed, see the introduction of free bus travel for under-19s, it appears that it will be funded through reductions in council budgets, which will presumably have a knock-on effect on councils’ climate change spending and make them unable to repair the very roads that the buses are supposed to run on.
At stage 1, last week, I was in the chamber and listened as Alex Neil waxed lyrical about the bus travel promise. I intervened on him, and, as he sat, he quipped, “It gets easier.” At the time, I assumed that he was deploying his characteristic wry sarcasm as he braced himself for my inevitably incisive and challenging intervention, but now I realise that he was simply taunting the Greens. He was reflecting on how, each year, it gets easier for the SNP’s finance secretary to make the Greens’ red lines vanish.
I cannot finish without noting that business tax income will rise from £2.75 billion to £3.42 billion by 2023-24—a 25 per cent hike in only three years. That will drive away growth and help Scotland’s competition.
Let us finish the scene where we started. Last week, Donald Cameron suggested that Kate Forbes had played the Greens “like a fiddle”. He might wish to reflect on that, because not only has she called the tune and made them dance; she has produced a finished work that lacks dynamic quality, is full of wrong notes and is ultimately disappointing to those who are forced to listen. For those reasons, I shall not support this budget at decision time today.
Liam Kerr said that I “waxed lyrical” in the speech that I gave last week. I can honestly say that I cannot make the same claim about the speech that he just made.
I say to all the Opposition parties, except the Greens, that we are living in very unusual circumstances because of the threat of the coronavirus. Therefore, uniquely this year, to consider voting against the budget—a budget that contains £15 billion for the national health service next year—in the middle of what could become a pandemic is absolutely irresponsible. I say to the Tory party and the Labour Party that anyone who does that is not fit to govern.
I thank my friend Alex Neil for taking an intervention. He knows that, when he was in opposition, he voted against a number of budgets. He knows that, as the SNP group is in opposition at Westminster, it votes against budgets. In local government, SNP groups vote against budgets all the time. It is a nonsense to suggest that, because a member votes against a budget, they are voting against every element of it. He knows that, and everybody else knows it.
I do not remember when we did that in opposition because it has been so long since we were in opposition, and we never did so in the middle of what could become a pandemic. We need to get the message out across the country about the great possible threat that we face.
Let us suppose that Opposition parties, other than the Greens, got their way tonight and we had to dump this budget. What impact would that have on the NHS and hospitals, on schools and on a whole range of public services, including the police and prisons? There would be mayhem, and those parties would be responsible for bringing it about. If ever there was an occasion on which it is irresponsible to vote against a budget, it is today.
The circumstances faced by this budget are the £1.5 billion of UK Government cuts that we have faced in the past 10 years. Labour Party members have said practically nothing in opposition to the Tories about those cuts, because of their loyalty to the better together campaign. It is because of the £1.5 billion of cuts that we have faced the problems that we have faced in the past 10 years.
I heard those on the Tory benches crying crocodile tears about what they describe as large cuts to local government. Their party has cut local government budgets in England by 40 per cent. They cannot tell us about cuts to local government—we are protecting local government.
I thank the member for giving way. I like listening to his speeches: they are always entertaining.
The member will know—because he was an MSP alongside me at the time—that when an SNP budget fell because people felt that it was right to vote against it, the SNP Government went away and produced a better one, and the next week we all voted for it.
By that time we already had the UK budget and we knew exactly how much money we had to spend in the following year.
This time, there is utter chaos in Westminster, so we will not get to know how much money we have to spend even after the budget next week—it will probably be the end of the month before we get to know that.
Does Alex Neil accept that the current fiscal framework was negotiated at a time when UK budgets always took place in March, just in advance of the new financial year? Therefore, there is nothing unusual about this year’s situation; it is just that, in the past two years, we have got used to budgets taking place earlier in the fiscal year.
Murdo Fraser has missed the point, which is probably why he was sacked as the Conservative finance spokesman and Donald Cameron has taken his place. One can understand Jackson Carlaw’s methodology—there is no doubt about it.
I will get back to my speech, Presiding Officer. After those interventions, I do not think that I will need injury time.
We have an excellent budget from Kate Forbes. One of the reasons for that is the new emphasis on increasing infrastructure expenditure in Scotland in line with the kind of percentage of GDP that is spent on infrastructure around the European Union, for example. That will lead to an additional £1.6 billion by the middle of the 2020s.
The Tories are quite rightly saying that we need economic growth. If any of them knew anything about economics, they would know that the best way to achieve economic growth is to spend money on infrastructure. All the evidence shows that every 1 per cent increase in infrastructure spend leads to a 1 per cent increase in the growth rate of the economy, but that every pound that is cut in income tax has only half that impact on growth. Further, that economic growth is often elsewhere, because it leads to increased imports, rather than a circulation of the money in our own economy.
