The next item of business is a debate on motion S6M-14825, in the name of Ross Greer, on budget priorities 2025-26. I invite members who wish to participate in the debate to press their request-to-speak buttons as soon as possible.
14:52
We are back to being a Parliament of minorities, which means that, for a budget to pass—or, indeed, for any parliamentary business to be agreed to—co-operation and compromise will be required. That is not a new challenge for this Parliament. In the previous session and in a number of other previous sessions, compromise has been required and minority government has been the order of the day.
However, minority government is a greater challenge today because Scotland is in a financial crisis. Our public finances are simply not sustainable. It is well timed that this debate comes at the start of this month and that, at the end of the month, we will have a Government debate on fiscal sustainability, which was requested by the Finance and Public Administration Committee.
The Green motion does not pretend that devolution is enough: devolution does not give us all the powers that we need to achieve our goals for Scotland. Under the powers of devolution, we cannot eradicate child poverty, nor can we completely take the required action against the climate emergency.
However, at the same time, we cannot afford to sit on our hands. It is of no comfort to people at the sharp end for us to explain the limits of the Scotland Act 2012 or the constraints of the fiscal framework. That does not help those who are suffering as a result of cuts to public services or who are suffering the effects of climate breakdown. We have a moral responsibility.
Would Mr Greer like to reflect on the fact that, under the fiscal framework and the Barnett formula, we in Scotland have around 20 per cent more to spend per head of population than the United Kingdom average, yet many outcomes in Scotland are poorer than they are south of the border? Why does he think that is?
I am grateful for that intervention. There is a range of explanations for those outcomes. First and foremost, although we have greater spending per head, we are not in charge of all the levers that affect the day-to-day lives of people in Scotland. Most obviously, we are not in charge of the vast majority of the social security system. If Mr Fraser’s party had not done such immense damage to that system over the previous 14 years, there would be far fewer people in Scotland living in poverty with worse public health outcomes.
Greens want more public spending, but we will be honest about where we think that the money for that can come from and how it can be raised. Unsurprisingly, we would take funding from the road-building and motorway expansion budgets and put it into housing and climate action, and we would raise more from those who can afford it, such as the supermarkets and people who travel by private jet.
The current balance of tax, spend and the block grant is not sustainable. We might all have different reasons for believing that that is the case, but I think that we all agree that the current balance is not sustainable. Addressing that is a shared responsibility—it is not just the Scottish Government’s or the Scottish National Party’s responsibility.
Ross Greer is right about sustainability and right to think about additional levies. However, I do not think that the levies that he has talked about, such as those for supermarkets, are enough to cover that sustainability. What we need is faster wage growth than the UK average, because that is what is baked into the fiscal framework. Would he agree with that point or reflect on it?
I am grateful for that intervention, because it takes me to a point that I am about to touch on. Before I get to it, I want to round off the shared responsibility point. All parties in the Parliament have voted for budgets at some point in the past 25 years and all parties have suggested areas of spending that we have seen as priorities. We therefore need to see getting devolved finances back on a sustainable footing as a shared responsibility.
I respect the honesty of those who come here and say that they would simply cut their way to balance. It would be immensely destructive and I would oppose it, but there is an honesty to that, when there is no honesty to what we have seen over recent years. Members come here to demand huge amounts of additional spending but suggest no tax rises or cuts in other areas.
On Daniel Johnson’s point, I do not think that it is an either/or between growing and strengthening our tax base and increasing taxes to raise revenue right now. I point to the approach that has been taken in the United States, which recognises that a Government needs to spend more to invest in and strengthen the economy. The Inflation Reduction Act there has been a far more effective way to recover from the global economic turmoil of the past few years than the approach that most European Governments have taken.
The Scottish Greens have already proposed a range of revenue-raising and savings options. For example, although we support tax support for small businesses, a quarter of a billion pounds every year is spent on the small business bonus scheme, from which the Government’s own evaluation could find no evidence of positive economic outcomes. Some of that money—although it is a small amount—goes to the shooting estates that the wealthy elite owns and some of it goes to businesses that are anything but small. Reform in that area would present a savings option.
The grants that are given to arms companies are another small but obvious example. A year into Israel’s genocide in Gaza, it is appalling that the Scottish Government’s enterprise agencies are still giving public money to those companies.
On the supermarket levy that I mentioned, at the moment our public services are under significant strain as a result of the harm that is done by alcohol and tobacco, but the supermarkets that make such a substantial profit from them are not being taxed proportionately. The private jet tax that the Greens have been pushing over recent weeks—albeit that we would need to see movement from the UK Government on subsidy control—is another example.
We would also, as I mentioned, cut motorway expansion. Our motion makes the point about policy coherence. It is not right—it is not effective—to spend money on increasing and cutting emissions at the same time. We should move the money that is currently spent on projects that increase emissions into those that would actually cut them. Another example of that would be the fact that the Government gives money to both arms dealers and the emergency appeals that charities have to launch to deal with the consequences of countries such as Yemen being bombed to rubble.
We agree with the Scottish Government’s amendment. The UK Conservative fiscal rules have failed and we would like the new Labour Government to abandon them—in particular, in relation to capital and the ability to invest in the public infrastructure that is required for a strong economy.
On the Conservative amendment, I am glad to see Murdo Fraser here. I was hoping that his colleagues were checking that he was okay when I saw his amendment yesterday—I was expecting him to come in wearing a sandwich board and shouting, “Doom is nigh!” It is such an extreme amendment that I was worried that Fergus Ewing had helped him to write it. [Laughter.]
The Labour amendment, on the other hand, could have been written by the Conservative Party just a few months ago, when it was in charge of the UK Government. There is a challenge for Labour here. Where is the vision? Where is the change on offer?
What is key to the Greens’ motion is empowerment of local government through the budget—the more local government raises, the less we must haggle annually here over the general revenue grant.
The visitor and workplace parking levies are examples of legislative change that came about as a result of previous budget agreements.
[Made a request to intervene.]
I am sorry, but I will not be able to take Katy Clark’s intervention, because I am just closing.
The Greens want to see progress big and small. We want, for example, a revaluation of the rates for council tax, but we also want the ability to set parking fines to be devolved to councils, which we need to start seeing as an equal tier of government.
There are some direct budget choices and others that—I will be quite honest—we are simply using as a point of leverage with the Government.
We are proud of our previous budget agreements that delivered free bus travel for under-22s; £1.5 billion of additional income for public services; an increase to the additional dwelling supplement; record spending on walking, wheeling and cycling; the nature restoration fund; the removal of peak rail fares; and more.
The challenge for the Scottish Government this year will not just be around specific proposals but around its ability to provide trust and good faith to any other party in the Parliament that it needs to deal with that what is agreed in the budget is what will be delivered. Agreement is possible, but the challenge for the Scottish Government is for it to prove that it is able and willing to deliver it.
