Budget (Scotland) (No 3) Bill

– in the Scottish Parliament at on 27 February 2024.

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Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

The next item of business is a stage 3 debate on motion S6M-12295, in the name of Shona Robison, on the Budget (Scotland) (No 3) Bill. I invite members who wish to speak in the debate to press their request-to-speak button.

Photo of Shona Robison Shona Robison Scottish National Party

In opening today’s stage 3 debate on the 2024-25 Scottish budget, I am direct with the Parliament that it is a challenging budget that requires difficult choices. In making those choices, our priority throughout has been to protect our front-line services. It has been done in the face of the United Kingdom Government cutting Scotland’s budget. Our block grant has fallen by 1.2 per cent in real terms since 2022-23. Our capital spending power is due to contract by almost 10 per cent in real terms over five years, and that is after factoring in our borrowing powers. All told, it is a cut from Westminster to our ability to invest in infrastructure of around £1.6 billion.

I appreciate that there are differing views on what the budget should support, but we cannot spend money that we do not have. If members have alternative priorities and wish for more investment to be made in a specific area, I ask them to be straight with the people of Scotland and say what they would cut to pay for it.

We are choosing to make our income tax system more progressive to help to fund our vital front-line services. It has become a mantra for politicians who sit to the right of this Government to say that we should instead be focusing on growth, as though the word “growth” was a panacea to cuts from the UK Government on public spending. Growth is vital, and we are investing more than £5 billion across Government to support it. That will help to create jobs, support the green economy and businesses, aid the transition to net zero and fund almost £2.5 billion in public transport and a further £220 million in active travel to provide viable alternatives to car use.

We are also investing £67 million to kick-start a five-year commitment to develop Scotland’s offshore wind supply chain, which will bring the total Scottish public sector support for offshore wind to £87 million for next year.

Photo of Murdo Fraser Murdo Fraser Conservative

I am very grateful to the cabinet secretary for giving way. If growth is so important to the Government, why is spending in the economy, fair work and energy portfolio down by 8.7 per cent in real terms compared with last year?

Photo of Shona Robison Shona Robison Scottish National Party

As I set out at the beginning of my speech, because our budget has been cut we have had to prioritise front-line public spending. If the Tories want to disinvest in our health service—[

Interruption

.]

The Deputy Presiding Officer:

I will not have this cross-bench sedentary chit-chat going on while the cabinet secretary is on her feet; it is discourteous to her. Please continue, cabinet secretary.

Photo of Shona Robison Shona Robison Scottish National Party

With a reduced block grant, the choice is either to invest in public services or not to. We have chosen to invest in our health services, fire service, police service and local government. That means that we have had to make difficult decisions elsewhere, and we have been clear with Parliament about that.

Our position is in contrast to that of the UK Government, which is paying for unsustainable tax cuts by further reducing Government spending and investment in the UK economy. It is unclear to me how the UK Government intends to provide the infrastructure or investment in capital that creates long-term sustainable economic growth when it is hell-bent on returning to a new age of austerity.

If members stand in the chamber today and say that the UK’s income tax bands and rates should be followed in Scotland, then in the interests of fiscal transparency, they need to say where their hammer blow of £1.5 billion-worth of cuts would fall.

The budget’s changes to income tax, including the creation of the new advanced rate, will mean that only employees earning in excess of £100,000 will pay more in income-based taxes during the coming financial year than they did in this one. The contribution from our progressive tax system is supporting us to provide more than £0.5 billion extra for the national health service, taking the total funding for front-line health boards to £13.2 billion next year. That is a real-terms increase, despite a real-terms cut to the NHS in England from the Tories.

Photo of Sarah Boyack Sarah Boyack Labour

Is the cabinet secretary aware that a quarter of Scotland’s sight loss population lives in areas that are served by the Princess Alexandra eye pavilion, but her budget in effect cancels the replacement for that hospital and condemns those patients to rely on a facility that has been designated not fit for purpose for more than a decade? Surely that is not investing in front-line services.

Photo of Shona Robison Shona Robison Scottish National Party

I will come back to Parliament with a revised infrastructure investment plan, but let me be clear that, with a reduction of £1.6 billion from our capital budget, every part of the public sector will be impacted by that decision by the UK Government, which I hope will be reversed when the Chancellor of the Exchequer gets to his feet next week.

We will continue to prioritise tackling poverty by investing £6.3 billion in social security benefits and payments, which is just over £1 billion more than in 2023-24.

We are also proud to support pay deals for the public sector that reflect the vital job that it does by providing support in the face of high inflation. This year’s pay deals were around £800 million greater than planned, and our total expenditure on public sector pay is now around £25 billion, which is more than half our fiscal resource. On average, public sector pay in Scotland is around 6 per cent more than in the rest of the UK.

We intend to set out pay metrics for 2024-25 after the spring budget, when the fiscal outlook is updated. However, I cannot stress enough the danger to Scotland’s public finances from the decisions of the UK Government at the spring budget next week. We are in the absurd position of finalising our budget plans for 2024-25 today, when, in a week, large parts of it may be impacted by the choices of the UK chancellor. Depending on which briefing is to be believed—or which black-top newspaper—the chancellor possibly has headroom of around £10 billion. My message to the chancellor could not be clearer: prioritise investment in public spending and infrastructure over further tax cuts. That message was echoed by the International Monetary Fund, the Institute for Fiscal Studies, the Resolution Foundation and others.

I now turn to the affordable housing supply programme, which is rightly a topic of much interest across parties and stakeholders. Let me be clear that that remains a key priority for the Government. Since 2007, Scotland has seen more than 40 per cent more affordable homes delivered per head of population than in England and more than 70 per cent more than in Wales. I was pleased to see today’s statistics showing that the number of affordable homes increased by 7 per cent in 2022-23, compared with the year before, delivering almost 10,500 homes, which is the highest annual increase since 2000.

The very difficult decision to reduce funding for affordable housing next year was driven by necessity rather than choice. We rely on financial transaction funding from the UK Government, but that has been decreasing significantly, with a reduction of around £290 million—or 62 per cent—since 2022-23. That challenge has been compounded by the UK Government announcing in the past two weeks, through the recent supplementary estimates, that there would be a further reduction of £64 million in-year in financial transactions. On top of that, we have the savage cut to capital budgets of £1.6 billion, all of which is impacting directly on the affordable housing budget.

Despite all those challenges, we remain focused on our target of delivering 110,000 affordable homes by 2032. To support that, we will bring forward the review that was scheduled for 2026-27 to 2024 and will concentrate on deliverability. Housing will, of course, be a key priority if any additional capital is made available. As I said earlier, the chancellor has the opportunity to do that next week and I urge him to do so. I will return to Parliament in due course to set out the impact of the spring budget on our spending plans, including our plans for affordable housing.

I turn to local government. I recognise the undeniable challenges and I thank the Convention of Scottish Local Authorities and council leaders for their on-going engagement on the Scottish budget. That budget delivers record funding of £14 billion for local government, which is an increased share of the discretionary budget. It baselines almost £1 billion of funding across health, education, justice, net zero and social justice, provides a fully funded council tax freeze that protects up to 2 million households nationally, and gives additional support to our island communities. The 2024-25 local government revenue settlement is already more than £650 million higher than the position that was published in the resource spending review less than two years ago.

However, in recognition of its representations, I have confirmed to COSLA my intention to prioritise additional funding to local government following the spring budget. We will allocate up to £62.7 million of additional funding to local government, in addition to the £147 million that has already been made available. That additional funding is contingent on the freeze to the council tax. I welcome the fact that 15 of the 16 councils that have set budgets so far have confirmed the freeze and protected household budgets across their authorities. I hope that that assurance removes the final impediment for those councils that are still considering their position.

Photo of Pam Duncan-Glancy Pam Duncan-Glancy Labour

Will the cabinet secretary let councils, including Glasgow City Council, know whether the developing the young workforce funding will be forthcoming before the money for that runs out on 31 March?

Photo of Shona Robison Shona Robison Scottish National Party

Any further adjustments to the in-year position will be absolutely contingent on what we learn at the spring budget next week. To be frank, we could have an improved position, but we could also have a position that is detrimental to the budget that we are discussing today. I will look at all representations, but that must be in the context of the future funding position.

I have also listened to the case that has been made by island authorities regarding the additional cost of delivering services to island communities. I am keen to work with COSLA to review the effectiveness of the special islands needs allowance. In the interim, I have committed to boosting the islands cost of living fund from £1 million to £5 million to support those services.

In addition to the funding that I confirmed earlier, I am also committed to increasing local empowerment and to working collaboratively to reform and improve existing local fiscal levers. In the short term, and building on the progress that has already been made, the joint working group on sources of local government funding will continue to identify, explore and deliver reforms to council tax, including exploring improvements in the targeting of council tax collection and support for lower-income households. Depending on the final analysis of the recent consultation, I can also confirm our intention to use primary legislation to extend the powers to increase the council tax on second and empty homes.

I am committed to increasing the fiscal empowerment of local government over the course of this session of Parliament and we are already making good progress with the passage of the Visitor Levy (Scotland) Bill. Alongside that, we will continue to explore jointly with local government how a cruise ship levy could be introduced, either in that bill or through another legislative vehicle, and we are keen to explore further options that are brought forward by local government and other partners.

In the budget statement in December, we committed to examining the scope for increased local discretion over fees and charges, including for planning. A consultation on the improvement of planning services, including increased discretion over fees, will launch tomorrow. We are always open to new proposals from local government and to the joint exploration of options for increasing fiscal and functional empowerment. Indeed, we are open to sensible proposals from any source, including from parties across the chamber.

We have also listened carefully to the ask from local government for more scope to take the steps that it believes are necessary to support its local communities, building on our commitment to support Mark Ruskell in seeking a reconsideration of the European Charter of Local Self-Government (Incorporation) (Scotland) Bill. With that in mind, I confirm that we will begin constructive engagement on the request to consider powers of general competence and examine whether the outcome that is desired could be delivered through an adjustment to councils’ existing general power to advance wellbeing. Any new powers must balance fiscal responsibility and risk against the potential for positive outcomes and should therefore be explored in the context of the fiscal framework that we remain committed to developing with COSLA.

The Scottish Government is committed to reforming the council tax. We share that commitment with our partners in the Bute house agreement, the Scottish Green Party, and COSLA. To date, we have taken forward a number of short-term reforms to the council tax, led by that partnership through the joint working group on council tax, which is co-chaired by COSLA and the Scottish Government. As the Minister for Community Wealth and Public Finance discussed with Councillor Katie Hagmann this week, I now commit to supporting the group in its second phase of work, which is focused on longer-term reform. In line with the commitments that we have made in the Verity house agreement, I hope that we will have the support of COSLA leaders, representing all parties, in agreeing to that work, which will include developing and implementing plans for public engagement to build consensus on the nature of that reform. I will provide resource as appropriate to enable that work to commence in the coming financial year, with a view to its conclusion in 2025-26 and the consideration of its outcome by the Parliament before the next Scottish elections.

I have been clear about the fiscal challenge that we face as a result of the UK Government’s failure to invest in public services and infrastructure. I have called on the chancellor to rectify that in his spring budget next week, and I continue to press the UK Government to increase the capital funding that is available to Scotland.

This is a budget that, in tough times, protects the vulnerable, invests in public services, grows our economy and tackles the climate emergency.

I move,

That the Parliament agrees that the Budget (Scotland) (No. 3) Bill be passed.

Photo of Elizabeth Smith Elizabeth Smith Conservative

If this budget process has achieved anything, it is the full exposure of the fundamental divide in Scottish politics, which is between those of us who believe that policies to stimulate jobs, investment and economic growth and to encourage aspiration should be the top priority, and those—principally ministers in the Scottish Government and their bedfellows, the Greens—who believe that the so-called social contract between the Government and the public should be the priority, because they believe that that is the best way to improve the delivery of public services and address our social ills.

Photo of Shona Robison Shona Robison Scottish National Party

Does

Liz Smith not recognise the irony of her talk about policies to stimulate economic growth, given that the UK Government has literally put the economy into recession?

Photo of Elizabeth Smith Elizabeth Smith Conservative

I see the irony of a Scottish Government that pretends to be on the side of economic growth despite the fact that virtually everybody in the business community—I do not know how many economic commentators—have universally said that this budget is not about growth.

Photo of John Swinney John Swinney Scottish National Party

Are we to take it, from that clear commitment that Liz Smith has given, that the Conservatives support growth and are opposed to the social contract, that we will not hear any demands, either in her speech or from any of her colleagues on the Conservative side of the chamber, for any more spending on anything other than what is contained in the budget?

Photo of Elizabeth Smith Elizabeth Smith Conservative

I do not think that Mr Swinney was listening just now, which is most unlike him—[

Interruption

.]

Was he listening? I do not think so. I spoke clearly about the top priorities, but that does not mean to say that one is not going to agree with other things. The level of priorities is the fundamental point of discussion in respect of the whole budget. That is not just a policy divide but a philosophical divide, because that debate matters, as does the future prosperity of Scotland.

Yet again, I want to put on the record why our approach, on the Conservative side of the chamber, is about priority for jobs, investment, economic growth, reducing the tax burden, supporting local government and ensuring that there is lasting public sector reform.

In recent days, the cabinet secretary and various ministers—and even Ross Greer, in the latest debate that we had—have said that they have a lot of respect for Sandy Begbie, but they disagree with him when he says that the current Scottish Government tax policy threatens to make Scotland

“a dangerous place to be rich or create wealth”.

The trouble for them, however, is that virtually all the people who are most likely to be able to deliver sustainable growth actually agree with Sandy Begbie.

Photo of Ross Greer Ross Greer Green

Liz Smith is, again, using the language that she used in the rates resolution debate last week about wealth creators and those who are most likely to deliver sustainable growth. I ask her to clarify something. Does that mean that the Conservatives believe that only the highest earners, company owners and chief executives, and not the vast majority of the rest of the workers in our economy, are wealth creators?

