Official Report 1121KB pdf
I remind members of the Covid-related measures that are in place. Face coverings should be worn when moving around the chamber and across the Holyrood campus.
The next item is a debate on motion S6M-03081, in the name of Kate Forbes, on the Budget (Scotland) Bill. As members will be aware, at this point in the proceedings, I am required under the standing orders to decide whether, in my view, any provision of the bill relates to a protected subject matter—that is, whether it modifies the electoral system and franchise for Scottish parliamentary elections. In my view, no provision of the Budget (Scotland) Bill relates to a protected subject matter. Therefore, the bill does not require a supermajority to be passed at stage 3.
14:56
Throughout this budget process, I have been open and transparent about the challenges that we face. As we approach the end of this financial year, we are still awaiting the finalised position of the United Kingdom Government on this year’s budget. Prior to Christmas, we were told that we might have to pay back consequentials. In mid-January, the message changed positively: the £440 million was confirmed and there would be further consequential funding.
In recognition of my commitment to Parliament to provide as much transparency as possible, with the fast-approaching deadline of the year’s end and the requirement to finalise our budget position so as to give certainty to the health service and local government, in particular, I announced a further £120 million for local government and we published the spring budget revision just last week, with the latest figures.
Last week’s announcement of funding for the cost of living crisis has changed the position again, not by increasing the expected consequentials but by decreasing the funding. That means that the spring budget revision will need to be updated at the first available opportunity.
Frustratingly, as I stand here at stage 3 of the Budget (Scotland) Bill, with about six weeks to go until the end of the financial year, the position is yet to be formally and finally confirmed. Why does that matter? It matters because Parliament often presses me for greater transparency, which is what I am giving in this statement. It matters because this is real money that affects all our lives. Ultimately, it matters because it demonstrates the extreme constraints of the devolution settlement within which we operate.
Due to the arbitrary and strict limits on carry-forward—which means being able to use funding on either side of the 31 March cut-off—if consequentials are to be used meaningfully this year, I need to give certainty now—today. The changes that have been made to date, over a very short space of time, are significant and will have an impact on our assumptions for next year’s Scottish budget. I will update Parliament once we have received the final position at the UK supplementary estimate outcome, later this month.
Despite all of that, I want to move on to the most important issue affecting households across Scotland right now: the rapidly increasing cost of living. Large rises in energy bills, increased costs for everyday essentials, rising interest rates and the UK Government’s new national insurance hike are causing huge concern and worry, and people are struggling. Those additional costs will hit the most vulnerable in our society. The additional energy costs alone will place significant burdens on many. Estimates suggest that they could move a further 211,000 households into fuel poverty and around 235,000 households that were already fuel poor into extreme fuel poverty. That would result in a total of 874,000 fuel-poor households—an increase of 43 per cent on the most recent statistics, published in 2019—and 593,000 households in extreme fuel poverty. The extent and the depth of the need is stark. That is why, whatever other budget challenges we face, we will honour our commitment to pass on the full £290 million to help families now.
That additional support will be the latest in our efforts to target funding to help those who are most in need. We are already using the powers that are available to us to support hard-pressed households, including targeted assistance for those on the lowest incomes; delivery of the unique Scottish child payment; the award of £76.7 million this year and last year to low-income families through the bridging payments; 530,000 low income pandemic payments last year; the funding of discretionary housing payments; an additional carers allowance supplement in 2020 and again in 2021; the delivery of the winter support fund to help people to heat their homes and meet rising food costs; and the continued £41 million investment in the Scottish welfare fund.
Does the cabinet secretary accept that the measures in the budget will not meet the child poverty targets?
I am going on to say that, when it comes to the challenges that we face right now, the measures that we have outlined will go only so far. I will outline what I think the next steps will be in providing as much support as possible.
With that £290 million, we can go further. However, I will be clear at the outset: we have explored a range of options and routes, and I have heard calls from Age Scotland, the Poverty and Inequality Commission and the Joseph Rowntree Foundation for us to ensure that the support is targeted, but it is frustrating that we do not have all the levers that I would wish to have, such as a full social security system or tax system, in order to best target and deliver that support.
Will the cabinet secretary take another intervention?
I want to make some progress on the substance, if that is okay.
Today, I can announce that there will be three elements to the package of support. First, we will provide £150 to every household, in all council tax bands, that is in receipt of council tax reduction. The council tax reduction scheme already identifies the households that are in greatest need and will allow us to target that intervention. Secondly, I will provide local authorities with funding so that they can pass on £150 to other occupied households in bands A to D. In total, from the combination of those elements, 1.85 million people—73 per cent of households—will receive £150 of support.
I have discussed the matter directly with the Convention of Scottish Local Authorities as recently as last night, indicating my preference that that money should be distributed as a payment rather than as a council tax credit. However, due to the urgency of mobilising that funding quickly, councils will have a choice: they can deliver either a direct payment or a credit to council tax accounts as long as it can be done in April. Clearly, the scheme is imperfect and it will reach some households that may not need it. However, it is the only route that we have to reach quickly and simply those for whom it will make a difference.
I know that the cost of living crisis also affects households that are not in receipt of benefits and that are not claiming a council tax reduction. They are facing hardship, too, and we need to do what we can to prevent those households and families on the edge of the poverty line from falling over it. Therefore, the third element of the package that I am announcing is £10 million for continuing our fuel insecurity fund, in order to help households that are at risk of self-disconnection or self-rationing their energy use due to unaffordable fuel costs.
Today’s package is in addition to the further £120 million for local government next year, which I announced previously, for easing its pressures and for helping to prevent inflation-busting council tax rises. We will also go further in ensuring that councils have as much discretion as possible to tailor their response quickly.
I seek clarification on two points. First, will those measures take place during the coming budgetary year rather than the current one? Secondly, I assume that they will be paid for from the £284 million reserve that was contained within the spring budget revision—or will the money come from other sources?
The measures will kick in from the beginning of April, which is in the next financial year. When it comes to effecting them, it is too late for a stage 3 amendment, because of when we received the detail. Therefore, I will be in touch with the Finance and Public Administration Committee to confirm that, to effect the change, we will need to take it through the autumn budget revision. I will clarify that to the committee.
To go further in helping councils to have as much discretion as possible, I am announcing that I will allow any existing underspent discretionary housing payment funding to be redistributed between councils and carried forward into 2022-23, to allow them to provide targeted, discretionary support. I will also allow any existing underspend of the Scottish welfare fund to be carried over by local authorities for the same purpose.
I say honestly and openly that that is not enough. Households across Scotland and the UK are struggling with the wide range of rising costs, and many of the macro levers—for example, around energy regulation—reside with the UK Government. In that spirit, I will write again to the Chief Secretary to the Treasury to highlight that we need to work together urgently and use our joint powers to do more to tackle the cost of living. I hope that members across the chamber can unite in that bid.
I will share one further update with the Parliament. One of our key objectives in the budget was economic recovery—if households are struggling, businesses are also identifying some of the challenges that they face. As members will be aware, the Government committed to maximising our Covid recovery support for businesses. As part of that, I previously announced the allocation of £276 million of omicron business support funding for the current financial year. Following consultation with businesses, which asked for support to focus now on economic recovery, I am pleased to announce today the allocation of further funding to support business sector recovery, including in some of the sectors that have been hardest hit, such as events and travel, as well as in city and town centres.
That funding includes an additional £16 million for culture and major events that have faced cancellations. For tourism, there is additional funding of £7.5 million to support inbound tour operators. We know that international tourists spend more when they visit, so supporting that sector helps to drive recovery in retail and tourism across Scotland.
Will the cabinet secretary take an intervention?
Yes, briefly.
The cabinet secretary might know that there is a specific issue for nightclubs that are not able to access money from the nightclub support fund because they are classed as hybrid if they operate a bar alongside nightclub premises. I understand that the Night Time Industries Association is meeting the Scottish Government on Monday to discuss that. Will she look at how that fund might be readjusted in order to support those in that category?
I am keen that that money gets out the door to support businesses that need it. As Mr Fraser has just referenced, we have met nightclub industry representatives a number of times and we will continue to do so. I am happy to look at the criteria, but we set out funding that was as targeted as possible, knowing that we cannot reach all businesses. However, I will certainly keep his comments in mind.
Will the cabinet secretary take an intervention?
I have one more minute and two pages left. So, if Willie Rennie does not mind, I will persevere.
We will also provide £3.5 million for outbound travel agents that have been impacted by near-continuous restrictions on international travel throughout the pandemic.
To come to the important issue that has been raised a number of times about supporting city centres to recover, we will make an additional £3 million available specifically for city centre recovery, to improve footfall and help those businesses that have been affected by, for example, office closures.
We will also provide additional support of £6.5 million for the childcare sector, because a fully functioning childcare sector is a pivotal part of our national economic infrastructure.
Last but not least, we understand that many small and medium-sized enterprises have already adapted, but more are keen to invest in digital adaptations. Therefore, we are providing additional funding of £3 million to help SMEs to continue their digital journey.
All those grants will provide a bridge from resilience to recovery. As I move the motion and we open stage 3 proceedings today, I think that we can all agree that we are still in unprecedented times. That requires a quick and flexible response from Government, which we have demonstrated today, but it also requires unity across Parliament, so I hope that members will vote to support the budget at stage 3 tonight.
I move,
That the Parliament agrees that the Budget (Scotland) Bill be passed.
Members might wish to be aware that we have time in hand this afternoon for interventions, so there might be opportunities as the afternoon proceeds. I invite members who wish to speak in the debate to press their request-to-speak button now.
15:09
I warmly congratulate the cabinet secretary on her exciting news that she announced earlier in the week. [Applause.] We wish her well in the months ahead.
I also start on a note of considerable agreement. The cabinet secretary said that the budget process is not satisfactory in exactly the terms of the Finance and Public Administration Committee’s report: there are real concerns about the timing of budgets, the definitions of “old money” and “new money”, and the challenges of working to estimates. That last concern is an issue between not just Westminster and Holyrood, but Holyrood and local government, which has been saying exactly the same thing. At base level, when it comes to planning budgets, there is, as the finance committee suggested, a need to try to ensure that we have a better process.
It is appropriate to think again about the economic context in which we find ourselves. Although the main economic forecast, on which the Scottish Government ultimately relies for both the formal interrogation of the budget statistics and policy making, has recently indicated some short-term relief—for example, growth in gross domestic product has been better—the longer-term predictions for the Scottish economy remain exceptionally gloomy. The main trends show that Scotland is behind the rest of the UK. They also point to serious structural problems in the Scottish economy, including imbalances in labour markets, which we have debated several times already.
The fact remains—and it is a fact—that income tax revenues are showing a £190 million shortfall for 2022-23. That means that the revenue from Scottish income taxes is growing more slowly than is the block grant adjustment. In other words, despite more tax powers having been devolved to Holyrood, we are facing a growing shortfall in income tax revenue, which will possibly rise to £470 million in four years’ time.