I move,
That the Parliament notes that the fiscal levers that are currently available to the Scottish Government are inadequate to fully protect public services and communities from UK Government austerity and economic turmoil, but that the Scottish Government must use every power at its disposal to address the urgent social, economic and environmental challenges that Scotland faces, and calls, therefore, on the Scottish Government to explore all avenues to fiscal sustainability, including seeking opportunities for further powers, such as those over levies and charges, to be devolved to local government for 2025-26, creating new powers, such as a cruise ship levy, exploring how a carbon emissions land tax and a power of general competence could be delivered and ensuring the most effective and progressive use of existing tax powers and tax reliefs and that spending does not undermine the core missions of tackling child poverty and the climate emergency.
As ever with these debates, there is very limited time in hand, so interventions will have to be accommodated largely within the speaking allocations.
15:00
I thank the Scottish Green Party for lodging the motion. It is absolutely right that the fiscal levers that are currently available to the Scottish Government are inadequate. We have all felt the impacts of the high inflation, austerity and economic turmoil of the previous UK Government, and our public services and communities have borne the brunt.
We have done our best to mitigate those impacts, but we are doing so without the full set of fiscal powers that other countries have. My amendment adds to the Scottish Greens’ motion and calls on the UK Government to scrap the fiscal rules of the previous Government. We want new fiscal rules that enable greater investment to support public services on the transition to net zero.
Last week, I met the Chief Secretary to the Treasury and raised the need for investment in public services and infrastructure in the UK budget. I pointed out the Treasury’s finding that departmental budgets had not been reset to account for inflation, which means that they are £15 billion lower this year in real terms than 2021 spending plans. If we had our share of that, I would not have needed to make the spending reductions that I announced last month.
I want to work with the UK Government to address the challenges and, of course, to put our public finances on a more sustainable footing. The Chancellor of the Exchequer’s commitment to multiyear budgets will help, but it is not sufficient: we need a wider range of fiscal tools to manage our budget.
The cabinet secretary is right to talk about fiscal sustainability. What are her reflections on the Scottish Fiscal Commission’s observation about the £600 million performance gap, and is the Scottish Government focusing on addressing that?
The Scottish Fiscal Commission also said that there is “considerable uncertainty” about the resources that will be coming to the Scottish Government from the UK Government, and that uncertainty adds to the fiscal constraints that we have. Moving to multiyear budgets absolutely helps us collectively to have a line of sight on resource and capital and on how we can get to a more sustainable position while investing in public services.
Ross Greer spoke about devolving further powers to local government to provide greater revenue-raising abilities, and I am keen to do so. We have already made significant progress on delivering a fiscal framework with local government, and we have delivered on our commitment to enable councils to apply a premium of up to 100 per cent on council tax rates for second homes from 1 April this year.
Parliament has also passed legislation to give councils the power to introduce a visitor levy in their area to support investment in the visitor economy. The programme for government makes it clear that we will intensify work on designing a potential cruise ship levy, so we will engage with local authorities and stakeholders over the coming months to develop more detailed proposals.
I would appreciate it if the cabinet secretary could confirm that it is still the Scottish Government’s intention to deliver a cruise ship levy by the end of this parliamentary session.
Yes—subject to all the consultation that we need in order to take on board stakeholders’ views of the cruise ship levy. It is important that we get that right, but we are keen to move forward as quickly as we can.
We are also carefully considering the responses to “Infrastructure Levy for Scotland—Discussion Paper”, which we published in June. If that levy is taken forward, it will provide local authorities with an additional mechanism to secure developer contributions to fund infrastructure in their area. Councils will also be able to decide whether to implement a workplace parking levy, depending on local circumstances.
We will continue to evolve the joint work on the fiscal framework, and I am happy to discuss with members from across the chamber further proposals to strengthen the powers of local government.
I have said that the Scottish budget for next year will be very challenging, and the decisions that the Chancellor of the Exchequer takes on 30 October will play a big role in determining our funding. Our budget will be focused on delivering the priorities that the First Minister set out in the programme for government. We are spending £134 million this year to mitigate the worst of the UK Government’s damaging welfare policies. If the chancellor changes course on those, we will have more money for further action on those priorities. I had a very valuable meeting with the Finance and Public Administration Committee yesterday as it looked ahead to the Scottish budget. I welcome further engagement across the chamber.
The motion calls on the Scottish Government to use
“every power at its disposal to address the urgent social, economic and environmental challenges that Scotland faces”.
That is what we are doing, but we can go only so far with our current powers. We need change from the new UK Government. It needs to increase funding for public services, invest in infrastructure to support our economy and deliver our net zero ambitions, and end the dreadful social security policies of the previous Government. It needs new fiscal rules that focus on public sector net worth, thereby allowing greater investment in the fabric of the country. Those are the changes that are needed to help us to address the challenges that we face. If the UK Government is up for it, we will work together to achieve that.
I move amendment to motion S6M-14825.3, to insert at end:
“, and calls on the UK Labour administration to scrap the fiscal rules of the former UK Conservative administration.”
15:06
I do not think that I have ever seen a motion so full of so much nonsense as Ross Greer’s. Let me try to unpick exactly where the Greens are in error—although I have only four minutes, so that will be a great challenge. We should remember that the Green Party is fundamentally hostile to economic growth and wealth creation, so everything that it says needs to be seen in that context.
The motion starts by decrying the fiscal levers that are available to the Scottish Government. Let us remind the Green Party that the Scottish Parliament is one of the most powerful sub-state legislatures in the world in its power to make laws and its fiscal powers. Indeed, that is how it is seen in federal states, such as Germany. The Länder look jealously at the Parliament’s fiscal powers, as anybody who has visited Germany would know—I say that as the Minister for Public Finance sits laughing on the front bench.
Will the member take an intervention?
Of course.
I am very grateful to Mr Fraser for taking the intervention. I am interested in his thoughts on the question that I posed. Does he believe that the Parliament is powerful enough to eradicate child poverty in Scotland, or does he acknowledge that that would require the co-operation of both Governments?
The Parliament has the most generous block grant in the history of devolution. The block grant has nearly doubled in real terms since the Parliament was established. As I pointed out to Ross Greer, per head of population, we have 20 per cent more to spend than is the equivalent across the UK. The Parliament has vast resources. The questions that Ross Greer should be asking are: why is that money not being properly spent, and why is so much of that money being wasted, given that the outcomes here are poorer than in other parts of the UK?
The Parliament has power over non-savings, non-dividend income tax and can change bands and rates completely. It has power over land and buildings transaction tax, aggregates tax, non-domestic rates and council tax. It even has the power to create new taxes. It is therefore nonsensical to say that the powers do not exist. We criticise the Scottish Government for using them to make the wrong choices. A case in point is the national care service, which our amendment refers to. Money is being wasted on bureaucracy that should instead be spent on front-line services.