Photo of Elizabeth Smith Elizabeth Smith Conservative

No—absolutely not. I am saying that the very people who are complaining the most about the budget are those who are the leaders of businesses and the various sectors, who are able to deliver the policies that we need to supply that growth in Scotland. That is why groups such as the Confederation of British Industry, the Federation of Small Businesses, the Scottish Retail Consortium and the Scottish Tourism Alliance have spoken out, as has Liz Cameron in today’s

Courier

, and why there have been warnings from people such as David Bell, David Phillips and other economic commentators, some of whom are suggesting that tax divergence from the rest of the UK is now beyond the tipping point, because it is starting to erode Scotland’s competitiveness. I understand that, yesterday, the First Minister actually acknowledged some concern about that problem.

Although I suspect that it is, privately, increasingly concerned about the extent of the backlash, the Scottish Government defends its tax policy on account of the desire to make the system more progressive—although, incidentally, that does not seem to apply to council tax—and because, in its eyes, there is a moral argument for middle to higher earners to pay more to support public services and the so-called social contract.

That argument might hold just a little bit more water if the public could see that their higher tax burden was delivering better public services in health, education, transport, policing and housing. However, all that they have seen are cuts, especially to local government, which is on the front line of public services, and a very unseemly stand-off between Scottish Government ministers and councils. My colleague Pam Gosal will say more about that in her contribution.

It is clear that the public does not believe that the Scottish Government has got its priorities right, and nor do the Scottish Conservatives believe that those priorities are the right ones. For example, the cabinet secretary knows from the two meetings that I have had with her that we would not be introducing the National Care Service (Scotland) Bill, for two reasons. First, we do not believe that its structure will deliver on the bill’s intentions, given that there are blurred lines of accountability. Secondly, like the Finance and Public Administration Committee and several key stakeholders, we do not believe that the proposals have been properly costed. That money would be better spent on helping local government to reverse some of the brutal cuts that have had to be made as a result of persistent underfunding by the Scottish National Party.

On the question of the delivery of public services, there is an extremely important debate to be had about how we make limited resources deliver better results. When we measure results, we should measure outcomes and not inputs. I well remember that when I held my party’s education brief—I am sure that Mr Swinney will remember it, too—we had a fascinating presentation from Reform Scotland, which had analysed the growing amount of money that had been put into education over quite a number of years. However, according to international measurements, standards were falling.

The same is currently true of other aspects of the economy. For example, we are putting more money into health, which is understandable, but the statistics show that we are not delivering better outcomes. For example, the other day, the Institute for Fiscal Studies said that we are not seeing increased productivity in return for the increases that have been made to public sector salaries, and it highlighted the position in hospitals.

For the second year in a row, the Scottish Government received Barnett consequentials from business rates relief. Instead of that money being passed on to businesses in Scotland, it went into the health budget—much to the dismay, I may say, of many businesspeople. At the weekend, we saw Nick Nairn from the hospitality sector commenting about that, and we have also seen people from tourism, retail and leisure all bitterly complaining about it. We disagreed with that decision not just because it had been made for the second year in a row, but because Scotland is losing out at a time when we are desperate to kick-start the consumer economy.

Photo of John Mason John Mason Scottish National Party

I note the point that Liz Smith makes. Does she accept that some businesses in the hospitality and retail sectors are doing very well, and that it is better to target any support at those that really need it—for example, those in the islands?

Photo of Elizabeth Smith Elizabeth Smith Conservative

I think that Mr Mason has made that point seven times, in my hearing. I might agree with him on some aspects of the hospitality industry. Overall, though, if we listen to what the Scottish Tourism Alliance is saying, day in, day out, we hear that the increasing tax differential is causing it particular problems. Therefore I cannot accept Mr Mason’s general point.

The cabinet secretary did not like the figure of £411 million of savings that I said could have been made had we returned to the 2016 levels that the Scottish Government promised it would get back to, in terms of the size of the public sector, and we have seen a huge—

Photo of Shona Robison Shona Robison Scottish National Party

I have to point out that, if we were to use the figures in Liz Smith’s calculations, that would have meant that anyone leaving the Scottish Government would have done so with absolutely no redundancy package whatever. I am afraid that those figures are not credible at all.

Photo of Elizabeth Smith Elizabeth Smith Conservative

By the same token, the cabinet secretary is well aware that, had the Scottish economy grown at the same rate as the UK economy, we would have had £6 billion of extra money to spend. Given that angle, I am not going to accept that line.

I will finish by making a couple of other points. It is important that we understand what creates the dynamism, aspiration, innovation and invention that mean that Scotland has so much potential to offer. At the moment, the budget has left Scottish business and industry in a state of despair. I put it as strongly as that—they are in despair. They are well aware of the difficulties that the Scottish Government is in, but they just feel that the whole budget has been anti-growth.

I therefore leave the budget with the cabinet secretary, who should have another think about what on earth we are going to do to mend the big black hole in the Scottish Government’s finances, and also to inspire Scotland to get the best out of everything that we should be able to do, without all the barriers and hindrances that the Government has put in its place.

Photo of Michael Marra Michael Marra Labour

Scottish Labour is clear that the budget does not deserve the support of Parliament today. It is a chaotic and incompetent budget, and it has been damned under the scrutiny of the cross-party committees at Holyrood. It fails the Government’s own tests, and it betrays its own rhetoric and spin. It is not a budget for growth or public services, and it is not one that fights poverty. It is a budget that is based on the economically and fiscally illiterate assumption that income tax can be used to plug the hole that has been left by the SNP’s failure to grow the economy.

Photo of Michael Marra Michael Marra Labour

I will not, at the moment.

We heard a little bit more about that from Mr Swinney just a few moments ago. He seems to fail to understand that we deliver a social contract by growing the economy. The two things are not in opposition: we have to deliver growth if we are to deliver public services.

This is a budget that will hike taxes for nurses who are struggling with their mortgages, while the SNP demands tax cuts for energy giants that are struggling with unprecedented profits numbering in the billions of pounds.

The Deputy Presiding Officer:

Please desist, First Minister.

Please continue, Mr Marra.

Photo of Michael Marra Michael Marra Labour

It is a budget through which Scots will pay much more but get much less in return. We know that the public finances are constrained by an economy that is not working, with two Governments that have wasted billions, while families count every pound. That is why a future Labour Government would refuse to play fast and loose with the public finances: it is why we will not make unfunded spending commitments, and it is why we will open the books to public scrutiny at the first opportunity, should we have the chance to serve.

People across Scotland continue to struggle in the shadow of the Liz Truss Government that crashed the economy.

Photo of Michael Marra Michael Marra Labour

No thank you, sir.

We watched on in recent days aghast at the car-crash TV horror show of someone who was a Tory Prime Minister only 18 months ago peddling conspiracy theories on far-right platforms in front of audiences that include known Nazis. We watched on, not in the least bit surprised, while the current weak Tory Prime Minister refused to do anything about it. The sooner this country has the chance to change, the better. It is urgent, and there is only one way that we can deliver that change.

Photo of Michelle Thomson Michelle Thomson Scottish National Party

I have commented on this before; I will comment again. I have heard an awful lot about things in the budget that Michael Marra disagrees with, but I have no sense whatever of what, specifically, UK Labour—of which Scottish Labour is a part—will actually do to manage the debt and deficit, and grow the economy. Does that mean that Michael Marra is in favour of increasing capital for this Government and Parliament in order that they can start to address some of the issues?

Photo of Michael Marra Michael Marra Labour

Ms Thomson is absolutely right that we have to grow the UK economy, and that we have to take action to do so. I can tell her how we would go about doing that. On day 1 of a UK Labour Government, we would deliver a new deal for working people in the first 100 days—

Photo of Michael Marra Michael Marra Labour

The First Minister mocks the very idea of putting money into people’s pockets through a real living wage, having rights in the workplace on day 1 and banning zero-hours contracts, which are pro-growth policies that would deliver growth for the UK economy.

Photo of Michael Marra Michael Marra Labour

No thank you, sir.

The consequences of that dreadful Tory Government are written into the polices that we are debating today, but this is an SNP book, and no mistake—it is an epic that has been written over 17 years. It includes failure to reform, failure to grow, failure to be prudent stewards of taxpayers’ hard-earned money and failure to do the basic job of making the budget work.

Let me give an example of that chaos. Four times in the chamber and in committee now I have asked the Deputy First Minister how much our colleges will have to spend in the coming year. That figure would normally be available to the sector within 24 hours of the budget statement, but here we are, 10 weeks on, and the Scottish Government still has no idea. The Deputy First Minister does not know, because her Government does not know.

The colleges are charged with training the next generation. They are needed to navigate the greatest economic transition that we have faced in half a century. They are today taking applications for courses that they do not know they can even pay to run.

This is the assessment of the SNP budget from the very top of the college sector in Scotland:

“I think we’ve had four or five different figures—flat cash, 8.4 per cent reduction, 4.7 per cent reduction and 1.5 per cent reduction ... Honestly, pick a number—any number.”

There is no direction, no leadership, no clarity, no empathy, no solutions and no clue. There is chaos. There have been multimillion-pound typos. There has been a failure to provide the Scottish Fiscal Commission with key strategic documentation accounting for £25 billion. There has been a council tax freeze that the civil service was not warned of, and to which the Cabinet did not agree, which was announced before a bemused party conference by a weak First Minister in open panic, following a massive by-election defeat. There is a tax policy that the Deputy First Minister has still not delivered, and which SNP councillors have unanimously demanded should not be repeated.

The Government was elected on a manifesto promise to recruit 3,500 additional teachers, but we now know that the SNP in Glasgow City Council alone will cut 450 teacher posts, due to budget cuts that have been visited on the council by the SNP in Holyrood.

The Deputy First Minister said at the Finance and Public Administration Committee last week that maintaining teacher numbers is critical to helping kids who are in poverty. What an unholy mess—it beggars belief. The Government even manages to run into the ground the things that it claims are its priorities and on which it claims it is focused—its sacred missions. That is almost as ludicrous as a Prime Minister entering number 10 on a promise to grow the economy, only to lead it into Rishi’s recession.

Given all that, trying to hide the whole thing is perhaps the rational decision. No wonder the SNP is so keen to make the budget as opaque as possible, in order to try to hide the truth by continually failing to present the coherent figures that have been requested by the Parliament’s Finance and Public Administration Committee, or by failing to provide the key documentation that has been promised time and again but never produced.

Photo of Shona Robison Shona Robison Scottish National Party

Michael Marra just used the word “opaque”. In the interests of transparency, given that he has again set out that Labour would cut taxes, can he set out where the spending cuts would come? Each budget has two sides, and Michael Marra has been here long enough to know that. He set out the tax cuts side, but what about the spending cuts side?

Photo of Michael Marra Michael Marra Labour

Labour has been absolutely consistent in the view that the tax policies that the Government is pursuing in the budget are, frankly, not going to produce the growth that we need. [

Interruption.

]

Photo of Michael Marra Michael Marra Labour

First Minister, I am more than happy to answer—

The Deputy Presiding Officer:

Mr Marra, please resume your seat.

I will not have this. We will listen to the person who has the floor, who is Mr Marra. Please continue.

Photo of Michael Marra Michael Marra Labour

Thank you, Presiding Officer.

We want a competent Government that does not waste billions of pounds, that can be a reasonable steward of the public finances and which can run services properly. Of course, it was not the—

Photo of Michael Marra Michael Marra Labour

No, thank you, madam.

It was not the Labour Party—the First Minister might want to listen to this—but the Institute for Fiscal Studies, no less, that said that the SNP Government presented a “seriously misleading picture” of local government funding and called out the trademark SNP spin on NHS funding, which is, of course, decreasing in real terms.

The Deputy First Minister must wish that she could—[

Interruption

.]

The Deputy Presiding Officer:

Mr FitzPatrick.

Mr Marra, please continue.

The Deputy First Minister must wish that she could channel Jason Leitch and delete it all before bedtime. Competence, transparency, country before party and a Government that is focused on growing the economy and not on saving its own skin is the least that we should expect, and it is all possible.

Let us be clear that people who earn £28,000 do not have the broadest shoulders: it never feels like that for them in the days between the end of the wages and the end of the month. This budget means fewer university places, fewer college courses, fewer houses being built, no new hospitals or health centres and a declining NHS that is on the verge of collapse, with ever greater pain on the way.

We need change and we need it now—things can be different. We can scrap non-dom tax status and we can cut waiting lists. We can reform our NHS for a better future. We can put a real windfall tax on the billions of pounds of profits of oil companies in order to fund lower bills and we could provide 50,000 jobs through a publicly owned UK energy company that would be headquartered here in Scotland.

We can make work pay, scrap zero-hour contracts, deliver day 1 rights on sick pay and parental leave and ban fire and rehire. We can put working people back in charge of their own lives.

We can have a responsible Government that puts country before party and which ensures value for money—value for taxpayers’ money. In doing all that, we can bring growth to an economy that two Governments have failed. The sooner we can have change, the better; the sooner we can vote for change, the better; and the sooner Labour can make that change, the better for Scotland.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

In this budget, the Scottish Government is reaching for more tax rises. It is punishing low and middle-income families through fiscal drag, it is taking a hammer to the green renewables piggy bank and it is cutting public services for young and old alike. Why? It is doing so because Scottish National Party and Green ministers are completely out of ideas about how to spark growth, drive innovation or enlarge the tax base sustainably. They have a habit of making costly blunders—for example, the two ferries that are rusting in dry dock, the botched deposit return scheme, the independence papers and the selling of Scotland’s prized sea bed on the cheap. Next in their sights is the clueless and bureaucratic billion-pound ministerial takeover of social care that we are set to debate this week. In every case, taxpayers and public services are expected to pay the price.