Since the budget statement was delivered on 9 December, we know exactly what the reactions of local government and business have been. Also, the cabinet secretary, quite rightly, has made reference to the significant increase in the cost of living. She has admitted to the finance committee that there are serious issues in relation to that, but she still fails to accept that the UK Government provided the Scottish Government with record funding for this year’s core block grant, not counting the funds from the UK Covid spend, and a record funding settlement for the next three years. This afternoon, she reiterated, as she said at stage 2, that she does not expect to be required to pay back the £440 million in Covid funding, as was previously thought.
I fully appreciate that there are severe issues with regard to planning budgets ahead and the fact that estimates have turned out not to be wholly accurate, not just in the UK but in Scotland, too. We know exactly what local government has felt about the uncertainty and the difficulties that it faces, because, as some of my colleagues will refer to later, at stage 1 there remained a real-terms cut of £251 million, which was £81 million short of what COSLA believed was necessary. I will leave it to my colleagues to pick up some of that.
For business—
Will the member take an intervention?
Yes, I will.
Liz Smith will have seen that Her Majesty’s Revenue and Customs has issued a winding-up order against the division of Liberty Steel, which could have implications for the workers at Clydebridge and Dalzell steelworks. Does she think that the finance secretary should address that in her closing remarks and give clarity on the disputed guarantee for the potential clean-up of the site?
I will leave it to the cabinet secretary whether to pick up that offer.
When it comes to business, although there is acknowledgment of the helpful support in the form of the small business bonus, there has undoubtedly been strong criticism that the Scottish National Party has ignored requests to extend the duration and level of relief. Marc Crothall of the Scottish Tourism Alliance said that the support went “not nearly far enough” to avoid the impending cliff edge facing many businesses in June. Liz Cameron of the Scottish Chambers of Commerce said that
“the Scottish Government should have gone further”
in supporting business. David Lonsdale of the Scottish Retail Consortium said that the SNP support for business was “a pale imitation” of UK Government support—and it goes on.
Will the member take an intervention?
I will not, if the member does not mind.
The SNP should remember that budgets are about spending money wisely. How much better would it have been if the SNP had not been so profligate with taxpayers’ money? Here is a reminder of what we are talking about. The Government spent £47.4 million on Ferguson Marine in the past financial year, when the original estimate was £28 million; £4.5 million of the £45 million of loans to Burntisland Fabrications had to be written off; £98 million went on the ferries overspend and £40 million on the malicious prosecution of Rangers administrators; and Audit Scotland confirmed that the £43.4 million of loans to Prestwick airport had to be reduced to £11.6 million to reflect all the losses. The list goes on.
Then, bizarrely, we have the money that is being publicly committed to the plans for a second independence referendum, which are no doubt being expanded every minute as the Scottish National Party tries in vain to write, or perhaps to rewrite, a coherent strategy for paying our pensions, saying what currency we would use and explaining how the huge black hole in Scotland’s public finances could ever be filled.
Will the member take an intervention?
No, I will not.
As well as that, we have very serious concerns about the SNP’s desire to spend millions of pounds on a national care service. [Interruption.] If we listen to local government and many stakeholders in the care sector, that is by no means what they feel—[Interruption.]
Ms Smith, will you give me a moment, please?
I ask for respect and courtesy while Ms Smith is speaking. Thank you.
I thank you for that, Presiding Officer, because what I am citing is not what I am thinking, but what local government and some stakeholders in the care sector are saying.
What about the people—those with lived experience?
The people are the very ones who are represented by local government and the care sector, which are saying that a national care service is by no means the right way to tackle—
Will the member take an intervention?
I will not, Mr Swinney. I think I am about to have to finish.
Councillors from the SNP, Labour and the Conservatives have said that the upheaval that is required to restructure the social care system into a national care service could be “hugely damaging”.
Will the member take an intervention?
Councils such as Falkirk, East Lothian, Fife, Highland, and Argyll and Bute are clearly very worried about the proposed changes and how they would affect local accountability.
Will the member give way?
Ms Smith is not giving way.
Do I have time?
You have time, Ms Smith.
I thank Ms Smith for giving way. Does she recognise that in the consultation responses, which have just been published, 70-odd per cent of people want a national care service? It is about delivery for people, ending the postcode lottery and doing what is right for them. Does she not agree that that is the right thing to do?
I am listening to the people who would have to deliver the services—local government and social care—and they are desperately unhappy, including many in Mr Stewart’s party.
The arithmetic in the Parliament and the unholy alliance between the SNP and the Greens mean that the budget has been a fait accompli from day 1, with very little engagement with the other political parties.
Will the member take an intervention?
Do I have time?
There is time for a brief intervention.
I am very grateful to Liz Smith for giving way. Would she enlighten the Parliament on what changes she would make to the Budget (Scotland) Bill that the finance secretary has put to the Parliament that would support her additional resources for local government? Where would the money come from and how much would it be?
I am not sure that Mr Swinney has been listening to what I have just been saying. I cited all the waste—[Interruption.]—and I have also—[Interruption.]
Members, I cannot hear Ms Smith’s contribution. I would be grateful if we could make sure that we can hear it.
I have also just cited the fact that when it comes to the national care service, on which the SNP proposes to spend millions of pounds, we have grave reservations about whether it is worth spending that money.
Will the member give way?
I will not, this time.
Ms Smith, you must conclude.
The budget has failed to put economic recovery first and failed to put forward the delivery of local services. In my opinion, the SNP has failed to listen to business and local government, and failed to understand where the public’s priorities lie. As such, we cannot support the bill.
15:19
I, too, add my congratulations to the cabinet secretary on her delightful news. I wish her and her family all the best for the coming months. I am sure that the experience will be even more frightening than the budget but that it will go very well. [Laughter.]
I might as well be unequivocal: Labour will not support the budget today—I am sorry if that is not much of a baby shower gift. It is a timid, regressive and unambitious budget, which does not do nearly enough to alleviate the cost of living crisis, which no longer looms in the distance but is staring us directly in the face, as the cabinet secretary herself has said. We all have a duty to do everything that we possibly can to address the hardship that families face, but the budget does not do enough to address the real, substantive concerns that Scotland’s underresourced and underappreciated local authorities have articulated, and does nothing to reboot our economy after the pandemic.
The Government could have used this year’s budget to invest in upskilling, in the future of education, and in upgrading Scotland’s antiquated public transport infrastructure. We could have welcomed radical and transformative domestic policies today that would have lifted people out of poverty rather than compounding the hardship that they already face. We could have led the way on a post-Covid recovery plan that would have seriously addressed our economy’s lagging productivity, stagnant wage growth and substantial labour shortages.
Instead, we got a budget that will force councillors of all parties to cut £250 million from crucial local services, despite the inadequate sticking plaster that the cabinet secretary has announced. We got a budget that delivers a paltry 48p an hour pay rise for care workers and settles for a rise of almost 4 per cent on rail fares and a further increase of more than 4 per cent on water bills. Inflation is projected to hit 7 per cent this year and interest rates are likely to rise, so families are being hammered with an increase in food, fuel and energy prices, too.
We know that today is, essentially, a foregone conclusion. Members from the SNP and the Greens will rise to their feet and proclaim how excellent and transformative the budget will be, but the fact is that people will be worse off. The very people who we are sent here to represent will see their incomes hammered, their bills increased and—for those fortunate enough to have them in the first place—their savings diminished. It is really that straightforward.
I hear much criticism of the Scottish Government, but I do not seem to hear anything of the Westminster Government, where many of those responsibilities actually lie.
I am more than happy to adumbrate on that particular issue, because I am no friend of the Conservative Government—that much is for sure—but we have to hold both Governments to account. It is said that politics is about choices, and both Governments are failing to capitalise on, and make the most of, those choices.
Every member on this Government’s benches has a choice. Whether at Westminster or in this chamber, will members toe the line and make their constituents poorer, or will they stand up and say that enough is enough? Experience tells me that I would be foolish to hold my breath waiting for the latter.
I return to the cost of living crisis, which is the most pressing issue that we face. The Joseph Rowntree Foundation said last week that those in low-income households will now spend
“16 per cent of their income after housing costs on energy bills.”
However, for middle-income households, that figure is just 5 per cent. The pain is not being felt equally.
Citizens Advice Scotland recently released an analysis that showed that more than a third of all Scots now find their energy bills unaffordable. Yesterday, Advice Direct Scotland revealed research that concluded that more than 70 per cent of Scots—more than two in three—are now worried about not being able to pay their gas and electricity bills this year.
Those points are absolutely valid. Does Paul Sweeney then not accept the absurdity of the Labour Party’s position? It will vote against the budget that includes the doubling of the child payment, which puts resources directly into the hands of some of the poorest families in our country. The Scottish Labour Party will turn its back on those self-same families this afternoon.
I am afraid that the Deputy First Minister offers a false choice. We welcome the measures that have been introduced, but they are not nearly enough to address the scale of the hardships that people face.
I am pushing the Government further on this, because, at the same time as we are talking about all the issues that are going on, Shell and BP are recording combined profits of more than £22 billion. That is why Labour has called for a windfall tax on oil and gas companies, which is a proposal that, last week, MPs of the Deputy First Minister’s party did not even turn up to vote for in the House of Commons. The proposal would have saved every household in Scotland more than £200, and the lowest-income households would have been £600 better off. Why on earth did they not turn up?
Politics is about choices, but it is also about priorities. That is why Labour has called for a £400 Scottish fuel payment, targeted at Scotland’s hardest-hit families; a top-up to the Scottish welfare fund, to ensure that local authorities have the power and capacity to help people in need; and the cancellation of increases in water and rail prices. Each of those proposals is within the gift of this Government and within the available £238 million spending envelope that is additional. The budget does not go far enough to capitalise on that opportunity.
As was just announced, the cabinet secretary is offering a basic £150 credit or payment through the council tax system—a system that is already regressive and was supposed to be abolished more than a decade ago, and that does not work to target support.
The Scottish Government has been slow to get out of the traps on delivering for people, and it is allocating only half of the unallocated sum of £238 million. It could have done something more constructive or creative such as using the carers allowance supplement to target support more readily or using the child winter heating assistance to do as Labour has proposed. There is still £60 million to £70 million to be allocated—why are we not pushing the throttle to the absolute maximum to get that money into the pockets of the neediest families?
The £10 million that was announced for fuel security works out as just £16 for every person who is on universal credit or pension credit. It is not nearly enough to address the harms that people face when bills are skyrocketing by £700.
The Conservative Government in Westminster holds some of the answers, but we cannot pretend that the Scottish Government is doing everything that it possibly can to help people. If that were the case, it would not be ripping £250 million from Scotland’s councils next year, and Scotland’s care workers would be receiving a more substantial pay rise than 48p an hour, which is a paltry amount that will barely dent the scale of the cost increases that they face.
A tacit acceptance of Tory economic doctrine has led to the difficulties that Scotland’s economy faces today. More of the same will not fix it; I think that, deep down, the cabinet secretary knows that to be the case. My plea to all members is simple: stand up and be counted. The facts are clear: Scotland’s poorest will struggle to survive this year, and this budget does not do nearly enough to alleviate their hardship.
