The programme for government is published in the context of the most severe cost crisis in our lifetimes. That crisis is pushing millions into poverty and threatening the viability of businesses, and it will almost certainly push the United Kingdom economy into recession. It poses a danger not just to livelihoods but to lives. To be blunt, it is a humanitarian emergency.
The Scottish Government is already committed to measures that, this year, are worth almost £3 billion and will help with rising costs. Today, I will set out further steps to mitigate the impact of what is a rapidly escalating crisis. However, the magnitude of what is being experienced by people and businesses across the UK means that mitigation is nowhere near sufficient. It is therefore essential that I also address today the wider context. What is needed now is action on a scale similar to the Covid response—action that will tackle the causes of inflation and pull the UK back from the brink. That means action to reform the energy market, action to freeze energy prices, more cash support for those already struggling to pay bills and increased funding for public services.
Regrettably, the powers to act in the manner and on the scale needed do not lie with this Parliament. Frankly, they should. If they did, we could have acted already—but they do not. These powers are, for now, reserved to Westminster.
A new UK Prime Minister has, of course, just been appointed. I congratulate Liz Truss and wish her well. Our political differences are significant but, as with the previous three Prime Ministers, I will work hard to establish a good working relationship.
I have today written to the new Prime Minister, renewing my request for an emergency four-nations summit on the cost crisis. I have also reaffirmed the actions that the Scottish Government is asking the UK Government to take without delay. First, it must cancel the October rise in the energy cap and freeze energy prices at the current level. A freeze on bills would deliver immediate relief to households, and help to lower inflation, easing the wider cost crisis.
Secondly, the freeze must be applied to businesses and to the public and third sectors. That is essential to stop an avalanche of business bankruptcies and job losses, and to prevent essential services being squeezed by the cost of heating schools, hospitals and other public and community buildings.
Although a freeze in energy bills is absolutely essential, it is not sufficient. The energy price cap has already increased by 54 per cent. So, thirdly, the UK Government must target additional cash support to those already struggling.
Fourthly, the UK Government must increase the budgets of devolved Governments, or grant us greater powers to borrow, so that we can do more to help public services and workers.
Finally, if reports that Liz Truss is considering an energy price freeze are accurate, that is welcome. However, the costs must not simply fall on consumers over the longer term. As a contribution to funding such measures, the UK Government should introduce an enhanced windfall profits tax, for example by broadening the energy profits levy and removing the investment allowance.
The Scottish Government will continue to do all that we can to help. We will always try to find money for things that matter. However, under the current devolved settlement, our budget is essentially fixed, and it is under severe and increasing pressure. I have a duty to be frank about the limits that that puts on our ability to respond as fully as we want to.
Let me illustrate that point very starkly. To start with, this year’s Scottish Government budget was 2.9 per cent lower than it was the year before. Every penny was allocated when the budget was passed by Parliament back in February. Since then, inflation has gone from 2 per cent last summer, to 6 per cent in February, to more than 10 per cent now. That means that our budget today is worth a staggering £1.7 billion less than it was when it was published last December.
In addition, and by necessity, we are also spending more in some areas than was anticipated. For example, public sector pay deals are, so far, costing £700 million more than we budgeted for.
To be clear, I don’t begrudge a penny of that. On the contrary, paying higher wages is the biggest contribution we can make to helping families with soaring costs. When we intervened in the local government dispute, we did so to help shift funding from the highest to the lowest paid, and secure the best possible increases overall. That was the right thing to do.
Criticism of workers and trade unions fighting for higher pay is deeply misplaced. That is why, to the Tories, threatening to row back on protections for workers and restrict the right to strike, and to Labour, who last month voted at the Convention of Scottish Local Authorities to block a bigger pay rise for council workers, I say this: our job in the midst of a cost crisis is not to press down on pay. Our job is to boost it with every penny that we can lay our hands on.
That is the approach that this Government will take, but there is no unallocated pot of money from which to fund higher pay deals or extra support for those in need. Our powers over tax and borrowing are also woefully inadequate, so, unless Westminster increases the total amount of money available, every additional percentage point on a pay deal and every pound that we spend on measures to help with rising costs must be funded by reductions elsewhere in our budget. That is the reality, and it means hard choices.