The Government is out of touch and is taking people for granted. One thing that it must realise is that it needs the talents of everyone in order to grow the economy and make our country fairer. There is an intrinsic link between the health of our people and the health of our economy. People are waiting in pain for long-overdue operations. Their conditions are worsening by the day. It can take years for people to get the mental health treatment that they desperately need, which means that they cannot get on in life. There are now around 200,000 people in Scotland who are out of work because of mental ill health, long Covid and long-term conditions. According to the Our Scottish Future think tank, that costs our economy £870 million a year.

The longer people are out of work, the worse their prospects become. The longer they wait to be treated, the greater the cost to the NHS. That is why making yet another cut to overwhelmed mental health services makes no sense whatsoever.

The SNP’s choice to freeze all NHS building plans—to put a hard stop on those construction projects—for two years is damaging. That includes the national treatment centres, which were once heralded as the cure for our waiting lists. That halts the much-needed replacement of the Belford hospital in Fort William and the upgrading and refurbishment of Caithness general hospital alongside the Princess Alexandra eye pavilion, which Sarah Boyack rightly mentioned. We need to see joined-up thinking and an understanding that there is an element of spending to save—a preventative agenda.

The same can be said about the 33 per cent cut to the more homes budget, which is totally disproportionate to the challenges that exist within the Scottish Government’s own capital budget. This morning, we learned that homelessness applications are at their highest level since records began, in 2002, with an 8 per cent increase in children in temporary accommodation.

Members should look at some of the things that are being said by the housing and poverty organisations that, together, wrote an excoriating letter to the Government. They said that the Government is “perpetuating housing inequality” and risking the transition to net zero, and that its cut to the affordable housing budget is

“baffling in the face of spiralling homelessness”.

Those are not my words—they are their words.

The priority that is being placed elsewhere in the budget on social security risks being undermined entirely by that myopic approach to housing. In the cost of living crisis, housing accounts for a huge proportion of household budgets, and cutting housing will push more people into homelessness and precarious situations.

At the most recent election, there was an SNP manifesto commitment to hire 3,500 additional teachers—we heard something about that from Mr Marra—and classroom assistants alongside them. However, teacher numbers have fallen in the two years since then. Members should look at SNP-run Glasgow, where 172 teaching posts are now on the chopping block.

The Times Educational Supplement Scotland has uncovered that that is part of a plan to cut 450 posts over three years.

Across the country, we will see bigger class sizes and more pupils becoming disengaged or excluded from school. That is particularly devastating for newly qualified teachers who were attracted to the profession by the Government’s promise of work.

Where is the plan to lift up Scottish education? We do not have in-class support for pupils, who are disappearing. Teachers are dipping into their own pockets to pay for basic equipment. Workloads are out of control. The Government is complacent about school violence and it refuses to put any money into fixing the dangerous concrete that exists in the roofs above the heads of our pupils.

Scotland has just recorded its worst-ever scores in the international education rankings, and the SNP-Green budget will make it significantly harder for that to be turned around. There is also a real danger that the Government is on the verge of taking colleges, universities and apprenticeships for granted. We cannot allow our excellent institutions to be downgraded in the way that they are being. In the words of the National Union of Students Scotland, the £100 million cut

“will mean fewer courses, fewer staff and fewer opportunities”.

It will damage key industries that are experiencing skills shortages, especially in renewable technology.

Therefore, I cannot fathom why the SNP and Green members are backing that cut. Why is there an indifference to what is going on? The budget as a whole will starve Scotland of the climate-friendly initiatives, jobs and skills that are needed to kick-start growth and to enable us to compete in the race for the industries of the future.

Cutting drugs funding will also mean that more people will end up requiring emergency healthcare or will be lost to us entirely in our spiralling drug deaths emergency.

More education cuts will punish pupils, students and anyone who is looking to upskill and retrain for a better life for themselves and their families. If SNP and Green ministers want to take credit for the extra funding that is being invested in pay deals and in social security, so, too, must they take responsibility where painful cuts are being made.

We will not vote for the budget, because people need a liberal budget that invests in local services, mental health and growing the economy; that enables businesses and entrepreneurs to prosper; and that generates the tax revenue that we need to lift up Scottish education, rescue the NHS and build more warm homes.

The Deputy Presiding Officer:

We move to the open debate.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

I commend the Deputy First Minister for taking such difficult decisions in extremely challenging circumstances.

The budget clearly sets out to protect our public services, as it provides above-inflation support for the NHS, police and fire services and local government. I welcome the additional funding for island communities, the 50 per cent increase in investment in digital connectivity and the 31 per cent increase for trunk road maintenance.

The Scottish child payment—which is unique in these islands, with no equivalent being likely in the rest of the UK, no matter who wins power at Westminster—rises by 6.7 per cent, which means that £26.70 per week will be paid to the parents of more than 323,000 Scottish children. The Scottish Government should be proud of that. Today, the Opposition parties want us to vote against that.

Of course, although expenditure will increase across most portfolios, there is nothing easier for the Opposition to do than to criticise where expenditure is falling, because, unlike the Government, it does not have to prioritise spending. The Opposition is fearful of upsetting any potential voters or vested interests—it wishes to appear all things to everyone.

Photo of Daniel Johnson Daniel Johnson Labour

Kenneth Gibson’s committee’s report decreed that the budget was an example of the Government procrastinating on important decision making, and it made the point that the Government was failing to make the strategic decisions that it needs to make. Does he still agree with that point?

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

Yes, I agree with that. However, today, we are talking about the funding for the budget that will apply from April. Last year, I asked where Daniel Johnson’s fully costed budget was. He said that he would bring it to my office but, a year later, I am still waiting for it.

That is not exactly the action of a potential Government in waiting, or even a junior partner in the nod-and-a-wink unionist de facto coalitions that we see in Edinburgh, Fife, North and South Lanarkshire, Stirling and West Lothian. In the previous session of Parliament, Aberdeen Labour councillors were suspended for working with the Tories. Such has been Labour’s ideological somersault from Corbynite to Blairite, in Edinburgh, councillors were suspended for not working with the Tories.

Opposition members have tediously demanded the impossibility of cutting income tax while increasing expenditure across virtually every portfolio, without making the slightest effort to explain how such increases would be funded. That is lazy, cynical and an insult to the intelligence of the people whom we collectively represent.

At last week’s Finance and Public Administration Committee meeting, I asked the Deputy First Minister whether any Opposition parties had come forward with alternative fully costed budget proposals. Her reply was, “There have been none.”

Despite all the hot air, bluff and bluster from the Tories, Labour and the gang of four whose name escapes me, this budget is the only game in town. Opposing it will mean less money for health and social care, less for our police and fire services and no increase in social security payments for the hundreds of thousands of our citizens who rely on them. The Opposition parties should stop posturing and get behind this budget.

As we know, while Labour presided over the financial crash that began austerity under Gordon Brown and Alistair Darling, the Tories gave us born-again conspiracy theorist Liz Truss and Kwasi Kwarteng. According to the Pensions Regulator, £425 billion was wiped from pension pots by their reckless mini-budget. To put that in perspective, that is equivalent to £34,000 for every single pensioner in the UK, yet the Tories in this place demanded that we mirror their disastrous policies.

As the Office for Budget Responsibility has pointed out, interest payments have rocketed. The 14 increases in two years have not just hit mortgage payers and anyone else who is borrowing to invest, to spend or just to get by. Last year, that led to average payments of £318 million each and every day on the UK’s colossal £2.54 trillion debt. No wonder the UK is in recession.

Scotland’s devolved budget is overshadowed by machinations elsewhere and the chaos of two UK budgets in fewer than four months. Anticipating next week’s spring statement, the Resolution Foundation warns of “deep cuts” to stretched public services as Chancellor Jeremy Hunt tries desperately to find money with which to bribe voters through tax cuts.

Liz Smith talked about brutal cuts to local government. In England, eight local authorities have gone bankrupt, including Birmingham City Council, which is the biggest. Andrew Goodwin, the chief UK economist at Oxford Economics, said:

“The problem is that this comes on the back of large real-terms cuts ... Efficiency savings have long since been exhausted—you’re now really talking about choosing which services not to provide any more.”

The Tories’ antics down south destroy any thread of credibility that they have as they make hollow demands for increased spending on Scottish public services.

During the stage 1 debate on the budget bill, Graham Simpson waxed lyrical about his love-in with South Lanarkshire Council’s Labour leader Joe Fagan, while merely calling the £1.6 billion cut to Scotland’s capital budget “regrettable”. Those cuts mean less money for housing, less money for schools, less money for harbours and less money for everything that we need infrastructure for.

Today, the Tories and their better together Labour pals will vote against a fully funded council tax freeze for everyone but will oppose an income tax increase for the best paid 5 per cent of earners. Meanwhile, there is no commitment from United Kingdom Labour to mirror the Scottish child payment. Labour is now the party of unlimited bankers’ bonuses, the two-child benefit cap, nuclear weapons, the House of Lords, tuition fees and Brexit.

At stage 1 of the budget bill, Michael Marra uttered not a single word of criticism of the UK Tory Government. I am pleased that he has at least ticked that box today.

Labour criticised the council tax freeze, having denounced the Scottish Government last September for consulting on proposals to raise it for higher-band houses. In this chamber, Mr Marra asked:

“why does the Government think that ordinary Scots should foot the bill”?—[

Official Repor t, 6 September 2023; c 16.]

However, during last October’s Rutherglen and Hamilton West by-election, Labour made three pledges, the first of which was that it would stop the SNP making residents pay more council tax. It called that “constructive ambiguity”, which was Labour’s incoherent, cynical and downright dishonest policy on Brexit. It pretended to agree with the previous person it spoke to while somehow forgetting that, as traditional media declines, folk have other information sources and can talk to one another—but then Labour always took voters for mugs.

The Opposition has no convictions to have the courage of. It grumbles but presents no costed alternatives. I urge members to support the budget.

Photo of Pam Gosal Pam Gosal Conservative

I am honoured to contribute to the stage 3 budget debate from the Scottish Conservative benches today. Everyone recognises that the relationship between national and local government is critical, especially as it is largely through local government that our public services are delivered. We all depend on that relationship to work. It needs to be built on trust and on a mutual understanding of the particular responsibilities that accord to both levels of government.

Earlier last year, there was a degree of optimism that the Verity house agreement would enshrine those principles. There was even more optimism when, in September 2023, the Scottish Government stated that it was looking to address the issue of multiyear budgets, which has been a consistent ask of local government and the third sector for a long time. How that optimism has been shattered in the 2024-25 budget process.

First, on 17 October 2023, at the SNP conference, Humza Yousaf announced, without any warning—including to most of his Cabinet—that there was to be a council tax freeze. That had come about without any prior discussion with local authorities, and there was no detail about whether the freeze would be fully funded. If that development badly strained relations and threatened to undermine the Verity house agreement, worse was to come. Local authorities were left in complete limbo with regard to the financial implications of the freeze and threatened with the loss of money if they did not agree to the freeze, which, of course, was not even in the powers of the Scottish Government to grant.

Between the end of the year and now, an unseemly stand-off between national and local government has been played out in the media and in the full view of the public, who do not know what to expect when their council tax bills land in their letterbox. We know, via COSLA, that there have been acrimonious meetings with ministers. On Friday 16 February, COSLA said to the Deputy First Minister in blunt terms that £147 million to fund a council tax freeze was not nearly enough. After all, COSLA had been asking for £310 million—so much for the First Minister’s claim that the council tax freeze is fully funded. In a letter on 21 February, there was a stark admission by the Scottish Government that it is no such thing.

That is no surprise to me because, in my role as local government spokeswoman for the Scottish Conservatives, I have taken the time in recent months to speak to 31 out of the 32 local authorities.

Members:

Ooh!

Photo of Pam Gosal Pam Gosal Conservative

Here is what I have been hearing. I hear members saying, “Ooh!” I am doing their job for them in relation to local government. [

Laughter

.] Members are laughing at local authorities.

Photo of Pam Gosal Pam Gosal Conservative

Members need to stop and listen. Perhaps they need to take a leaf out of the Scottish Conservatives’ book and understand that listening to local authorities is important.

Photo of Pam Gosal Pam Gosal Conservative

Here is what I have been hearing—this one is for the cabinet secretary. Under the current funding settlement, the three shared priorities are undeliverable. Public services are being cut. A just transition to net zero is a pipe dream. [

Interruption

.]

The Deputy Presiding Officer:

Ms Gosal, please resume your seat for a second.

This behaviour is not worthy of all members who are conducting in it. It is disrespectful to the member who has the floor. Ms Gosal, please resume your speech.

Photo of Pam Gosal Pam Gosal Conservative

Thank you, Presiding Officer.

In relation to tackling child poverty, the cabinet secretary need look no further than SNP-led Glasgow City Council, which is looking to axe 450 teaching posts, or SNP-led Perth and Kinross Council, which could be forced to hike the cost of school meals, cut school days and close breakfast clubs.

Photo of Pam Gosal Pam Gosal Conservative

I will certainly not give way to that member.

After speaking to 31 local authorities, it is clear to me that this decades-old, outdated system is in urgent need of reform. Just last week, the Deputy First Minister attempted to bully COSLA and all councils into accepting a council tax freeze, or else the Scottish Government would withhold UK Government Barnett consequentials. Imagine the uproar from SNP members if the Westminster Government told the Scottish Government that it must do as it said or Barnett consequentials would be withheld. Less than a year after the announcement of the Verity house agreement, the SNP is demolishing local democracy in front of our eyes. It is simply unacceptable.

The SNP’s gross mismanagement of the nation’s finances means that we face the worst of all budgets—a combination of tax hikes for hard-working Scots and eye-watering cuts to public services. Our approach to the budget is fundamentally and ideologically different from the approach of SNP and Green members. Our stance is that we are fully in favour of sustained public sector reform, a reduced tax burden, economic growth and support for local government. The measures that the Scottish Conservatives have proposed would make economic growth a top priority and would provide much better support for local government. Those are the two things that the SNP has neglected throughout its time in office, and that has been a major contributor to the black hole in public finances.