The economic illiterates who are arguing against the budget would cause damage by putting money into tax cuts for people who do not need them, rather than spending the money on growth-creating infrastructure. It would be a huge mistake if we went down that road.
It is disappointing that this budget will only continue cuts to hard-working local authorities, forcing them to make difficult decisions and risking the reduction of essential services.
Thank you, Presiding Officer.
With a full and fair local government settlement, climate opportunities could have been seized and there could have been changes for those who are living in the grip of poverty. That is why we will vote against the budget.
The Government seems to underestimate the impact that annual budgets have for decades ahead and therefore just how vital it is that this budget is fit for the climate emergency. It has been Labour’s ask throughout the budget process that the budget be made fit for purpose for tackling climate change and delivering a just transition for Scotland’s workers and communities.
The budget should have put an end to the past decade of mismanagement, with £898.8 million lost to local authority revenue budgets since 2013-14 under the SNP Government. However, the budget has not done that, and the next decade will not be nearly as forgiving.
I turn the focus on to local government, where there is still a cut of £205 million. COSLA states that its
“ambitions to tackle climate change are at risk when core budgets are under threat”,
and it emphasises that
“To address climate change we need ... Fair funding for revenue and capital budgets”.
Local authorities are perfectly placed to act on climate change and against fuel poverty, transport poverty and food poverty and to tackle flooding, bringing a better quality of life for our rural and urban communities while creating local, skilled jobs throughout our country through the just transition framework. Failure to take on climate change in this decade means failure to take on climate change—full stop. With the 26th session of the Conference of the Parties—COP 26—this year, we need to hold our heads up high with a climate-aligned budget.
The publication of the “Just Transition Commission: Interim Report” gave us a welcome reminder of the importance of the steps and the urgency of the implementation required. With more ministerial intervention and mutually reinforcing environmental and social policies, there are huge opportunities in innovation, progress and co-operation to seize. The SNP’s approach has not worked, and it has failed to engage in many ways: renewables jobs have been lost, going abroad; yards are left idle; and sectors such as energy and agriculture are rudderless and without direction.
Key to a positive future for our children and grandchildren will be the development of skilled and unionised jobs in communities across Scotland. There are many examples of courses across Scotland, not least in my South Scotland region. I will highlight but two. Dumfries and Galloway College offers courses for installers of solid biomass, heat pumps and more, and Heriot-Watt University offers an MSc in marine renewable energy through, importantly, distance learning. There is much to build on.
The “Just Transition Commission: Interim Report” recommended
“Development of a Climate Emergency Skills Action Plan”,
recognising the commitment to that in the programme for government. The commission stated that it
“would expect to see assessment of workforces most likely to be affected by the transition (including those indirectly affected through supply chains), and the most immediate and pressing skills ... needed.”
The commission also invited the Scottish Government to work with it over the year ahead to help inform the action plan’s development. That is surely also a precious opportunity to focus on how to support women into science, technology, engineering and mathematics courses as the skills action plan is developed.
However, how can the necessary opportunities for skills for a new green deal be developed across all sectors of the economy at the strategic and institutional levels given the successive cuts to our colleges and universities, which lain Gray laid out in his speech at stage 1 of the budget bill? All sectors will face strategic challenges for decades to come, and all spending decisions must be climate proofed from here on in.
Moving beyond this budget, we must also ensure that the updated climate change plan is robust and transformative. It is profoundly important that the reviews of climate assessment for future budgets deliver effective recommendations for action that lead to transparency and accessibility so that we can go forward together. The SNP Government must also do better to tackle the nature emergency that is intrinsically linked to the climate crisis. Nature solutions are real. We hear warm words from the Government about how it values nature, but the facts do not support that. Since the SNP assumed office in 2007, Scottish Natural Heritage has faced a real-terms cumulative loss of as much as £302 million.
Inevitably, where there are cuts, there is a serious impact. For example, 11 per cent of species found in Scotland are threatened with extinction; the Scottish Government is on track to meet only seven out of 20 of the Aichi biodiversity targets; and there have been radical reductions in site inspections, meaning that SNH’s responsibility for monitoring wildlife and habitats has been jeopardised. Further, the Scottish Environment Protection Agency has also had a real-terms cumulative cut in its budget of as much as £38 million since the SNP came to power.
Both those public bodies play crucial roles in maintaining and enhancing the health of our environments, the sustainability of industry and the living standards of communities. The Scottish Government should invest in those issues. They are quality-of-life issues that are rooted in the just transition principles across all sectors, and they are fundamental to the international, historic labour movement and Scotland’s future.
I am grateful for the opportunity to contribute to this debate on the Scottish Government’s budget proposals for 2020-21. I am very conscious that the Scottish budget has been prepared against a backdrop of chaos and uncertainty in Westminster. We are in quite an unprecedented situation as we are uncertain how much of our tax money will be returned from London to fund vital services in Scotland.