15:27
I offer my heartfelt good wishes to Kate Forbes on the news that she is an impending member of the greatest club in the world—she has all our good wishes.
I am sorry that I am joining the Parliament remotely, having tested positive for Covid-19 this morning. It is not how I wanted to contribute to the budget process, but it is a reflection of our times.
Covid casts a long shadow over the budget. The job of recovery is only just beginning in our hospitals, where hundreds of thousands of operations have been lost; in our schools, where children have missed out on so much; and across our economy, where footfall remains down and the company accounts make for difficult reading.
The last thing that businesses, public services and households needed on top of Covid was a cost of living crisis. The doubling of the child payment, which we all support, was supposed to drive down poverty, but I fear for the impact that it will have while household incomes fail to compete with 7 per cent inflation, while food prices rise, while Scotland’s rail and water prices rise, and while national insurance goes up. Critical child poverty targets that were set by this Parliament were already at risk, even before Covid or these dire economic circumstances, which is why both of Scotland’s Governments must go further.
Scottish Liberal Democrats want a cross-Government, combined cost of living rescue package to help the thousands of people who are on the brink. That means the reversal of SNP and Green rail price hikes, the scrapping of the Conservative national insurance hike, unprecedented investment in retrofitting homes to insulate households against soaring energy prices, and doubling and expanding the warm homes discount. It means boosting disability benefits—the Scottish Government can do better than copy a UK Government policy that leaves the benefits 3 per cent or even 4 per cent below inflation. It means new broadband social tariffs for vulnerable customers; extra financial support for this Government’s new smoke alarm requirements, because many people cannot now afford the hundreds of pounds that it will cost them; and a windfall tax for oil and gas companies that have made record profits on the back of the energy crisis.
Households are also worried about hikes in the council tax. The finance secretary has set the same elephant trap as her predecessors. Year after year, the SNP lays down punishing cuts to councils, only offering a little extra cash at the last hour. This time, the £120 million was described as “a funding boost”. The finance secretary labelled it as “additional funding”. Let us be clear: when £370 million is deleted from a budget and £120 million of that is restored, it still makes for a £250 million cut. There are no heroes on the Government benches today.
I do not understand why, year after year, the Green Party goes along with the charade. The SNP has always been a centralising Government. It does not hide that it believes that ministers know best. We should just look at the police and what is now being planned for social care. It is, however, a depressing reality that the Green Party has become ingrained in this pattern of council cuts and central Government ring fencing. Only last May, the Government was promising a new era for Scottish local government, but the new era looks very much like the old one, with brutal council cuts and no prospects of local tax reform in the current parliamentary session. It is the same old tricks and the same old sleight of hand.
Broadly speaking, if we can break it down, education makes up about half of what we ask our councils to do, so the impact of the cuts will be felt mostly in Scotland’s classrooms. Despite all the disruption and all the promises of extra resources, teachers and parents are still struggling to see any difference in what is on offer for our schools. It is therefore no wonder that the poverty-related attainment gap is wider now than it has ever been, and the Government is still to take air quality in our schools seriously. Today’s cuts to councils will just not help that.
We have seen the SNP-Green Government being visibly embarrassed by its now notorious recommendation to chop off the bottom of the doors in schools, but the bigger embarrassment is the fact that the height of this Government’s ambition is to fund changes in just 2,000 of Scotland’s 50,000 classrooms. That is all that £5 million will get us. Cleaning the air needs proper investment, and that means a HEPA filter in every one of Scotland’s classrooms.
The finance secretary is always keen to impress on Opposition members the need to account for extra spending, so here is an idea. Take the £17 million that this SNP-Green Government is about to spend on putting children as young as four or five through senseless national testing and invest it in keeping them safe in our schools. Investing in infection control will do more for attainment than national tests ever could.
The reality is that this SNP-Green Government has a central mission, but it is not the climate emergency, it is not education, and it is not health. We would struggle to point to the Greens moving the dial on any of those topics. Instead, their votes are there principally for independence.
The energies of the Government are shifting towards it now. We have seen it in this past week in the discussions on pensions where, by the way, the claim that taxpayers in the rest of the UK will pay for Scottish pensions after independence holds about as much water as Donald Trump expecting Mexico to pay for his border wall. Regrettably, independence consumes political oxygen, the attention of ministers and the attention of this Parliament. I—and, I think, most of the people of Scotland—would far rather that we in Parliament devoted our time to the existential threat to humanity in the climate emergency; helping children to recover from two years of disruption to their education; driving down the painful waiting lists that now exist in every corner of the NHS; overhauling Scotland’s meagre response to long Covid; and the social care crisis that is causing harm to people up and down this country.
The Scottish Liberal Democrats will vote against the budget tonight because the Government has got its priorities all wrong.
15:34
I warmly welcome the cabinet secretary’s happy personal news.
I am delighted to support the Scottish budget and pay tribute to finance secretary Kate Forbes, her ministerial team and her officials, who have all worked so hard to produce a detailed and positive budget for Scotland at a time of great financial challenge and uncertainty, all within the parameters of the limits set by the independent Scottish Fiscal Commission and amid the on-going machinations of the Treasury.
Investing £197 million in the new Scottish child payment and doubling it to £20 a week three years ahead of schedule—amid much muttering from the Opposition—will make a huge difference to recipients, as will the provision of the £150 council tax grant to 73 per cent of our households; continuing investment in the NHS and affordable, energy-efficient housing; and a much more generous local government settlement than we see south of the border under the Tories, despite their ludicrous attempts to be seen as the champions of our councils, which I doubt that even they believe. In addition, £840 million in new money will be allocated to the national care service over the next three years.
Of course, no other party made any attempt whatever to provide an alternative budget. The Tories praised one-off consequentials, which we hope will not be clawed back by the Treasury, while asking for extended rates relief and increased local authority funding. Meanwhile, in England, the Tory cuts to local government, which, over the past decade, have amounted to 37 per cent in real terms, continue. Birmingham City Council will have to make further cuts of £41 million in 2022-23, which will rise to £107 million by 2025-26.
A headline in last Monday’s Times, referring to the situation in England, read:
“Budget cuts mean 11m rural potholes will go unfilled”.
The article lamented a broken Tory manifesto promise to increase spending on council road maintenance by £500 million a year; instead, from April, it will be cut by £480 million, which is a 40 per cent cut in two years.
Regarding Scotland, no attempt has been made to explain how much additional local authority funding the finance secretary should deliver and from where in the budget it should be found. Indeed, when he was asked directly by the Minister for Public Finance, Planning and Community Wealth in the stage 1 debate exactly how much should be allocated to local authorities, all that Douglas Lumsden could say in reply was:
“I will easily set the budget whenever the Government wants to move out of office.”—[Official Report, 27 January 2022; c 88.]
It is woeful stuff. The SNP will be in government for at least another four years. If the Tories want to be seen as even a competent Opposition, let alone as an alternative Government, they really need to raise their game.
Will the member give way?
I would rather take interventions from members of one of the two major parties, if Mr Rennie does not mind. We have local government elections coming up and, the last time that we had them, for the 96 council seats that were contested in Ayrshire, the Lib Dems had not one candidate. In fact, the last time that they contested a council seat in my constituency, they came 10th—and only because the Greens did not have a candidate in that ward.
What cuts will the member’s local council face as a result of this budget?
There has been a real-terms increase in council funding, as has been clearly expressed through the budget. Indeed, it is 3.5 per cent in North Ayrshire, before the addition of the £120 million.
When Gerry Hassan wrote “The Strange Death of Labour Scotland” a few years ago, I doubt that even he imagined the precipitous decline of that once-dominant political force, following years of indolence, incompetence and taking voters for granted. At stage 1, we were given a stark demonstration of exactly why Labour has plummeted into its present rut as Scotland’s third party here at Holyrood, and fourth, in terms of Scottish seats, at Westminster.
Following the cabinet secretary’s confirmation of the independent Scottish Fiscal Commission’s figures that our resource budget will reduce by 5.2 per cent in real terms, while our capital allocation is slashed by 9.7 per cent, courtesy of Westminster, what was Labour’s reaction? Was it to denounce the wicked Tories for cutting Scotland’s funding at a time of rocketing inflation, as we recover from Brexit and the pandemic? Not a bit of it. Daniel Johnson, Jackie Baillie, Pam Duncan-Glancy and Paul Sweeney treated us to a tirade of invective against the SNP Government, with only a two-sentence whimper of a critique of the Tories for being disingenuous from Daniel Johnson, and not a word from the others.
Labour has become increasingly marginalised over the past two decades, having declined from holding 53 Scottish Parliament constituencies to two, both of which it managed to hold only because of desperate appeals to Tory voters for tactical votes. Therefore, it is little wonder that Labour members fear to criticise UK Tory cuts when it is that party’s voters that Daniel Johnson and Jackie Baillie rely on so heavily. The others have no such excuses.
As with the Aberdeen nine, it appears that Labour is smoothing the path for lots of local deals involving the better together parties across our councils, come May.
As for the party’s budget comments—calling them “proposals” would be a stretch—in evidence to the Finance and Public Administration Committee last week, the finance secretary diplomatically and politely advised the committee that she did “not recall seeing costings.” She also said:
“there is certainly not capacity for anything in the region of £1.8 billion”,—[Official Report, Finance and Public Administration Committee, 1 February 2022; c 38.]
which is the cost of the pay increase for care workers that Labour demands.
Only yesterday, Jackie Baillie submitted a motion that called for nurses to be given what she called “a proper pay rise” without mentioning that Scottish nurses are the best paid in the UK, or giving the merest hint of what a “proper” pay rise might be and how it could be funded.
Labour’s wish list for a budget that the cabinet secretary has repeatedly made clear is fully allocated could be met only by cutting deep into other budget lines. At a committee meeting nine days ago, Daniel Johnson offered to share his party’s mythical costings, but, alas, they have yet to appear.
What of this new-found, budget-busting interest in care workers? We know that, when Labour left office in 2007, Scottish care workers were being paid a measly £5.35 an hour. Despite the financial crisis, austerity and rising demand, the SNP Government is increasing the hourly rate to £10.50—a 96 per cent increase in 15 years. During that period, inflation has been 45 per cent. The increase is more than twice the rate of the rise in prices. Under the SNP in Scotland, hourly rates are higher than under Labour in Wales or the Tories in England. We recall that, in Glasgow, Labour spent millions on legal fees in trying to deny female care workers and others equal pay.
Labour has never recovered from its humiliation in 2009, when it set out reasonable budget demands, all of which the then Finance Secretary John Swinney met, only for Labour to then vote down the budget before crawling back a week later to vote for an identically worded budget out of fear of an election.
It seems that, each year, Labour cynically makes the most unaffordable demands as an excuse not to back an SNP budget. I gently suggest that, if Labour wishes to return to the halcyon days when it held more Scottish constituencies than the Lib Dems, a more responsible and grown-up approach to the budget might help.