We have seen years of economic and fiscal mismanagement by the SNP in government—propped up by the Greens in government for a number of years—which has led to £2.7 billion of taxpayers’ money being wasted over this parliamentary session.
Will the member take an intervention?
I have only four minutes, and I have a lot more to say. I am sorry.
Scotland is forecast to have the fifth-lowest gross domestic product growth of any UK region. We lag behind the rest of the UK in growth and have done so for the past decade. The SNP’s failure to grow our economy has cost the Scottish budget, to date, £624 million, according to a calculation that was done not by the Scottish Conservatives but by the Scottish Fiscal Commission. Underpinning all that, in Scotland, we pay more tax than the rest of the UK. Those decisions are having a negative impact on our ability to grow the economy. I have, many times in this Parliament, referred to the attitude of Scottish businesses towards the tax differential. In order to attract staff, many of them now have to offer a wage premium to take account of our higher taxes.
In addition, the Greens’ destructive approach to housing has damaged investment confidence and driven away hundreds of millions of pounds of investment, which has gone elsewhere. Thanks to the Greens’ policies on that sector, it is no wonder that we have a housing crisis.
Instead of introducing new taxes and widening the tax gap with the rest of the UK, the Scottish Government should go in the opposite direction. It should ignore the economic and fiscal illiteracy that the Scottish Greens propose and instead use its extensive and generous fiscal powers to deliver a budget later this year that will prioritise economic growth and reduce the tax gap with the rest of the UK. The Greens will not like that budget, but the rest of Scotland will be thankful for it.
I am pleased to move amendment S6M-14825.2, to leave out from “notes” to end and insert:
“agrees that the fiscal levers currently available to the Scottish Government are more than adequate to deliver the economic growth that is vital to sustain public services; recognises that the current fiscal settlement, provided by the former UK Conservative administration, is the most generous on record, and that the Scottish Government has failed to properly utilise the monies allocated to it, by instead choosing to prioritise wasteful projects, such as the National Care Service; notes that the Scottish Government’s financial incompetence, which was exacerbated by the former Bute House Agreement with the Scottish Green Party, has resulted in Scotland becoming a high-tax, low-growth economy that has lost the confidence of the business sector and has resulted in severe public sector spending cuts to fix the Scottish Government’s financial black hole, and urges the Scottish Government to show some common sense and ignore the economic and financial illiteracy proposed by the Scottish Green Party, which proposes yet more burdensome taxation and anti-growth regulations, and to use the generous fiscal powers that it already has to deliver a Budget that prioritises economic growth and provides for all of Scotland.”
15:10
I agree with Ross Greer that it is certainly a good thing that we are going to have the long-awaited fiscal sustainability debate. There are real challenges in our public finances in Scotland that we need to get to grips with. In eight weeks’ time, the cabinet secretary will be on her feet in the Parliament to announce the budget for the coming financial year—or, more likely, the budget for the following six months.
There are significant pressures on the public finances, not least the pressure that is applied by an incompetent Government that has been wasteful with taxpayers’ money and has refused to plan for the future. However, I am sorry to say that the measures that the Scottish Greens set out today—some of which are certainly worthy of investigation—will not be able to close the gap in the coming budget.
Last week, the Parliament passed the Aggregates Tax and Devolved Taxes Administration (Scotland) Bill, and the Scottish Government plans to introduce the Scottish aggregates tax on 1 April 2026—a decade on from the Scotland Act 2016, in which the power to introduce that tax was devolved. It has taken 10 years to devolve a tax that, to a large extent, mirrors a pre-existing one.
A range of independent experts say that they are sick and tired of the idle talk of wealth taxes. They want Government to get on and reform the wealth tax that we already have—the council tax. However, the SNP has spent 17 years not reforming the council tax.
Last year, Professor David Bell pointed out that it had taken
“six years to implement social security in Scotland.”—[Official Report, Finance and Public Administration Committee, 19 September 2023; c 7.]
That is giving people money, not taking money away.
I could not agree more with Mr Marra on his frustration with the failure to reform the council tax. Can he clarify Labour’s position on reforming the council tax? Would his party at least support revaluation? Would it go further? Does Labour believe that the tax should be replaced outright?
Over the past decade, the Labour Party has brought forward a range of measures to reform council tax, but we have not found willing partners in this chamber. We are entirely open to conversations with the Greens, the SNP, the Conservatives and anybody else about how we make those proposals work. We know that reform has to happen, and we should get on with it. [Interruption.]
Minister!
Presiding Officer, given some of the cabinet secretary’s comments, you can understand why I am sceptical as to whether a shopping list of additional levies will be the silver bullet for the budget.
The Greens are right to point to the unholy mess that the SNP has made of Scotland’s finances: £5 billion lost to waste; the failure to grow our economy, leaving us £8.5 billion poorer; and nearly half a billion pounds of Scotland’s money squandered on a black hole, rather than invested in our nation’s future. There have been three consecutive years of emergency budget statements that announce swingeing in-year cuts across the board, but it does not have to be that way.
After 17 years, we might think that the SNP would have got to grips with the process, but, if anything, it is getting worse. Part of the problem is how opaque the budget is. A responsible Government would surely comply with its agreement with the Scottish Fiscal Commission to supply the data that is needed for forecasts, but, for two consecutive years, the SNP has failed to provide to the Scottish Fiscal Commission such fundamental information as a public sector pay policy. At yesterday’s Finance and Public Administration Committee meeting, the cabinet secretary still refused to say whether she would supply a pay policy for this year’s budget, despite the fact that pay accounts for more than half the total budget. Surely that is something that ought to be budgeted for. The levels of incompetence are truly shocking.
Of course, it was only yesterday that the cabinet secretary confirmed the assumptions that she had made on pay in last year’s budget—a £375 million understating of the cost. It is no wonder that we ended up with £1 billion of emergency crisis cuts in a year, and no wonder that the likes of the Fraser of Allander Institute, the Institute for Fiscal Studies and Audit Scotland have criticised the Scottish Government for its lack of transparency around budgets.
This incompetent Government has well and truly lost its way. Worse still, it has lost control of the public finances, meaning that ordinary Scots will pay the price as they pay more and get less.
I move amendment S6M-14825.1, to leave out from “notes” to end and insert:
“understands that tackling the social, economic and environmental challenges that Scotland faces and delivering sustainable funding for public services is only possible through delivering sustainable economic growth and an economy that works for everyone in Scotland; recognises the importance of the UK Government’s commitment to fix the foundations of the economy, and understands that Scotland will benefit from this approach; understands that the Scottish Government’s wasteful spending and failure to plan ahead have led to significant pressures on the Scottish Budget, including £5 billion lost to waste; notes that the Scottish Fiscal Commission has projected a £1.9 billion gap between spending pledges and available funding in the Budget by 2027-28, and believes that, in addition to effectively using the extensive fiscal powers available to it, the Scottish Government should prioritise fiscal competence and transparency in the management of Scotland’s finances.”