The easy option would have been for the Scottish Government to have introduced a standstill budget that simply replicated last year’s budget, pending information on what Scotland’s handout might be. It is to the Scottish Government’s credit that it did not do so; instead, it chose to move forward in key areas that the people of this country value and support.
The budget includes a record £15 billion investment in healthcare and care services, which will deliver an essential child poverty payment, and expand early learning and childcare support by £645 million.
The Government pledged to deliver 50,000 new homes in this session of parliament, and it is investing £800 million in this budget to do so. In addition, the Government is committing an additional £300 million to ensure that momentum is maintained and the target is reached. There is nothing more important than providing a family with a home, a roof over their heads; it is a fundamental right.
Some £220 million has been committed to the Scottish national investment bank. That is a real opportunity to provide burgeoning young companies with patient capital, which is so lacking in the present market.
My experience as an MSP is that mental health is a significant issue that I have to deal with in my constituency. The investment of £117 million in mental health for people of all ages and at all stages of life represents a significant step forward, and I hope that that investment will be spent wisely.
I am pleased with all the investment and progressive steps forward that this Government is taking, and that income tax levels have been held so that no one will pay more this year than they paid last year. It is really important to note that more than half of Scottish taxpayers continue to pay less than they would if they lived south of the border. Our tax system in general is fair and progressive—it is probably the fairest in the UK.
All that investment and solid commitment to progress is in spite of the brutal Tory policy of austerity. After 10 years, the evidence of its failure is indisputable. Indeed, Scotland’s discretionary resource budget has been cut in real terms by £840 million over the past decade. The SNP Government has repeatedly called for an end to the austerity programme. It has been ignored. Although there are some fine words in London about ending austerity, the reality is that it lives on, and there is no indication that the UK will signal an end to that state of affairs.
Before I continue on the Scottish budget proposals, I make a small plea for my constituency. As part of the arrangement with the Green Party, there is a proposal to review the current initiative for Sheriffhall roundabout. The Edinburgh and south-east Scotland city deal means that plans are in place to upgrade the roundabout in order to help businesses and residents cope with the volumes of traffic. The Green Party has asked for a review of the upgrades, which would delay the process. A review is not in the interests of my constituents, and the considerable reaction from them to the Greens’ proposal has been overwhelmingly negative.
The member will be aware that, on the day that the proposed roundabout is due to open, congestion will be 5 per cent worse than it currently is. Does the member really think that that is a good spend of £120 million? That money could make a difference by transforming the gridlock, the pollution and the congestion that blights our communities.
I share the concerns of my SNP colleague. I represent the other part of Midlothian. What I, and I think my colleague, would say to the Greens is that the changes to the Sheriffhall roundabout will be useful to the buses, because we have no trains in that area; separately, there were walking and cycling facilities, but those had been got rid of.
I can only agree with my colleague Christine Grahame on that point.
The benefits of putting in place a solution to that long-standing choke point on the Edinburgh city bypass are multiple. I will list one or two of them. First, safe cycling and pedestrian routes will be put in place for the first time. That is an excellent first step in making the route greener and more sustainable. Many of my constituents have been waiting for those routes, so that they have alternative ways of travelling safely. Delaying the upgrades would prevent access to a green means of travel.
Secondly, instead of there being a significant traffic build-up at the Sheriffhall roundabout, traffic will be distributed to a variety of points, which will produce marginal traffic build-ups, as opposed to the significant traffic jams that currently happen. That will minimise idling traffic and longer car journeys as a result of delays.
I need to make progress.
The traffic jams resulting from the inadequate traffic-flow system mean that vehicles are often idling and producing high emissions and pollution. That is to the detriment of the surrounding villages and my constituents. The emissions could be lowered through better traffic flow, and the upgrades would enable that.
It makes every economic sense to have an efficient transport system in order to encourage businesses to move to or remain in the area. Efficient transport links reduce pollution and sustain jobs. Public transport and cyclists alike depend on them. I ask the Scottish Government and the Green Party to reconsider that potentially damaging and deeply unpopular review.
That was my small moment of dissonance in otherwise unequivocal support for what I consider to be an excellent budget. I extend my congratulations to the cabinet secretary on constructing it.
In recognising the benefits of the Scottish budget, I also feel a sense of frustration when I consider what we are not able to do because the powers are not currently within our grasp. It has been made abundantly clear that Westminster is not going to reinvigorate Scotland—only we can do that.
This is a strange situation. We are debating the budget again and nothing has really changed since last week. Our very reasonable demands have still not entirely been met. The Greens have been conned, or perhaps they just rolled over as they always do—the wee nats doing the big nats’ bidding.