Support the budget.
15:41
I add my best wishes to those that have already been expressed to the cabinet secretary.
I open by thanking all those who work across our public services for all the hard work that they have put in, especially during the pandemic, to help support our families and communities.
In the limited time that I have, I will concentrate my comments on the social care crisis faced by councils across Scotland and on the delivery of the policy to extend free personal care to people under the age of 65.
Local authorities from across Scotland are warning of the social care crisis that they face. Here in my own area—the city of Edinburgh—that crisis has become acute. It was reported this week that council staff have been asked to volunteer for secondments to help plug the gap in the capital’s social care workforce. I am disappointed that the minister responsible for that issue has left the chamber; I would have liked an intervention from him on that matter.
A report to the Edinburgh integration joint board, which oversees health and social care services in the capital, makes clear that there is a crisis. Between September and December, 83 people across the capital needed arrangements for services that they had not received, and a total of 1,400 hours of care had to be provided by outside agencies. The report noted the extreme distress that that caused many people and their families.
The cabinet secretary did not mention the social care crisis in her speech.
I have two quick points for the member. First, that is precisely why we have increased the overall amount of funding for the local government settlement. Whenever the Conservatives and other parties talk about cuts to local government, they are excluding all the additional funding that we have provided for social care. For some strange reason, they exclude it from the overall settlement, as if social care is not part of local government commitments.
On ensuring that that money reaches its allocated intention, that is why we say that health and social care funding is for social care. I hope that the member will accept and agree with that position.
That does not get us away from the fact that I am talking about. Under this SNP-Green Government budget, Edinburgh will receive one of the lowest levels of funding per head, both for our council and for our health board. It does nothing to address the social care crisis in the capital.
For a long time, there has been growing concern about ministers’ plans to destabilise services further, the potential impact of which could undermine fragile local services and accountability, making a difficult situation even worse. As my colleague Liz Smith said, there are serious concerns about the top-down restructuring and redevelopment of social care through a national care service. The total restructuring of social care in Scotland will be hugely destabilising. We must accept that. It will present significant challenges and bring considerable additional costs to our local authorities. Scotland does not need a national care service; it needs SNP and Green ministers to properly fund local care services.
That brings me to the policy to extend free personal care to people under the age of 65, which is something that I campaigned for in the previous session of Parliament. I am passionate that we should see that fully delivered.
I am therefore more than disappointed and concerned about the lack of progress that we have seen on delivering the policy to extend free personal care, and the increasing secrecy around it. The Scottish Government committed to deliver the extension of free personal care—known as Frank’s law—in 2019, but no data has been provided on how it has actually been delivered.
When I spoke to Amanda Kopel, Frank’s wife, this week, she told me that she is concerned that two years and eight months—almost three years—after Frank’s law was initially implemented following the campaign that she fought, there are still no figures on the uptake of the policy. Covid must not be used as an excuse for the discrepancies in the proper implementation of the policy across all our councils. Amanda said:
“I and many thousands of Frank’s law supporters do not want to think that our six-year battle for justice, fairness and equality was all in vain.”
I agree.
In 2019, the Scottish Government promised councils £30 million in the budget to deliver the policy. Despite written questions and freedom of information requests, however, we have not been able to obtain information on how much of that has been provided to councils, or indeed how many people have been given access to the care and support that they need and now have a legal right to receive.
Given the problems that people have experienced in accessing care packages during the pandemic, with many packages being removed from individuals or cut, it is concerning that there are more and more reports that people with complex needs and life-limiting conditions are not getting that vital care. I hope that delivering and protecting free personal care will become one of our main focuses in future budgets, because all parties have supported it. It is vital that care packages and assessments for personal care are fully restored across Scotland.
It is clear that the pre-pandemic pressures on social care services are only going to increase in the post-pandemic environment. As I said, I hope that, in the future, we will all focus on social care services and the crisis across Scotland, but especially here in the capital, whose people I represent in the Parliament. That is why I am disappointed that ministers have not agreed to my proposal that a national recovery group be convened. We desperately need that, and we desperately need national leadership on the issue—something that is lacking from the budget that we are discussing today.
15:47
The budget is lacking in ambition and it is full of the usual unnecessary compromises that leave people wondering why public funds are not being utilised effectively to help us to recover from the pandemic and tackle the looming cost of living crisis. It will simply not help individuals enough. It has little to offer our hard-working NHS and social care workforce and, on top of that, councils are being left to suffer once again as the Government passes difficult decisions down the line and forces local authorities to take on yet another round of real-terms cuts.
COSLA suggests that the real-terms core funding cuts amount to £371 million of lost funds. That is a story that my council colleagues have been forced to hear year after year. I will be interested to speak to the councillors on the ground, from all parties, about the announcements that are made and the way in which the budget process is conducted. However, we know that the local government funding position means that many of the targets and priorities around care, exercise and social isolation that the Government brings to the chamber and covers in various reports week after week will never get off the starting block in local communities.
Local authorities simply do not have the capacity to meet their populations’ needs, and they cannot commit to funding beyond very basic provision. They cannot commit to funding additional care, exercise and green-space areas, housing improvements, roads or bin collections, because they cannot afford to do that. I hear from council colleagues and residents all the time about the lack of local services but, yet again, the Government simply does not listen. It finds it convenient to blame councils, claiming that they have the choice to prioritise what they deem suitable and that they can raise their own revenue in some cases. In reality, the decisions that are made here in the chamber will be fatal for large chunks of locally run services.
In April, many people will see their energy costs rise by as much as 50 per cent. Even for relatively comfortable families, that is a serious load to bear, but for those who are already living from month to month, it is potentially life destroying. I understand that the £290 million that was announced by the chancellor will go towards that, which is welcome and the correct thing to do. However, the £290 million should not lead to a squeeze on other expenditure in Scotland’s budget and it should not be assumed that that is even close to enough for those families. I join my colleagues in calling for an additional £400 payment to be given to those families who will be hit the hardest by the crisis.
The ballooning energy costs, which have been caused by poor energy infrastructure planning, Governments putting profit before people and greedy oil and gas companies that clearly have done everything in their power to lobby those at the top against Labour’s windfall tax on their profits, will disproportionately impact the most vulnerable. Most people around the country believe that such profitable and gigantic companies should be made to pay more towards the countries that they benefit from. A windfall tax is justified and the right action to take. I am glad that the First Minister appears to have now backed something similar to the windfall tax—although, as is often the case, it has not been made clear exactly what she is backing—but it would also be helpful if she could make her MPs do the same and walk into the lobbies to support people over profit.
The budget is simply not enough even to meet the Government’s child poverty targets and to fund our councils—I do not need to reiterate the very cogent points made by my colleagues about education, health and social care.
I come back to a point that I raised earlier about our undervalued social care staff, who are a severely low-paid workforce. At the very least, the Scottish Government should commit to a £15 minimum wage for social care staff, who have worked especially hard during the pandemic and have not been valued by the Scottish Government. Scottish Labour has costed an immediate pay increase to £12 an hour, rising to £15 an hour.
Can the member tell the chamber how much that would cost?
The Labour Party has costed that out and we have had that discussion. It is about choices. If the SNP Government had the political will, it would do it—[Interruption.]
Let us hear the closing minute of Ms Mochan’s speech.
Where is the ambitious funding to help our NHS recover and prevent so many staff leaving? We know that a recent report indicated that six in 10 nursing professionals are thinking of leaving the NHS at a time when we can ill afford to lose them. Urgent action is needed from the Government to value NHS staff and to maintain staff numbers.
Without a commitment to funding our councils, paying our social care staff properly and giving our NHS the resource that it needs and deserves, it is impossible for anyone who is committed to helping Scotland to recover from the pandemic to back the budget. This budget represents a Government bereft of ideas and lacking a desire to support those most in need. It simply is just not enough.
I was hoping for an intervention from Mr Gibson. I hope that he will join us in Glasgow or Edinburgh on Saturday to campaign and fight to stop the cost of living crisis.
15:53
I appreciate the opportunity to speak on the budget today. As I was preparing for the debate, I hated to think that Murdo Fraser would be bored with my repeating myself by saying again today that we can only spend the money we have. Nevertheless, demands for further spending by the Conservatives or anyone else are pretty pointless if we do not know where the money is coming from.
However, perhaps I can change tack a bit today by focusing more on some of the good things that will come out of the budget. The first is housing. In particular, I welcome £831 million for affordable housing. I get the point that we need to invest in many other things, such as skills and a whole range of less tangible assets, which are important for the future, but I still think that there is something incredibly important about investing in bricks and mortar. I always get a boost when I see a new housing development in my constituency. A new affordable home can mean that an overcrowded family who could not afford to heat some old, draughty and damp building are able to move into a modern home that is easier and cheaper to heat, perhaps to Passivhaus standards, and in which the young people have an opportunity and the space to study.
Again, we see investment in public transport and active travel. I very much welcome the investment of £1,396 million in rail, £413 million in buses, including concessionary fares, and £150 million in active travel. I would like us to think about the amount with which we support the rail industry. By my calculations, that is £258 per person. Members know that I am very much in favour of rail, but it is worth emphasising how much is being invested. Every person in this country, whether or not they have a train line nearby, pays £258 for the railways each year. Maintaining rail as well as other public transport continues to be a challenge because of Covid, with passenger numbers still at around only 50 per cent of pre-pandemic numbers—fares income is down in line with that. It is all very well for some Opposition parties to say that they want increased services despite the lack of passenger demand, and that they want lower fares, more routes, and better terms and conditions for staff, but all of those come at a cost. Of course we want people to switch from car to rail, but we cannot afford to run trains with hardly any passengers on them.
It is clear that buses are important, too. They carry many more passengers than trains do, but bus passenger numbers have been declining over a number of years in Glasgow and the west of Scotland. The ownership of buses may be a factor, but I do not believe that it is the major one. Lothian Buses told us that it would run in very much the same way whoever owned it.
In the west of Scotland, we have an excellent local train service, and it is clear that the buses struggle to compete on speed and comfort, although they are cheaper and free for some people. That said, I very much welcome the £110 million to give free bus travel to under-22s. I hope that that will get more young people into the habit of using buses and that they will therefore become paying passengers in due course.
In health, we can welcome the spending of £12.9 billion for health boards as part of the total £18 billion budget. The doubling of the Scottish child payment from April—that will cost £197 million—is hugely good news. I hope that that will make a big impact on where child poverty would have been otherwise.
The announcement of an extra £120 million for local government is very welcome. I hope that that will give our councils a bit more room for manoeuvre. I know that they would like more certainty further ahead, as would a number of other sectors, including colleges and universities, but that, in turn, brings up the question of how much certainty the Scottish Government and we in the Scottish Parliament have about our funding. The answer to that is not very much. Even today, we have heard from the cabinet secretary about her lack of certainty on UK funding announcements. Is the £290 million to tackle increased energy costs new money or a reallocation from existing budgets? That makes a huge difference to our spending ability. We are at stage 3 of the bill for the budget for next year and we are still very uncertain about the budget for this year.