Our emergency budget review is intended to maximise the help that we can provide, while still balancing the books. That will mean stopping some things that we planned to do to fund what is essential to support people through this crisis. John Swinney will say more about the budget review in a statement tomorrow. However, that work will be impacted by the fiscal plans of the UK Government. For example, if Liz Truss decides to pay for irresponsible and regressive tax cuts by reducing spending on public services, that could mean an immediate cut in Scotland’s budget. It is not possible, therefore, to conclude our own budget review until we understand the impact of decisions that will be taken at Westminster in the days and weeks ahead. However, I can confirm that, within two weeks of an expected UK Government budget, we will lay out an emergency Scottish Government budget review to Parliament. That will then inform our annual budget bill for 2023-24.
The cost of living crisis means that this programme for government is even more focused than usual—deliberately so. Our ambition and our intentions are unchanged. Our commitment to the full-Parliament plans set out in last year’s programme for government and in the Bute house agreement stands, but increased uncertainty and rising costs are very real. Quite simply, given all that I have set out, we cannot do everything that, in more normal times, we would want to do. I know that that is not a message that anyone wants to hear but, unfortunately, that is the reality.
Understandably, there are also calls on the Scottish Government every day for more support. We will respond as positively as we can. Where we cannot do so, though, it is not a lack of political will that stops us. It is a lack of money. So, as well as targeting our own resources as effectively as we can, we will continue to apply maximum pressure on the UK Government to provide the additional funding that is so desperately needed. I hope that, in doing so, in the interests of the people of Scotland, we will have the full support of parties across the chamber.
I turn to the priority actions set out in the programme for government. Those are focused on providing help now, but also on continuing our long-term work to build a wealthier, fairer and greener country. We will take the following steps to strengthen the emergency safety net for those who are, right now, struggling to pay bills. First, to provide more help for people who may be at risk of self-rationing or even self-disconnection from their energy supply, we will double the fuel insecurity fund from £10 million to £20 million this year. Secondly, we will give local authorities flexibility to use discretionary housing payments to help with energy costs as well as rent payments. We will also increase funding for discretionary housing payments by £5 million. Thirdly, we will extend eligibility for the tenant grant fund, introduced as part of our Covid response, so that it can provide help for those struggling to pay rent as a result of wider cost of living increases.
This Parliament—regrettably—does not have the power to freeze energy prices, but there are other costs that we can, and will, use our devolved powers to bear firmly down on. To that end, I can announce that ScotRail fares will be frozen until at least March 2023.
As well as rising energy bills, housing costs and increasing levels of debt are a concern for many. We do not control mortgage or general borrowing rates, but we will continue discussions to encourage banks and other financial services firms to take an approach that maximises security for home owners and businesses.
We will also raise the minimum threshold at which bank arrestments can be made, and will introduce regulations to give greater protection to people who are repaying debts through the debt arrangement scheme. A new bankruptcy and diligence bill will also seek to improve the lives of people who are struggling with debt.
In what is perhaps the most significant announcement that I will make today, I can confirm to Parliament that we will take immediate action to protect tenants in the private and social rented sectors. I announce that we will shortly introduce emergency legislation, which will have two purposes. First, it will aim to give people security about the roof over their heads this winter, through a moratorium on evictions. Secondly, it will include measures to deliver a rent freeze. The Scottish Government does not have the power to prevent people’s energy bills from soaring, but we can and will take action to ensure that their rent does not rise.
By definition, those are temporary measures, but they will provide much-needed security for many during what will be a difficult winter. We envisage that both measures will remain in place until at least the end of March next year. Crucially, I can confirm that we will time the emergency legislation to ensure—subject, of course, to Parliament’s agreement—that the practical effect of this statement is that rents are frozen from today.