Local government has been hit, as always. Council tax bills are going up and services will be poorer. Jobs will be lost, the grass will not get cut and Christmas has been cancelled in North Lanarkshire. Music tuition is being pared back, which is not good for the culture of Scotland. Nothing has changed since last week.
Earlier today, I asked the First Minister how she responded to Citizens Advice Scotland’s statement that council tax arrears is now its number 1 debt issue. She spoke some words but did not really give an answer. When I spoke in the debate last week, I said that we have seen council tax rise year after year and suggested that we would see council tax poverty if we had not already done so. It seems that I was right.
The citizens advice bureaux network in Scotland is seeing more and more people struggling to pay council tax due to general pressures on household budgets. Last year, it helped more than 2,000 people with council tax debts totalling nearly £7 million. That works out at around £3,000 per person.
Does Mr Simpson agree that the council tax is a regressive tax and that the debt problems that he cites will always be exacerbated by that simple fact? Does he also agree that the Conservatives have brought forward no proposals for scrapping the council tax and seem to want to maintain that regressive tax?
We have never argued that the council tax should be scrapped. My point is that the level of council tax increases, year after year, is hitting people in the pocket. There are lots of reasons for council tax poverty, but it cannot have helped that council tax bills have rocketed by 21 per cent in the course of this Parliament. Why is that? Because the Government has been starving councils of funds, forcing them to increase bills and make cuts to services at the same time. This budget is no different.
Council tax poverty is serious. Falling behind on council tax can lead to the removal of someone’s right to pay in instalments, being charged the whole council tax bill for the year and, ultimately, enforcement action by sheriff officers to recover the debt. It is striking that around 88 per cent of debt enforcement actions by sheriff officers relate to summary warrants for council tax. When council funding is cut, that is what happens.
Citizens Advice Scotland also raised concerns about the fall in the number of claims for council tax reduction. Since 2013, when that scheme was introduced to replace council tax benefit, around 85,000 fewer homes have applied for the reduction. Figures for the last quarter, released this week, continue to show a fall.
Citizens Advice Scotland believes that fall to be due to a lack of awareness among people, combined with the fact that council tax reduction requires people to make a claim, whereas access to the previous council tax benefit was joined up with receipt of other benefits.
Not at the moment.
Another of our reasonable asks was on homelessness. The draft budget makes £50 million available for the ending homelessness together fund, but as the Salvation Army pointed out last week, Scottish councils have submitted proposals for spending on homelessness that would cost £130 million. We asked for a rather modest £10 million extra. Even though that was a modest ask, sadly, the cabinet secretary has not gone for it. Ultimately, spending on homelessness saves the public purse. That is undoubtedly why we had a protest at First Minister’s question time.
Spending on energy efficiency comes into the same category. The draft Scottish budget included a small increase of £18 million, taking the total spending that is dedicated to energy efficiency measures, such as the provision of insulation, new heating systems and advice and information for renters and home owners, up to £137 million. However, that falls more than £100 million short of what the Existing Homes Alliance says is required—a doubling of investment to £240 million. Therefore, the £25 million for investment in local energy efficiency projects that was announced last week is pretty small beer.
Failing to invest properly in energy efficiency will drive up the cost of heat decarbonisation, and it risks undermining efforts to alleviate fuel poverty. At the current level of improvement—which, according to the most recent Scottish house condition survey, is just 2 per cent a year—it will take 25 years for the vast majority of our homes to reach the standard of energy performance certificate band C.
The draft budget misses a critical opportunity to capitalise on existing programmes to reduce fuel poverty and respond to the climate emergency before it is too late. The Greens cannot possibly say that that is good. Like much of the budget, it is a con.
I am delighted to take part in another budget debate.
We covered quite a lot of ground in last week’s stage 1 debate, and some of the same ground has been covered today. In between times, the Finance and Constitution Committee had a fairly thorough session with the cabinet secretary yesterday.
There are a few issues that I want to focus on. First, I warmly welcome the plan for free bus travel for under-19s. I had initially assumed that it would be exactly the same as the current scheme for those of us who are over 60, but it was good to hear Kate Forbes say yesterday that all options will be explored and, specifically, that what young people themselves want will be considered. I imagine that that discussion might include use of the ferries and the Glasgow subway.
As I think I heard one of my colleagues saying, those are two different areas. If Mr Kerr listened to my speech last week, he will know that one of my themes was that we would all like to spend more money on a whole range of areas. If we had the money, we would all like to spend more on health, local government, the police and so on and so forth, but the reality is that we must choose priorities. One thing that disappoints me about the Conservatives, some of whom I know can add up, is that they make more and more spending demands without telling us where that money would come from.
No. I would like to make a few points first; I might come back to Mr Kelly later.
