The next item of business is a statement by Shona Robison on the Scottish budget 2024-25. The Cabinet Secretary for Finance will take questions at the end of her statement, so there should be no interventions or interruptions.
14:20
It is an enormous privilege to present my first budget, which is built on our values and sets out, in tough times, to protect people, sustain public services, support a growing sustainable economy, and address the climate and nature emergencies.
Our values of equality, opportunity and community are missions that should be at the core of any social democratic Government. They are our guiding lights in difficult times. This Government is committed to achieving equality through tackling poverty and protecting people from harm. At the heart of the budget is our social contract with the people of Scotland, whereby those with the broadest shoulders are asked to contribute a little more, where everyone can access universal services and entitlements, and where those who are in need of an extra helping hand will receive targeted additional support. That is what we mean when, in the face of Westminster austerity, we say that we will always stand up for Scotland.
This budget is set in turbulent circumstances. At the global level, the impacts of inflation and the war in Ukraine and the after-effects of the pandemic continue to create instability. In the United Kingdom, the combined effects of Brexit and disastrous Westminster policies mean that we are uniquely vulnerable to such international shocks. Recent research by the Resolution Foundation concluded that the UK is now defined by the toxic combination of low growth and high inequality and is therefore “a stagnation nation”.
Despite that, our economy has been resilient. Unemployment is low, at 3.8 per cent, and average earnings in Scotland are growing faster than those elsewhere in the UK. Scotland is the top-performing economic area outside London and the south-east, and it is the third largest as regards wages and gross value added per person in 2021. A record number of foreign direct investment projects were secured in Scotland last year.
Devolution has brought many benefits, but it has also exposed quite how beholden we are to the decisions of Westminster. We are fighting Westminster austerity with one hand tied behind our back. In today’s budget, the Scottish Government has no say on corporation tax, no powers to mandate the real living wage for all, no ability to consider windfall levies on excess profits, and no options on wealth taxes such as capital gains tax.
Last month’s autumn statement was the worst-case scenario for Scotland. It contained a fiscal settlement from the UK Government that undermines the viability of public services across the whole UK, including here in Scotland. Our block grant funding for this budget, which is derived from the UK Government’s spending decisions, has fallen by 1.2 per cent in real terms since 2022-23. Our capital spending power is due to contract by almost 10 per cent in real terms over five years.
Under his own fiscal rules, the Chancellor of the Exchequer could have invested £27 billion more in core services and critical national infrastructure, but he did not. Instead, he prioritised tax cuts at the expense of public services. For example, members of Parliament will receive a £754 tax cut at the expense of funding the national health service and other vital public services. That cannot be right, Presiding Officer. Disgracefully, the motivation for that choice is not the national interest but the electoral interest of the Tory party ahead of the coming general election. We should be in no doubt that, while Scotland remains in the union, we will continue to pay the price of Westminster austerity.
Given the current turbulent economic environment, we are publishing single-year spending plans for 2024-25 in this budget. I recognise the merit of multiyear budgets, but the autumn statement and the forecasts from the Office for Budget Responsibility make future prospects more volatile. I will revisit the multiyear outlook in our 2024 medium-term financial strategy.
I am very grateful to both the Scottish Fiscal Commission and the Office for Budget Responsibility for their engagement in the budget process, and I have of course used the tax and social security forecasts prepared by the Scottish Fiscal Commission. We have worked with our Scottish Green Party colleagues to present a budget that is true to our shared priorities. The latest Scottish Fiscal Commission forecasts show a significant improvement in our tax performance, driven by higher earnings growth in Scotland, with Scottish income tax receipts forecast to increase by £1.5 billion between this year and next. That is positive news, and it has contributed to Scotland’s improved income tax position for 2024-25.
On income tax, we will make no changes to the starter, basic, intermediate and higher rates of 19 per cent, 20 per cent, 21 per cent and 42 per cent. We will increase the starter and basic rate bands by inflation to £14,876 and £26,561 respectively. I will maintain the higher-rate and top-rate thresholds at their current levels of £43,662 and £125,140. Maintaining the higher-rate threshold in 2024-25 will add £307 million to the income tax forecast, as estimated by the Scottish Government.
We do not believe that those people who are the backbone of our public services—our teachers, police officers and nurses—should see their tax rate increase. Taking the police as an example, constables, sergeants, inspectors and even chief inspectors will not see their tax rate rise. However, this Government believes that, when public services need investment and protection from Tory cuts, those with the broadest shoulders should pay a higher rate of tax. To be clear, by “the broadest shoulders” I mean the top-earning taxpayers. We will therefore add a new income tax band to the Scottish system—the advanced rate—which will be set at 45p and will apply on incomes between £75,000 and £125,140. In addition, I will increase the top rate by 1p to 48p in 2024-25.
The Scottish Fiscal Commission estimates that those policy decisions will raise a further £82 million in revenue next year. We have chosen to create the new band at a threshold above the top of the unpromoted teacher salary scale, and above those of a police chief inspector and a band 8b nurse. The threshold is set so high that it does not even capture MSPs. However, in case Mr Ross is wondering, MPs will have to pay a little more tax, because they get paid more than £86,000. Combined, the income tax policy that I have outlined will grow our much-needed revenues by £389 million. On income tax, only top earners—around 5 per cent of taxpayers—will be impacted by the rate changes. Of course, no one in Scotland will pay more in council tax for their main home.
Overall, taking a different progressive course on income tax in Scotland means that, in 2024-25, we will have an estimated £1.5 billion of additional revenues compared with what we would have if we followed UK Government tax policies.
Asking those with more to pay more is the right choice. It is a choice rooted in our values, and it is in stark contrast to the tax and service cuts of the Tory party. In making our choices, we are supporting public services, including those delivered by councils. Let me be clear that the Government will fully fund the council tax freeze. This year, in 2023-24, councils set their average council tax increases below the level of inflation. The OBR projection for inflation in the coming year based on the consumer prices index is 3 per cent. Of course, I could fund an inflation-proof 3 per cent council tax freeze, but I want to help support services, so I will go further than that. I will fund an above-inflation 5 per cent council tax freeze, delivering more than £140 million of additional investment for local services. Combined with the other support that is being provided to local government, that will increase councils’ overall funding by 6 per cent since the last budget, taking local government funding to a new record high of more than £14 billion. That will help household budgets during tough times, and it will support our local authorities to deliver services.
On other devolved taxes, I can confirm that I intend to make no changes to land and buildings transaction tax rates or bands, and we will introduce legislation to increase the Scottish landfill tax rates, in line with planned UK landfill tax increases.
I have considered very carefully the steps that I can take on non-domestic rates that support business while ensuring that we have the necessary funding to protect public services. Although the UK Government may be happy to provide tax cuts on the back of real-terms cuts to the NHS, I am not, because—let us be clear—if I spent every penny of consequentials on business relief and tax cuts, that would mean making a real-terms cut to our NHS and other vital public services, just as the UK Government has done.