Photo of John Mason John Mason Scottish National Party

I am grateful for the opportunity to speak, once again, about the budget. I speak in support of the Scottish budget for 2024-25. As others have said, it is a very tight settlement. Clearly, we cannot do all that we would want to do. Yes, we would like the Scottish child payment to be higher and we would like more money for affordable housing, transport, colleges and universities, councils, preventative spending and a range of other sectors that really need the finances. However, we can spend only the money that the Scottish Fiscal Commission forecasts that we will have available.

I want to use my speech today to challenge a few myths that have been circulating during the budget process. Myth number 1: we can increase spending in one area without raising taxes or cutting expenditure elsewhere. No, that is not possible. The Scottish budget must be balanced, so demands for more on the Scottish child payment, on business support or on other things mean a cut somewhere else. Opposition parties have no credibility when they ask for more funding for cause X if they do not tell us where the money is to come from.

Capital expenditure is similar. I agree that we would like to spend more on affordable housing, and I think that the cabinet secretary agrees with that, as she has said that any extra capital or financial transactions money would go to more new homes. However, we have been forced to accept a very poor fiscal agreement, so the bulk of our capital budget comes from Westminster and we have only very limited powers to borrow. Therefore, more money for housing needs to come from somewhere else, such as economic investment or the transport budget.

Myth number 2: growing the economy is the whole answer. We have had the suggestion from Opposition parties that, if only we grew the economy more, the public purse would automatically benefit and we would not need to raise taxes. In fact, some have argued that higher taxes are necessarily a barrier to the economy growing. However, that is flawed thinking. In the first place, it is difficult to grow the economy if there is a shortage of workers. We have a fairly static total population and an ageing population. We need more immigration to provide the bus drivers, hospitality sector staff and health workers we need. However, without powers over immigration or even just Westminster allowing visas specifically for working in Scotland, we are really up against it.

Secondly, the UK shows that lower taxes do not automatically mean better growth. The UK has lower taxes than a number of our neighbours, with only 38 per cent of gross domestic product going in tax. Despite that, we are now into a recession, with the economy contracting. Therefore, clearly, there is not an immediate link between taxes and growth.

Thirdly, even if the economy grows, the question is where the benefits of that growth will go. If businesses are foreign owned or based in a tax haven, and if their profits increase and go overseas, there is no benefit to the Scottish budget. If people who are already better off just earn more and then spend that money elsewhere, again that does not benefit the public purse. I believe that we should seek to grow the economy but that, as a separate, albeit related, exercise, we need to do more to redistribute income and wealth within Scotland.

Myth number 3 is specifically a Labour myth: we can cut taxes for middle earners but not cut public services. Wrong again—that does not work. No one is saying that middle earners are rich. We are saying that those who can afford it, including middle earners, should pay a bit more tax so that we can all get better public services. Cutting income tax, as Labour suggests—by £560 million, I believe—means cuts to vital public services.

Myth number 4: we can raise taxes as much as we want and introduce new taxes quickly. Many of the Scottish Trades Union Congress proposals for possible new taxes, plus those for revising how present taxes work, are very good, but some of them would take a considerable time—that is, several years—especially if we required Westminster approval in addition to our legislative processes. Those proposals will therefore not solve our problems for 2024-25.

With council tax, we need to act on a replacement or at least a major revamp. Even revaluation would not be popular among those who would lose out, yet we cannot go on much longer using 1991 property valuations. Houses in more deprived areas appear to have gone up less in value than those in richer areas, which means that poorer tenants and residents are losing out.

On raising income tax, there is no real sign, as yet, of behavioural change that is due to the slightly higher Scottish rates. We need to remember that people make decisions as to where they live and work for a range of reasons. Tax may well be one of them, but so are house prices, which are normally much lower in Scotland than they are in London. I suggest that another reason is living in a more caring country, where people who are in need are treated with more respect—for example, Social Security Scotland treats people with more respect than is often the case with the Department for Work and Pensions.

On social security, it is worth focusing on one of the big positives of the budget. Increasing spending on social security from £5.3 billion to £6.3 billion is a real success story. I have not heard many Opposition calls for that sum to be cut. We will need to carefully watch its affordability as we go forward, but let us be positive right now that the adult disability payment is going to a range of people who need and deserve it but who would not get it if they lived in the rest of the UK.

I suggest that, overall, this is a fair budget in the circumstances. As far as I am aware, the Opposition parties have not come up with any real suggestions as to how it could be amended. The Conservatives and Labour can vote against it at decision time if they want, but they would not do any better if they were in power and I suspect that it would be a lot worse.

Photo of Jackie Baillie Jackie Baillie Labour

Seventeen years of economic and financial mismanagement by the SNP have come home to roost. The scale of the SNP’s financial failings is exposed in a deeply chaotic budget, the impact of which will be felt by generations of Scots for years to come.

Sleight-of-hand presentation cannot mask the reality that public finances are in dire straits and that Scots are paying the price of SNP incompetence. Public services are at breaking point, and nowhere is that more evident than in the NHS. Members should not just take my word for it. The Scottish Fiscal Commission’s analysis reveals that the SNP Government plans to spend less in real terms on health and social care in 2024-25 than it did in the preceding financial year.

Photo of Jackie Baillie Jackie Baillie Labour

Maybe you should listen for a minute.

I am also old enough to remember—[

Interruption

.] I will give way on this point, because I would like to hear what the Deputy First Minister has to say.

The Deputy Presiding Officer:

Jackie Baillie, please resume your seat. Mr Swinney is gesticulating at the chair. I am not sure what he is trying to say. If he wants to say something, he should raise a point of order.

Photo of John Swinney John Swinney Scottish National Party

On a point of order, Presiding Officer. Members are supposed to address each other properly in the chamber. Jackie Baillie, who is a long-standing member of the Parliament, was failing in that. That is all that I am gesticulating about.

The Deputy Presiding Officer:

Thank you, Mr Swinney. That is noted.

Ms Baillie, we need to refer to members courteously and, of course, through the chair.

Photo of Jackie Baillie Jackie Baillie Labour

I always endeavour to do so, Presiding Officer, and I learned everything that I know from John Swinney, so I am grateful to him for the reminder of behaviour.

I am genuinely long enough in the tooth to remember that, for the last two years of a UK Labour Government, when the SNP was in government here, the money that was passed on to Scotland for the NHS was diverted away from it by the SNP to be spent on other things. Had the SNP not done that, the NHS would be at least £1 billion better off in the budget now.

Let us roll forward to 2021, when the SNP’s NHS recovery plan promised more than £1 billion of investment to increase NHS capacity, reform the delivery of care and quickly get everyone the treatment that they needed. Humza Yousaf presented a flagship network of national treatment centres, with at least 40,000 additional elective surgeries and 40,000 procedures per year by 2026, increasing to 50,000 in the years after. By 2026, an additional 1,500 staff would be recruited to work in those national treatment centres.

Those plans were apparently costed and worked out. Audit Scotland, in a scathing report in September 2023, warned about delays. Now, many of those national treatment centres have been cancelled or postponed for years. The result of that incompetence is that planned operations continue to lag well behind pre-pandemic levels: 60,000 fewer operations were carried in 2023 out than were performed in 2019.

Those cancellations and delays are already impeding the recovery of our NHS, and waiting times are getting even longer for people who are waiting for in-patient treatment. That is nothing less than an insult to the almost one in six Scots who are on an NHS waiting list and the hard-working NHS staff who are simply trying to do their jobs in a broken system.

Audit Scotland has described Scotland’s NHS as directionless, risking patient safety and on the brink of breakdown. Health is fully devolved, and responsibility lies with the SNP Government. The Deputy First Minister, like the rest of the Government, is at pains to blame everybody else, but there comes a point when a little self-reflection is required. After 17 years in power, the SNP has left the health service at breaking point, with extreme overcrowding and long waiting times threatening patient safety.

Let me focus on capital. There has been a 10 per cent cut to the capital budget for the Scottish Government over the next five years, but there has been a 100 per cent cut to the capital for new health projects. National treatment centres that are critical to tackling waiting times have been delayed for years in Ayrshire and Arran, Lanarkshire, Lothian, Grampian, and Tayside. They are all gone and there is no answer about what will happen now to tackle waiting lists.

People in the Highlands are waiting for the redesign of Caithness general hospital and the revamp of Raigmore’s maternity services, which are now parked on the shelf. Lochgelly and Kincardine in Fife, the Liberton GP practice, the Gilmerton GP practice, East Calder in Lothian and Greenferns in Aberdeen have all been denied desperately needed health centres. Funding has been pulled from the Edinburgh eye pavilion, despite promises to the contrary, and a new cancer centre in Lothian has been delayed. A promise to publish the revised capital investment plan alongside the budget has been broken. There is no transparency from the SNP—there is just more secrecy.

Where has the capital gone? What is it being spent on? Overpriced replacement ferries are costing almost four times the original, at almost £400 million, and they are seven years late. What other capital projects will be cancelled or delayed? Will it be the A9 or the A83 at the Rest and Be Thankful? The reality is that we simply do not know.

The crisis in social care deepens. Care packages are cut, contracts are handed back, staff morale is low and the number of vacancies is growing.

The SNP can spin out of this in any way it wants to, but this is a Government that has lost control and is financially incapable of running the country. The real-terms decline in funding to the NHS is an insult, as is the real-terms cut to the social care budget, and the impact of those cuts will impede the recovery of our health and social care services for decades to come. SNP ministers have, for years, promised patients and staff that they would deliver state-of-the-art national treatment centres, but despite almost 830,000 Scots being on waiting lists for tests and treatment, those promises have been broken.

The people of Scotland should not have to pay the price of SNP incompetence. That is why Scottish Labour cannot vote for the budget today and why only Scottish Labour can be trusted to support our NHS and social care services and their dedicated staff, so that they can deliver for the people of Scotland.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

The budget is set against the backdrop of some of the toughest conditions that the Scottish Parliament has faced. We have had to contend with 14 years of Westminster austerity, which has been compounded by a Brexit that Scotland did not vote for and is wiping billions from the UK economy, and has also been exacerbated by the Truss-Kwarteng mini-budget disaster that further contributed to inflation rates rising and the cost of living crisis deepening. Yet, despite our being presented with a profoundly challenging financial situation that is not of Scotland’s making, the budget sets out to protect people, sustain public services, support a growing sustainable economy and address the climate and nature emergencies. I will be voting for the budget, but we all recognise that we could spend more money on every single department if the money was there.

At the heart of the budget is the social contract with the people of Scotland, where those who have the broadest shoulders are asked to contribute a little more. It is a budget that reflects our shared values as a nation and speaks to the kind of Scotland that we want to be—one where everyone has access to universal services and entitlements, and where those who are in need of an extra helping hand receive targeted additional support. The Scottish child payment is an example of that.

Given the reckless economic mismanagement that is on display at Westminster, it has become increasingly important to prioritise the most vital services: the NHS and social security. That means supporting those who are on the lowest incomes, including by lifting kids out of poverty, despite the Scottish budget being slashed by Westminster.

Health is one of the key issues that constituents raise with me, as I am sure that they do with other members from across the chamber. Although health is fully devolved, I often remind constituents that, without the full levers of power, it is misleading to treat Scotland as if we are already independent, considering how devolved areas are funded. For example, the Tories delivered a 3 per cent real-terms cut to England’s NHS in their autumn statement, yet the SNP and Green Government has just increased the front-line NHS budget in real terms. That is a choice that the Scottish Government has made, despite the UK Government providing less funding in that area.

When we compare Scotland’s health record with that of Labour-run Wales, we see that we have more GPs, more dentists and more qualified nurses and midwives per 100,000 people. The SNP Scottish Government has also protected free eye exams, whereas people in England and Wales must pay for that service. In fact, people across Scotland have reaped several benefits since the SNP came to office in 2007, including free prescriptions, free school meals, free childcare for three and four-year-olds, free bus travel for under-22s, free dental care until the age of 26, seven additional welfare benefits—including the Scottish child payment, which I have already mentioned—and publicly owned rail services.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

Hold on.

Free university tuition is saving Scottish students thousands of pounds. However, only last week, Michael Marra suggested that Labour would consider reintroducing back-door tuition fees.

Earlier, Michael Marra touched on windfall tax, but he must be honest with the population. The windfall taxes that he was talking about would be based on the global profits of energy companies and not the profits that are made solely in the UK. Is Michael Marra suggesting that a future Labour Government, possibly later this year, will attempt to charge a windfall tax on profits made in France or elsewhere?

Photo of Michael Marra Michael Marra Labour

I appreciate Stuart McMillan giving way. What Labour is proposing is a real windfall tax that will pay for a green prosperity plan that will deliver 50,000 jobs in Scotland and will include a publicly owned energy generation company that is headquartered in Scotland. Those are the kinds of transformation projects that can be undertaken by taxing the energy companies, whereas this Government appears to believe that somebody with £28,000 has broad shoulders and should pay the costs.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

Michael Marra did not answer the question that I posed to him. The question was about the global profits of energy companies and not the profits that are made solely in the UK. Although Labour likes to think that it knows better when it comes to the interests of the people of Scotland, its rhetoric—as we have just heard—says it all.

We read in

The Greenock Telegraph last week that Jackie Baillie has called for ring-fenced funding to be given to the treatment of long Covid patients. Although I, too, want more money to be spent supporting people who are suffering from long Covid, I found it strange—

Photo of Stuart McMillan Stuart McMillan Scottish National Party

Haud on a minute, Ms Baillie.

I found it strange that Ms Baillie sought for the Barnett consequentials to be ring fenced for long Covid when, normally, her party is vehemently against any sort of ring fencing. That shows how the argument can change depending on the politics that are being used.

As in almost every other budget process, local government finance is a focus for Labour, which, year on year, shouts about cuts but never wants to accept that Scotland’s budget has been reduced by Tory austerity budgets for the past 14 years.