Two of the most important and fundamental sources of security for any of us are a job and a home. In times of economic and financial crisis, those can be the foundations that help people through. The Scottish Government’s powers to respond to this crisis are constrained. That is a matter of the utmost frustration. However, our policy of no compulsory redundancies in the public sector—which we continue to support notwithstanding the budgetary pressures that we face—will give people who are delivering essential services the peace of mind of knowing that their jobs are safe over this winter. To those who live in rented accommodation, I say that we aim to ensure that their homes will be safe, too.
The choices that any Government makes ultimately come down to a question of values and priorities. Where we can, we are prioritising interventions that will provide security, stability and reassurance by safeguarding jobs and homes. We will put as much money as possible into people’s pockets through decent pay rises, and we will continue to make tough choices to target support to the people who need it most.
The programme also sets out measures to address longer-term challenges and to build a wealthier, fairer and greener country. I can announce that a housing bill in the coming year will improve affordability for the longer term, provide new and strengthened rights for tenants, and implement key policies on short-term lets and the prevention of homelessness.
We will support more households to install energy efficiency measures through continued investment in, and extended eligibility for, the warmer homes Scotland programme. That will help to lower energy costs, reduce energy use and deliver our climate change obligations. We will also launch a £25 million Clyde mission decarbonisation fund to support zero-emission heat projects and communal heating systems along the length of the River Clyde.
We will also continue our work to tackle child poverty, increase opportunity and improve educational attainment. The most significant measure against child poverty anywhere in the UK is the Scottish child payment, which already delivers £20 per week for every eligible child up to the age of six. I can confirm today that, from 14 November, the Scottish child payment will increase again, to £25 per week per child. That means that it will have increased by 150 per cent in less than eight months. On that date, the payment will also open to applications for children up to the age of 16. Those extensions, to a strand of the social security safety net that is unique to Scotland, will make more than 400,000 children eligible for support of £1,300 per year.
It will lift children out of poverty and enhance their life chances, and will improve the lives of thousands of families across the country.
In addition, two best start grants—the early learning and school-age payments—will now be awarded automatically to families in receipt of the Scottish child payment without the need for a further application.
We will also make two child payment bridging payments by the end of the year. I know that there have been calls to increase the value of those payments in light of the cost crisis. For the reasons that I set out earlier, we cannot commit to that today, but I can confirm that it will be given priority consideration in the emergency budget review.
We will also take further action to reduce the cost of the school day. Having delivered universal free school meals for all pupils in primary 1 to 5, I can announce that we will now start work with local authorities to extend universal provision to all pupils in primary 6 and 7.
We will continue to keep the Promise to children and families in and at the edges of the care system. This year, the first £50 million of the £500 million whole family wellbeing fund will be invested to improve support for vulnerable families. I can also announce that we will introduce a children’s care and justice bill to ensure that young people who come into contact with the justice and care systems are treated more appropriately. I am pleased to confirm that, among other measures, that bill will finally end the practice of placing children under 18 in young offenders institutions.
We will also continue to invest in and improve early education and childcare, and school education. Last year, we delivered the expansion of funded early learning and childcare for all three and four-year-olds, and eligible two-year-olds. In the year ahead, we will design and test options to extend year-round childcare for school-age children.
Our school buildings are in the best condition that they have ever been in, and over the coming year, work will start on a further 17 new schools. We will also introduce an education reform bill, which will establish an independent education inspectorate and a new public body responsible for qualifications. To support our commitment to substantially eliminate the poverty-related attainment gap by 2026, we will invest £200 million each year in the Scottish attainment challenge. Having already met the initial target for widening access to higher education, we will now appoint a new widening access commissioner to build on that progress.
We will continue to support our national health service. The NHS recovery plan to tackle the Covid backlog and build sustainability will be supported by more than £1 billion of targeted investment over this parliamentary session. We will invest £50 million to help improve accident and emergency waiting times. We will ensure that waits of more than 18 months for out-patients are eliminated in most specialties by the end of the year, and for in-patients by September next year. We will then aim to eliminate waits of more than one year for out-patients by March next year, and for in-patients and day cases by September 2024.