That is not even to mention the problem that we have had in several recent years in having to start our budget process before Westminster has formally started its budget process. I do not want to get into the fiscal framework in this debate, but it would help all of us hugely if Westminster set its budget during the autumn. We would then have a better idea of where we stood.
The budget seeks to maintain current public services and to do new things, such as with the child payment and more childcare. That is not an easy balance to strike—there is always a tension. Should we pay existing workers more or expand services and take on new workers? Should we make existing train lines better or create new lines? There are no easy answers to those questions. Somehow we have to try to do both. However, the budget makes a good attempt to do what it can on both fronts. We see continuing finance for valuable existing services in health and local government and elsewhere, but we also see expansion into significant new areas.
Overall, I am happy to support the budget. We would all like to do more in a whole range of sectors but, like every individual and organisation in Scotland, we have a limited amount of money available. I consider that the budget does well in using our resources wisely and effectively.
I hope that all parties will see the huge benefits that will come from the budget and will support it at decision time, as I certainly will do.
15:59
Like colleagues, I would like to pass on my congratulations to the cabinet secretary and her husband. I would also like to observe to Liz Smith that, although I have certainly been called many things in my political career—as I am sure that the cabinet secretary has—I am intrigued by the notion that a process that was based in large part on dialogue between Kate Forbes and me could be described as “unholy”. [Laughter.] The Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights observed to me a moment ago that, had he been leading for the Greens in the discussions, “unholy” may have been a more apt description.
The budget process in this Parliament is far more compressed than members in committees would like, as John Mason has just noted. However, even in the relatively brief period between the publication of the first draft and this final debate, the world around us has, not for the first time, changed significantly.
A global energy crisis and a complete failure on the UK Government’s part to regulate our domestic energy market means that almost every household in Scotland faces a huge rise in their energy bills. For many, those will be completely unpayable. It will force families into crisis, and, without radical action, as the cabinet secretary for energy said at the weekend, some people will die. At the same time, the energy companies whose gas runs through our network are laughing all the way to the bank, reporting billions of pounds in net profits. BP and Shell made a combined £44,000 of net profits a minute in 2021.
With a single step—a windfall tax on the profits of oil and gas companies—the UK Government could raise the money that is needed to help families through this difficult period. I hope that all parties in this Parliament and in Westminster recognise the growing public demand for that very just tax on obscene profits.
I welcome the finance secretary’s announcement today that the Scottish Government is doing what it can to support families, particularly given the revelation that the £290 million of additional funding that the UK Government claims is coming to Scotland largely does not exist. That support is on top of the measures already in the budget that support family income: the doubling of the transformational Scottish child payment; free bus travel for young people; increasing funding for family income maximisation projects; increasing pay for care workers; delivering free school meals for all primary 1 to 5 pupils; and funding of capital investment needed to roll that out to primary 6 and 7 as soon as possible.
On home energy and fuel bills in particular, I am proud of the role that the Greens are playing in government to drive forward energy efficiency and decarbonisation programmes that will reduce emissions and reduce household fuel bills. The £160 million already earmarked to support those who would otherwise be unable to pay for energy improvements to their home will clearly be essential. I hope that the plans for its deployment are being revisited, to ensure that that money is going out the door and resulting in home energy improvements as soon as possible.
Supporting people to pay their surging bills in the short term is obviously critical, but the budget reflects the priority that we are putting on reducing the amount of energy that people need to heat their home in the first place and on decarbonising the sources of that energy. The new low-income winter heating assistance programme will also be hugely important this year, but I ask the Government to consider if plans for how it is deployed might be adapted to reflect the energy crisis that we now face.
The warmer homes scheme is another scheme whose importance is now far greater than previously envisaged, and, given the circumstances, there is probably merit in revisiting and widening the eligibility for that scheme. Expanding the advice capacity of Home Energy Scotland would also seem sensible at this point.
I say all that knowing the huge pressure that the Scottish Government is under. The context of the 5 per cent real-terms cut from Westminster is still true, and the developments around that £290 million—the money that never was—have again demonstrated that the fiscal framework simply is not working. Opposition parties have now proposed about £3 billion of additional spending—I think that the amount has gone up in the course of the debate—but there is absolutely no credible accompanying proposals for where that money would come from.
I return to the point that I made during the debate on the Scottish rate resolution. We need to change how the budget is developed, scrutinised and debated in this Parliament. All parties should be given the opportunity—they should be expected—to confirm at least some of their taxation proposals each year. Spending proposals without revenue-raising or reallocation proposals should not be taken seriously.
I agree with the need for a better budget process. However, would the member accept that, if we compare last year’s budget with the resource funding that is available for this year, and we assume or take it on good faith that the Government did not use Barnett consequentials for Covid on recurring items, £3 billion that was unallocated from last year’s budget is going into this year’s budget?
I thank the member for the intervention, but I do not recognise his characterisation—both of the way in which the underspend is calculated and of the way in which Covid consequentials are deployed. There is a difference between one-off and recurring spending as a result of Covid. The example that I gave during the stage 1 debate was the amount of money that must be spent this year to keep public transport operators operating. That goes from our core funding. We hope that that will not be needed on a recurring basis, but it is certainly needed this year. That comes out of the core budget, as a result of the Covid consequentials being withdrawn.
Having all parties putting forward at least some spending proposals—or some taxation-raising proposals, rather—would be better for Government and for Opposition in the course of the debate.
Will the member give way?
I think I am about to close.
There is a wee bit of time in hand, should you wish to take the intervention.
Yes, please, in that case.
I thank Mr Greer for taking the intervention. Is he in favour of going back to a system in which we have three-year projections on budgets? Would he also agree to the possibility of having a finance bill, which would be better for scrutinising where expenditure lies?
I am grateful to the member for that intervention. Someone can intervene to correct me if I am wrong, but I think that all parties in the Parliament would prefer it if we were able to do multi-annual budgeting. Three-year budgeting is something that we would all support if we were in the position to do that. We are in a position this year, as a result of the UK spending review, to look a little bit further forward. If we had more certainty from the UK Government, I would strongly support three-year budgeting. However, that is not possible under the current arrangements that the Parliament has on an annual basis.
This year’s budget is based on three strategic choices made by the Scottish Government, and that is why the Greens are supporting it. Those are choices that have been made in the programme for government and in the co-operation agreement between our parties, which underpin it. We have chosen to tackle child poverty, climate action and Covid recovery as shared strategic objectives. That is reflected, for example, in the £150 million for active travel, the £300 million for bus services, the £6 million for the climate justice fund and the £200 million for tackling the poverty-related attainment gap. The Greens are proud to vote for a budget that reflects those strategic priorities, and we would urge all parties in the Parliament to seriously consider what they might be voting against at decision time.
16:06
I think that we can all agree that the backdrop to the budget has been extremely challenging. We have considerable uncertainty. We have talked about rapidly rising inflation, a cost of living crisis, energy price hikes and so on.
Against that backdrop, we must acknowledge that the UK Government has added its own challenges for the Scottish Government, with the constant changing of reliable consequential figures and, fundamentally, its lack of respect for this Parliament.
The response of the UK Treasury to the wider economic conditions remains unclear. The Bank of England has started a process of regular interest rate rises and, although that has received little comment in this Parliament, it is setting out on a path of unwinding quantitative easing. No one can be certain of the consequences of that—least of all, I suspect, the Bank of England.
That backdrop, which it is very important for us to understand, of course leads to pressure to increase Government expenditure on every front. No area has been immune from such pressures, and we have heard multiple calls from across the chamber today to raise department allocations and expenditure on virtually everything. It cannot be overstressed that the cabinet secretary and her ministerial team face all those pressures with a largely fixed budget. As someone coming into the chamber for the first time, I cannot understand why it is so hard for the Opposition parties to understand that. The calls for increased expenditure are simply not matched by suggestions of where budget cuts should be made. Opposition members seem to imagine that there actually is a magic money tree after all.
A further issue about which I have spoken before is the uncertainty and fast-changing forecasts that the Scottish Government must contend with. The forecasts from the Office for Budget Responsibility determine the size of the block grant adjustments for both devolved taxes and welfare benefits, and the forecasts from the Scottish Fiscal Commission affect tax revenues and welfare spending. That is a headache—and more so if the outcomes are significantly different from the forecasts and given the limited ability to carry forward, which the cabinet secretary has already pointed out.
For me, the question is how we should judge the budget. Perhaps there is a test. Amidst that background and the challenges that we face, has the Government come up with a balanced, fair and proportionate set of proposals? Furthermore, is there flexibility to allow for adjustments as circumstances evolve? As a member of both the Finance and Public Administration Committee and the Economy and Fair Work Committee, I think that the cabinet secretary and her ministerial team have done a remarkable job to satisfy those tests.
The scrutiny of the budget by the Finance and Public Administration Committee was detailed and thorough, given the time and resources that were available. Our report identifies the importance and challenges of the fiscal framework and of the negotiations that take place. Among the evidence that we examined, I was impressed by the paper “Options for reforming the devolved fiscal frameworks post-pandemic”, which was authored by the three Davids: Professor David Bell, David Phillips and David Eiser. They argued persuasively for increased flexibilities in borrowing and reserve drawdowns in normal times. They also sought the reintroduction of funding guarantees and extended borrowing powers during times of rapid change and adverse shocks such as those that we have experienced in the Covid-19 pandemic.
Scrutiny of a budget can become dauntingly technical, but we cannot forget the need for transparency and clarity for the citizens of Scotland. Rather than asking about the intricacy of the fiscal framework, they might ask—probably encouraged by the media—why there was an underspend of £580 million for 2020-21. When asked about that during an evidence session, the cabinet secretary responded with her typical clarity and candour:
“It is illegal for me to overspend. Therefore, as we get closer to the end of the financial year, coming in under budget is a bit like landing a 747 on a postage stamp.”—[Official Report, Finance and Public Administration Committee, 21 December 2021; c 32.]
In other words, that is a function of the quite ridiculous process of how we need to manage our budget. Earlier today, I tweeted:
“you wouldn’t run a business like this - so why are the SG expected to run a country like this?”
I have already had my say on tax, during the debate on the Scottish rate resolution. However, from some of their earlier comments, I notice that the Tories still fail to pick up on the fact that, as was mentioned last week in the Spotlight on Corruption report, £290 billion is lost every year to the UK GDP as the result of corruption. Last week, I called on Murdo Fraser to condemn that, but he did not. Perhaps he might like to do that today.
Will the member take an intervention?
I would like the member to condemn it. Would he like to do that?
Will the member take an intervention, or not?
I would be delighted to.
Will the member condemn all the wastage that we have seen from the Scottish Government, which my colleague Liz Smith outlined in detail earlier in the debate?
Presiding Officer, the member is beginning to sound a bit like Boris Johnson. He will not condemn it.