However, I must also be clear that I will take a balanced approach to this budget, including how we can support businesses through non-domestic rates. The number 1 ask that we have heard on NDR has been to freeze the poundage. I am therefore happy to announce that we will freeze the poundage on the basic property rate, thereby protecting businesses with a rateable value of up to and including £51,000 from the impact of inflation. That is forecast to save ratepayers £37 million compared with an inflationary increase. Alongside inflationary increases in the intermediate and higher property rates, that will still ensure that Scotland has the lowest rate for all but the largest properties for the sixth year in a row.
I am pleased to confirm that we will maintain the small business bonus scheme in the budget, ensuring that 100,000 properties are taken out of rates altogether. We recognise the pressures that the hospitality sector faces, which is why, this year, we will work through the new deal for business group to take forward two actions to be implemented in our budget for next year. First, we will work with the sector to explore long-term targeted solutions and better promotion of existing reliefs, rather than relying on short-term steps that do little for future sustainability. Secondly, we will examine with the Scottish assessors the valuation methodology for the hospitality sector, to address concerns that have been raised that the methodology is not truly reflective of the experiences of those businesses.
In addition, in recognition of the unique challenges that the hospitality sector in our island communities faces, we will, in this budget, introduce 100 per cent relief for hospitality properties in our islands, capped at £110,000 per business. We will take forward the two actions that I mentioned earlier in our budget for 2025-26.
We will prioritise tackling poverty and protecting people from harm. One child or household in poverty is one too many. This budget prioritises support for low-income households, centred around a cash-first approach. It is here, driven by our priorities and values, that we will make our largest single investment. We will invest £6.3 billion in social security benefits and payments—an increase of more than £1 billion compared with 2023-24. That will support disabled people to live full and independent lives, help older people to heat their homes in winter and aid low-income families with their living costs. All in all, it will support more than one in five people in Scotland.
We will support those who are most in need by uprating all Scottish benefits by 6.7 per cent, in line with the consumer prices index rate of inflation at September 2023. That includes increasing the weekly amount for our game-changing Scottish child payment to £26.70 from April 2024. The Scottish child payment lifts children out of poverty and stands as an example for anyone looking to form the next UK Government of the action that can be taken if one is true to one’s values.
We will continue to deliver free school meals for all children in primaries 1 to 5 and special schools, and we will invest £43 million in estate upgrades to support the delivery and expansion of free school meals. That includes extending the roll-out of free school meals for primary 6 and primary 7 children who are in receipt of the Scottish child payment, providing more children with access to healthy meals during the school day.
Due to Westminster mismanagement of our economy, too many households worry about debt. With our limited powers, there is only so much that we can do, but, where we can step in, we will. That is why I am pleased to confirm that we will provide local authorities with £1.5 million to cancel school meal debt, removing a worry that hangs over families up and down the country who struggle to make ends meet.
I also confirm that, through this budget, we will keep the Promise to Scotland’s care-experienced children and young people, providing £50 million through the whole family wellbeing fund for holistic family support.
We recognise the importance of high-quality childcare. That is why, in 2024-25, we will continue to invest in a more flexible childcare system that offers families access to more local options and expand our innovative childminder recruitment and retention pilots to grow that essential part of the childcare workforce by 1,000 more by 2026-27.
Affordable housing is a key area for supporting many people to find a home. That is why we will invest over £550 million in the supply programme. That will help to deliver homes for social rent, homes for mid-market rent and low-cost home ownership in communities throughout Scotland.
I have said throughout this budget that it is a statement of our values. Unlike some, the Scottish Government does not think that homelessness is a “lifestyle choice”. We know that those who are homeless need support not just with housing but often with other complex challenges that they face. That is why, in 2024-25, we will commit over £90 million in discretionary housing payments and £35 million of additional funding for specific action to end homelessness and reduce the number of households living in temporary accommodation. That is over and above the homelessness funding that is provided through the local government settlement.
It is because we follow our values that we are providing direct support to people, tackling poverty, and working to achieve a more equal Scotland.
Our ability to ensure that employment opportunities are available and to provide the support that is required to tackle poverty is reliant on our seizing the huge opportunities that exist in Scotland to build a fair, sustainable and growing economy. Businesses are critical to creating good jobs, delivering fair wages and expanding Scotland’s tax base in order to tackle poverty and improve our public services. This budget and the new deal for business support our national strategy for economic transformation.
Only yesterday, the Fraser of Allander Institute published a study that showed that the renewable energy sector supported more than 42,000 jobs across the Scottish economy and generated over £10.1 billion of output in 2021. That is yet another illustration of the significant opportunity to develop the renewables supply chain and maximise the economic benefits from Scotland’s renewables potential. That is why we will invest nearly £67 million to kick-start our commitment of up to £500 million over five years to leverage private investment in the infrastructure and manufacturing facilities that are critical to the growth of the offshore wind sector.
Delivering the critical infrastructure for a green and growing economy requires investment. That is why we are boosting funding for digital connectivity from £93 million to £140 million in this budget.
Recognising the importance of planning to a growing economy, we will work with local authorities, business organisations and the development sector and will set out options to accelerate the planning system in a consultation paper that will be published in early 2024.
To tackle structural barriers to employment, we will invest up to £90 million in devolved employability services in 2024-25 to provide support to people who are keen to re-enter the workforce but need help when taking the final steps.
Recognising the needs of the Highland economy, we will progress the next phase of the A9 dualling programme in 2024-25, including commencing construction on the Tomatin to Moy section and advancing procurement and land acquisition for further sections. The Cabinet Secretary for Transport, Net Zero and Just Transition will make a statement on the details to Parliament tomorrow.
Our aim for opportunity is about more than economic opportunity; it is also about the opportunity for individuals and organisations to realise their potential. That is especially true of our nation’s culture. The transformational power of our culture is immense. It attracts people from all over the world who want to come here and experience it at first hand.
As the first instalment of delivering the First Minister’s commitment to double arts and culture funding, we will increase funding for culture in 2024-25 by £15.8 million. We will restore funding to Creative Scotland for utilising its reserves this year, and more. That is only the first step on the route to investing at least £100 million more in the arts and culture by 2028-29. Our aim is to increase arts and culture investment in 2025-26 by at least a further £25 million.
Perhaps the biggest opportunity before us and one of the most pressing dangers that the world faces is the climate emergency and our actions to address it. While the UK Government rolls back, we will take action. We will invest nearly £2.5 billion in public transport to support our bus, rail and ferry networks, ensure that there is a viable alternative to car use for those who need it, and allow people to make sustainable choices.
That includes investing more than £425 million in bus services through our network support grant and concessionary travel schemes for under-22s and for older and disabled people. Our investment in public transport includes £434 million to support our island communities through the provision of ferry, port and harbour services.