15:14
As normal, the Liberal Democrats will come forward with costed, reasonable proposals that will balance a growing economy with an interest in our constituencies and protecting the fabric of society. However, that is for another day, when the UK Government’s budget comes forward and when there are further proposals from elsewhere.
Today, I want to acknowledge the Greens’ influence. There is no doubt that the party has made an impact on the economic performance of the country and the Government. There is no doubt that they have made an impact on housing, the climate and tax. My concern is about what that impact is, and about the Greens’ lack of concern about the consequences of their policies.
For example, there have been reports of behavioural change, with people choosing to work elsewhere because of the ever-rising taxes in this country—yet there is not a peep, a word or a concern from the party about that. The party has ignored housebuilders telling us that they are investing in England, rather than Scotland. It dismissed those concerns with, “What do these people know? Do they know what they are talking about?”, as if it is not a concern for the Government.
Will the member take an intervention?
Not just now.
When there is evidence that the majority of what is raised through a tax rise will be lost to behavioural change, there is no concern. No questions are raised—there is no concern at all. Where is the commentary about the £624 million economic tax gap resulting from the sluggish economy? There is not a peep, a word or a concern. It is as if those things are nothing to do with the Greens.
Will the member take an intervention?
Not just now.
It is important that we understand the consequences of the SNP Government’s decisions, including the hundreds of millions of pounds of ScotWind money that is being used to plug the hole in the country’s finances. Those problems were partly created by the Greens’ economic policies. The trouble is that the Greens claim to be progressive. They tell us that they care more than everyone else, and that it is the progressiveness of the party that brings more care to the country. However, it is not progressive to lose hundreds of millions of pounds in a tax gap. It is not progressive to lose good people who choose to work elsewhere. It is not progressive to fail to build the houses that we are desperate to build in this country. That is not progressive politics—it is cavalier politics, which we should dismiss.
Will Mr Rennie take an intervention?
I have only four minutes, and there is a lot to criticise with the Greens.
The Greens feel cheated, and I feel sorry for them, because they were thrown out of the Government when their allies had so willingly agreed to apply their policies in government. They feel cheated and hurt because of that. In those circumstances, I, too, would probably feel hurt. However, the Greens have now come forward with a whole suite of popular policies for the Parliament to embrace, including suggestions for the exploration of further fiscal avenues, lots of new taxes and a rise in income tax, which is how I interpret an aspect of the Greens’ motion. It does that without any acknowledgement of all the concerns that I raised—
I am trying to acknowledge them, but Willie Rennie will not take my intervention.
If he wants, Mr Greer can include that when summing up.
It is important that we understand the consequences of the Greens’ policies of ramping up taxes and the impact on behavioural change; of the loss of income as a result of putting up those taxes; of the £624 million tax gap; and of the loss of the ScotWind funds. None of that was in Ross Greer’s speech—not one element. That is why we should forever reject the policies of the Green Party.
We now move to the open debate.
15:19
As we have been discussing, Scotland stands at a critical crossroads. The challenges that we face—social, economic and environmental—are not abstract, but daily realities in our communities. Those communities are not just affected by the challenges; they are poised to be the vanguard of our response. Throughout the parliamentary session, I have witnessed at first hand the untapped potential in our communities to combat the climate and nature emergencies. Communities are not waiting for permission to lead; they are demanding the opportunity.
The question before us is not whether we should involve communities but how quickly we can empower their leadership. We have seen that work before. During the pandemic, we unleashed the power of local action through trust and openness. The same spirit must now be ignited as we confront climate change, biodiversity loss, housing shortages, homelessness and poverty. However, that vision demands robust and responsive local authorities that are equipped to facilitate and amplify community initiatives.
As we begin to consider next year’s budget, the stakes could not be higher. If we reconvene this time next year facing the same obstacles, we will have betrayed not just our councils, which have spent decades calling for reform, but our entire democratic principle of local governance. The time for reports and rhetoric is over; the time for action is now.
The Verity house agreement fiscal framework is an important vehicle for engagement that the Scottish Government must respect. I understand the dedication that is required to forge and maintain productive partnerships, but I also know that all can be torn up on an ill-considered whim. Equally, we must not confuse process with making meaningful progress.
While we have the opportunity, let us make progress and build on the framework. There is much to do, but we must start with three critical reforms of local government funding.
We must have multiyear funding. Westminster’s indicated spending review could finally break the cycle of year-to-year uncertainty. I challenge Labour colleagues to leverage their influence with the UK Government to secure that vital change. We must escape that Kafkaesque trap that stifles long-term planning.
We must introduce powers of general competence. The Greens have been working constructively with the Scottish Government on revenue-raising powers, including the cruise ship levy and the carbon emissions land tax, but we must move beyond having semantic debates on powers of general competence. The Scottish Greens advocate for councils to have broad revenue-raising powers that are subject to appropriate oversight. The City of Edinburgh Council’s years-long wait to implement a visitor levy exemplifies the current system’s failings.
We need comprehensive devolution of powers, not piecemeal concessions. Council tax revaluation is being discussed. Having been involved in those discussions during our time in government, we know that the path forward requires bold leadership. The Scottish Government must convene all parties to forge a consensus on that crucial reform.
Those changes are not mere administrative tweaks but are fundamental to Scotland’s community empowerment and wealth-building vision. To see a truly represented Scotland, the Government must also spearhead cross-party dialogue to advance the £4.6 million uplift of councillors’ pay that the Scottish Local Authorities Remuneration Committee is calling for.
It is frustrating to see Labour and Tory amendments to our motion not only remove all mention of local government finance but fail to make any proposals for how we can ensure that our councils are adequately funded to support our communities. Once again, for the unionist parties, it is a case of all roads lead to Westminster. There is no scope for empowering our communities to make their own financial decisions. Holyrood must live on the handouts from London, and local councils are even further down the pecking order. The Scottish Greens reject that centralising agenda. Our communities are ready, but they need councils that are resourced and thriving to facilitate local leadership. The question is, are we ready to trust councils with the tools that they need?
You need to conclude.
When we gather here next year, let us ensure that we can point to tangible progress not just more promises and processes.
I notify members that we now have no time in hand and that speakers will need to stick to their speaking allowance.
15:23
The Scottish Government faces the most persistent challenges in balancing its budget since devolution, forcing it to make difficult decisions to ensure sustainable public finances. We cannot be certain about future levels of funding until the UK Labour Government announces its first budget on 30 October. Worryingly, if its first three months are anything to go by, it looks like the Chancellor of the Exchequer’s solution will be more austerity, in the tradition of Gordon Brown and subsequent coalition and Tory UK Governments.