I will close by reflecting on an important aspect of expenditure. The budget for 2022-23 gives emphasis to the importance of preventative spend across a range of areas, from health to the environment. That is also related to the need for reform. I strongly agree with the view that Professor Graeme Roy expressed to our committee, that the resource spending review provides
“an opportunity to undertake a significant review of how public services are delivered ... That will involve difficult choices, but that is ultimately what the Government has to do”.—[Official Report, Finance and Public Administration Committee, 14 December 2021; c 29.]
I commend the budget for its tackling of such difficult choices amid the current economic conditions, and I congratulate the cabinet secretary and her team on their efforts on behalf of the people of Scotland.
16:13
I add my congratulations to the cabinet secretary and her husband Ali on their wonderful news.
Over the past two years, we have lived through a global crisis that would be almost unimaginable had we not experienced it. At times, it has brought nations to a standstill. It has emptied our streets of people and it has led to restrictions on our citizens that we have never seen before and that, I hope, we will never see again. Scotland’s economy has been hit hard, but many people and many families have been kept afloat through a combination of Government support and their own resilience.
How we live our lives has changed, too. Many trends—including the increase in online shopping, there being more remote working and there being more cash-free transactions—have been accelerated by the pandemic. Combined with changing rules, closures and disruptions to supply chains, the pandemic has stretched people, businesses and the state. Our collective resilience has been battered; however, it has not been broken.
It goes without saying that the Government must be responsive to that change, which calls for an ambitious programme of recovery with the aspiration—this is, perhaps, an overused phrase—to build back better.
Sadly, the budget falls short in almost every way. Councils are still the guiding hand for many of the services that matter most to people—including schools, social care, housing and transport—but, once again, they face the sharp edge of decisions that are made in St Andrew’s house.
Over the past couple of months, we have witnessed the now familiar announcements of swingeing cuts to local government—which accumulate year on year—being followed by the announcement of some previously undiscovered spare cash to sweeten the bitter pill. The cuts are why vital services are being stretched ever further, downgraded or abandoned altogether. It is difficult not to assume that the reason why the cuts fall on councils is that it is hoped that councils, rather than the Scottish Government, will get the blame.
We have heard something about the creation of a national care service, but beyond a title and the odd high-cost externally commissioned report, there are few solid proposals on how we will fix the crisis in our care sector. Instead of offering support, the Scottish Government is offering an approach that worries many councils, which see the move as being potentially damaging. It risks centralising the approach to care and ignoring the distinct needs of communities, particularly those in my Highlands and Islands region.
The budget also fails to help business to recover. Across the Highlands and Islands, we have seen an extremely mixed recovery for tourism and hospitality, but phase 2 of the tourism recovery plan has been shelved, never to see the light of day. The Scottish Tourism Alliance has said that the budget
“does not go anywhere near far enough”
in supporting recovery. I suspect that that might be polite, compared with what constituents in the sector would tell the finance secretary in private.
In our countryside, £4.4 million is being removed from agricultural support. All the while, the budget for Highlands and Islands Enterprise—the body that is responsible for supporting business growth and new business creation—is being cut.
Instead of targeted help, the Government’s approach to recent support schemes seems to be little better than arbitrary, and ignores the impact of winter public health measures on a range of businesses. Conservative members called for 75 per cent targeted business rates relief for a full year, but what the budget offers is paltry in comparison.
We now know that one part of the Scottish Government—the Scottish Greens—does not believe in growing the economy; increasingly, it seems that that has infected the SNP, too. Therefore, it is no surprise that the fiscal outlook shows Scotland lagging a good quarter behind the rest of the UK in the timing of its economic recovery.
Where are the big ideas, the change and the aspiration to rebuild? We were promised much throughout the pandemic. One of the notions was a skills-led recovery to address not only the issues of the pandemic but the long-term drag on economic growth and productivity growth across Scotland. Instead, the skills and training budget is being cut and funding for colleges—already the victims of years of SNP downgrading—is being cut by £53 million.
Based on any honest assessment, the budget fails to live up to the requirements of today’s circumstances or to the aspirations for the future that we should all share for our country. The budget not only dodges the big questions, but actively serves to undermine progress against the long-term challenges that Scotland faces.
Above all, the budget shows the deep complacency in the Scottish Government. If the recent upsurge in discussion about breaking up the United Kingdom is anything to go by, that Scottish Government has got tired of the day-to-day business of governing.
The budget will leave the Highlands and Islands and Scotland worse off, but it is not too late for SNP and Green MSPs to put their constituents first and reject it. I urge them to do so today.
Paul McLennan will be the last speaker in the open debate.
16:18
I also pass my best wishes on to the cabinet secretary on her fantastic news.
I am delighted to speak in the stage 3 debate to pass the Scottish Government budget. I will speak about the economic situation in Scotland at this time of crisis and economic upheaval.
We have heard before about the cost of living crisis. Our poorest families have already had to deal with the universal credit cut, which affected 8,000 families in my constituency alone, including 5,000 single-parent families.
In the UK, fuel-cost increases will see the energy price cap rise from £1,277 to £1,971—a rise of £693 per year, or nearly £60 per month, which will impact on the most vulnerable people in our society. However, in France, price hikes have been limited to 4 per cent, in Spain the Government introduced a windfall tax on electricity generators and gas producers, and in Germany the Government slashed the surcharge on bills in order to support renewables.
The German Government will support them by increasing state subsidies, which are drawn from higher carbon taxes. Those were all policy choices that were available to the UK Government.
The average rise in national insurance payments will be around £350 per year, or £30 per month. Inflation is expected to hit over 7 per cent later this year, and food bills are soaring. Interest rates also look set to rise sharply. For many of our working poor, the combined rise in costs could range from £100 to £350 per month. Those are people who are already struggling. In my constituency, food bank use was up 40 per cent in December and 28 per cent in January. It is no surprise that that biggest rise in years followed the universal credit cut. Most food bank users in East Lothian are people on low incomes.
The cost of living crisis is caused by UK Government policy choices on universal credit, energy and national insurance. Those choices are all coming home to roost. Make no mistake: they impact the poorest in society. They are Westminster decisions.
We hear the Tories talk about the need to grow our economy, but let us look at another Tory policy choice. Brexit has given the economy its biggest hit—even bigger than Covid—yet we hear not a word about that on the Conservative benches today.
Only yesterday, one of Scotland’s biggest trading partners, Germany, reported that its import of goods from the UK dropped 8.5 per cent in year-to-year trading figures, while its imports from the rest of Europe surged by 17.1 per cent. For the first time ever, the UK is no longer among Germany’s top-five trading partners.
Yesterday, the UK Parliament’s Public Accounts Committee said that “the only detectable” sign of Brexit so far has been increased burdens on business, through higher costs, more red tape and border delays.
Let us now be reminded of what the Scottish Fiscal Commission said in its forecast:
“Overall the Scottish Budget in 2022-23 is 2.6 per cent lower than in 2021-22, after accounting for inflation the reduction is 5.2 per cent.”
We will hear from the Scottish Tories that this is all about grievance politics and that the UK Government has been very generous. Yet on Tuesday, Mark Drakeford, the Labour First Minister of Wales, said:
“Last week HM Treasury said Wales would receive £175m from its English council tax rebate plan.
Just as we’re finalising our plans to tackle the Cost of Living Crisis, we’ve learned there’s no extra money for Wales.”
—surprise, surprise—
“We will continue to work to support those who need it the most.”
How ironic is it that the Welsh First Minister stands up more for the devolved budget than do his Scottish Labour Party colleagues? What Mr Drakeford says sounds familiar. The Tories naturally do not like devolution, nor will they ever.
We have talked about the Tory-created backdrop. What is the Scottish Government going to do to help? I welcome the cost of living measures that were taken by the cabinet secretary today. The Scottish Government has provided funding to business—more than UK Government consequentials provided. The Scottish Government’s latest business support package of £375 million would equate to a £4.6 billion equivalent package from the UK, far exceeding the chancellor’s £1 billion of funding that was announced in December.
The finance and economy portfolio budget will provide £1.75 billion and will support the Scottish Government’s economic response with a firm commitment to build a net zero wellbeing economy and protect and create good-quality, green jobs across every region of Scotland. This budget will support economic recovery by protecting the resource budgets of Scotland’s three enterprise agencies and VisitScotland. It will also capitalise on opportunities that are created by the green economy, while strengthening Scotland’s pandemic recovery. That is a major focus of this budget.
To accelerate the potential of digital technology, £192 million has been allocated to improve connectivity and boost the digital economy.
Will the member take an intervention?
Yes.
I am interested in the advances in digital, because, as we all know, the R100 scheme, which is managed completely by the Scottish Government, is years behind schedule. What does the member think of that?
The R100 scheme was picked up by the Scottish Government because of the inadequacies of the UK Government, which did not know what it was doing. [Interruption.] I am not going to take lectures on that—sorry.
The spending plans maintain the Scottish Government’s non-domestic rates reliefs package and will save ratepayers more than £800 million. It includes the small business bonus scheme, which takes over 111,000 properties out of rates altogether and is the most generous relief package of its kind in the whole of the UK. I see that every single day in the high streets of East Lothian.
In 2021-22, retail, hospitality and leisure businesses received 100 per cent rates relief, meaning that they pay nothing until April 2022, while equivalent businesses in England started paying rates last July.
Other budget funding for 2022-23 includes £215 million for the Scottish National Investment Bank, to enable it to invest in existing and emerging sustainable businesses. I have seen that through Sunamp in my constituency of East Lothian. It also includes £370 million for Scotland’s enterprise agencies, up from £340 million last year, and £225 million for Skills Development Scotland, to support a range of national training interventions.
A further £45 million will support the young persons guarantee, which will, through new and enhanced employment and training opportunities, target employment support at young people who face longer-term scarring effects from the pandemic.
It is a budget for business recovery, business growth, business renewal and jobs. I am proud to support it this afternoon.
We move to closing speeches. I take the opportunity to advise members that there is some time in hand for extended contributions and/or interventions, should the closing speakers so wish. I call Daniel Johnson to wind up for Scottish Labour.
16:25
Thank you, Presiding Officer. I will try not to notice the disappointment on members’ faces as I rise to speak when you have just said that.
We have become used to, if not weary of, finance secretaries making unexpected last-minute announcements as we conclude the budget process. However, the unexpected announcement that the cabinet secretary made the other day was very welcome indeed. I offer my congratulations to her and her husband. Parenthood is genuinely a blessing and a joy—most of the time.
Let me turn to the budget. It comes at an important time, because we all recognise and hope that we are entering a new phase of the virus in which we can genuinely start to look towards recovery, rather than just dealing with the emergency. We can all agree that the Covid costs have not gone away, but recovery means going further than simply accounting for those costs. It means saying what action we will take in order to build that recovery.
What the budget needed to do was to set out clear plans to help our shattered public services get back to normal, businesses to get back to trading and schoolchildren to recover the learning that they have lost. Although there are many things in the budget that we can support, such as the doubling of the Scottish child payment, I would argue that there is sufficient focus and clarity in those detailed steps to build recovery, and that is where the budget falls short.