ScotRail and the Caledonian sleeper are now in public hands, and, through this budget, we are providing £1.6 billion to support passenger rail services, as well as for the operation, maintenance and renewal of our rail infrastructure. We will invest £220 million in active travel as we continue increasing our investment in walking, wheeling and cycling.
We need a step change in how we heat our homes, so we are providing £358 million to continue to accelerate energy efficiency upgrades and the installation of clean heating systems. We are investing £49 million to make progress in Scotland’s transition to a circular economy.
Effective support for nature can bring a substantial impact in sequestering carbon, which is why we are investing £129 million to maintain and restore peatlands and to increase woodland creation.
We recognise the vital role that agriculture plays in the rural economy, and we recognise the opportunity to become more productive and sustainable. I confirm that we will provide the same level of support through direct payments to farmers and crofters that was available before Brexit. We are currently providing farmers and crofters with the most generous package of support anywhere in the UK. We will provide additional funding to support them to transition to a new support framework. In November, I wrote to the National Farmers Union Scotland president to reiterate my commitment that the funds that had been released to support the cost of living crisis would be returned in full, to be spent on the right agricultural priorities at the appropriate time. Agricultural Scotland has taken the hit for a Brexit that we did not vote for, but this budget demonstrates that the Scottish Government is resolute in our support for farmers and crofters right across Scotland.
While the UK Government has chosen to prioritise tax cuts at the expense of the NHS and other public services, our values—and therefore our choices—are very different. We recognise that we cannot address the financial challenges that are before us through tax alone or by delivering public services in traditional ways. Our approach must be investment and reform. Working in partnership with Scotland’s trade unions, we will take action to ensure that our services remain sustainable, improve outcomes and support the people and communities that need them most. That approach will be underpinned by our continued commitment to our policy of no compulsory redundancies. Reform takes time, so we are taking decisive steps today.
Investing in Scotland’s NHS is a non-negotiable position for this Government. Health consequentials to Scotland from the UK Government’s autumn statement amount to a total of £10.8 million, which is equivalent to five hours of NHS Scotland activity. It is evident from the autumn statement that the UK Government has no intention of funding pay uplifts for staff in England. Instead, as many independent analysts have said, we are looking at deep real-terms cuts to public services across Scotland.
We choose to take different choices in Scotland, which is why we are delivering an increase of more than £550 million to front-line NHS boards. That is a 4.3 per cent uplift that takes the total investment in them to more than £13.2 billion. That is above real-terms protection for the NHS in Scotland, in the face of UK Government austerity and a real-terms cut to the NHS in England.
The investment will help the NHS to continue to evolve its delivery of services and work to improve waiting times. New services and innovations will need a step change in our reform programme, which is why we will take forward a national conversation to help to shape the NHS for the future.
In stark contrast to others who, in their words, are keeping “the door wide open” for the private sector in our NHS, we remain absolutely committed to keeping our NHS publicly owned, publicly operated and free at the point of need.
We know that one of the keys to a successful NHS is the successful provision of social care, so that everyone has access to consistently high-quality care, whenever they need it. We are investing £2 billion in health and social care integration, meaning that we are already exceeding our commitment to increase social care investment by 25 per cent by the end of this parliamentary session—two years early.
We are supporting hard-working social care and early learning and childcare workers in the private, third and independent sectors by providing more than £200 million additional funding to raise pay to at least £12 an hour from April 2024. That is the equivalent of a rise of £2,000 a year for full-time workers, which is a pay rise of more than 10 per cent in a year.
We recognise that disabled people living in Scotland face particularly difficult barriers, and that is why we are reopening the independent living fund. That will enable up to 1,000 disabled people in Scotland to access the support that they need and deserve to live independent lives.
One of our key partners in the delivery of services is, of course, local government. Through our partnership with local government under the Verity house agreement, we will work with the Convention of Scottish Local Authorities to empower councils through a new fiscal framework that will also increase discretion to determine and set fees and charges locally. Through the fiscal framework, we will also seek to ensure that distribution arrangements continue to meet the needs of our remotest communities and changing population.
One of the key services that councils deliver is, of course, schools. Delivering excellence and equity in Scottish education remains a top priority for the Scottish Government. That requires meaningful engagement with the students, teachers, families, support staff and communities that rely on our education system.
We remain committed to investing £1 billion during this session of Parliament to tackle the poverty-related attainment gap. That long-term targeted investment improves outcomes for children and young people and helps to break the cycle of poverty, with recent statistics showing record levels of literacy and numeracy attainment at primary school level and improvements in secondary.
As part of that, £130 million of pupil equity funding will continue to empower headteachers across Scotland to invest in the best approaches to improving the literacy, numeracy and health and wellbeing of children and young people in their schools.
We will continue to provide £145.5 million to councils to maintain teachers in the system and enable councils to offer permanent contracts to our education workforce. In addition, we are taking action to support our colleges, universities and skills system with more than £2.4 billion of investment, which includes protecting free tuition and driving forward our commitment to widening access.
The safety and security of the public is one of the most important duties of any Government. That is why we will invest £1.55 billion in policing in 2024-25, increasing the Scottish Police Authority resource budget by 5.6 per cent, which is an additional £75.7 million, and giving Police Scotland a real-terms increase, providing the resources that are needed to support front-line service delivery. We are also increasing the police core capital funding by 12.4 per cent to £64.5 million for investment in the police estate, technology and fleet.
Another key blue-light service is the Scottish Fire and Rescue Service. We have listened to and engaged with the SFRS. That is why, next year, we will provide it with a resource uplift of £13.5 million, and increased capital investment of £10.3 million, enabling the service to improve its facilities.
For the Scottish Prison Service, we are committing an additional £38.6 million to its resource budget, which is an additional 10 per cent, to meet its rising costs. We will also invest in the modernisation of the prison estate, providing £167 million in capital funding, progressing much-needed replacements for HMP Inverness and HMP Barlinnie.
I know that there will be members who want us to go further in different areas in the budget. I would remind them that we are in this situation because of the constraints that have been placed upon us by a United Kingdom Government that does not share our values, our principles or our commitment to public services. [Interruption.]
Thank you, members.
Quite simply, we cannot spend money that we do not have and we cannot mitigate every cut that the UK Government makes. We are at the upper limit of the mitigation that can be provided within the devolved settlement. We will always do our best with the powers that we have, but they are simply no substitute for independence. [Interruption.]
Thank you, members.
We have always said that, to truly transform our economy, society and public services, and to reap the benefits of Scotland’s resources for current and future generations, we need the full powers of independence and to retake our place in the European Union.
The autumn statement’s impact on services was just the latest example of why Scotland must walk a different path. Through the choices that we have made in this budget, we have been true to our values and have been rigorous in prioritising our investment where it will have the most impact.
Our social contract with the people of Scotland is at the core of this budget and shines through every funding decision that is contained in it. We choose investment in our people and our public services. This is a budget that reflects our shared values as a nation and that speaks to the kind of Scotland that we want to be. I am proud to commend it to the Parliament.