Of course, although Labour’s group of supine MSPs must follow the Starmer line, the Tories have completely lost the plot and any sense of fiscal rectitude. At last week’s general and First Minister’s question times, all that they offered was a lazy litany of moans and uncosted funding demands. Douglas Lumsden’s was about the A96, Craig Hoy’s was about pubs, Brian Whittle’s was about the third sector, Oliver Mundell’s was about dyslexia assessments, and Pam Gosal’s was about police pay. Tory demands already amount to more than £1.5 billion a year since early September, with no attempt whatsoever at costing or prioritisation. Frankly, it is embarrassing.
One hoped that their new leader would get a grip. There are no signs of that so far, although Murdo “Always the bridesmaid, never the bride” Fraser continues to valiantly tilt at that windmill.
Mr Gibson, I warn you against nicknames in the chamber, please.
It seems that the Greens’ approach to taxation is “How much do you earn? Hand it over.” However, the Scottish Greens at least suggest ways to address the sustainability of public services. A cruise ship levy at the discretion of local authorities seems sensible and is in line with actions that have been taken in Greece and Italy. It could benefit Inverclyde, which is subject to the harmful sulphuric oxides that are emitted by cruise liners, despite very little passenger spend being retained locally.
Taxing private jets flying from Scotland is an interesting suggestion. I, for one, was surprised that more than 12,000 such flights took off from Scotland last year. Although that is a potential source of revenue, the Government must also look at the potential impact on the people who are employed in crewing and maintaining such aircraft and the airports where the planes are hangared.
In 1999, the McIntosh report proposed to give local authorities a “power of general competence”. That is a subject in the motion, and I was pleased that Ariane Burgess touched on it. I raised that specific recommendation in the chamber 25 years ago—I was very young at the time—and indicated full SNP support for it. Labour’s Wendy Alexander initially backed it, but a year later changed it to a power of general initiative. That was further diluted to a “power to advance well-being”, which was set out in section 20 of the Local Government in Scotland Act 2003. The Society of Local Authority Lawyers and Administrators in Scotland said:
“As envisaged, the Courts have interpreted the power of wellbeing in a restrictive way. The underlying reason for this is the ... ultra vires doctrine. As long as the doctrine survives, local authorities can only do what they are specifically allowed to do.”
Thus, the society concluded,
“The Power of Wellbeing contained in section 20 of the 2003 Act is effectively now dead.”
Although sympathetic delivery might not be easy, a public health supplement surcharge on large retailers that sell alcohol and cigarettes is already under discussion between Scottish ministers, sector representatives and public health organisations. That proposal recognises the impact of alcohol and tobacco by directly targeting large retailers that benefit from selling such products. However, if tobacco and alcohol duties were devolved, it would better allow reinvestment in improving public health, and that should be pursued.
The most effective way to ensure sustainable funding for public services, infrastructure and anti-poverty measures is to grow Scotland’s economy and widen the tax base. We must focus investment on innovation, research, digitalisation and skills; enhancing productivity; and building on our globally competitive successes in life science, photonics and quantum science, to name but three.
The phenomenally successful Data-Driven Innovation initiative secured more than £200 million of private investment—four times the target and four years ahead of schedule—with our universities providing specialist programmes and initiatives to help 500 cutting-edge companies to raise funds to drive innovation in Scotland. That shows the way forward to a more prosperous and dynamic future.
I apologise for not taking interventions, but time was against me.
15:27
As has rightly been highlighted by my colleagues, Scotland is the highest-taxed part of the UK. That is largely, although not exclusively, because of Scottish Green MSPs, who backed and encouraged their nationalist SNP colleagues to hike taxes and who, as they stalked the ministerial corridors of St Andrew’s house, previously thought of new ways of putting up additional burdens on and barriers to Scotland’s businesses and individuals.
Of course, it is not about just taxes but about the impact of their ill-considered and poorly delivered policies, too. The botched attempt at introducing a deposit return scheme and the dismissal of the genuine concerns of the very industry that the scheme was being forced on will appear in textbooks as an example of how not to legislate. Unfortunately, the damage is done. As well as millions of pounds of taxpayers’ money being lost, businesses right across Scotland, including my Highlands and Islands region, were forced to prepare for a scheme that never happened. All that time was wasted. All that money—the potential funding for future investments—was lost. There was the stress, strain and frustration of it, and all because Lorna Slater and other SNP-Green ministers just would not listen.
It has had a serious impact on a lot of those businesses, but it has also damaged their already low confidence in how the Scottish Government delivers policy. Why should they have any confidence? I recently met a group of hospitality, tourism and other local businesses in Fort William that are concerned about the implementation of the visitor levy. Because of the way that it has been drafted and introduced by the Scottish Government, as well as being forced into becoming tax collectors, businesses are now being taxed twice, with VAT being incurred on the levy cost. Businesses are being forced to pay tax on tax, which forces some of them over the VAT threshold and increases both the financial and regulatory burden for all.
As ever, it did not have to be that way. Solutions were suggested by industry, but they were ignored by the Scottish ministers. Only yesterday, in the Finance and Public Administration Committee, when I asked the Cabinet Secretary for Finance and Local Government, Shona Robison, whether she is happy with what I hope was an unintended consequence of the legislation, I received a fairly indifferent response, and certainly not one that will give any comfort to the sector that the Scottish Government has any real interest in addressing its concerns. I suspect that tourism and hospitality businesses in my region will view the SNP’s response with the understandable suspicion that that botched legislation will not be amended and nothing will change.
Of course, the sector remembers that it was the Scottish Government that took the UK Government’s funding for hospitality and retail in Scotland but refused to pass it on to the very businesses that it was intended to support. It is a sector that is already reeling from, but yet to feel the full extent of, the impact of short-term lets licensing. The Scottish Conservatives have long argued that the best way to grow Scotland’s economy is to support businesses, to remove barriers to doing business and to build an environment that encourages entrepreneurship. However, Scotland has experienced a nationalist Government and a nationalist coalition that have heaped extra rules, regulations and burdens on our businesses.
I have focused on tourism and hospitality, but the same is true for our fishing sector, given the threat of highly protected marine areas, for the farming sector, and for almost any sector that actually wants to grow. All that has been exacerbated by Green politicians who continue to oppose much-needed investment infrastructure in projects such as the dualling of the A9 and the A96 and other road improvements. That has been devastating for communities across the Highlands and Islands.
The Scottish Green Party’s coalition with the SNP was a disaster for Scotland. We are now seeing another unofficial coalition that is built on the SNP’s desperation to squeeze through its endangered budget, threatening Scotland. If that happens, it will not be Scotland’s priorities that are delivered; it will be the priorities of the Scottish Greens, and we already know how damaging those have been to Scotland’s economy.
15:31
Mr Gibson may have been young 25 years ago, but I was, in fact, a student 17 years ago. I remember campaigning in the 2007 election, when the SNP ran on a manifesto that promised to abolish and replace the council tax. Of course, the current First Minister was part of crafting that manifesto and has been part of the SNP Governments ever since, barring one year. Yet, 17 years later, not only has the council tax not been reformed but, as was reported yesterday, the Scottish Government’s joint working group on council tax reform has not even met in the six months since John Swinney became First Minister.