In the short term, as well as helping young people and their families to save money, the bus passes plan will allow young people to travel more and might assist those young people who have been unable to afford to travel at all. In addition, I hope that, in the longer term, it will get young people into the habit of using public transport, which can only be a good thing as we seek to reverse the decline in bus usage, especially in Glasgow and the west of Scotland.
Secondly, I particularly welcome the £3.4 billion in social security assistance. The Scottish child payment, which is due to start by December, could help 170,000 children under the age of six and eventually 410,000 in all, lifting some 30,000 out of poverty. The Glasgow Centre for Population Health reckons that about one third of children, or 37,000 in Glasgow, live in poverty; in some neighbourhoods, that rises to 41 per cent. Such measures are therefore extremely welcome.
Next, I was very impressed by Bruce Crawford’s speech last week—his speech today was also okay—on the need for reserves. That formed part of the Finance and Constitution Committee’s budget report, but Mr Crawford emphasised it, and rightly so. As I understand it, councils have a target for reserves of 2 per cent, although some may be below that. For example, I understand that Glasgow has 1.6 per cent in reserves. Given our budget of £40 billion, 2 per cent in reserves is £800 million.
In one sense, that is not a huge figure given the risks that we face. On the other hand, if we had £800 million in reserves when health, the police and local government all need money, some people would feel that that was too much as we could be spending that money on vital services. We need to have that debate and ideally we would have cross-party agreement on the principle of holding reserves, and at least rough agreement on the figure required.
Another point that came up in last week’s debate was preventative spend. That was mentioned by Sarah Boyack, and was mentioned again yesterday at the Finance and Constitution Committee by Alex Rowley with regard to the Christie commission recommendations. If I am not mistaken, all parties agree on the principle of preventative spending, which is that we spend earlier in any process in order to prevent bad things happening later on, whether that be children growing up in ill health or young adults ending up in prison.
If we were in a time of growing budgets, we could use the extra money to invest in new preventative spend while carrying on with reactive spending for a period. However, in a time of tight budgets such as the present one, we would need to cut reactive spend first and disinvest in order to finance more preventative spending. That could mean cutting new prisons to keep young people out of trouble, or cutting hospital budgets to put more into primary care. We should be having the debate, but I fear that Opposition parties would be quick to criticise if reactive spending were to be cut and short-term problems arose.
Another issue that appeared in the committee report, to which the Government responded this week, was European Union funding. That might not be part of the Scottish budget per se, but it has been a vital part of our nation’s overall spending of both revenue and capital nature, affecting the public, private and third sectors. The committee report mentioned the common agricultural policy, structural fund support, common fisheries policy funding, research and innovation funding and loans from the European Investment Bank.
Those are crucial issues, which have been discussed by the Economy, Energy and Fair Work Committee, the Finance and Constitution Committee and the Rural Economy and Connectivity Committee, not to mention the cross-party group on industrial communities, which is ably chaired by Colin Beattie. Yesterday, the cabinet secretary made it clear at the committee that we are making slow progress, if any, on this topic. She hopes that there will be clarity in the Westminster budget next Wednesday, and I certainly hope that there is. Our farmers, older industrial communities and many others really need to know as soon as possible whether there will be replacement funding, how much, and how that will happen.
Whatever happens, we have to live within our means. There will always be areas on which we want to spend more money. We are a democracy and we can only raise the amount of tax that people are willing to pay; that, in turn, limits what we can spend. Allocating that money between needs will never be easy. However, we have a reasonable budget before us today and I hope that all parties will support it.
As in previous years, parties have to make a choice to develop proposals, to cost them, to negotiate and to come away with some wins. I do not know how much effort was made by each of the Opposition parties but, before they criticise us, they could review their own approaches because they do not appear to be leading anywhere.
Opposing the budget means reverting to last year’s budget, and the Greens do not find that acceptable. That is why I find the Conservatives’ approach disappointing. Like those of many of his colleagues, Liam Kerr’s contribution was out of tune with the challenges, which were well set out by Alex Neil.
It was also disappointing to hear Colin Beattie rehearse long-outdated ideas about what road improvements actually achieve. Congestion will be increased by 5 per cent by the proposed Sheriffhall works. Congestion is tackled by taking vehicles off the road, which is why free public transport is so important.
Therefore, the Greens are pleased to have achieved a budget deal that reverses many cuts that were proposed by councils and secures concessionary travel for young people and investment in public transport. In a Parliament in which no one party has a majority, a coalition has to be built to secure such support.
Based on Mr Wightman’s contribution so far, he is making the argument that, if Labour votes against the budget, we are voting against the whole budget and all the good things that are in it. If we take that argument a step further, if Mr Wightman votes for this budget, he is voting for roads expansion and all the negativity that comes from it.