There has been a lot of hot air, heat and argument about what the Opposition parties may or may not have been saying. Let me set the position out very clearly in numbers. At the point that it was passed, there was £37.8 billion of resource funding in last year’s budget. That included £1.8 billion of non-recurring Covid spending. The Covid money rose to £4.6 billion, but when compared with the £39.2 billion of resource spending in the coming year’s budget, that left £3 billion unallocated. It is true that there is less money overall if we include the non-recurring Covid money, but that non-recurring point is important, because the money was unallocated in the coming budget.
We set out proposals within that envelope of £3 billion that would deliver recovery. The Government’s contention is that, because of Covid, the cost of just running services more than exceeds that £3 billion. That may be so, but I do not think that it has clearly demonstrated that. Therefore, I make no apology for setting out our proposals in detail. I say politely to Kenny Gibson that, if he wants to accept invitations, he needs to do so. If he had got back in touch with me, I would have sat down with him and my dossier and gone through it literally line by line. Likewise—
Will the member take an intervention?
I will in a moment, when I have finished the point.
Each one of those proposals was published with detailed costings. They may be wrong, but I would be happy for Mr Gibson to sit down with me and point out where they are wrong.
Mr Johnson completely misses the point that we have reached in the budget process. The finance secretary has allocated the budget in its entirety, including the supposed £3 billion about which Mr Johnson is talking just now. If he wishes to allocate money to some other purpose, he has to serve Parliament well by telling us where in the proposals that have been put forward by the cabinet secretary he is going to move the money from. It is just incredible for him to come here and say that he wants to spend £1.5 billion on this side without saying where in the allocated budget the money will come from. That is the credibility problem that the Labour Party has failed today and it is why there is no justification for Labour turning its back on the young people and children of Scotland by not supporting the doubling of the child payment.
Mr Swinney has got his sequencing a bit out of order. The point at which we made the claim was before the budget was—
That is irrelevant.
If Mr Swinney would just wait a moment!
The key point is that there are two fatal flaws in the budget. We cannot build social care recovery on low pay, and that recovery is needed if we are going to deal with the backlog problem. I contend that simply raising the pay of social care workers by 48p is a problem, because we will not be able to recruit and retain the social care workers we need to deal with that backlog.
We cannot vote for a budget that does that, nor can we vote for a budget that treats council services as a budget line to be raided and redistributed elsewhere. Council services are not something to be expended in the cause of recovery; they are the foundation of recovery. We need roads, schools, libraries and play parks, and we cannot afford to cut them if we want a recovery that is worthy of the name.
Since the budget was first introduced in December, the cost of living crisis has come to dominate headlines, which underlines the challenge that recovery poses. In recent days, we have heard that the profits of multinational oil and gas companies are spiralling. BP has announced £9.5 billion-worth and Shell £14 billion-worth of profits. When Labour comes forward with a proposal to tax those profits and use them to alleviate the cost of living, what do SNP MPs do? They vote down those proposals with the Tories. Frankly, that is shameful.
Will the member take an intervention on that particular point?
If the member can explain why SNP MPs voted with the Tories against those proposals, I am happy to take the intervention.
I recall Labour voting for £30 billion in cuts before it lost 40 of its 41 MPs in 2015. However, we are talking about the Scottish budget today. What Daniel Johnson is talking about is a reserved matter. Is Daniel Johnson saying that he believes that Scotland should have the powers to decide whether to have a windfall tax? As for the invite, it seems to have got lost in the post, because I have never received it.
What has been lost in the post is whether the SNP agrees that we can talk about reserved matters and about what MPs do in Westminster. There is a huge amount of inconsistency from that side of the chamber.
The plan against which SNP MPs voted would have given most households £200 off their annual bills and delivered targeted support to the hardest hit by increasing the warm homes discount—815,000 households would have received £600 off their bills if plans from both the UK and Scotland were included.
I note with interest, and I will consider in detail, the measures that the cabinet secretary has introduced. I would be interested to look at their detailed impact, and at who will benefit from the £150 council tax reduction. Critically, I have a key question on whether disabled households will benefit.
I might have missed the answer to my intervention, but I am interested to know where the money is coming from if not from Barnett consequentials. I noted that, in the published spring budget revision, £284 million was in the reserve and I wonder whether the funding is coming from there. It would somewhat indicate that more money is available as the budget process goes through.
For clarity, the spring budget revision is out of date. For example, the overall quantum has been revised down and it is now net of the £290 million, so there are two different changes that require a more substantial revision, which I will take through the Finance and Public Administration Committee.
Clearly, much more work needs to be done and we will examine the detail.
I was pleased to hear the cabinet secretary discuss the various allocations of the remaining £104 million, but I only totalled an additional £36 million in what she has stated. I would be grateful if she could state when the extra £60 to £70 million will come.
Do I need to wind up, Presiding Officer?
A minute or so would be amply sufficient.
I welcome the calls from the cabinet secretary and from Mr Greer for a more constructive approach to the budget process. Indeed, I believe that it is necessary. I suggest that we need three things. First, we need earlier and more open on-going dialogue—meeting a day or two before the budget is published does not provide for that.
Secondly, we need more transparency about the numbers. The calls for that have been made not just by Opposition parties but by Audit Scotland, too. We need to be able to track where the money goes, from budget to announcement to outturn to consolidated accounts. For us to be unable to see how money is spent is impossible.
Finally, there must be consistency. I note very different figures—£12 an hour and £15 an hour—being discussed in different places, and some consistency would be helpful.
There are some things in the budget that we can support, but we cannot pass a budget on the back of low pay for social care workers and cuts to front-line and foundational services that are delivered by councils. For those reasons, we will not be voting for the budget.
16:35
Like other members, I congratulate the Cabinet Secretary for Finance and the Economy on her happy news. Like Daniel Johnson, I can testify that parenthood is a great joy. I am a parent of two teenagers, and she will have no idea what a joy that is. She will just have to wait until her children get to the age at which their friends can troll her on Instagram—that will be something for her to look forward to.
When we had the stage 1 budget debate three weeks ago, I reminded members that we were dealing with the largest budget in the history of devolution. If we take out the extraordinary coronavirus funding of last year, we find that, in the year to come, the Scottish Government will have more money to spend than ever before. I am grateful to Daniel Johnson for confirming that during the debate.
It is the task of Opposition parties to scrutinise the money that is spent, ask whether it has been properly allocated and highlight areas of wastage where we feel that money could be put to better use, which my colleague Liz Smith did earlier.
In Ross Greer’s speech, he raised an interesting point about the budget process and whether Opposition parties should present more detailed proposals, which I remember being debated in the Finance and Constitution Committee in the previous parliamentary session. One of the barriers to prevent that happening is that only the Government has full sight of all the information. In the previous session, as members of that vintage will recall, we had the phenomenon, which we discussed in the many happy exchanges that we had with both the current finance secretary and her predecessor, of the remarkable ability of the Government to find money between the presentation of the draft budget and when the budget got to stages 1 and 3—down the back of the sofa, we used to call it. By all means, the Opposition could be brought in to present more proposals, as Mr Greer asked for, but we would need to have sight of and access to additional information, which, up until now, the Government has been reluctant to share with Opposition parties.
In the stage 1 debate, I mentioned support for business, which was discussed earlier in the debate. It is an issue that is more important than ever. Over the past few weeks, I have spoken to a large number of hospitality businesses across Perthshire, which has brought home to me the severe impact of the Covid restrictions that were introduced in December.
Having experienced two very difficult years, hospitality businesses were looking forward to the Christmas and new year period as an opportunity to make up for lost revenue. There were bookings for office lunches, Christmas parties and family get-togethers. In early December, when the advice came from the Scottish Government that Christmas parties should not proceed, it was catastrophic for many businesses, as virtually all their bookings were cancelled. Many had already bought in their Christmas supplies of food, alcohol, decorations, napkins and crackers—all that is required for the festive season—much of which could not be reused.
In such circumstances, it is reasonable for such businesses to ask that they be supported financially. However, what has been offered by the Scottish Government falls far short of compensating them for their losses. As we speak, two months on from businesses being told that restrictions would be put in place, many are still to receive a penny of support.
In the budget, we called for the Scottish Government to provide 75 per cent business rates relief for a full year for businesses in the retail, hospitality and leisure sectors, which was widely supported by the business community. Instead, the Scottish Government has offered only rates relief of 50 per cent for the first three months of the financial year, and it has capped that at £27,500.
Will Murdo Fraser also call on the UK Government to put a halt to the 20 per cent VAT that it is about to put on the hospitality industry?
I have heard that call from many people in business. Of course, they have also called on the Scottish Government to take action on business rates, which is within its gift and within the context of this debate, here in Parliament. The support that has been offered by the Scottish Government is less generous than what is being offered by the UK Government to businesses south of the border.
Earlier, I raised with the cabinet secretary the issue of support for nightclubs because, as a sector hard hit by the closures, nightclubs have been squeezed—
Unbelievable!
Mr Fairlie is shouting at me from a sedentary position, as if he wants me to give way again.
Yes, a bit of calm on all sides would be helpful. Mr Fraser, please continue.
Nightclubs have had a particularly difficult time for the past two years. They were looking forward to a busy Christmas and new year period and, of course, they faced closure. The Scottish Government provided a nightclub closure fund to compensate them.
Is Murdo Fraser concerned, as I am, that there are still nightclub owners who are saying that they are yet to receive money? Indeed, some are claiming that they have been refused it because their music is not loud enough. One person said that a nightclub has to play its music at above 85dB to be a nightclub.
That is a significant point. I had not heard the point about the level of noise, but I have heard from other nightclub operators who have said that they are classed as hybrid premises because they have a bar alongside a nightclub and, because of that, they do not meet the criteria for support from the Scottish Government.
Earlier, I urged the cabinet secretary to address that. I know that the Night Time Industries Association has a meeting with the Scottish Government, and I hope that the Scottish Government will listen to what it has to say. It is a sector that has been hardest hit by the restrictions that were brought in, and yet it is being left high and dry without proper support.
The Scottish Government will say—we have heard it from the finance secretary—that there is more support for business in Scotland than there is south of the border. However, we have to remember that businesses south of the border did not face the same level of restrictions that we have seen here in Scotland. Despite all the additional restrictions that were introduced in Scotland, there is no evidence whatsoever that we faced a lesser impact of omicron than was the case elsewhere in the United Kingdom.
We have had some discussion about local government. Despite the finance secretary finding an extra £120 million for stage 1, we are still looking at real-terms cuts to local government amounting to £250 million in its core grant.
How can the Tories seriously talk about local government—no one does take them seriously on the issue—when we are seeing 40 per cent cuts on a manifesto promise south of the border on top of 37 per cent real-terms cuts? Their own record in government is so utterly woeful that to pose as defenders of local government is, frankly, embarrassing. Pick another topic next year.