In a similar vein, as we have heard from my colleague Michael Marra, just last week, the Scottish Parliament passed legislation on the Scottish aggregates tax, which will replace the UK aggregates levy. That legislation makes use of tax-raising powers that were agreed as part of the Smith commission and passed in 2016, but it has taken a full decade to pass legislation on a tax that, in many fundamental ways, is the same as the prior UK equivalent.
I reference those issues because it is important to note that the Parliament has tax-varying powers but it takes time for any changes to be developed, implemented and come to fruition. Although we will have varying levels of disagreement in the debate today—and in the debates that will follow—with the Greens and other parties on the range of suggestions that are made in the Green motion today, ultimately, none of those changes will be brought about in time for the 2025-26 budget that we are discussing.
Will the member take an intervention?
I will not, because I have a lot to get through and I am now in my second minute. I apologise to Ross Greer.
If we want to talk about priorities for the coming Scottish budget, we need to say that the real change to the budget process that we need is an end to the financial incompetence that has been the hallmark of the SNP Government. We need an end to the need for statements on emergency cuts because the SNP has failed to set an appropriate budget. Let us remember that those cuts have included £116 million from the health budget, a reduction of almost £19 million in the budget for mental health services, a £24 million cut to active and sustainable travel, and nearly £16 million in cuts to social justice funding.
Will the member give way on that point?
No. I have much more to say and I have only a short time.
We must have an end to the plugging of financial black holes that the Government created with £460 million-worth of ScotWind money. That money was supposed to be earmarked for investment in our future, but it is going to be used to repair the SNP’s black hole. We need an end to the waste and lack of transparency that we have seen. Senior Scottish Government sources have admitted that there is waste and a lack of transparency, and they have said:
“We haven’t looked under the bonnet properly in years.”
We really need an end to the sort of governance that we have seen in the recent past. The next Scottish budget needs to demonstrate a return to competence and an intention to grow the Scottish economy. We know that, had the economy grown at the same rate as the UK economy, there could be billions of pounds more to spend.
Of course, the motion does nothing to address the fundamental problems that poor economic growth is creating in Scotland’s finances. We need to ensure that growth is at the heart of what we do. That has been eloquently outlined by my colleagues, as it will be in their closing speeches as well.
There are no quick fixes for the economic mess that we face in Scotland after 17 years of an SNP Government and across the UK after 14 years of the Conservatives’ mismanagement of our public finances and crashing of our UK economy. However, that is the work that the new Labour UK Government has undertaken. It will take time and focus.
I fundamentally disagree with Mr Greer’s assessment—Mr Harvie said some of this in the debate yesterday as well—that there has been no change. The priority of the new UK Labour Government has been to pass changes to planning laws that will help to boost house building and infrastructure development. This week, we will see legislation for a new deal for working people—
Conclude, please.
—to increase the wages of working people in this country and to ensure that their work is stable and that we end fire and rehire and zero-hours contracts. It is not fair to make that characterisation of this Government, which is committed to change. It is time that the Scottish Government started thinking about the same.
15:36
The motion raises some important issues, but no single motion is likely to cover the full complexity of the issues involved—and neither will my short speech.
I have previously critiqued the new Labour Government for adopting the Tories’ fiscal rules—but do not take it from me. An important essay on fiscal rules was published this week by the distinguished Professor Chadha, director of the National Institute of Economic and Social Research. I will quote his opening line:
“The UK’s current set of fiscal rules are not fit for purpose.”
He goes on to say:
“They have clearly introduced an unintended incentive ... to trade off government investment for government consumption.”
Does Michelle Thomson at least acknowledge that the rules that the Labour Government has brought forward exclude capital investment from that borrowing and are about just current expenditure—which is different from the outgoing rules—and that there is speculation that they may change?
[Inaudible.]—possibly agree to anything. As I will go on to say, it seems to be a moving feast as we speak—as he would know if he had read The Guardian today.
I would argue that at least three things argue against having a rigid fiscal rule and that we need appropriate flexibility and discretion in its use. First, we never have perfect information about the economy. Secondly, we do not know what future shocks await. Thirdly, we do not have perfect tools to enable us to meet targets. Perhaps it is those arguments, which I and others have been making, that prompted The Guardian’s report today that the UK chancellor is believed to be considering using an alternative debt metric and abandoning the one that she originally intended to copy directly from the Tories.
Nevertheless, those changes will simply increase UK debt, which is currently nearing a whopping £3 trillion and close to 100 per cent of UK GDP. An additional consequence of this dithering is that it is now more expensive to borrow. Despite that, I support—if it is true—more investment, given the chronic underinvestment, particularly in capital, of the UK over decades, which has consistently lagged behind that of other large, advanced economies.
The motion calls on the Scottish Government to use
“every power at its disposal”.
That is fine, but I want to introduce a cautionary note. Existing powers here are very limited and, critically, lack the flexibility and discretion that are needed for overall management of the economy. As a consequence, the very limited powers that we have must not be burdened with the expectation that they can address all areas in need. I am concerned, for example, that tax should not be treated as some kind of easy, short-term fix at the expense of medium and long-term growth. If we want to significantly increase our tax take, the most effective way to do that is to grow the economy. That emphasis on growth is missing from the motion, with its overreliance on limited tax powers.
I will return to the insight provided by Professor Chadha. In considering the wider context of fiscal rules, taxation, debt and policy objectives, he concluded that we need to take
“a decision about how to change the level of taxes to meet expenditures and to what extent debt should be issued to allow tax changes, which are sui generis distortionary, to be smoothed.”
He went on to say:
“The instruments ought to be used to meet the social objective but in our current framework”
—he means the current UK framework, of course—
“they have become the target themselves, and so we have conflated instrument with objective leading to fundamental failures in the regime.”
I watch with great interest to see whether the new UK Government continues those fundamental failures.
We move to closing speeches.
15:40
As ever, I seek consensus in a debate in which, although some members have been trying to find disagreement, I think that there is consensus.
First, if we are going to solve the issues around the sustainability of the Scottish budget—I think that there is consensus that there is an issue in that regard—there requires to be partnership between the UK and Scottish Governments.
I go back to the point that Ross Greer made when he intervened on Murdo Fraser, about the decisions that have been made by the UK Government on things such as social security. Colleagues on all sides of the chamber, whatever their views, have to accept, if they believe that partnership working needs to be at the heart of the solutions, that, however much they might seek to deny it, social security decisions will—it stands to reason—have had those impacts.
Likewise, Murdo Fraser was right to highlight the Barnett formula and the fact that we have 20 per cent higher spending in Scotland than exists in the rest of the UK. We, and taxpayers in Scotland, should be asking a simple question: are our public services 20 per cent better as a result? I think that, if we are being honest with ourselves, we have to say that they are not. That goal is what we must strive towards.