The cabinet secretary will now take questions on the issues raised in her statement. I intend to allow about 60 minutes for questions, after which we will move on to the next item of business.
It is very good to see the Presiding Officer back in the chair. [Applause.]
What was not so good was the extraordinarily late delivery of a copy of what is an important budget statement. I consider that to be a discourtesy to the Parliament.
In the Deputy First Minister’s very lengthy letter to the Chancellor of the Exchequer on 20 November, she set out all her demands for the Scottish economy. Shona Robison wanted more money from the UK Government for public services, increased capital investment for infrastructure and more money for public sector pay increases. She said:
“Businesses across Scotland have faced various challenges in recent years”,
so
“I encourage you to take action by using the reserved tax levers at your disposal to support them”.
I have read that letter several times, and I cannot see anywhere any acknowledgement—there is none whatsoever—that the Scottish Government takes any responsibility for the current fiscal circumstances in Scotland. Indeed, there was a complete abrogation of responsibility for the running of the Scottish economy not just for this financial year but for the past 16 years. Not only is that disingenuous, but it will not wash with the public, because the current fiscal situation in Scotland reflects the policy decisions that have been made right here in Holyrood by the Scottish National Party during all the time that it has been in government.
Pandering to the Greens most of the time, ministers have failed to improve public services; they have failed to undertake public sector reform, which economists and analysts have warned about for years; and they have failed miserably to grow the economy, thereby starving Scotland of the much-needed revenue that is required to close the gap relating to the huge bills for public expenditure. Indeed, if the Scottish economy had grown at the same rate as the UK economy has grown over the time that the SNP has been in power, we would have many extra billions of pounds to spend, just as we would have if billions of taxpayers’ money had not been wasted on failed projects.
Hah! HS2!
Do you think that this is funny?
Of course, the Scottish Government—
Ms Smith, please give me a moment. I must ask that we do not have shouting from members on the front benches. [Interruption.] Members, let us hear one another in this important session.
I think that the First Minister is embarrassed by that, because he knows full well that the UK Government is having to help Scotland.
The Scottish Government asking the UK Government to use its tax levers to support business really does take the biscuit. Last year and this year, the UK Government decided, on top of all the furlough and cost of living support that it provided during the pandemic, to give businesses 75 per cent rates relief, but—oh no—the Scottish Government refused to pass on those Barnett consequentials, with the exception, I think, being rates for those on the islands this year.
First, in line with the cabinet secretary’s own demands to the chancellor, why is she not supporting businesses more? That would be in line with some of the comments from her back benchers, too.
Secondly—again, with her back benchers in mind—does the cabinet secretary really think that, by increasing the tax burden and the income tax differential between Scotland and the rest of the UK, she is sending the right message that Scotland is open for business, for economic growth, for investment, for innovation and for job creation, because it is abundantly clear that those in business and industry, including Sir Tom Hunter, do not think that it is?
With regard to local government, which seems to be getting only half of what it asked for—perhaps even less than half—does the cabinet secretary not accept that the long-term cuts that the SNP has imposed on core local government funding over many years could have been reversed for the next financial years if it cancelled its controversial National Care Service (Scotland) Bill, with all its spiralling costs, and gave that money to front-line services that are more in line with the priorities of the people of Scotland?
I join Liz Smith in welcoming the Presiding Officer back to her seat. I also give my apologies for the late statement.
Our asks of the UK Government—for more money for the public sector and for capital—were quite modest. The UK Tory chancellor had £27 billion of fiscal headroom but chose to deliver only tax cuts and no investment in public services. That is a political choice made by the Tory chancellor, but it is not a choice that will be made by the SNP Government. Of course, the £1.5 billion that we have in addition to spend is due to the tax decisions that we have taken here—those are actions taken by the SNP Government.
Liz Smith mentioned failed projects. I have to say to her that, with the growing list of HS2, the failed Rwanda policy and the latest PPE—personal protective equipment—scandal, I do not think that she should really bring that point to the chamber.
The top three concerns and asks of business are on inflation, interest rates and energy costs, and those issues have been compounded by the decisions that the UK Government has made. On tax, I have been clear that the tax position will impact only on the highest-earning 5 per cent of taxpayers in 2024-25. People who earn up to £28,850—that is 51 per cent of Scottish taxpayers—will continue to pay less income tax in 2024-25 than they would pay if they lived elsewhere in the UK.
We have been clear on growing the economy, and I set out in my statement the actions that we are taking to do that. Since 2007, gross domestic product per capita in Scotland has grown by 10 per cent, compared with 6.4 per cent at UK level. Average earnings in Scotland are now growing faster than those in the UK. Next year, we will continue supporting investment that seizes the opportunities of our net zero transition, and we will work with business and investors to launch a new green industrial strategy.
We will get on with delivering a balanced budget that recognises the needs of public services, first and foremost, but also of households and of business.
This is a chaotic budget from an incompetent Government that will leave ordinary Scots paying much more and getting much less in return. The SNP’s mismanagement of our public finances has left us with a massive gap to be filled between what it promised and the tax revenues that ordinary Scots pay. That is an SNP waste gap, an SNP incompetence gap and a huge SNP growth gap. If Scotland’s economy had kept pace with the economy in other parts of the UK, it would now be £8.5 billion larger. The failure of this Government over 16 years to focus on the priorities of country rather than party means that it now needs taxpayers to bail it out as a result.
It is chaos—there is no other word for it. The SNP was going to raise council tax by 22 per cent and suddenly, unbeknownst to the civil service or even to the Cabinet, it was freezing it. The SNP had a plan to cut thousands of jobs in the public sector, but then the Deputy First Minister came to Parliament and said that the plan was cancelled. Now the plan for thousands of job cuts is back with a vengeance.
The Deputy First Minister invited all Opposition parties to suggest their cuts, and then Humza Yousaf announced £1 billion of conference spending commitments as he panic-spent public money following the Rutherglen by-election. Now we are told that the black hole is the biggest that it has ever been.
The SNP has neglected the day job of growing the economy and delivering public services for Scotland. Tax cannot and should not be used as a substitute for economic growth. NHS waiting times are soaring—we heard even today that cancer waits are up again. General practitioner services and NHS dentistry are a fiction for many across our country, but it does not need to be like that. Scotland cannot accept more managed decline from the SNP, with two incompetent Governments in the UK. Scotland needs change, and it is coming.
Does the Deputy First Minister accept that her Government’s failure to grow Scotland’s economy means that we are lagging behind England and Wales? What will this horrendous budget mean for the one in seven Scots who is currently on an NHS waiting list? How many more Scots will be on NHS waiting lists by next year? How many public sector workers will be made redundant as a result of the budget? Why does she think that the hard-pressed people of Scotland should bear the brunt of her Government’s failures in higher taxes and cuts to services?
I am not sure whether Michael Marra is saying that he is against the people with the broadest shoulders paying a bit more, which would mean, therefore, that there would be less revenue for public services. I take it that he is confirming that the Labour Party would invest £82 million less in public services. That is now on the record, and it is an incredible thing for a Labour finance spokesperson to say.