Budgets are always finely judged. I accept that voting for a budget en bloc does not mean that we support everything in it, just as voting against a budget does not mean that one supports nothing in it. My point is that we have a Parliament of minorities and we have responsibilities to try to achieve a budget that has broad support. I think that we have done so. We have filled the £95 million hole that was identified by COSLA and we continue to implement the longer-term measures to improve the local government finances that were agreed last year.
I sit with Willie Rennie and Rhoda Grant in the cross-party talks that we secured, and I genuinely hope that if we make the requisite efforts in those talks, we will be able to reach agreement with the Government on scrapping the council tax. However, whether we do so will depend on our own efforts.
Parliament has instigated a new approach to budget scrutiny, which is very welcome. However, as I mentioned last year, and as Kate Forbes mentioned in her opening speech, we need a more strategic approach. Last year, I suggested that we might do better and that the Cabinet Secretary for Finance could convene roundtable talks in September, to be followed by more detailed discussion and negotiation. Building on that progress and trust, parties could then enter into detailed negotiations that would lead to the budget bill. That approach might even involve parties submitting their own proposals to the Finance and Constitution Committee. In other words, there are a lot of things that we could do to make a Parliament that is composed of different parties, such as it is at the moment, work much better.
This is not the budget that a Green Government would have delivered, but it is a better budget than was originally presented by the Government. We will be pleased to support it tonight.
We are at the final stage of the budget process. I have no doubt that Kate Forbes is glad to be nearing the finish line, having picked up the reins of the budget process in very difficult circumstances.
Bruce Crawford made some interesting points about the budget process that should be taken seriously. They should certainly be taken seriously by the Government, which was criticised by the Fraser of Allander institute over transparency and the amount of information that it put in the public domain to facilitate budget discussions.
It is time that the Government started to be more open about the process. When the budget was published, we heard that there was no money left—all the coffers had been emptied and every penny had been spent. Kate Forbes might be new to the job, but, as with previous cabinet secretaries going back to John Swinney, lo and behold, there was a change in the forecast and new assumptions. As a result, hey presto, £173 million was found down the back of the sofa. [
.] In the Scottish Parliament’s version of groundhog day, the Greens then suddenly appeared and said that they would support the budget after all. If we are really serious about having a proper and transparent budget process, then the Government must let us know at the point at which the budget is published what money is available and not change the amount half way through.
Rhoda Grant and Claudia Beamish made very strong points about cuts to council services. The fact is that, in real terms, there have been £898 million-worth of cuts since 2013, and £205 million-worth this year. That shows that, at the heart of this Government, there is a policy of penalising local councils. It is not only about the figures; we just need to look at the analysis—
For a start, people such as Tom Arthur and I should be paying more tax.
As I was going to say, if we look at the analysis in
, we see cuts to library services. Some councils will have to close libraries. Meanwhile, MSPs and Government ministers will, this year, actually pay less in income tax. That is totally unfair. [
.] It is not nonsense. Members should look at the analysis by the Scottish Parliament Information Centre. It is totally unfair—
No, I will not take an intervention at this point. Mr Neil should read the SPICe blog.
The Herald on Sunday also pointed out, support for children with additional needs will have to be cut in a number of council areas. That is totally unacceptable.
We face a situation where, all across the country, local councils will have to make cuts. When will SNP MSPs start standing up for the communities that they were sent to the Parliament to represent?
No, thank you.
Some of those MSPs will not even be standing for re-election next year, so they do not have to worry about reselection. For once, they should discover a backbone and stand up for their constituents. At 5 o’clock, Scottish Labour will oppose the budget, because of its inherent unfairness.
Government ministers, in the Holyrood bubble, in their chauffeur-driven cars—both Mr Neil and Mr Crawford have been there—who will not be paying the same amount of income tax, cumulatively over the year, should compare their situation with that of single parents in communities across Scotland who will be paying 4.84 per cent more in council tax this year. If that single parent wants to send their kid to a library, the service might be cut or it might be closed. If their kid needs additional support, that will be cut as well.
There is an inherent unfairness at the core of this budget. For that reason, Labour will oppose it at 5 o’clock.
It is always a challenge to find new issues to raise at this stage, but I want to sum up a number of points that members have made.
It is worth reiterating that the backdrop to the budget is a 3.7 per cent real-terms increase in the resource budget that is available to the Scottish Government, thanks to increases in spending at Westminster. That translates into around an extra £1.6 billion in real, hard cash at the Scottish Government’s disposal. However, one consequence of the budget decisions that have been taken by the Scottish Government—backed up by the Greens, as we know—is that we are still seeing real cuts to local council services across Scotland. Graham Simpson and James Kelly have made that point.
I want to finish my point.