You would think that Mr Gibson would be embarrassed to raise a point that illustrates so perfectly the value of the fiscal transfer of £2,000 for every man, woman and child in Scotland from the rest of the United Kingdom—a fiscal transfer that he would throw away overnight because of his demand for Scottish separation. We are seeing support for the Scottish public sector thanks to fiscal transfers from elsewhere in the UK. [Interruption.] Mr Gibson is still shouting at me from a sedentary position; does he want me to give way again?
Is Mr Fraser saying that the people of Scotland are less able to run their own country than their next-door neighbours? Is that what he is actually saying? Where is the union dividend if what he says is true?
Of course the people in Scotland could choose to run their own country. Back in 2014, we asked that question and people chose to keep the benefits of being within the United Kingdom, and they chose to be part of a union in which the stronger economic part supports those that are in greater need, such as Scotland. Kenneth Gibson would throw that away.
We have also had some discussion about the cost of living crisis, which is a very serious issue, and a number of members have referred to it. SNP members are very anxious to talk about what the Westminster Government should be doing about the cost of living crisis, so let us look at what the Scottish Government is doing about the cost of living crisis. We are seeing increases in council tax for many households. We are seeing inflation-busting increases in Scottish Water charges. We are seeing the hated car park tax that will mean commuters paying up to £1,000 per year just to park their cars. We are seeing increases in the cost of rail tickets.
Will the member give way?
Not just now. We are even seeing the introduction of compulsory smoke alarms costing hundreds of pounds for households at a time when budgets are being squeezed.
Each and every one of the measures that I have talked about is under the direct control of the Scottish Government. Instead of talking about what Westminster should do, it should be using the powers that it has to address those measures.
If Mr Arthur wants to intervene, I will give way.
I am very grateful. I ask this question in all sincerity. Does Mr Fraser think that there is a relationship between the pandemic and all the disruption that that has caused, and the current cost of living crisis that we face?
There are many different reasons behind the increase in the cost of living. The pandemic, the rise in energy prices and the fact that there is a shortage of supply of energy have all been factors. One wonders why the Scottish Government and its Green partners are talking about closing down oil production in the North Sea at the very point when fuel prices are going through the roof and hitting households right across Scotland.
In the debate, we have once again been challenged to say where money would come from. John Mason made his usual comments in that area. Let us look again at the projections from the Fiscal Commission on the amount of money that Scotland will get in income tax, which Liz Smith referred to earlier. If we could only grow the Scottish economy even at the same rate as—not faster than—the UK average, the finance secretary would not be facing a big cut in the budget that is available to her because of a drop in income tax receipts. If we want to find just a little bit of extra money, let us start with the £700,000 in civil servants’ wages that is being spent preparing for another independence referendum, which we know is not going to happen.
Will the member take an intervention?
No. I am just coming to a close.
The Scottish Conservatives have made it clear that the budget before us is not one that we can support. Even though the Scottish Government has more money than ever before, the budget delivers cuts to local government and does not properly support businesses that have been struggling over the past two years. It is a budget that should be rejected by the chamber.
16:46
l am grateful to members for their very kind words. I do not mean to coincide major life events with budgets; that is just the way that things have unfolded. I assure members that I was not designing to get out of next year’s budget. Whether that is a pro or a con I will leave to others to determine.
I will begin with a reminder of the announcement that we have made to help families. We are committing the full £290 million to support households, which will mean that 73 per cent of all households in Scotland will receive £150 at a time when budgets are squeezed. Even more importantly, we will use the council tax reduction scheme to target support better so that all households that receive a council tax reduction, regardless of what band they are in, will receive that support, which is a reflection of need.
In recognition of the energy impacts, we will continue the fuel insecurity fund to help households that are at the greatest risk of self-rationing their energy use.
I congratulate the cabinet secretary on her news.
While we have been in the chamber, leading poverty organisations have said that the cabinet secretary’s proposals on the cost of living are deeply disappointing and a missed opportunity to right a wrong done by the Westminster Government. What is her response to that?
My response is very similar to what I said in my opening remarks, in which I was up front and honest about two things. The first was that our scheme is an imperfect one. We have intentionally chosen to distribute funding in a way that is simple and effective, knowing that some will receive it who do not need it but that others who desperately need it will receive it.
My second point was that what we are doing must be seen in a much wider context. I read with interest Age Scotland’s proposals and the Joseph Rowntree Foundation’s analysis. If we had the full levers of a social security system or a tax system, we could take a far more targeted approach, but the approach that we have taken will ensure that families get help sooner rather than later. Obviously, deliverability is key, which is why COSLA is a key delivery partner in the whole process, which has been developed in collaboration with it.
I thank the cabinet secretary for being generous in taking interventions.
The point about targeting is an important one, but there are levers and powers available to the Scottish Government that would allow it to better target support to low-income families. Support could be targeted to those on the carers allowance supplement or on pension credit, or to families that access child winter heating payments. Does the cabinet secretary agree that those would be appropriate ways to target support to low-income households?
I certainly think that that must be part of the package. As I said in my opening speech, support should be seen in that context. The fact that there was a supplement to the carers allowance in 2020 and again in 2021 is one example of such targeting. Over this winter, £41 million was provided through the winter support fund. Last year, low income pandemic payments were made to everyone in receipt of council tax reduction. Those are examples of how we have sought to target our funding.
On the point about deliverability, we have looked at a lot of options. The best way to get funding out as quickly as possible in April, instead of waiting for months, is to do it in the way that we have outlined. I am in no way shying away from the fact that that is imperfect. Thankfully, we have a council tax reduction scheme in place that allows us to identify those households that are in greater need and to provide support to them.
Will the cabinet secretary accept an intervention on that point?
I think that we have time for that.
At stage 1 of the budget, the cabinet secretary announced that she was giving councils the opportunity to raise council tax as an option for offsetting budget cuts. Given that her announcement of additional funding would account for only a third of the proposed cuts, does that not mean that any councils that do choose to increase council tax will wipe out, at a stroke, any additional support coming from that measure?
I dispute the premise of that point. We did not give councils discretion over council tax for any reason beyond the fact that they have been asking for that discretion for years. I have not been in a single budget call with COSLA in which it has not specifically requested discretion.
I was going to come on to the position for local authorities. The point about the final position for councils has been raised a number of times in the debate, and I will come to that.
This budget, which all parties will have the opportunity to vote on at 5 pm, is about tackling inequalities. It includes £3.9 billion for benefits next year to provide support to more than a million people. There is £197 million to deliver the Scottish child payment, doubling it to £20 a week. The budget will continue tackling homelessness, with £831.5 million towards the delivery of more affordable housing. There is £200 million for the Scottish attainment challenge, as part of our commitment to providing £1 billion over this parliamentary session to tackle the poverty-related attainment gap.
We all know what the major challenges are. I thank Paul Sweeney for raising a point that the Joseph Rowntree Foundation has made clear, which is that the current rise in the cost of living will disproportionately affect lower-income families. That is why the holistic approach to providing more targeted help is critically important.
I will pick up on some other points that were raised by colleagues. Members from all parties talked about local government, and Miles Briggs illustrated a point that is central to the debate about local government. Social care is a key part of local government’s responsibilities. Funding for that is therefore a key part of the overall settlement, although many parties exclude that when they talk about the settlement.
This budget will deliver real-terms growth in the local government settlement. It will protect the core budget, which increases by £120 million in cash terms. Over and above that, we will see £354 million for health and social care integration, £200 million to support investment in health and social care and £145 million for additional teachers and support staff, as well as significant funding for the increase in the Scottish child payment and the rolling out of free school meals.
If the budget is so good for local government, can the cabinet secretary name any councils that are not having to put up council tax?
We have provided an additional £120 million so that no council has to deliver an inflation-busting council tax increase.
The point that I am making is that, when members debate the local government settlement, they exclude the very point that Miles Briggs quite legitimately put to me about the fact that social care is under pressure. We have increased funding for social care as part of our renewed commitment to passing on health consequentials to not just the health service but social care as well, but that is excluded from much of the debate and discussion.
Over the past few years, and again this year, Labour has—rightly, I think—highlighted the need for us to support carers. The budget that Labour will vote against tonight increases carers’ pay by 10.5 per cent over last year. That 10.5 per cent increase in carers’ pay is made for precisely the reasons that Daniel Johnson rightly outlined. To build resilience into the social care system, we need to make sure that carers are rewarded and remunerated rightly. There is a clear commitment, too, to building in collective bargaining as part of the national care service.
All parties have identified the need to invest in economic recovery, and we are doing precisely that. Murdo Fraser talked about business support, as others did. He also talked about the impact of omicron on hospitality businesses. Hospitality businesses in Scotland were not paying a penny in rates under the SNP, but hospitality businesses in England, under the Conservatives, were paying rates. It is all right to talk about the need to extend non-domestic rates relief, but, when businesses needed it, the SNP Government ensured that they had support. The same cannot be said of the UK Government.
When it comes to supporting the economy, there has been much debate about the need for some game-changing policies that will accelerate growth. My plea would be for the other parties to actually deliver on the rhetoric in terms of concrete, tangible ideas. There is much in the way of denigrating and criticising but very little in the way of tangible policies that the other parties have put forward that would accelerate growth in the way that they call for.
Presiding Officer, I was going to go through the contributions that were made by other parties, but I will not do that apart from making two quick comments. Michelle Thomson talked—I think very helpfully—about the challenges that we face but also about some of the hypocrisy. She talked, for example, about waste. We have all seen the reports of the £4.9 billion of fraudulent business loans under the UK Government and the £8.7 billion of personal protective equipment that was written off. In relation to waste, perhaps the Conservatives should start with their colleagues.
Jamie Halcro Johnston made a point about Highlands and Islands Enterprise, and I want to ensure that the answer is on the record. The enterprise agencies have seen a record level of funding—the highest level since 2010-11—because of the critical role that they play in economic recovery. HIE plays an absolutely essential role in the economic recovery of the Highlands and Islands, which is why we have maintained its spending power. What Jamie Halcro Johnston referred to as a reduction is a non-cash reduction—it is about accounting charges like depreciation. I want to make sure that it is clear that this is about protecting our enterprise agencies.
Last but perhaps not least, Paul McLennan talked about the wider economic impacts that we are all contending with. He talked about the impact of Brexit and the impact of the cumulative costs on businesses. It reminds me of the debate that we had a few weeks ago about labour shortages, when, on the one hand, the Conservatives were at pains to say that Brexit is not the problem and that there are labour shortages in France as well, while, in the same breath, they blamed all economic woes on the SNP. They cannot have it both ways. I have spoken directly to businesses and it is quite clear to me where much of the challenge is coming from.
Presiding Officer, I have endeavoured to fill the time and take us right up to 5 o’clock. I am delighted to commend the budget to the Parliament. It is an ambitious and bold budget that delivers for the people of Scotland and highlights their priorities. It also ensures that, as a Government, we have been quick to respond to the needs that have emerged since 9 December.
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