Today, the Welsh Labour Government set its budget. The Welsh Minister for Finance and Local Government, Rebecca Evans, said:
“We have had to take some really difficult decisions to radically redesign our spending plans to focus funding on the services which matter most to the people of Wales ...
We have been presented with the most stark and painful budget choices in the devolution era. We have”
had to reshape
“departmental spending plans so that we can invest more in the NHS”.
Exactly the same issues face this Government. Why do Michael Marra and the Labour Party in the Scottish Parliament support the position of the Welsh Labour Government in putting the blame where it lies—at the UK Government’s door—but do not accept the same premise for the Scottish Government? [Interruption.]
Thank you!
In my statement, I was clear that we are prioritising funding for the NHS and vital front-line services, and that we are raising revenues to do that. As Michael Marra knows, we have a clear position of no compulsory redundancies in the public sector, so we will work with our trade union colleagues on ensuring that we reform our services in a way that makes them sustainable and high quality.
We will get on with that. We will just leave Michael Marra and the Labour Party to whinge from the sidelines, as they always do.
I call Alex Cole-Hamilton.
Thank you, Presiding Officer, and welcome back.
The SNP has spent years ignoring expert warnings about the lack of a long-term economic strategy and the impact of its failure to grow the economy. Scotland needs predictability and a long-term plan for tax and the wider economy, not erratic changes that will undermine confidence.
We now know from the budget who will pay the price: everyone who is going without the social care that they need, parents who cannot access childcare and pupils who are left behind as Scotland slides down the international rankings. Councils are on the brink, and education is half of what they do. The vulnerable, pupils and taxpayers—all taxpayers—are all suffering the cost of SNP-Green incompetence, from ferries to the white elephant takeover of social care.
The budget is about priorities. Why is the Government slashing energy efficiency spending in the middle of a climate emergency, and why is the Deputy First Minister slashing the housing budget in the middle of a housing emergency?
In the face of a 10 per cent cut to our capital budget from the UK Government over the next five years, we are taking the action that we need to take to prioritise investment in our vital infrastructure. There is nothing erratic about making sure that our tax decisions raise £1.5 billion of additional revenues that would not have been there had we followed UK Government tax policy. As I set out in my statement, we are very clear about investment in the front line.
Alex Cole-Hamilton mentioned local government. The total resource budget has increased by £840.3 million since the 2023-24 budget, which is a 6.8 per cent cash increase and a 5 per cent real-terms increase. On top of that growth, the budget also makes available up to £144 million to support councils to freeze their council tax. In total, the budget makes available more than £14 billion of funding to councils, should they agree to freeze their council tax. That is a record level of funding to local government—more than £14 billion. Alex Cole-Hamilton should have looked at the figures before he came to the chamber.
I advise members that there is considerable interest in asking questions, so we will need to have shorter questions and answers.
The Deputy First Minister has had to make very difficult choices, not least because of decisions that were made by the chancellor in his autumn statement, such as freezing capital expenditure at a time of high inflation. What will be the impact of such a freeze on public investment in Scotland’s infrastructure, productivity, economic growth and labour market participation? Does the Deputy First Minister agree that widening the tax base, nurturing new business start-ups and backing innovation would boost our economy and help to deliver the resources that are needed to fund our public services?
As I said, our capital spending power has reduced because the UK Government has persistently underinvested in infrastructure and has not inflation proofed its capital budget. It will now take longer to deliver on all our planned capital projects and programmes unless the UK Government changes course and increases its investment in its capital programme.
Despite those cuts, we are using all our powers to maximise the funding that is available to support employment and the economy, achieve net zero and maintain high-quality public services and infrastructure.
Ahead of this budget, the business community in Scotland had two key asks: first, that the income tax differential with the rest of the UK should not be widened; and, secondly, that the chancellor’s 75 per cent rates relief for retail, hospitality and leisure businesses that has been delivered in England for the second year would be replicated here. In both cases, the finance secretary has decided to do the opposite of what was asked. Does that not leave the much-vaunted new deal for business in tatters and leave the position of the economy secretary in this Cabinet utterly untenable?
Let us be clear. Murdo Fraser has just put on the record that the Tories wanted us to follow the UK Government Tory spending plans, which would have meant that, out of the £320 million available in consequentials for this year, £260 million would have gone on tax cuts for business, not the NHS. That would have meant that there would have been only £10.8 million of investment in our NHS. [Interruption.]
Please resume your seat, cabinet secretary. We will not have this shouting across front benches—I am referring to members of both the front benches that I am currently looking at. Cabinet secretary, please resume your answer.
That would have meant us replicating the real-terms cut to NHS England here in Scotland.
Let me tell Murdo Fraser what that would have meant to health boards. A 0.8 per cent real-terms reduction applied to health boards in Scotland would have resulted in more than £0.5 billion less funding for our health boards this year. Let me tell Murdo Fraser what that would have meant for his health boards. In Fife, that would have been £31.27 million less funding, and in Tayside, it would have been £35.27 million less. I hope that he will explain that to his constituents when he goes back to meet them, because I think that they will be very interested in his priorities. Business tax cuts over NHS funding—that is not the priority of this SNP Government.
On the one hand, the budget boasts about investing in colleges, universities and skills, and on the other hand, it cuts £100 million from the Scottish Funding Council, which pays colleges and universities to deliver those skills. The warm words about wanting people to get opportunities through further and higher education are cold comfort when colleges and universities face such a devastating cut, in a year when they have already faced cuts and had money snatched away from them. Colleges and universities are doing an incredible job in considerably hard—and harder—times, against a backdrop of higher costs and year-on-year cuts. Today’s news will leave them wondering whether the SNP Government values them at all. Rather than recognising their value, the Government has—
We need a question, Ms Duncan-Glancy.
Where does the Deputy First Minister expect the Scottish Funding Council cuts to fall? If those cuts fall on colleges and universities, how much funding will be cut from colleges and how much from universities? How does she plan to explain that to colleges, universities and students?
I say to Pam Duncan-Glancy that the education and skills resource budget has increased by £144 million, or 4.8 per cent. Neither Pam Duncan-Glancy nor anyone else on the Labour benches can come to Parliament demanding more money for education when the party’s finance spokesperson has basically said that they want £82 million less to be spent on public services because they do not agree with the new advanced tax rate. They cannot come asking for more money when they have said that they want less money for public services. That does not add up. I hope that we are not going to hear more funding calls from the rest of the members on the Labour benches, because that would be totally incompetent.
The Deputy First Minister mentioned that she was targeting some support; for example, in the hospitality sector. Can she explain her thinking around targeting support rather than providing universal benefits?