Budgets are about choices, and I am pleased that the Cabinet Secretary for Finance is providing additional resources for local government. It is now a choice for local councils as to whether they implement the fully funded council tax freeze or place an additional burden on households.

In Inverclyde, the Labour council group wants to introduce a two-year budget that will see the council tax increase by 8.2 per cent next year and a further 6 per cent the year after. In contrast, the SNP council group has proposed a one-year budget that will implement a council tax freeze, keeping more money in my constituents’ pockets. It is interesting that Inverclyde Labour is proposing a two-year budget, because, if Sir Keir Starmer wins the next general election, it would surely expect him to give Scotland more money. However, Labour clearly does not believe that that will happen, and we have heard nothing about that this afternoon.

I will support the budget. Like all members across the chamber, I would like more money to be invested in every area, but that is only possible with independence for Scotland.

Photo of Liam Kerr Liam Kerr Conservative

In late January, Richard Lochhead, the Minister for Small Business, Innovation, Tourism and Trade, intervened on me, asking for my help in suggesting how the Government could increase its budget. In response, I offered that he should

“cut the waste and grow the economy”.—[

Official Report

, 25 January 2024; c 76.]

The second element of that point is illustrated by Office for National Statistics figures that show that Scotland would have an extra £6 billion in tax revenue over the next 10 years if our economy grew at the same rate as the rest of the United Kingdom. However, it will not have that revenue: PwC forecasts that Scotland will have the fourth-lowest GDP growth of any UK region in 2024.

What concerns me most is that the budget makes it abundantly clear that the Government has no strategy to grow the economy. Specifically, short-termist and blinkered decisions are being taken around education and skills, which were described in a recent editorial in

The Scotsman as

“the fundamental building block upon which everything else depends.”

Photo of Alasdair Allan Alasdair Allan Scottish National Party

I am interested in the member’s theory that there are policies that a devolved Scottish Government could pursue that would somehow release the untold billions in products of economic growth that he mentioned. Could he explain to me how that would be possible, given that VAT, corporation tax and most of the extra taxes that such businesses would pay all go to the UK Government?

Photo of Liam Kerr Liam Kerr Conservative

We can talk about a small business bonus or income tax; there are innumerable ways that that could be done, which have been articulated throughout the afternoon. If the member cares to listen, I will give him some more examples. A proper strategy and, by extension, a proper budget to grow the economy would look at how we get people into the economy with the skills that they need and the qualifications that employers require.

John Mason said that it is difficult to grow the economy if there is a shortage of skilled workers, and for once—uniquely—he is right. We will not get those workers by cutting the economy budget by £97 million, the enterprise budget by £62 million or the employability budget by more than £30 million. We certainly will not do that by axing the flexible workforce development fund, which, according to the Chartered Institute of Personnel and Development, is one of the key interventions in the upskilling space, as well as a unique offer for Scottish apprenticeship levy payers. It is also particularly surprising that that fund is being axed given that an independent evaluation unequivocally recommended its continuation.

Photo of Maree Todd Maree Todd Scottish National Party

Does the member think that it will help to attract people to work in our social care system if the UK Government creates a hostile environment that says very clearly that although they are welcome to come and look after our most vulnerable people, their families are not welcome in the UK? That is exactly what the UK Government has done. We need immigration as well as growth.

Photo of Liam Kerr Liam Kerr Conservative

I am grateful to the member for giving a speech in the middle of my contribution. She ought to be listening to my points about upskilling the Scottish economy. That is not done by slashing funding to the Scottish Funding Council by more than £141 million. Our higher education sector is already struggling, and it does not need a budget that the Institute for Fiscal Studies said brings cash cuts of almost 6 per cent to resource budgets and a £28.5 million cut to teaching grants. As we heard, that means a cut of at least 1,200 places for Scottish students.

Bear in mind that the supply of talent to grow our economy will also come from the further education sector. The SFC reports that two thirds of colleges are already facing a budget deficit and the Auditor General recently warned about sustainability in the sector. However, the budget sets out a funding reduction of £33 million in revenue funding, which colleges are warning might lead to a reduction in places, further limiting the future supply of skilled entrants. Given that the number of college students has fallen by more than 140,000 since the Scottish National Party came to power, that is a staggering lack of planning by the Government.

Make no mistake: this is not only about young people. The SNP Government’s adult learning strategy states that more than 300,000 Scottish adults have

“low or no qualifications” and that almost 2 million Scottish adults have

“low numeracy skills.”

The response in the budget was to cut lifelong learning funding by almost £24 million.

We must not forget that, last year, there were more than 350 fewer science teachers, 300 fewer maths teachers and 180 fewer computer science teachers than there were in 2008. Furthermore, a Scottish Government document that came out today shows that the number of pupils leaving school with no qualifications is at a 13-year high.

I will not be voting for the budget today, as it has been put together without any form of strategic plan by a cabal of ministers, several of whom have been out of the economy for so long—if, indeed, they were ever in it—that they clearly do not understand how to grow it, are just economically illiterate, or, I dare say, both.

The Government’s budget is making the wrong choices for Scotland, preferring short-termism, diversion and grievance over coherent, cogent, competent strategic policy making. I will vote against it.

Photo of Liam McArthur Liam McArthur Liberal Democrat

I advise members that there is no time in hand and that any interventions will have to be accommodated in the time allocated for speeches.

Photo of Ivan McKee Ivan McKee Scottish National Party

It is a pleasure to speak in what is arguably the most important debate of the year. The budget is not just about getting the numbers to add up but, as the Deputy First Minister has so clearly outlined, sets out the Government’s hugely important values, approach and priorities.

We must recognise and appreciate the UK Government’s fiscal context; the drag caused by Brexit, which is pulling down our economy; and the fallout that we are still living with from the disastrous experiment in Trussonomics, which we see in the numbers that the Deputy First Minister laid out today. That will not get any easier when UK Labour is rapidly back-pedalling on its commitments, whether those are on green investment or support for social security payments.

We should be proud of our values, of the social contract between the Government and people of Scotland, of the provision of universal services and of the principle that those who can afford to pay more should do so. I will list those services, because we sometimes forget about them: free tuition fees, free prescriptions, free travel for the under-22s, free school meals, free childcare, and free dental services for those under 26. Of course, there is also the Scottish child payment, among many more benefits.

We should be proud of the work that the Scottish Government has done to embed that social contract and of its acceptance by the people of Scotland. However, part of that social contract should be to continue ensuring that we have excellent delivery of those services and that we spend taxpayers’ money as efficiently and effectively as possible.

Photo of Brian Whittle Brian Whittle Conservative

It is all very well having free dental care up to the age of 26, but if people cannot actually access NHS dental services because that is not financially viable for the dentist then they cannot access treatment and they cannot access the legal service. That inequality is a direct responsibility of the SNP Government.

Photo of Ivan McKee Ivan McKee Scottish National Party

If the member looks at the comparable data for the rest of the UK, he will find that the Scottish Government is doing a better job than the UK Government in all those regards.

I will focus on how we strengthen that social contract and maximise the funds available to support front-line services. The Scottish Government absolutely recognises the importance of delivering an expanding tax base to fund that social contract.

I will first talk about how we can broaden the tax base, ensuring that more taxpayers are paying more tax and that we have more higher-rate taxpayers in Scotland. We all agree with the progressive principle, but it is hugely important to understand where we are in that regard and to monitor that to ensure that the policies we are executing deliver more, not less, revenue.

We need to understand the percentage of revenue lost due to behavioural changes, doing so both through the Scottish Fiscal Commission’s theoretical calculations and by understanding what is happening in reality. We know that more people are moving to Scotland from the rest of the UK than are moving in the other direction. We must continue monitoring that very closely. I look forward with interest to the longitudinal data that will soon be published by His Majesty’s Revenue and Customs and that will track how Scottish and UK taxpayers move, so that we can understand in more detail the effect of the tax changes that have been rolled out in the past few years. We must also understand the multiplier effect, which is not only about tax revenue but about the money that is spent within the broader economy as a consequence.

My second point is about the need to broaden types of tax. It is important to recognise the need to move beyond income tax to have a coherent policy on property taxes. I very much welcome the Deputy First Minister’s commitment to take that work forward and review those property taxes, so that we can have more progressive and proportionate taxation as a consequence. I also welcome the commitment to work towards more decentralisation, particularly of the general power of competence, to give councils more power to address broader issues.

Photo of Daniel Johnson Daniel Johnson Labour

Given that one of the two income tax measures that the Government set out raises only £7 million, is the member suggesting that that should be reviewed?

Photo of Ivan McKee Ivan McKee Scottish National Party

It is clear from what I said that it is important to continue monitoring the percentage of behavioural change. If measures lead us to a position where the data shows that we are receiving less revenue, then those measures do not make economic sense, or sense for the funding of our public services. The member knows the SFC numbers as well as I do and we both look forward to seeing future data—as I am sure the Government does—from HMRC.

My next point is about spending. A lot of numbers are thrown around about the spends of different portfolios. It is important to go below the bonnet on that, to understand, below those headline numbers, how effective each spend is. Christie gives us the road map and underlining principles to take forward that work to understand how effectively and efficiently that money is spent in each portfolio and what the opportunities are for the removal of duplication and more effective and efficient public service delivery.

The public sector reform agenda needs to pick up pace, and I look forward to that being taken forward with clear metrics on what we are measuring and comparisons across different organisations—all 129 of the Scottish Government’s agencies and non-departmental public bodies. Data on the details of the spend—how much is spent in the back office versus the front line—is hugely important for each of those bodies. It is important that we understand the delivery of funding streams, in order to make those as streamlined and efficient as possible. We have spoken about the estates strategy, and there is much more besides.

What is really important, as a number of members have raised, is to recognise the lack of powers of the Parliament and the Government—for example, on economic levers around company law and tax, and levers around employment law to drive up low wages. The Labour Party has refused to support the delegation of that to the Scottish Parliament.

There is a lack of borrowing powers, which Scotland needs to have as normal independent countries do. Only with those full powers of independence can we deliver on the potential of the Scottish economy.

Photo of Mark Griffin Mark Griffin Labour

I draw members’ attention to my entry in the register of members’ interests, which shows that, until July last year, I was the owner of a private rented property in the North Lanarkshire Council area.

This budget has been entirely chaotic. It will send the housing emergency spiralling and it has surely put the final nail in the coffin of the Verity house agreement. Working people will pay more and get less; the 10,000 children who are trapped in temporary accommodation will continue to be stuck there; and the Government has finally admitted what we all knew—that the council tax freeze is underfunded. The Government has used Barnett consequentials, which arise from money that is allocated to local government in England, to restore the previous cut to councils’ budgets. That is particularly galling—in essence, it uses councils’ own money to plug Government cuts.

The finance secretary said that the budget was built on

“Our values of equality, opportunity and community”.—[

Official Report

,19 December 2023; c 9.]

There is an overused quote when it comes to budget times:

“Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.”

Shelter has come to an assessment of the Government’s budget. In its intervention—which is possibly the most devastating response to a budget in all my time in the Parliament—it has made clear what it thinks of the Government’s values. It said:

“The Finance Secretary called this a ‘values-led budget’. Those values now include increasing homelessness.”

How any Government could receive such a damning critique from experts who deal with homelessness and just carry on without making any changes is astounding. To cut £200 million and pretend that 110,000 affordable homes will still be built has been described this morning by Shelter as an attempt by the Government to “gaslight” homeless people.

Photo of Ross Greer Ross Greer Green

I pose to Mark Griffin the same question that I posed to him two weeks ago, and I hope that the Labour Party has considered it since then. This year, the Scottish Government faces a £485 million real-terms cut to its capital budget. Once what is legally or contractually obliged or safety critical is taken out, almost no options are left for balancing the capital budget. How would the Labour Party have done it instead? Nobody claims that it is a good decision.

Photo of Mark Griffin Mark Griffin Labour

Ross

Greer made that intervention a number of weeks ago. He makes the mistake of thinking that this is somehow a day 1, year 1 SNP Government budget. It has been 17 years in the making. The Government is reaping what it has sown in its wasteful spending.

Photo of Mark Griffin Mark Griffin Labour

I am sorry, but I do not have time.

It is wasteful spending. There has been an absolute failure to grow the economy. That is something that has come not just this year but has been arrived at over a number of years.

Again, I make the point that I made to Mr Greer a number of weeks ago. We do not come to the chamber asking the Government to fund new commitments—we are simply asking the Government to meet its own commitments. It promised the people of Scotland that it would build 110,000 affordable homes, but it is cutting £200 million from the budget for that. That is the Government’s failure, not this Parliament’s failure.

We have to realise that the reason why the Government is in this mess in the first place is because the First Minister felt the need to stand up in front of the SNP conference and make £500 million of unfunded promises to get him through his first conference speech. When it comes to the budget, it is clear to everyone outside the chamber, as well as those inside it, where the fault lies.

On the eve of this debate, on the front page of the

Daily Record, the Scottish Federation of Housing Associations, Homes for Scotland, the Chartered Institute of Housing, Shelter Scotland, Crisis and the Joseph Rowntree Foundation all spoke openly to set out the incredible damage that this values-led budget will do.

Independent research shows that 693,000 households have some form of unmet housing need. YouGov polling shows that 80 per cent of the country think that we are in a housing crisis. There are 250,000 people on social housing waiting lists, 30,000 people are homeless and 10,000 children are in temporary accommodation. In that context, to take a 4 per cent cut to the capital budget and end up with a figure for housing cuts that is six times higher is simply malicious. That is a hammer blow to the housing sector that will boost homelessness and push the housing emergency in the wrong direction.

It is no wonder that those in the housing sector think that the Government’s promise to deliver 110,000 affordable homes is gone and that bringing forward a review of the scheme is a tacit admission of failure.