We have only to pick up local newspapers to see that councils across the country are having to reduce services. They are having to look at reducing teacher numbers; to look, as Fife Council is doing, at potentially reducing the length of the school week; to look at laying off school crossing patrollers, as Perth and Kinross Council is having to do; and to look at reducing the opening hours of libraries and leisure centres. That is the consequence of the deal that has been struck between the SNP and the Greens. Mark Ruskell lives in a parallel universe if he does not recognise that that is what is happening across Scotland.
Murdo Fraser and a number of his colleagues have expressed concern about local authority budgets. Given that, will he condemn the huge increase in the cost of Public Works Loan Board borrowing that applies to all councils, because of what the UK Government believes is spendthrift behaviour by some English local authorities? It is an easy thing to do—will he condemn it?
The centrepiece of the Greens’ budget deal is a supposed commitment to free bus travel for the under-19s. We know that that is no commitment at all. It is an allocation of only some £15 million towards an estimated annual cost of £80 million, and it will be introduced in January of next year only “if possible”. We know that there has been no consultation with bus companies and no consultation with local authorities, and that no thought has been given to the impact on the school transport that is currently provided and funded by local authorities. Whether it will ever be delivered as a policy remains to be seen; however, given the lack of any serious, rigorous work in preparation, it would be a reasonable bet that it never sees the light of day.
A lot has been said in the debate about the question of uncertainty due to the UK budget being in March, after the Scottish budget. I gently remind members that there is nothing novel about that. Historically, UK budgets were always delivered in March; only for the past two years has there been a shift, with the UK budget being moved to November. Indeed, the current fiscal framework—which was agreed by the Scottish Government—was negotiated on the basis, and based on the assumption, that budgets would be in March. Historically, Scottish Governments would produce their budgets in September of the previous year. As such, we need to hear a little less faux outrage from the SNP benches about uncertainty being caused by the timing of the budget, because, historically, that was always the case.
On the question of process, Donald Cameron and a number of members reminded us about the issue that we raise in budget debates every year. When the finance secretary produced her budget on 6 February, she was very clear that all the money had been allocated. She told Parliament:
“In allocating those resources, we have used every fiscal lever that we have to the fullest extent. Every penny is accounted for”.—[
, 6 February 2020; c 76.]
As we pointed out at the time, that was familiar rhetoric, because it was exactly the same language that was deployed by her predecessor as finance secretary. However, over the years, he was able to find substantial extra funds down the back of the sofa. True to form, the new finance secretary has pulled off exactly the same trick, producing £173 million from thin air in order to sweeten her deal with the Greens. It would substantially aid transparency and assist budget negotiations if the full extent of the resources available to the finance secretary was made clear at the time that the budget was presented to Parliament. Donald Cameron made that point earlier, and it is a serious one.
Of the additional sums that have been found, £50 million has come from a reprofiling of non-domestic rates income over the period 2020-23. Although it does not like the term, that means that the Scottish Government is, in effect, borrowing against future income from business rates in order to increase its budget in this year. Given that next year, due to an overforecast of income tax receipts, we face an estimated black hole of some £555 million before we even start, I question the prudence of dipping into income for future years at this point. Presumably, the Scottish Government is once again relying upon a Boris bailout to fill that gap, just as it has done in this year.
In that case, will Murdo Fraser explain why so many speakers from the Conservative benches, in speech after speech, asked for additional spending upon additional spending, which would only add to the risk to the Scottish budget in future? The Tories have really lost their way on this one.
If Mr Crawford had been paying attention during all the budget debates that we have had in the past week and the previous years, he would know that, if we could match Scottish economic growth even to the UK average, we would have billions of pounds extra to spend on Scottish public services and we would not have to increase taxation. Mr Crawford should know that.
My final point about the budget is that Scotland’s entire fiscal position is underpinned by the union dividend—a fiscal transfer that is now worth almost £2,000 for each man, woman and child in Scotland. Without that fiscal transfer, we would have none of the additional spending that is being announced today. Without that support, Scotland’s notional deficit stands at some £12 billion. Yesterday, during the debate on the rate resolution, the Minister for Public Finance and Migration, Mr Macpherson, let the cat out of the bag when he confirmed that a loss of £12 billion from the Scottish budget would be, in his words, “catastrophic”. There we have it from a minister in the SNP Government: independence for Scotland would be catastrophic for the public finances of Scotland and for the public services that its people enjoy. I could not put it in better terms myself.
For that reason, and all the other reasons that we have outlined, Parliament should reject the budget this afternoon.
The debate has once again allowed Parliament to reflect on the 2020-21 budget. I am sure that it will not be for the last time, not least because our decisions in the budget will, in my opinion, have a hugely positive benefit and will make a difference to people in our communities.