We have to balance out those benefits that are universal and those that are targeted. We are looking at programmes across the Government and we have been looking at ways in which we can make sure that we have the right balance of universal services for as many people as possible, but target our resources where necessary; for example, on the Scottish child payment. Over the coming months, we will set out where that balance lies. We will have difficult decisions to make. That is why, in our free school meals expansion, we are targeting those who are in receipt of the Scottish child payment; we are targeting that provision in a way that makes sure that the priority is those children and young people who need it most.
In recent months, both the City of Edinburgh Council and Glasgow City Council have declared housing emergencies. Under the SNP-Green Government, we see a record number of homeless people in Scotland and children living in temporary accommodation. Will the Deputy First Minister explain to Parliament why cutting our housing budget by more than a third will help to address that situation?
The UK Government cut the housing budget—it was the member’s own Government that cut the budget. I find it astonishing that members of the Tory party come here demanding that we spend more money on an area for which their Government has cut the budget, which means that we do not get any consequentials for housing or homelessness in our budget. If we were to follow what we have just heard from members on the Tory front bench, we would be putting every single penny into business tax cuts. Members cannot demand that more money be spent on housing or homelessness when they want every penny to go on business tax cuts. The Tories need to get more joined up, because they are looking pretty incompetent, from where I am standing.
The Grangemouth flood prevention scheme in my constituency is a vital infrastructure project. The project has been waiting for some time for clarity over funding for the next stages. I have assumed that the delay was due to budget uncertainty, particularly around capital. As a result of the budget, will the cabinet secretary be able to shed any light on funding for flood prevention schemes generally, and specifically for Grangemouth?
Michelle Thomson will be aware that we have made £42 million per year available to local authorities to invest in important flood risk management actions, and we have committed an additional £150 million over the course of this parliamentary session to support those actions.
The Grangemouth flood prevention scheme is exceptional in its scale and cost and, as such, requires careful consideration. The Scottish Government will continue to work with Falkirk Council to ensure that the scheme delivers for the local community and economy, and I will ensure that the minister sets up a meeting with Michelle Thomson to discuss the details.
I may be corrected if I am wrong, but I am a bit concerned that I did not hear the Deputy First Minister actually use the term “economic growth” in her statement.
The Deputy First Minister has announced a £15.8 million increase in cash terms for the arts and culture budget, but the budget line for Creative Scotland is less than it was in 2022-23, leaving only £4.7 million in cash terms for the rest of the sector and promises of jam tomorrow.
Does the Deputy First Minister accept that the budget announcement does not rise to the challenge of dealing with the crisis in the sector, which affects jobs, venues and organisations, and that the Government is not on track to deliver its promise—the Government’s own promise—of £100 million over the next five years?
First, I mentioned economic growth on a number of occasions and made very clear the actions that we are taking.
Secondly, I clearly announced additional funding for culture in my statement. We will deliver on that, as per the First Minister’s commitment.
Yet again, we have a Labour member coming here and demanding more money when members on Labour’s front bench have said that they want less money because they do not support the tax changes that we are making in this budget. I cannot understand where Neil Bibby thinks the money is going to come from when Labour members are against the additional revenues that we will raise because of the decisions that we are taking.
I welcome the additional resources for Police Scotland and for the Scottish Fire and Rescue Service. Those were two of the items that I spoke to the Deputy First Minister about when we met last week—the third being the Inverclyde socioeconomic task force.
I ask the Deputy First Minister to provide more detail regarding the funding allocations for Police Scotland and the Scottish Fire and Rescue Service, which I hope will result in extra resources being channelled directly to the emergency services in my Greenock and Inverclyde constituency.
The investment in the Scottish Fire and Rescue Service has been made in response to concerns that have been raised by Stuart McMillan and others. I met the Cabinet Secretary for Justice and Home Affairs to ensure that what is in the budget will help to deliver some of the infrastructure needs of the Scottish Fire and Rescue Service. How that money is spent is an operational matter, but I am sure that the justice secretary would be happy to meet Stuart McMillan to discuss the details of that funding allocation.
The Deputy First Minister has confirmed the positive impact of decisions made since 2017-18 in response to Green proposals about tax, with £1.5 billion now available to support public services as a result of those decisions. That is in sharp contrast to the UK Tory Government, which prioritises tax cuts for its rich mates, and a Labour Party that is actively opposed to redistributing wealth from the richest to those who are most in need.
What will the additional £1.5 billion from Green tax policies deliver for public services in Scotland next year?
The Scottish Fiscal Commission has estimated that our income tax policy choices since devolution will raise around £1.5 billion more in 2024-25 than if we had matched UK Government policy. That is vital revenue to invest in our public services. Presumably, we would have £1.5 billion less to spend, had we followed the advice of the Tories sitting to my left, and it seems that the Labour Party is in exactly the same place and also wants less money for our public services. Those are not the priorities of this Government.
Will the Deputy First Minister provide further information about how the Scottish budget will help to reduce the cost of the school day for low-income families?
Reducing the cost of the school day is really important, which is why a decision has been made about school meal debt. That is a straightforward, practical way for this Government to support households that are struggling with debt and is something that we will take forward, with COSLA and local government, to ensure that we deliver.
What impact analysis has been undertaken of the cabinet secretary’s decision to increase income tax? Does it include an analysis of the impact of behavioural change on Scotland’s labour market?
Behavioural change is always part of the Scottish Fiscal Commission’s analysis, which is why it has said that £82 million will be raised by the advanced tax band. As I said in my statement, that will impact on only 5 per cent of taxpayers. A majority of taxpayers in Scotland will still pay less tax than they would pay if they lived elsewhere in these islands.
The behavioural analysis is something that we will, of course, keep a very close eye on. It is at the heart of the Scottish Fiscal Commission’s analysis.
As well as households, businesses across Scotland are facing substantial pressures as a result of rising costs. Can the Deputy First Minister provide an update on the Scottish Government’s latest engagement with businesses and business groups to ensure that their views and concerns have been considered in the budget? Can she say any more about how the budget will support businesses in Scotland to thrive as we move forward in our economic recovery and transformation?
Neil Gray, the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, met business earlier today. We know that businesses’ key concerns are around inflation, interest rates and energy costs, and their number 1 ask has always been around the freezing of the poundage. I am pleased that we have frozen the poundage and made sure that it is lower than it is elsewhere in these islands for the sixth year in a row. I am sure that business will welcome that.
I recently met the Confederation of British Industry, whose main ask was about simplifying the planning process. That is why, in my statement, I made reference to us taking forward work on the planning process to see how we can make sure, particularly for big projects, that we have the capacity and expertise in our planning system that is needed to move projects forward at pace.
At a time when renters and home owners are facing spiralling costs, the budget cuts more than £200 million from the housing budget. That means that, in two years, spending on new housing will have halved. While we face skills shortages, while colleges and universities face a cut of £100 million and while we need to support businesses, our enterprise agencies are being cut by £63 million, or 25 per cent in two years. Housing, skills and enterprise support are all levers that are vital for growth, but they are all being cut in the budget. Is it the case that the Scottish Government has given up on growth altogether?