I am talking about the children in temporary accommodation; the first-time buyers; the workers who are building the homes; the sons, daughters, friends and families who are living in overcrowded homes, unable to buy somewhere of their own or stuck in unfit homes or on waiting lists; and the working people who are paying more but getting less. They have all been abandoned by this budget, which Parliament should reject.

Photo of John Swinney John Swinney Scottish National Party

This budget takes place at a time of enormous fiscal challenge for the Scottish Government in dealing with the cumulative impact of 14 years of austerity, the unwanted Brexit process, rampant inflation and increased borrowing costs. Some of those factors are a product of the problems on the international stage, especially the illegal invasion of Ukraine and the conflict in the middle east. However, most of them are a direct product of the deliberate policy and financial choices of the United Kingdom Conservative Government.

That context forces this Parliament to address some acute financial and policy issues, and the Scottish Government has been prepared to do that. The Government’s budget priorities of equality, opportunity and community deserve our support. On equality, tackling poverty and protecting people from harm is ably demonstrated by the commitment to the Scottish child payment, which is lifting children out of poverty. On opportunity, we are building a fair, sustainable and growing economy, with—crucially—Scotland’s wealth per head having increased by 10 per cent since 2007 in comparison with 6.4 per cent in the United Kingdom. On community, we are delivering efficient and effective public services, with greater investment in NHS recovery than would have been the case if Scotland had followed policy in the United Kingdom.

Despite the prevailing economic and fiscal conditions, the Scottish Government has taken decisions to expand the resources that are available to Parliament to spend. That has meant that Parliament is able to invest in the social contract that is so vital to people in Scotland. The existence of free access to higher education is an important part of that contract, as is access to 1,140 hours of early learning and childcare, which is more than double what was on offer when we came to office in 2007. The maintenance of free personal care for the elderly is a policy choice that has to be paid for, as is the availability of concessionary bus travel for over 60s, which has now been extended to young people under the age of 22.

In that respect, I met some pupils yesterday at Perth grammar school, who explained to me the significant increase in the opportunities that are available to them to participate in society as a result of the policy innovation that this Government has taken forward.

Those choices are available only because the Scottish Government is prepared to take the financial decisions needed to make them possible. Some of those have involved being prepared, over a number of years, to take a progressive approach to taxation. I commend the Government for doing that.

One of the acute challenges in the budget is the capital programme. The UK Government plans to reduce capital funding for Scotland by 10 per cent in real terms over the next five years. That is a very short-sighted policy approach that does not recognise the need for sustained investment to support long-term competitiveness. It also takes place at a time when the value of capital budgets has been eroded by soaring inflation. Private sector organisations tell me that in the past two years their construction costs have risen by 30 to 50 per cent. If that has happened in the private sector, why on earth does Parliament not believe that it is also happening in the public sector? To answer Jackie Baillie’s question about where the money has gone, the money for capital projects has been eroded and eaten up by inflation, which the Conservative UK Government has allowed to become rampant.

The Scottish Government has a commendable record on capital investment, with the successful completion of the Queensferry crossing, the Aberdeen western peripheral route, the M8, the M80, the M74, the Borders railway and the Airdrie to Bathgate line. I point out to Mr Griffin that, on average, the Scottish Government has built more social houses per annum than the previous Labour and Liberal Executive managed to do. I look forward to the budget continuing to support the dualling of the A9, a project on which the Government has already embarked and which it is committed to completing.

Photo of Elizabeth Smith Elizabeth Smith Conservative

Mr Swinney has just reeled off some of the Scottish Government’s successes on capital spend. Does he acknowledge that there has also been a huge category of failures because of the waste that the Scottish Government engaged in on several really big commitments, such as those on the ferries, Burntisland Fabrications and a range of others? Had those been successful, we would have had an awful lot more money in this budget.

Photo of John Swinney John Swinney Scottish National Party

There will be capital projects that get into difficulty, such as the UK Government’s projects for frigates, aircraft carriers, and high speed 2, which are squandering money left, right and centre. The Tories do not have a leg to stand on as far as public finance management on capital projects is concerned.

That brings me neatly to where I intended to end on the Opposition. If the Conservatives’ plans were followed here, we would have to take £1.5 billion out of this budget. If Labour’s plans were followed, we would have to take £561 million out of the budget. I wish that I had some of the brass neck of the Conservatives, who come here and lecture us about public finances when every one of the members currently sitting on their front benchLiz Smith, Murdo Fraser and Liam Kerr—told us to do what Liz Truss did, which resulted in wrecking the United Kingdom’s economy and public finances. I wish that I had a smidgen of the brass neck of that crowd.

In Scottish Labour’s tradition of making empty, vacuous speeches that are high on rhetoric and devoid of choices, Mr Marra has truly excelled himself today. His contribution perhaps competes only with the vacuous speech made by Jackie Baillie.

The budget is being undertaken in difficult circumstances, but, despite the gravity of that challenge, it will deliver formidable benefits to the people of Scotland. I urge Parliament to support the Government in its efforts to deliver equality, opportunity and community, in line with the values of the people of Scotland.

Photo of Ross Greer Ross Greer Green

It has been said already that there has never been a more difficult context in which to set a Scottish budget. Going into it, we have a £1.5 billion gap, which would have been a £3 billion gap had we followed the tax policies set by the Conservatives and had Parliament rejected those championed by the Greens in recent years.

There has been a huge cut to the capital budget of almost £0.5 billion in one year and more than £1.5 billion over the remainder of the capital spending cycle. Despite those challenges, the budget reflects Green values. It puts people and planet first, and it is honest about the need to redistribute wealth to deliver on those ambitions.

The contrast could not be sharper. Earlier this month, we heard that the planet has hit 1.5°C of global warming. That is catastrophic, yet the UK Government is ditching its climate action measures and approving more oil and gas licences, and the Labour Opposition is ditching its UK-wide £28 billion green spending commitment. We should compare that with the £4.7 billion in the Scottish budget for climate and nature, which is securing our country’s and our planet’s future. It is taking action now to tackle the climate crisis, restore our natural world and create jobs for the future.

Photo of Ross Greer Ross Greer Green

Not at this point.

I will repeat a quote from Francesca Osowska, the chief executive of NatureScot. She said to the Finance and Public Administration Committee:

“I see in the budget a shift towards recognising the long-term challenges of climate change.”—[

Official Report, Finance and Public Administration Committee

, 9 January 2024; c 42.]

What the Scottish Government is doing is working. We saw that in the Fraser of Allander Institute report that was published just a few weeks ago, with an increase from 27,000 to 42,000 jobs in the renewables sector in just one year. The budget includes £67 million for the offshore wind supply chain, which is a doubling down on that key sector. We cannot prioritise everything or every sector, but that money shows that the Scottish Government is investing in green growth in the sectors that will really reward us for years to come.

Photo of Ross Greer Ross Greer Green

Not quite at this point.

We need to ensure best value for money in our spending, and that is about setting stricter conditions on the money that goes from the public sector to the private and third sectors. When Ivan McKee was Minister for Business, Trade, Tourism and Enterprise, he made a lot of progress on applying real living wage conditions to grants and contracts issued by the Government. That was a great move, but we need to move forward. The budget includes a commitment to move towards disqualifying from those grants and contracts companies that use unpaid trial shifts.

We can go further again. We should apply that commitment not just to grants and contracts, but to all money that moves from the public sector to the private sector. Bus companies would be an obvious area for that. We can strengthen fair work commitments and what that actually means, moving away from the somewhat abstract concept of the worker’s voice to make it clear that the Government expects any company in receipt of a grant or contract to recognise trade unions. That is important for making progress on our child poverty targets, for example, when funding is limited.

The council tax freeze is clearly not what the Greens would have chosen, and it cannot happen again, but we are not voting down a budget with £4.7 billion for climate and nature and £6 billion for social security just because we are unhappy with one policy. I welcome the Deputy First Minister’s commitment this afternoon on the next steps on council finance reform, which involve more than doubling council tax on second and holiday homes, not just raising more revenue but freeing up more housing.

The power of general competence is an incredibly important power, and I welcome the commitment to explore that. It would be living up to the value in the Verity house agreement of local by default, national by agreement if we were to empower councils in that way. The Greens do not want an English-style general power of competence that does not allow councils to create their own taxes and levies but does allow them to make the kind of dodgy investments whereby councils such as Thanet have financially catastrophised. That cannot be where we end up. The general power of competence presents a huge opportunity, however, and will build on the commitments that have already been made for a visitor levy, a cruise ship levy and a carbon emissions land tax, as well as the progress already made on doubling council tax on holiday homes. There are also the infrastructure levy and the public health levy, which is mentioned as a commitment to explore. That particular levy is important, as I do not think that the general public want supermarkets to pocket the profits from any increase in minimum unit pricing. That money should be reinvested in our health service.

I am proud that, despite inflation and cuts, we are funding essential services from progressive taxation. I understand Conservativesopposition to such tax policies, which is in line with their economic philosophy. I accept that Liz Smith put forward an alternative saving option for the national care service. The problem is that Graham Simpson, in his stage 1 speech, spent it many times over—never mind what Conservative colleagues have said this afternoon.

It is not surprising, but the Labour Party is disappointing the rest of us on the left of the spectrum by mimicking Tory tax policy, opposing not just its own manifesto but its own votes in the Parliament for previous rate resolutions. I really felt for Michael Marra today. His script was clearly written for him in London. For years, we have asked what Scottish Labour’s budget policies are, and today Mr Marra told us. Scottish Labour’s alternative to the budget is to sit tight and just wait for England to start voting for the Labour Party. It is an admirable sales pitch for Labour’s general election manifesto, but, as Mr Marra is fond of reminding us, this is the Scottish Parliament and, if the Scottish Labour Party was in charge, the 90,000 children who have been lifted out of poverty this year by this Government’s policies would still be waiting. That shows a total lack of ambition for Scotland. We saw how Scottish Labour is not in charge of its own policy, with the removal of the reference to collective punishment from the Commons ceasefire debate last week, and that could not have been better symbolised than by the Labour Party confirming that, if it wins the next general election, it will lift the cap on bankers’ bonuses but will not lift the two-child limit on child benefit.

This is a budget with Green values at its heart: cancelling school meal debt, extending free school meals to 20,000 more children, providing a record £4.7 billion for climate and nature, and creating jobs in the green industries of the future, all funded by the redistribution of wealth from those at the top to the most vulnerable people in our society and to the public services that need it. That is why the Scottish Greens will vote for the budget today.

Photo of Jackie Dunbar Jackie Dunbar Scottish National Party

I am pleased to speak in support of the budget. It is a difficult budget at a difficult time. Years of Tory austerity have taken their toll on the budget, as has the sky-high inflation of recent years, which means that the money that we are allocating is stretched much thinner than it might have been—and that is before we factor in that things have been made worse by Brexit and by nearly every one of Liz Truss’s 50 days as Prime Minister. In short, times are tough. That stands true not only for the Scottish Parliament’s budget, but for household budgets across this country.

I believe that this budget delivers for these difficult financial times. It delivers significant investment for our public services, it delivers support for Scotland’s growing economy, it delivers on tackling the climate emergency, and it delivers on protecting our most vulnerable people from the full force of Tory austerity. I am proud that the Scottish National Party Government is refusing to follow Westminster’s austerity agenda and is instead, with the limited powers of devolution, using this budget to mitigate some of the worst of the Tory cuts. That includes the continued mitigation of the bedroom tax. The Scottish Government is investing in tackling inequality and in our future, such as through the record investment in social security.

The Scottish Government is unashamedly targeting resources at the people who are most in need. Since 2007, where devolution has allowed, we have made a range of choices in this Parliament that have made things a little easier for those people than they are for people elsewhere in the UK.

An SNP Government decided to stop taxing folk for being sick. That means that prescriptions in Scotland are free, saving folk £9.65 for every prescription that they need to pick up. The same goes for eye tests, saving folk £25 every time that they need to get their eyes tested.

An SNP Government decided that university education should be free. That means that back-door tuition fees—graduate endowments—were scrapped. University tuition has remained free in Scotland while the cost of it has soared to up to £9,250 a year in England.

An SNP Government made a decision to invest in Scotland’s future and give our young folk the best possible start in life. That means that we are well ahead of the rest of the UK in the provision of universal funded childcare. It means that the game-changing Scottish child payment, which is now going up to a record £26.70 a week—that is £26.70 more than anywhere else in the UK—will benefit more than 327,000 under-16s. It means that every baby born in Scotland is supported with the contents of a baby box, which includes a range of essentials to support a baby’s first six months.

The accumulated impact of those decisions adds up, and they are making a positive difference to folk across Scotland. That means that, on average, people are spending £37 a year less on their water bills than people in Tory-controlled England are. It means that, on average, households are paying £648 a year less in council tax than households in Tory-run England are. It means more investment in education, with £305 more per person being spent in Scotland than in England. It means more investment in transport, with £234 more per person being spent. It means £87 more per person being spent on police, public order and safety; £294 more per person being spent on housing and community amenities; £86 more per person being spent on environmental protection; £75 more per person being spent on agriculture, fisheries and forestry; and £124 more per person being spent on enterprise and economic development.

In practice, that means that, per head of population, Scotland has more police officers, more prison staff, more firefighters, more nurses and midwives, more hospital consultants, more general practitioners, more dentists, more NHS staff, more teachers and more schools. All of that has been achieved without the full range of powers that the Tories have at Westminster. It has been achieved despite the many obstacles that the Tories have thrown in our way, such as austerity, Brexit and Liz Truss. And that is before we touch on the billions being spent on Trident, the billions disappearing on Covid cronyism contracts, the millions being spent on unelected lords and the billions being spent on new nuclear power plants at the expense of investing in a just transition for the north-east of Scotland.

What a contrast with what we have in front of us today. At the heart of the SNP budget is our social contract with the folk of Scotland. For 17 years, the SNP has delivered for the folk of Scotland. It has made life better for them, and the budget is no different. It will still do only a fraction of the good that it could be doing, though. It is only with the full powers of independence that Scotland can escape Westminster austerity for good, invest in our future properly and realise our full potential. However, whatever resources and powers we have, that social contract with the folk of Scotland will be honoured to the best of the Government’s ability.