The budget provides investment of around £645 million in the revolutionary expansion of early learning and childcare, which is improving the life chances of our children; £220 million of fresh seed funding for the Scottish national investment bank, with its mission to drive the transition to a net zero economy; increased investment in health and care services by more than £1 billion, taking total spend on the health service to £15 billion for the first time; funding to establish the game-changing Scottish child payment, which, when fully rolled out in 2022, will help an estimated 30,000 children out of poverty; and £1.8 billion of investment in low-emission infrastructure, including a package of more than £500 million of investment that is specifically designed to increase our efforts to respond to the global climate emergency.
All that sits alongside a progressive income tax system, with 56 per cent of income tax payers in Scotland paying less than they would if they lived elsewhere in the UK, while we are raising the revenue that is needed to support investment in the Scottish economy and our public services. To vote against the budget tonight is to vote against all of it. It is to vote against more than £1.4 billion towards tackling poverty, a cash increase of £589 million to local authorities and a £60 million uplift to the police.
Most of the other parties have criticised the budget because it does not spend vastly bigger sums of money on the particular areas of their choosing, but they have not had the courage to identify what they would deprioritise in order to do that. The truth is that, despite the uncertainty and the risks of producing our budget before the UK Government’s budget, and despite a decade of Tory-imposed austerity, we have set a balanced budget that prioritises investing in the economy, tackling climate change, reducing poverty and delivering certainty for taxpayers.
We are doing that within a fiscal framework in which the UK Government will claw back more than £200 million this year and more than double that next year because of forecast error in independently determined forecasts. The UK Government is doing that while keeping one of our hands tied behind our back, because borrowing powers to deal with forecast error are limited to £300 million. That demonstrates why we need an urgent review of the fiscal framework to allow us to respond properly to the volatilities and uncertainties that we face.
We have taken a prudent approach to the budget and have made wise assumptions to deliver a balanced budget and give ratepayers and public services the certainties that they need. We have tried to spread the risk and spread our exposure to the promises that the UK made in the December election campaign.
Murdo Fraser said that we have gone before UK Government budgets in the past, but the fiscal framework envisaged that block grant adjustments for the next financial year would be based on forecasts in the autumn statement, before the Scottish Government budget in December. No UK autumn statement has been published, so the Scottish budget has had to be based on provisional BGAs rather than on new, up-to-date Office for Budget Responsibility forecasts. That has inevitably increased uncertainty around the Scottish budget. If the chamber is agreed on how important the budget is, surely we can all be equally amazed and astounded that the only assurances that the UK Government could give the Scottish Government on the block grant was to refer us to estimates from March 2019—a year ago—and to its election manifesto. The consequences of the UK Government not delivering on its promises could have serious repercussions. We will hold the Tory Government to account for the promises that it made.
Labour’s position on the budget is somewhat wearying. It called for a climate change budget, and we have delivered that, but still it moans. It talked about inequality, and we are investing £1.4 billion in tackling poverty, including the first child payments later this year, but I did not hear a single comment on that from Rhoda Grant. Labour called for an extension of free bus travel to young people, but when that is delivered, it is not good enough. If the Labour Party votes against the budget at decision time, it will be voting against £15 million to extend free bus travel, £21 million for the Scottish child payment, continued investment in the Scottish child poverty fund and increases in the Scottish welfare fund. It cannot claim to champion the many and not the few while voting against those increases.
This year, through negotiations, the Greens have delivered something. They have made changes and they have left a mark and a legacy. All the parents who have been in touch with me in the past week to talk about the difference that extending free bus travel will make to them and their families appreciate that. As for the Lib Dems, Willie Rennie talked about certain inevitabilities, but what appears inevitable is that the Lib Dems never achieve any of their asks, because they set up absurd constitutional red lines.
I am sorry to have to correct the cabinet secretary, but the one time that the budget fell, the Liberal Democrats achieved the astonishing consequence of voting for exactly the same budget without a single amendment in exchange for two letters written by the Scottish Government. That was their budget price—two postage stamps. Was that not impressive?
That was hugely impressive, and I am glad that I allowed that intervention.
Bruce Crawford talked about the importance of being honest and up front about the inherent risks in the fiscal framework and making prudent judgments on tackling those economic challenges. It is one thing for Opposition parties to call for greater spending—that is easy. The real test is how they take responsibility for the economic challenges that we face.
I am proud to present the budget tonight, which delivers for our communities and businesses, despite the uncertainties about our block grant and the decade of Tory austerity that we are contending with. Murdo Fraser talked about exactly how much he thinks is coming to the Scottish Government next week from the UK Government. We will hold the Tories to account for that. We will hold them to their promise of ending austerity and their election promise of levelling up spending. We will hold them to that, because they have not just subjected the Scottish budget to unacceptable levels of uncertainty; they have subjected all our public services, taxpayers and businesses to that uncertainty. Despite that, we have provided certainty and ensured that this budget delivers for all Scotland. This budget ensures that we are tackling climate change and poverty and I am proud to commend it to the Parliament.