No. It is in recognition that we have a 10 per cent cut to our capital budget over the next five years. If the Welsh Labour Minister for Finance and Local Government was standing here, she would be making the point that that is due to the UK Government’s decision to cut our capital budget by 10 per cent over five years. It is just a pity that the Labour Party here cannot put the responsibility where it lies, which is at the UK Government’s door.
On our investment in housing, skills and enterprise, I set out in my statement the priority that we are giving to those areas, but I cannot stand here and say that the budget decisions of the UK Government and an austerity budget will have no impact on our budget. If the Labour Party wants to tell me where it would take money from, elsewhere in the budget, to apply to the areas that Daniel Johnson wants to apply money to, I am willing and able to listen to that. [Interruption.] However, if Labour just wants to come here and ask for more money on the basis of having no more money and opposing tax rises from the front bench, it has no credibility whatsoever. [Interruption.] Do not—
I call Clare Haughey, to be followed—[Interruption.]
I have to say to Daniel Johnson that his patronising manner in the chamber leaves a lot to be desired and is very disrespectful.
Cabinet secretary, please resume your seat for a second. I thought that you had finished. I say to members on the Labour benches who are normally better behaved that we have to have the courtesy of listening to the person who has been asked to respond. I have to say that Mr Johnson’s dismissive gesturing was not very courteous.
We move on to Clare Haughey, to be followed by Brian Whittle.
I refer members to my entry in the register of members’ interests. I hold a bank staff nurse contract with NHS Greater Glasgow and Clyde.
Investment in our NHS over the years from this Scottish Government has led to record high staffing levels and has ensured that we have the best-performing core accident and emergency services across the UK. Can the Deputy First Minister outline how the newly announced record NHS funding will be used to improve A and E waits and reduce waiting lists?
Clare Haughey’s question goes to the heart of the priorities that we have set. Funding was not available to do everything that we wanted to do, so we had to prioritise.
We also had to make the decision not to just pass on a real-terms cut in health funding of £10.8 million. In order to make sure that we could give the NHS that real-terms increase, we had to prioritise funding to it, and that is exactly what we have done. Reducing the waiting list backlogs that were built up during the pandemic and improving A and E performance remain absolute priorities for the health portfolio budget. The increased funding for NHS Scotland will support our cross-system approach to performance, productivity and improvement, grounded—as is important—in clinical leadership across NHS Scotland.
The cabinet secretary’s statement proves that we should never underestimate the SNP Government’s willingness to prioritise short-term gain regardless of the potential for long-term pain. That lack of ability to develop a long-term strategy is coming home to roost, and the Scottish public are paying a heavy price, with the continued closures of community facilities and the lack of investment in local public services. Does the cabinet secretary accept that, by doubling down on that short-term sticking-plaster economic strategy, she condemns Scotland’s public services to a state of perpetual crisis management?
It takes a brass neck for Brian Whittle to talk about short-term gain. There have been tax cuts as a pre-election bribe to the electorate. What is that, other than a short-term gain?
Brian Whittle talks about there being no money for public services, but the consequentials that we got had no money for public services other than £10.8 million for the NHS. Had we followed the advice of Brian Whittle’s front bench, we would have put all that money into business tax cuts and none into public services—whether to the NHS or local government.
I cannot understand why Brian Whittle thinks that it is okay to come here and ask for more money for public services, given that his own Government has butchered public services and prioritised tax cuts. That really takes a bit of a brass neck.
The finance secretary will be aware of the unique challenges of rurality and depopulation that are faced by Dumfries and Galloway and the Scottish Borders. Will she further outline how the budget will support people in D and G and the Borders who are most impacted by the Tory-created cost of living crisis and will help to address depopulation and attract people to the region by improving transport and infrastructure?
Shortly—early next year—we will publish our addressing depopulation action plan. It contains a range of commitments that will support communities to deliver place-based interventions that will support population attraction and retention.
Making Scotland an attractive and welcoming country is a key pillar of our population strategy. To help to deliver that ambition, we will launch a talent attraction and migration service in 2024, which will support employers to use the immigration system effectively to address the skills that they need. That will help people to move to Scotland and successfully settle into their communities, including in the south of Scotland.
As we know from figures from National Records of Scotland, there is still net in-migration to Scotland from the rest of the UK. That is very welcome.
Given that the national minimum wage will be £11.44 per hour from April, does the cabinet secretary really think that paying social care workers just an extra 56p will make any difference to the social care recruitment crisis? Given that, when she was health secretary, she promised to eradicate delayed discharge but is now presiding over it at record levels, how many hundreds of millions of pounds has she had to build into her budget to pay for the cost of this incompetent Government’s utter failure to tackle delayed discharge?
The additional support will mean an extra £2,000 a year to those social care workers. However, we would not be able to afford that extra £2,000 a year if we did not have the tax position that we have had. Colin Smyth’s front bench did not want to raise those additional tax revenues. They want more money for social care workers, but they do not want to raise the revenue to pay for it. [Interruption.]
Cabinet secretary, please resume your seat for a second.
I really must insist that, when a question is asked, we listen to the response.
The Labour back bench and front bench members should have a word about their incoherence.
As the Deputy First Minister outlined, the UK Government’s autumn statement was the worst-case scenario, with big consequences for the Scottish Government’s budget. In the face of continued austerity and the Tory-made cost of living crisis, can she outline what the Scottish Government is doing and the challenges that it faces in trying to mitigate so many reckless Tory policies? Can the Deputy First Minister also highlight the measures in the budget that will help to tackle inequality?
The Government has spent more than £1 billion mitigating the impacts of 13 years of UK Government policy, such as the bedroom tax and the benefit cap. As I have said, the UK Government’s autumn statement was a missed opportunity to reverse those policies and wider spending decisions that have resulted in a 1.2 per cent real-terms reduction since the 2022-23 budget was presented by the UK Government.
By contrast, this Government continues to prioritise investment to tackle and reduce poverty, including committing £6.3 billion in social security benefits and payments, which is just over £1 billion more than in 2023-24. That is our single biggest increase in funding in the budget, which is helping to deliver our national mission to tackle inequality.
In last year’s budget, the Government eventually pledged £6.6 million to Creative Scotland. It then cut that funding entirely in September, before being forced to reinstate it and shattering the confidence of those who work in culture and the arts, U-turning not once, not twice, but three times. We now have a supposed commitment to Creative Scotland for next year, but how do we know that we can trust the Government to deliver for the culture sector when it has been so cavalier with its promises in the past?
What we do know is that we cannot trust the UK Government, because it puts no money into culture. It cuts culture budgets. Donald Cameron comes here and asks for more spending in an area where his Government has reduced funding. I do not quite understand how he thinks that that is a thing.