Photo of Ash Denham Ash Denham Scottish National Party

The budget exemplifies Scotland’s being failed by two Governments. As a mid-size European nation that is abundant in natural resources and human talent, Scotland should be thriving for all our citizens, but here we are again in Parliament, voting on a budget that fails even to attempt to weave a Scottish silk purse from the pig’s ear of Brexit Britain.

I am sympathetic to the Scottish Government’s difficult position as the junior partner in the flawed fiscal framework, but my sympathy will run out if the only response to the poor budgetary cards that it has been dealt is hand wringing and finger pointing, instead of substantive action on delivery of the core mission on which it was elected.

Scotland deserves better than a spiral of downstream cuts to public services, and we deserve better than a slashed capital budget and critical investment in infrastructure being hamstrung by decisions that are made in Westminster. Our constituents deserve honesty in forecasting on matters that are important to their lives—whether that is schools’ additional support needs provision or affordable homes—and not a continuing pattern of delayed disappointment.

In 2024, thousands of Scots are still being failed in their basic need for a home of their own. Many children are being raised in temporary accommodation because of the lack of social housing across Scotland. The current desperate situation is not a blip; it is a direction of travel. Proactive planning must replace reactive managed decline, if we are to tackle the challenges of the inadequate supply of homes and unlock the significant economic opportunities of building and sustaining communities across Scotland.

We cannot afford not to act. The downstream consequences of insecure housing and homelessness are devastating to lives, to our society and to the economy. They exacerbate the challenges to sustained provision of health, education and welfare services.

The brutal cut of £205 million in real terms to the affordable housing supply programme budget makes the current target to complete 110,000 affordable homes by 2032 increasingly unrealistic. Soaring build costs and supply chain delays have resulted in house builders going out of business in a climate of housing shortage. The reality is that the affordable housing budget, even as it stands, will now buy less than it could have bought at the beginning of the parliamentary session.

The Scottish Government cannot continue to fall back on its previous successful track record on housing. A recent Survation poll that was commissioned by True North found that 74 per cent of Scots believe that we are experiencing a housing crisis. The Scottish Government is right to blame the disastrous impact of Brexit for construction supply chain issues, labour shortages and the inflationary pressures that are being driven by UK Government financial mismanagement.

However, it is eight years on from Brexit. We were dragged out of the European Union against our will. Scotland has not yet had the right to choose, and Scotland’s future is not in Scotland’s hands. Campaign slogans fade and leave the reality of managing the consequences across all sectors of our society.

The time for hollow words is over. The people of Scotland deserve clarity and transparency from both Governments to enable them to plan their lives with security, and our country’s vast resources must benefit the common weal if we are not to be stuck in an ever-decreasing cycle of pulling our people out of the river. It is time that the Scottish Government went upstream and tackled why they keep falling in.

The Government must publish its promised revised capital spending plan, with it considering both inflation and reduced capital funding from the UK Government. Given that this is the second year in a row in which the budget has been cut, coupled with the increasing concerns across the housing sector as to the viability of the target, we now need an annual tracking commitment from the Government in order to present clarity. That is not to manage disappointment about failed targets, but to address head on the threats to delivery, to allow plans to pivot where required, and to halt the impending housing crisis, with real ambition for Scots.

The Deputy Presiding Officer:

The final speaker in the open debate will be Keith Brown.

Photo of Keith Brown Keith Brown Scottish National Party

I should say at the start of my speech that I believe that this is a good budget that was constructed in very difficult circumstances. I like that it supports our public services, that it has social justice at its heart and that it protects our NHS—the best-performing NHS in the UK.

However, we heard in a number of speeches from Conservative and Labour members comparisons with previous Tory Governments or a future Labour Government.

Liz Smith told us that there is not sufficient support for business. That statement comes from a party that said virtually nothing in Scotland about the effects of Brexit on the Scottish economy and business. If the member is going to listen to what business says about the budget—which would be quite right; I do not deny that it should be done—why did she not listen to business when it told her its concerns about Brexit, which has had a far greater impact on business in Scotland? Is it the case that she shares Boris Johnson’s attitude to business? I cannot use the word that he used when he said what he would do to it, but I can say to members that it starts with an F. That was the Tory approach to business.

Conservative members have also made allegations that there is financial mismanagement or a budgeting crisis. Those allegations come from a party that has seen us reach £2.65 trillion in debt, which is the highest-ever level. We have the highest tax burden since the second world war: that has come from a Tory Government. As John Swinney mentioned, we also see the effects of inflation.

Photo of Murdo Fraser Murdo Fraser Conservative

Has

Mr Brown reflected on the comments of the Scottish Government’s economic adviser, Professor Mark Blyth of Brown University, who said that independence would be “Brexit times 10”. How can he come to the chamber with a straight face and talk about Brexit without realising that independence would be many times worse?

Photo of Keith Brown Keith Brown Scottish National Party

First, I do not agree with that statement and there is no way of knowing what it is based on. However, the idea that an independent Scotland could not construct a better future than being £2.65 trillion in debt and having the massive tax burden that the Tories have given us is, in my view, for the birds.

We have had 14 years of Tory austerity, which built on the previous Labour Government’s start to austerity way back in 2008-09, and that has had a huge impact on our public services.

We also have to consider the impact on the Scottish taxpayer. For example, they are currently contributing to the Ajax tanks programme. It was meant to cost £5.5 billion and to have produced 589 tanks by 2017. We have had only 44 tanks. The tanks were meant to cost £9 million each, but the current cost is £90 million each, and the programme is seven years late. That is the level of Tory mismanagement of the economy and the impact on the Scottish taxpayer.

The Tory Government, as Maree Todd said, has now said that we cannot have care workers coming to this country because their families cannot come. That has passed without comment or a word of criticism from Tory MSPs, who fail to criticise any action of the UK Government. There is another path for them. Why, if they really believe in support for business, can they not just say that it is wrong for the UK Government to cut our capital budget? What prevents them from doing that? Tory MSPs could do a lot more to stand up for Scotland and add their voices to the case for Scotland.

I turn to Labour. My goodness. Jackie Baillie mentioned the last period of the previous Labour Government. We all know its last words, which were

“There is no money left.”

It started the austerity—

Photo of Keith Brown Keith Brown Scottish National Party

I will not.

Jackie Baillie would not take an intervention from me and I will not be taking one from her.

What Labour did in 2009-10 is exactly what it did in 1979: it facilitated a long-term Tory Government that was committed to austerity, and Scotland continues to suffer the consequences of that.

Michael Marra mentioned the Scottish Government’s budget and Glasgow City Council. Let us make a comparison with Birmingham City Council, which is a Labour-run local authority. It will be making £1.5 billion in cuts, including cuts to adult social care, and it will be imposing a 21 per cent increase in council tax on the people of Birmingham. Of course, Birmingham City Council has something in common with Glasgow City Council: both have to deal with the legacy of Labour having failed to pay the councils’ female workers for many years.

That is the history of government by Labour, and that is a warning about what we should expect from a future Labour Government.

We have been talking about local government. I remember, having been a local government leader in the early 2000s, telling the Labour and Lib Dem Executive in Scotland that it was once again cutting local authorities’ share of the overall Scottish budget. I was told by both parties that it was not an important indicator, and that I should not worry about it. However, it seems to be very important to Labour and to the Lib Dems now. We have done far more to remove ring fencing and to support local government than Labour has ever done.

Alex Cole-Hamilton spoke about selling off the sea bed cheaply. His is the party that, under Vince Cable, sold off the Royal Mail for billions of pounds less than its market value. We are still paying for that. I will not mention what Ed Davey has done in relation to the Post Office, or the party’s betrayal on tuition fees. However, those things are very important. People think that we should dismiss and forget about the Lib Dems because they are an irrelevance, but we should not forget their record in office.

The Deputy Presiding Officer:

You will not have any additional time, Mr Brown.

Photo of Keith Brown Keith Brown Scottish National Party

I conclude by saying—given what has been said and the complete absence of any substantive amendment or suggested change to the proposed budget—that to my mind, the best thing that members in the chamber can do is vote for the budget motion in the name of the Scottish Government.

The Deputy Presiding Officer:

We move to winding up speeches.

Photo of Daniel Johnson Daniel Johnson Labour

In some ways, this debate is summed up by what we have just heard: a desperate, flailing SNP speech—something akin to a second-rate George Osborne tribute act—that attempts to blame a Labour Government for a global financial crash, despite the fact that the previous Labour Government left the economy growing. We will have no more of that chaotic nonsense.

This has been a chaotic budget. It is all pain and no gain, leaving Scottish taxpayers paying more but getting less. This is not just about a single year’s budget but about the cumulative impact of 17 years of stopgaps and short-term decision making. It is not just us saying that—committee after committee in this Parliament, the Institute for Fiscal Studies, the Fraser of Allander Institute and leading economists are saying that, too.

This budget is from a Government that is out of ideas, out of touch and, given that this is its penultimate budget, increasingly out of time.

The reality is that Scottish taxpayers are being failed by two Governments. The Tories are ushering in a recession under Rishi Sunak, and the SNP is presiding over 17 years of cuts, which is leaving every institution in Scotland weaker and impoverished after its time in government.

Perhaps the most interesting and most telling section of the debate was the exchange between Liz Smith and John Swinney. There was a contrast, with the two sides trying to juxtapose the social contract versus growth. Those are not binary options. We need one in order to deliver the other. We need the NHS so that, when people get ill, they get better and return to work. We need a good education system so that people can learn the skills that they need for the workplace. Businesses need roads and rails that are invested in so that they can get their goods to their customers and their workers can travel to their place of work.

We need to have good and well-funded public services for growth, and good and well-funded public services require there to be growth, so that the revenues that are generated can be reinvested in them. It is not either/or, which is the mistake that the Conservatives and the SNP have made in the chamber this afternoon.

Michael Marra was quite right. In some ways, this whole budget process was summed up in its inception. It started with a commitment to local government that was designed in a matter of hours in order to give the First Minister, who is struggling to make any headway whatsoever, a talking point for his speech from the conference podium. Civil servants were given mere hours’ notice before he did so.

Let us just look at the budget. It has been called out by the IFS, which has shown that it does not deliver the compensation to councils as was originally set out. It will mean £65 million cuts to core local government budgets, leaving local authorities such as Glasgow City Council making hundreds of cuts to teacher numbers. That travesty will do long-term damage to our young people in Glasgow.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

I am enjoying Mr Johnson’s speech, but it is just empty rhetoric. Where is Labour’s alternative budget?

Photo of Daniel Johnson Daniel Johnson Labour

I would be delighted if Mr Gibson could point to one year in which the SNP, when it was in opposition, presented an alternative budget to the Parliament. No, it did not, so we will have none of that.

Jackie Baillie was quite right in what she said about health. A 4 per cent cut has done an awful lot of work in this debate. It has led to a 100 per cent cut in the budget for NHS projects across Scotland. That means that we do not know when the Princess Alexandra eye pavilion will be replaced, when Raigmore hospital will get its upgrade or when Lochgelly will get much-needed upgraded health facilities. The budget leaves our health service teetering on the edge and provides only sticking plasters for it to carry on.

Mark Griffin was quite correct in what he said about housing. This year’s capital budget is being cut by 26 per cent. Yet again, the 4 per cent cut in the Government’s capital budget has been massively amplified. The housing budget will be cut by half over two years, so is it any wonder that 15,625 households are waiting in temporary accommodation, that the number of homelessness applications has increased by 36 per cent and that, as the Scottish Parliament information centre has pointed out, home building this year will be at half the rate that is needed for the Government to meet its affordable housing targets? That is not just a tragedy but an outright scandal. As Mark Griffin correctly pointed out, the Government is failing not only to do what we have called for but to meet its own commitments on affordable housing. That is how far short the budget falls.

Ivan McKee was quite correct to say that it is not just about making things add up but, ultimately, the budget is summed up by a lack of planning and a lack of strategy.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

Daniel Johnson will have heard, in Keith Brown’s rather bizarre tirade against my party—we clearly upset him no end—that the Scottish Government has burned through, in this year alone, half the money from selling off our sea bed on the cheap. Does he accept that that betrays a lack of forward planning by the Government?

Photo of Daniel Johnson Daniel Johnson Labour

The Government has squandered all the money that came in. It has patched up the holes in its budget instead of investing money for the future. That is absolute economic illiteracy.

Let us be clear about what has been said. The Finance and Public Administration Committee described the Scottish Government as “procrastinating on important decision-making”. In recent days, Audit Scotland set out that there is a lack of vision or medium-term financial strategy in the health service. The Institute for Fiscal Studies points out that the budget will grow by 2.3 per cent over the medium term but that, if the Scottish Government continues on its path, it will have to make cuts of between 3 per cent and 12 per cent because of its failure to implement a medium-term strategy.

The Christie principles lie in tatters. Those principles were about being outcome oriented, focusing on stability and having joined-up medium-term and long-term planning. On each of those points, the Scottish Government has done precisely the opposite.

We cannot have a budget that asks hard-working people to pay more while less and less funding is provided for public services. The SNP is asking working people to make up for its incompetence, which is why Scottish Labour cannot support the budget at decision time.

Photo of Murdo Fraser Murdo Fraser Conservative

At the start of the debate, my colleague Liz Smith set out her view that the budget exposes the fundamental divide in Scottish politics between those who want economic growth in order to stimulate investment, create jobs, encourage aspiration and, crucially, grow the tax revenues that we need to spend on our public services, and those who believe that the role of Government is simply to tax individuals so that it can take more of their money and spend it, without having any regard for the impact that that has on the wider economy. We see the outcome of the latter approach writ large, with Scottish economic growth over the past decade, on average, lagging behind that of the UK—indeed, the Scottish economy has grown at only half the rate of economic growth in the UK.