I also observe that, regardless of our constitutional views—there has been much talk about the unionist parties and what they may be saying—the fundamental nature of our economy is such that decisions that are made in one part of these islands will always impact the others, and the solutions are, therefore, always going to be about Governments working together.
There is a fundamental challenge, however, in that there is a £2 billion black hole at the heart of the Scottish Government’s budget. That is the point about sustainability, which, if I am to be honest, I think that the motion somewhat skirts around. It also skirts around the fundamental issue of the underperformance of the Scottish economy to the tune of £600 million, as was clearly identified in the Scottish Fiscal Commission’s most recent reports.
Against that backdrop, there is at best a time lag—as my colleagues Michael Marra and Paul O’Kane correctly pointed out—between coming up with some of the ideas that the Greens have set out in their motion and the implementation of those ideas and seeing them bear fruit.
I would actually go a little further—
Will the member take an intervention?
Very briefly.
I very much agree with Mr Johnson’s point about the relative underperformance of the economy. If we had included every point in our motion, however, it would have been an essay.
Does Mr Johnson accept the Greens’ position that one of the challenges for the Scottish economy is a lack of strategic direction? We cannot be the best, and a world leader, in everything—we need to decide which sectors are the priorities for public support.
I completely agree with that point, which is well made.
Kenneth Gibson made an important point about general competence. We need to look at the role of both local and regional government, because that is where the building blocks of the economy lie. When we talk about implementation in respect of skills, infrastructure and housing, that is at the heart of where we see growth, and ultimately the issue is growth.
As I close, I will highlight Willie Rennie’s contribution, because I think that it goes to the heart of the debate. If we are going to address the £600 million gap, we cannot simply ignore the behavioural effects and the waste. Willie Rennie hit on something really important: it is not progressive to ignore those things.
I tell members what is progressive: growing above-median-wage jobs. If we do that, it is better not only for the people who are in such employment, but for the economy and the public finances. If we grow our economy by just 0.1 per cent more than the growth in wages in the UK, we get £25 million. Let us deliver those better jobs, using the levers that we have around skills, infrastructure and planning, and let us drive up the public finances and drive up wages for ordinary working people. That is how we will fix the fiscal sustainability problem.
15:44
I am pleased to close the debate on behalf of the Conservatives—my first in my new role as the shadow minister for local government and public finance. I will support the amendment in the name of Murdo Fraser at decision time.
It is clear that the Scottish public are not receiving the standard of public service that they expect, and it is also clear that the Scottish economy has not performed as well as it could have done over recent decades. However, it would be flattering the Scottish Government to say that that can be blamed on a lack of powers. As my colleague Murdo Fraser has highlighted, Scotland’s is among the most powerful devolved Governments in any part of the world, and any supposed failure of devolution is not due to the lack of fiscal levers—they exist—but down to successive choices that devolved Governments have made.
Instead of using its devolved tax powers to make Scotland a more attractive place in which to live and work, the SNP Government has done the opposite. It has imposed more than £1 billion-worth of additional taxes. In recent years, it has been aided and abetted in that by the Scottish Greens.
Will the member give way on that point?
I would like to make some more progress. I have only four minutes.
The truth is that the current Scottish Government has failed to make effective use of the levers that it already controls. When the Labour UK Government decided to cut pensioners’ winter fuel payments, the Scottish Government could have recognised the importance of those payments to Scottish pensioners, who face lower temperatures in this part of the United Kingdom. Devolution could have shown the way forward in dealing with that. Instead, the SNP Government simply chose to pass the cuts on to Scottish pensioners. Even when it was presented with the opportunity to use devolution for the better, the Scottish Government chose, in effect, to bypass devolution in its entirety.
Given Alexander Stewart’s complaints about the £1 billion—it is actually £1.5 billion—of additional taxes and about the Government not spending £160 million on winter fuel payments, can he tell us what the Scottish Conservatives would cut to compensate for those tax cuts and for appropriate spending on the winter fuel payment that they have just proposed?
We could start with some of the waste, and we would certainly not spend billions of pounds on the national care service.
With regard to some of the speeches that we have heard, Murdo Fraser talked about the Green Party being hostile to economic growth and the Scottish Government not using the powers that it has. We heard that the block grant has continually grown, that it is now 20 per cent higher and that the new taxes that the Government has introduced have ensured that Scotland is the highest-taxed part of the United Kingdom. The Scottish Government has made wrong choices; indeed, the Scottish Fiscal Commission has also highlighted the Government’s errors.
Willie Rennie talked about behavioural changes and individuals and organisations moving out of Scotland, and he also mentioned policies such as the £624 million economic tax grab and higher taxes. My colleague Jimmy Halcro Johnston talked about Scotland being the highest-taxed part of the United Kingdom, visitor levies and the failed deposit return scheme.
All of those policies matter and have a massive impact. Any debate about the Scottish budget priorities is an opportunity for a constructive discussion on how Scotland’s powers can be used effectively, but the solutions that are proposed in the Green motion do nothing to address that. Our amendment calls on the Scottish Government to recognise that its higher tax and anti-growth strategies do not work. Instead, the Government should do all that it can to ensure that we make Scotland the best place in which to live, work and invest.
I support the amendment in the name of Murdo Fraser.
15:48
I thank Ross Greer and the Scottish Greens for bringing this subject to the chamber for debate. It gives us an early opportunity to explore some of the options that might get discussed further as we move closer to the budget debates later this year and into next year. I thank members for their varying contributions and will talk about some of them shortly.
First, it is important to recognise the centrality to the process of the UK Government’s announcement on 30 October. It will be crucial in determining the funding that we have in Scotland and how far we can deliver on the ambitions of the Scottish Government and other parties across the chamber. As long as our funding is tied to decisions taken at Westminster, that will be the case.
The motion makes it clear that the fiscal levers that we have are inadequate in delivering the change that we want in Scotland. We agree absolutely, but we are determined to work with the UK Government to improve the situation.
An early indication will be whether the UK Government changes its fiscal rules, as we propose in our amendment. I understand that the Chancellor of the Exchequer will be communicating with the Office for Budget Responsibility today on how she wants to move forward with the fiscal rules. We want them to focus on public sector net worth, which will mean that our public assets will be properly valued, while retaining a prudent approach that allows the investment that we need to build a future for our economy. One thing is sure: if the chancellor continues with the low-investment and low-growth approach of her predecessors, Scotland will be held back.
On the fundamental dilemma whether we should try to fix fiscal sustainability through additional levies or through economic growth, what side of the debate does the minister come down on?
The Government is unashamedly pro-growth. We work to increase fiscal sustainability by increasing revenues through economic growth, as the member well knows.
It was good to hear some constructive suggestions from Opposition parties about what they would like to be included in the budget, but, frankly, we did not hear such suggestions from all parties, which was a bit of a shame and a missed opportunity.