As part of work to reduce waiting times, the next four national treatment centres will open over the coming year, in Fife, Forth Valley, Highland and at the Golden Jubilee hospital in Glasgow. We will also invest a further £10 million to improve waiting times for cancer diagnostics and treatments, and establish a further two rapid cancer diagnostic services.
We will also continue to offer protection from Covid. Over autumn and winter, Covid booster shots, alongside flu vaccines, will be offered to those most vulnerable to serious illness. We will provide NHS boards with funding and support to deliver co-ordinated services for those living with long Covid.
We will introduce legislation to establish a patient safety commissioner to help improve safety and amplify the voice of patients. We will also publish a new mental health and wellbeing strategy, and a refreshed suicide prevention strategy.
The year ahead will also see the creation in law of the national care service. The new service will deliver the consistency and quality of care across Scotland that people deserve. It will be the most significant development in health and social care since the establishment of the national health service.
We will also drive forward our national mission to reduce drug deaths, with a total investment of £250 million by the end of this parliamentary session.
We will continue to work with partners with the clear aim—if, and as soon as, possible—of establishing a safer drug consumption facility in Glasgow. We will also introduce a new public health bill to restrict promotions of less healthy food and drink, and consult on proposals to restrict alcohol promotions.
We will take forward a range of actions to improve women’s access to healthcare, and we will appoint a women’s health champion. We will work with Gillian Mackay and MSPs across the chamber to safeguard women’s access to abortion services without harassment or intimidation.
As well as investment in health and care services, we will support the justice system. We will introduce a criminal justice bill. Among other measures, the bill will provide for the abolition of the not proven verdict. If approved by Parliament, that will be a change of truly historic significance in Scotland, and one firmly intended to improve access to justice for victims of crime. The bill will also deliver statutory protection of the anonymity of complainers in sexual offence cases.
In the coming year, we will also consult on specific draft laws to give effect to the recommendations in Helena Kennedy’s report on tackling misogynistic behaviours. We intend to introduce a misogyny and criminal justice bill later in the parliamentary session.
We will also introduce a police complaints and misconduct handling bill to improve the way that complaints about the police are managed and investigated, and a legal services regulation reform bill to improve the accountability and transparency of the legal complaints system.
We will introduce a charities regulation bill to update and strengthen the legal framework that governs the work of charities.
I turn to business and the economy. The pressures on business—as on individuals—are acute. We will continue to support both the lowest business rates poundage and the most generous small business rates relief scheme in the United Kingdom. We will support the business community in making demands to the UK Government for, among other measures, an energy price freeze and a reduction of VAT on energy bills.
For the longer term, we will continue to implement the national strategy for economic transformation, with a laser focus on entrepreneurship, productivity and skills and new market opportunities. In the year ahead, we will further fund the Scottish National Investment Bank to deliver its key missions.
We will support further improvements to broadband infrastructure. We will establish a national network of six new hubs for tech companies, giving Scotland’s tech start-ups access to some of the best development and support anywhere in the world, as part of our wider work to promote entrepreneurship.
We will continue to deliver our export growth plan with new export plans for the life sciences and renewables sectors. It is worth noting that Scottish goods exports, excluding oil and gas, grew by more than 5 per cent in the two years to the end of March, compared with a fall elsewhere in the UK. Scotland’s position as the most successful location in the UK outside London for inward investment projects has also been strengthened.
We will also introduce a local visitor levy bill to give local authorities additional fiscal flexibility. That will help councils, if they so choose, to fund activities related to tourism and related infrastructure. One of the central aims of the national strategy for economic transformation is to maximise the jobs and economic activity that the net zero transition can deliver. The recent ScotWind auction, which offered lease options for up to 28GW of energy, has the potential to deliver £28 billion of supply chain work.
Indeed, Scotland has a golden opportunity now to lead an energy transition that secures net zero, enhances energy security and lowers energy costs—we must grasp that opportunity. However, maximising that opportunity will require fundamental reform of the energy market. The scandal of the current situation—the scandal of extreme fuel poverty in energy-rich Scotland—is that renewable electricity is already relatively cheap.