Liz Smith quoted those, including many in the Scottish financial services sector, who are increasingly concerned about the growing tax differential between Scotland and the rest of the UK, and she was quite right to do so. The Parliament’s Economy and Fair Work Committee heard recently from one large hospitality chain that it is already having to offer higher salaries to attract staff to Scotland to compensate for the additional tax that they will pay. That is hardly surprising when someone who earns £50,000 a year will be paying over £1,500 more in tax than someone south of the border. That simple illustration puts into context all the messages that we have heard from the SNP this afternoon about the so-called benefits of its approach, because clearly those are not seen by many of the people out in the real world who might otherwise be attracted to come and work in Scotland.

There might be some justification for the approach that the SNP Government has outlined if people really felt that they were getting good value for money. However, according to an opinion poll that was published earlier this month, by a margin of two to one, people in Scotland do not believe that the additional taxes that they are paying represent good value for money. Even on the SNP benches, members are starting to raise concern about the tax differential. Kate Forbes was in the press a few weeks ago saying that

“Continually increasing taxes is ultimately counter-productive”.

Even the former finance secretary, Derek Mackay, understood that equation. What a pity that the current incumbent of that office does not get that higher taxes do not necessarily lead to greater revenues.

Photo of Keith Brown Keith Brown Scottish National Party

Murdo Fraser is carefully avoiding mentioning the fact that, under the Tories, the UK now has the highest tax burden since the second world war. He also never mentions the £400 to £500 lower council tax in Scotland. As well as the differential that he mentions, will he at least acknowledge the base that the UK Government has set in having the highest tax burden since the second world war?

Photo of Murdo Fraser Murdo Fraser Conservative

Mr Brown makes a point about the tax burden, but he seems to forget what we have had over the past few years. We had Covid, when the entire economy was closed down and had to be supported by the Government through borrowing money for the furlough scheme, the generous business support and individual support payments that were made to keep the country going. [

Interruption

.]

The Deputy Presiding Officer:

Let us listen to Mr Fraser.

Photo of Murdo Fraser Murdo Fraser Conservative

Surely Mr Brown is not suggesting that that was a bad idea.

We also had the invasion by Russia of Ukraine, which had a devastating effect on the world economy and, again, the Government had to borrow money to give cost of living payments, from which many of our constituents have benefited. Of course the Government has had to borrow money and, when Governments borrow money, they eventually have to pay it back. Mr Brown should recognise that.

Photo of Murdo Fraser Murdo Fraser Conservative

I have already taken an intervention. I might give way to Mr Swinney later, if I have time.

The Scottish Fiscal Commission has pointed out that behaviour change will wipe out many of the potential gains from higher taxes on higher earners. That argument was made many years ago by the economist Art Laffer, and it is as true today as when he made it. We used to hear that argument in the chamber all the time from Alex Salmond. I know that we are not allowed to mention his name any more, but he used to mention that all the time, and it seems to have been erased from the memory of the current SNP front-bench members.

If we were to grow the economy, we would have more tax revenues. Instead, we see a real risk of higher earners leaving Scotland or not coming here in the first place. There is little wonder that we are hearing about a boom in property sales in Northumberland and towns such as Berwick-upon-Tweed, as the Scottish Government is creating tax exiles and then losing out on vital tax revenue as a result.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

Can the member tell me how cutting capital by £1.6 billion over the next three years will help to boost economic growth?

Photo of Murdo Fraser Murdo Fraser Conservative

If Mr Gibson had done his homework and looked at the plethora of cuts that are being delivered by the SNP Government right across the economy and fair work portfolio, he would realise that he has a real brass neck to raise that question with me, given what the Government that he supports is doing. This budget is simply a long list of cuts.

Photo of Murdo Fraser Murdo Fraser Conservative

N o, thank you.

We see cuts to local government right across the country. Local services are being cut or are disappearing. Libraries are being closed in Mr Swinney’s constituency, leisure centres and public toilets are being closed and there are cuts to educational support staff and to teachers. In SNP-run Glasgow, 172 teaching jobs are to go, which is a point that Pam Gosal made strongly. All that is thanks to the choices of the SNP Government—those cuts are being handed down to local authorities.

On capital, we see a 26 per cent cut in funding for housing at the very time when homelessness is at record levels. There is a cut of 75 per cent in the just transition fund and a total freezing of the NHS capital programme, which means that long-awaited patient treatment centres in cities such as Perth are not now proceeding and that long-awaited health centres in places such as Lochgelly and Kincardine are not being delivered. Of course, the SNP tries to deflect criticism.

Photo of Murdo Fraser Murdo Fraser Conservative

Yes, I will give way, because Mr Swinney is so persistent.

Photo of John Swinney John Swinney Scottish National Party

In responding to the intervention from my colleague Keith Brown, Mr Fraser mentioned some of the major difficulties that have faced the United Kingdom economy—Covid and Ukraine. I agree with him that those are big factors. Would he now like to apologise for his support for Liz Truss’s economic madness?

Photo of Murdo Fraser Murdo Fraser Conservative

Mr Swinney was the Cabinet Secretary for Education and Skills in the SNP Government. As a result, the average child in Scotland is one year behind the equivalent child in England. If anybody should apologise to the chamber, it is Mr Swinney who should apologise for his record as education secretary when he was in the Scottish Government.

The Scottish Government tries its best to deflect criticism and to put the blame on Westminster for the cuts, but even if we accept that the capital budget has been reduced, it is down 10 per cent in real terms. How does that equate to a cut of 100 per cent in the NHS capital budget, 75 per cent in just transition funding or 26 per cent in affordable housing? It is not possible to take a 10 per cent cut and turn it into a 100 per cent cut with any credibility or justification.

The most worrying of all have been the cuts in the economy, fair work and energy portfolio. It was downgraded in the recent Scottish Government reshuffle and lumped in with net zero and the environment. Perhaps that is no wonder, with an 8.7 per cent real-terms cut across that portfolio. The tourism budget is down 12.3 per cent, the enterprise, trade and investment budget 16.7 per cent, the Scottish National Investment Bank budget 29.2 per cent and the employability budget 24.2 per cent. All the measures that could help with economic growth are being cut in the budget. The Government has no interest in promoting economic growth, creating jobs or supporting household incomes.

The budget has no friends outside the chamber. It has no interest group outside the chamber telling us to support it. It delivers real pain for communities across Scotland, which will lose vital services. It hikes taxes on hard-working families but delivers no benefit to them as a consequence. It is a budget that fails Scotland and one that we should reject.

Photo of Shona Robison Shona Robison Scottish National Party

I thank members across the chamber for their contributions. I will come back to some of them in a moment.

Through the budget, we can show the breakdown in allocation between different portfolios and areas of activity within them. However, we are cognisant that, in practice, there will be areas that overlap in how they affect people, which is why we always consider our budgeting in the round. Of course, we always reflect on the priorities of the people of Scotland as we set budgets, and we will continue to seek new ways to engage with as wide an array of people and interests as possible as we work towards future budgets.

As I set out, the budget prioritises front-line spend in difficult circumstances, which I will come back to in a moment. We have heard a theme throughout the budget process, which is that members—particularly Opposition members—focus more on areas where difficult decisions have been made and less on areas where funding for front-line services has increased. They have refused to bring alternative spending plans on any aspect of the budget to the Parliament and, of course, have not been straight with the public when pretending that they can cut taxes while increasing public spending. I am afraid that that is not credible and does not work.

Labour would have to find £560 million through reductions in spending to fund its tax cuts. We have heard from UK Labour that it has a commitment to continue with Tory spending plans. The idea that there is any more money for health, housing or anything else is misrepresentation, to say the least. The Tories, who have said that they want to return to UK tax levels, would lose £1.5 billion of revenues from the Scottish budget. Can members imagine the impact that that would have on employability, areas of the economy, housing, health or anything else? We need more transparency from the Opposition when it comes to budget setting.

I want to turn to a couple of areas. First, there was an interesting difference of opinion on health even among members on the Labour front bench. Daniel Johnson at least acknowledged that the health budget had increased, whereas we heard Jackie Baillie and Michael Marra saying the opposite in the same debate.

Photo of Shona Robison Shona Robison Scottish National Party

Not at the moment, because the member did not take my intervention. I might later, if I have time.

The truth of the matter is that there is an extra £0.5 billion for front-line NHS boards, with a total investment of £13.2 billion, which is an above-inflation increase of 4 per cent, in contrast to the UK Government’s real-terms cut. That is before we look at the in-year revenues that will go to health, which depend on whether we get agenda for change pay consequentials from the UK Government. We will pass every penny on to the NHS, as we have done previously.

There is an additional £230 million to support a minimum of £12 an hour for adult social care workers, which is a 10.1 per cent increase for all eligible workers. I would think that the Labour members would welcome that and vote for it, but they are voting against that proposition, which is quite astonishing.

I turn to the affordable housing supply programme, because it again encapsulates the Opposition’s refusal to recognise the impact of not just the 10 per cent cut to the capital budget but the cut to financial transactions capital, which has had a devastating impact. There is £290 million less coming through financial transactions, which were underpinning the affordable housing supply programme. Just two weeks ago, there was a further £64 million cut to financial transactions, directly impacting on the affordable housing supply programme. It is not just the 10 per cent cut to capital, but all the other cuts that undermine our ability to deliver.

We have a good track record of delivery on affordable housing, and we are determined to continue that record. As I have said—and I will say it again—if we get additional capital in the spring budget next week, the priority will be the affordable housing supply programme. We recognise the importance of continuing with the Government’s record on delivery of affordable housing, which has been higher than anywhere else in these islands, and the impact that it can have on homelessness.

Let me turn to some other points. Liz Smith talked about Scotland’s economic performance. Tory members always attempt to talk down Scotland’s economic performance while presiding over a recession, with economic commentators—to an institution—all saying exactly the same thing. The International Monetary Fund, of all organisations, the OBR, the IFS and the Resolution Foundation are all talking about Tory economic incompetence in cutting taxes instead of increasing public spending. If that happens at next week’s spring budget, it will be an outrage and it will further compound the economic incompetence of the Tory Government.

Photo of Elizabeth Smith Elizabeth Smith Conservative

I know full well that there are concerns within our party about the comments that are forthcoming from so many in the business community about the increasing tax differentials and the difficulty that they are presenting to Scotland in terms of recruiting new labour, which we desperately need in Scotland’s powerhouse industries. We cannot get some of those people. Those are not our comments; they are coming from across the business community, right, left and centre. That is why the budget has had such a negative reaction.

Photo of Shona Robison Shona Robison Scottish National Party

The Scottish Fiscal Commission builds in the assumptions on behavioural change and HMRC is doing a lot of in-depth work, which we will, of course, pay close attention to. However, the National Records of Scotland data shows net in-migration to Scotland. That just does not fit with the Tories’ narrative and they cannot bring themselves to welcome the fact that people from the rest of the UK make an active choice to come and settle here. Why do they do that? They do it because of free tuition, the free support that is given and the social contract, where there is a better offer on childcare, for example, and local services also give a better offer to people. That is why people come from the rest of the UK to locate in Scotland. The Tories, of course, cannot bring themselves to welcome that.

On Scotland’s economic performance, earnings in Scotland have grown by 8 per cent in 2023—faster than earnings in any other part of the UK, including London and the south-east—which is providing much-needed revenue for our tax base.

They might not fit with the Tory narrative, but those are the facts about the performance of the Scottish economy. For once, it would be refreshing to hear the Tories welcome some of those aspects.

Photo of Shona Robison Shona Robison Scottish National Party

No. I do not have a lot of time.

Alex Cole-Hamilton talked about Liberal budgets, and I gently say to him that we know what the last Liberal budget looked like when that party was part of a Tory-Liberal coalition in the UK Government—they butchered welfare spending. People are still seeing the consequences of that, whether in the rape clause or the two-child limit. We know what Liberal budgets look like, so we will take no lessons from Alex Cole-Hamilton.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

I am grateful to the cabinet secretary for allowing me to interrupt yet another bizarre tirade from a prominent SNP politician. She mentioned the rape clause, but that did not come in under the Lib Dems. In fact, it was the Lib Dems being in coalition government that stopped the worst excesses of the Tory Government, such as the rape clause. My goodness—[

Interruption

.]

Photo of Alison Johnstone Alison Johnstone Green

Members, let us hear Mr Cole-Hamilton.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

My goodness, can the cabinet secretary not see the tempering influence that we held over that Government?

Photo of Shona Robison Shona Robison Scottish National Party

I am really not sure what to say, other than that, if the best that the Liberals can do to stop the worst excesses of a Tory Government is to prop up that Tory Government, we know what happens when we vote Liberal Democrat.

Like Kenny Gibson, I am still waiting for any alternative budget proposals. He reminded members, quite rightly, of the impact of the Truss budget, which the leadership of the Tories in Scotland urged—demanded, in fact—that we follow.

Kenny Gibson also, quite rightly, reminded members of the position of local authorities down south, with eight councils in England going bankrupt, which compares with record funding for local authorities in Scotland of £14 billion. That is a real-terms increase in funding to local government, even setting aside the money for the council tax freeze. With the only council so far not to freeze the council tax being the Tory-Liberal coalition in Argyll and Bute, is it not ironic that the Tories come here and lecture us about tax increases? Argyll and Bute is the only place where the Tories are able to act rather than just talk, and what do they do? They increase people’s taxes by 10 per cent. They do one thing in opposition in the Parliament—

The Presiding Officer:

The cabinet secretary must conclude.

Photo of Shona Robison Shona Robison Scottish National Party

— and they do an entirely different thing when in government in a local authority. We will take no lessons from the Tories on tax policy.

This is a budget in difficult circumstances that prioritises funding for front-line public services. I urge the sensible people in the chamber to back it, because it means funding for services and for social security payments, and it means ensuring that people are supported in difficult times.