Turning to some of the contributions, I think that Murdo Fraser’s contribution and the other Conservative contributions deserve a special mention. The Conservative amendment mentions “financial illiteracy”. That comes from a party that is, on the one hand, asking for £1.5 billion of additional funding—I think that even more money was being added to the list during the contributions from Conservative members—while, on the other, asking for £1.5 billion of tax cuts from the Scottish Government. That would amount to a £3 billion black hole. That is financial illiteracy on stilts, but it is to be expected from the party of Liz Truss.
The fact is that, according to the latest statistics, the Scottish economy is growing at the same rate as the UK economy. In fact, if we look back over the longer term, we see that, since 2007, the Scottish economy has per capita grown at twice the rate of the UK economy, and productivity in Scotland has grown at twice the rate of productivity in the UK.
Will the minister take an intervention on that point?
The latest figures also show that there has been higher earnings growth in Scotland and that, outside of London, Scotland is the best-performing part of the UK in relation to inward investment. There has been positive migration from the rest of the UK into Scotland—despite our higher taxes, as we ask those who can afford to pay more to do so—because people see other benefits of coming to live and work in Scotland.
To answer Daniel Johnson’s point, I note that we do not spend 20 per cent more on public services in Scotland. In fact, we spend 30 per cent more per head of population than the rest of the UK, and we pay our key public sector workers—teachers, doctors and nurses—more, too.
Daniel Johnson wanted to make a brief intervention.
I think that the minister should move on and conclude.
Okay. He is too late, so I will move on.
Turning to Labour, I note that there was much talk about council tax, but it provided no plans for what it would put in its place. It is interesting to see the party’s direction of travel on that issue, given that it looked at the black hole and, despite being aware of what was coming down the track, decided to make the poorest pay by cutting the winter fuel payment.
We are using the powers that we have to maximum effect. Our decisions on income tax since devolution have meant that we have had an additional £1.5 billion to spend on the things that matter to the people of Scotland. Our action to address child poverty is making a difference—100,000 children will be kept out of poverty this year as a result of the Scottish Government’s policies. We are leading the rest of the UK in renewable energy production, and our target to reach net zero by 2045 is more ambitious. However, we need to go further, so I want the Scottish Parliament to have the full range of fiscal powers that we need to meet the challenges that we face and to seize the opportunities of the future.
15:54
The overwhelming narrative in today’s debate has been one of scarcity. There appears to be a collective belief that, despite having had more than 150 years of an industrial market-based growth economy, we find ourselves out of money. That is obvious codswallop. Plenty of money and wealth have been generated. The question is: where has that gone? Given that, from my quick googling, I found that the chief executive officer of BP has an annual compensation package of £8 million and that BP made a profit of $66 billion last year, it is clear that we do not live in an economy that is short of money.
We do not live in a time of financial scarcity. In fact, we live in a time of financial abundance. Massive multinational corporations are allowed to make eye-watering profits while generating carbon emissions, pollution and environmental damage, and expecting other people—usually the public purse—to pay to clean it up or to pay for the consequences. The oil, gas and aviation industries create climate change, but the Government has to repair broken bridges, roads and homes when there is a catastrophic flood.
I ask all members of Parliament for some honesty in finance. We cannot demand billions more in spending without increasing taxes or cutting spending elsewhere. I know that everyone likes to wave the magic growth wand as if that will solve all our problems.
On that point, does Lorna Slater acknowledge that the Green Party’s motion does not set out a range of measures to fix the financial hole that she is alluding to. Will she reflect on that point?
I aim to set out some more measures that we think can be used to raise revenue in Scotland. Of course, Scotland’s revenue-raising powers are quite limited and that goes nicely into my next point, which is that I have some sympathy with calls not to tax workers more. Income tax is not my favourite tax—it is a tax on people’s work. Rents, inheritances and capital gains are all forms of income, but they are all taxed less heavily than people’s work.
Because of the limited powers of devolution, income tax—as I said, it is not my favourite tax—is one of the few powers that the Scottish Government has to use, and it is right to use it to generate funding for our public services. Our baby boxes, free public transport for large numbers of people, free eye tests, the Scottish child payment, free prescriptions, free university tuition and better pay for nurses are all things that make Scotland a better place to live, and, in my view, they give good value for money.
However, limited powers on taxation does not mean no powers, and the Scottish Government should be aligning every policy and all its spending decisions behind its stated goals of tackling the climate and nature emergencies and tackling child poverty. However, we are not seeing that. What we see from the Scottish Government is policy incoherence. For example, there is massive spending on expanding road capacity during a climate crisis, when the Government has the stated goal of reducing car kilometres by 20 per cent. That is seriously counterproductive.
The Scottish Fiscal Commission has calculated that at least £1.1 billion per year more is needed to account for net zero spending. Let us not make that amount bigger or worse by spending what money we do have on projects that increase emissions. Failing to reduce emissions now—or, worse, increasing them—will store up more costs for decarbonisation in the future, as well as increasing the risk of incurring future costs to deal with the effects of flooding, wildfires and other manifestations of the climate crisis.
I have some suggestions for how we can increase revenues in Scotland to support the delivery of local services while, at the same time, incentivising emissions reductions and moving towards net zero. With the limited powers that we have in Scotland, one of the things that we can do in this space is implement a private jet tax. The intention to allow Scotland to have an airport departure tax has been in place for a decade, but without the key exceptions for islands in order to make the policy at all workable. I urge the Scottish Government to approach the UK Government urgently to resolve that issue.
Very wealthy people who own large landholdings in Scotland are managing their land in such a way that it is emitting carbon. Land that should be behaving as a carbon sink is deforested or has damaged peat on it. A carbon land tax that would be collected by local authorities would not only fund their journey to net zero and local service delivery but motivate those large landowners to manage their land in the way that they must if Scotland is to reach net zero by 2045.
The Scottish Government has so many opportunities to empower local authorities to raise the money that is needed: a stadium levy to ensure that communities benefit when they host large events; a cruise ship levy to ensure that communities benefit when they host cruise ships; and all the ideas that my colleague Ross Greer presented, including making good on the promise to properly reform council tax.
In wrapping up, I ask the Scottish Government how spending can be allocated effectively if there is no clear focus. If tackling climate change and tackling child poverty are really the Government’s top priorities, we need to show coherence across Government and align to deliver those things, instead of having different parts of Government pulling in different directions, as we have when one part of Government is subsidising increases in carbon emissions while another part is funding reductions in them; one part of Government is increasing road capacity while another part is looking for policies to reduce it; and one part of Government is avoiding a public health levy while the NHS is creaking from a lack of funding.
I challenge the Scottish Government to make good on its promises and to bring its policies in line with its stated goals.
That concludes the debate on budget priorities 2025-26. There will be a short pause before we move on to the next item of business to allow front-bench teams to change position, should they so wish.
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Bus Travel (Asylum Seekers)