Offshore and onshore wind can now provide electricity at a lower cost than nuclear or gas-fired power, but the wholesale price of electricity in Britain is driven by gas, which is the most expensive form of generation. That must change. We will press the UK Government to speed up fundamental reform of the energy market and break the link between the cost of gas and the price of renewable and low-carbon electricity.
In the meantime, we will do all that we can to speed up our development and use of renewable energy. This autumn, we will seek approval for the fourth national planning framework, which will support the delivery of renewable energy projects. In the year ahead, we will publish an energy strategy and a just transition plan to guide our path to net zero. We will continue to support solar energy and maintain Scotland’s position as one of the most advanced nations in the world for the development of wave and tidal technologies. We will set out plans for a further expansion in onshore wind capacity, as we also support the massive expansion in offshore wind.
The scale of our onshore and offshore wind capacity also gives us huge potential in green hydrogen. In the coming months, we will work to develop a new hydrogen industry, with publication of the finalised hydrogen action plan and investment proposition, backed by £100 million of capital funding.
Finally, we will establish two green ports in Scotland and make the first investments from the £500 million north-east and Moray just transition fund. We will also introduce a circular economy bill to increase the reuse and recycling of materials and, next August, we will launch the deposit return scheme to encourage the reuse and recycling of containers, such as drinks bottles.
We will also support public transport. In addition to the freezing of ScotRail fares, we will support bus services, including the continued delivery of free bus travel for all those under 22 and over 60. We will invest in vital improvements to ferry services and consult on the new islands connectivity plan. We will support the shift to electric road vehicles, and we will do even more in the year ahead to support active travel, with investment in new routes for walking, wheeling and cycling.
Alongside the climate crisis, we will take action to address the nature crisis. In the year ahead, we will publish a biodiversity strategy and take action to stimulate private investment in nature restoration. We will continue work to identify the location of a new national park and develop a land reform bill to further diversify land ownership and empower communities. We will work with partners to further improve flood protection and resilience, and we will support farmers and crofters to reduce greenhouse gas emissions. We will introduce a wildlife management bill for grouse to reduce the negative impact of some grouse moor practices on wildlife and the environment.
In addition to the bills that I have mentioned already, the programme for government includes bills for the new devolved tax on aggregates and to clarify the law on trusts and succession.
Last but by no means least, the programme for government provides for a Scottish independence referendum bill. If the outcome of the forthcoming Supreme Court referral confirms that a consultative vote is within the competence of the Scottish Parliament, I can confirm that we will legislate for a referendum on 19 October next year.
The current crisis highlights starkly the pressing need for independence. We are being reminded every day that where and in whose hands power lies really matters. The crisis is much worse in the UK than it is in other developed countries because of a Brexit that Scotland voted against but was powerless to stop. Under the current devolution settlement, powers over borrowing, taxation and energy regulation—the key powers that are needed to address the crisis—are reserved to Westminster, and yet the exercise of those powers by a UK Government that Scotland did not vote for has been woefully inadequate. As a consequence, and despite the obvious and urgent need to provide help to millions, people are suffering.
The Scottish Parliament, by contrast, stands ready, willing and eager to act, but we lack the powers and resources that we need to do so in all the ways necessary. Independence would give us—as it does to other independent countries—the levers that we desperately need to respond to such a crisis. More than that, independence would give us the wherewithal to build a better, wealthier and fairer future. That is the prize that we should now grasp.
Despite the uncertainties that we face and the current limitations on our powers, the programme for government seeks to chart a path towards a better future. We will do everything possible to support people and businesses through the months ahead, and we will do so in a manner that is consistent with our values and our long-term vision for Scotland. We will improve our energy security and cut carbon emissions. We will support business growth. We will tackle the lasting harm caused by child poverty. We will prioritise help for those who most need it and, just as we did in the face of a virus, we will foster a spirit of solidarity to help one another through the challenges ahead. We will provide as much security and reassurance as we can in these tough times, as we continue to lay the foundations for a more equal and more sustainable country. Together, we will build a wealthier, fairer, greener Scotland.