Let me be clear: as I said in my statement, we will increase funding to the culture sector by £15.8 million. That is the first step on the path to increasing funding for the culture sector by £100 million in five years. We will provide Creative Scotland with £6.6 million in national lottery shortfall funding for 2023-24, along with a further £6.6 million for 2024-25. However, we would not have been able to do any of that had we followed the advice of the Tory front bench to put every penny into business tax cuts, not public services. Again, I think that the member ought to have a word with his party and get a bit of joined-up thinking going on.
Given its role in supporting young people in our communities with a whole range of issues, from improving mental health and wellbeing to reducing antisocial behaviour, what consideration is given to youth work in our budget deliberations?
I know about the importance of youth work, having been a community youth worker back in the day, before I came into Parliament. Of course, it is an important service that is delivered by local government, so I hope that the record level of more than £14 billion of funding that we are giving to local government will help to sustain services such as youth work, which are so important in making sure that we support young people, particularly those who are vulnerable.
Green MSPs have pressed to ensure that the budget invests in the green economy of the future. I welcome the fact that the proposals will see £4.7 billion invested in cutting carbon emissions and tackling the nature emergency. That is the right thing to do for the planet and for the people of Scotland. Already, households are feeling the benefit, as this week’s report from the Fraser of Allander Institute highlighted, of the huge growth in jobs in the renewables sector. However, it is critical that those benefits are felt in rural communities. Will the Deputy First Minister set out how the budget will support green job creation in rural Scotland?
Woodland creation, sustainable management of Scotland’s national forests and lands, and peatland restoration are part of our just transition to net zero. The £129 million funding for those measures supports Scotland’s rural economy and creates economic opportunities and good green jobs. Green job creation and support for workers and young people who are transitioning into those roles remain at the heart of Scottish Government planning. We welcome the Fraser of Allander Institute’s study, which, as I said in my statement, shows that the renewable energy sector supported more than 42,000 jobs across the Scottish economy and generated more than £10.1 billion of output in 2021.
In her statement, the cabinet secretary spoke of having a one-year budgeting cycle. Does she agree that long-term strategic budgeting, such as that which is done by most of our European neighbours, would be much better for all concerned, and that the one-year cycle that the Treasury currently puts before us represents both short-term and long-term pain? However, that is what we have come to expect from bankrupt broken Brexit Britain.
I agree with that. That is one of the reasons for my intention to come back at the point in May when we will publish our medium-term financial strategy, to set out what we think will be the future fiscal position once we have more certainty. The recent autumn statement is an extraordinary one. It clearly represents a pre-election bribe to cut taxes at the expense of public services, which makes it very difficult to plan on a multiyear basis. We will set out our further plans when we get to that point in May, once we have more certainty of the future fiscal position.
I remind members of my entry in the register of members’ interests: I am a partner in a farming business and a member of NFU Scotland, Scottish Land & Estates, and the Royal Highland and Agricultural Society of Scotland.
Tens of millions of pounds will be stripped away from the agriculture budget in the next financial year. With £61 million of ring-fenced funding already cut in year, this budget represents an attack on rural Scotland. What does the cabinet secretary have to say to Scotland’s farmers and crofters, who will feel angry and abandoned by this SNP-Green Government in Edinburgh?
We received no money from the UK Government for rural Scotland or for agriculture. Again, Jamie Halcro Johnston comes here [Interruption.] and contradicts members on his party’s front bench. They want all the money to be spent on business tax cuts, whereas he wants it to be spent on agriculture.
In my statement I set out the importance of agriculture and supporting our rural economy. I have made it clear, as I did to NFUS, that we will return that £61 million at the start of the year. We will work with it on the priorities for when that funding is returned.
It is a bit rich for any Tory member to come here and talk about the lack of money for rural Scotland or agriculture when not a single penny has been given by their UK Government colleagues for that purpose. I reiterate that not a penny for those areas was asked for by members on the Tory front bench. That is just total incoherence.
I call Jim Fairlie, to be followed by Ash Regan. [Interruption.]
Can you hear me, Presiding Officer? [Interruption.]
Mr Fairlie, please resume your seat for a wee second. We need to hear the person who has the floor. The person who currently has the floor is not any of the people who are sitting on the Conservative benches; it is Mr Fairlie.
Thank you, Presiding Officer. Will the cabinet secretary tell my constituents what the proposed reduction of almost 10 per cent on capital funding in the Scottish Government’s budget will mean for the timescale for building the new elective treatment centre at Perth royal infirmary?
Jim Fairlie is right to point out the impact of a 10 per cent cut in capital budgets over the next five years: it will have a profound effect on our ability to invest in our infrastructure. In the new year, we will come back with a revised infrastructure investment plan that will set out what we are able to do and the timeframes within which we will be able to do it. If any member in the chamber thinks that a 10 per cent cut to our capital budget will not have an impact on our infrastructure investment, they are living on another planet. We will set out our priorities and how we will ensure that we continue to invest in Scotland’s vital infrastructure.
The budget shortfall is down to the Conservatives choosing to keep children in poverty and to underfund the NHS across the UK. Those are clearly political choices, not economic ones. That funding model is not working for Scotland, and securing independence is the only way out of this mess.
I note that, in the Deputy First Minister’s 30-minute statement, no mention was made of funding to advance the cause of Scottish independence. If spending reflects priorities, the Scottish Government is not serious about independence, is it?
Let me first find a point of agreement with Ash Regan, as I always try to do. She is right about the political choices that the UK Tory Government has made. It has made a political choice to cut NHS funding by 0.8 per cent in real terms. Had we followed that political choice, all the health boards in Tory members’ areas would have had cuts to their funding, and they would have had to explain to nurses, doctors and their constituents why that was—why we were following Tory spending plans and cutting the NHS. Of course, we will not do that, because those are not our priorities. Our priority is, of course, to protect front-line NHS funding.
On the other business of Government, as Ash Regan will know, Jamie Hepburn is working on the matters that she alluded to, and that is important. As I set out in my statement, to get away from Tory austerity budgets for good requires us to have independence.
There are, understandably, concerns among disabled people that unprecedented pressures on public finances may impact on the support that is given to them. Those concerns are only exacerbated by UK Government plans to slash sickness benefit, force disabled people into work and axe the post of Minister for Disabled People. What assurances can the Deputy First Minister give to disabled people in Scotland that the Scottish Government will take a different approach here and that the budget will support disabled people in Scotland?
Bob Doris is absolutely right about the butchering of welfare support by the UK Government. It sees it as the go-to area to cut, which means cutting support to those who are most vulnerable. I am sure that we have not seen the last of that from the UK Tory Government.
In stark contrast, and as I set out in my statement, we are going to support the re-establishment of the independent living fund, supporting those who are living independently and ensuring that more people who want to live independently in their own homes will be able to do so through the independent living fund.
I should add that one of the biggest investments in our budget, as I set out in my statement, is that in social security benefits, which is more than £1 billion higher than the funding that we receive through the social security block grant adjustments from the UK Government. The contrast could not be starker.
Page 71 of the unredacted budget booklet shows that the funding for “Children’s Rights, Protection & Justice” goes up to £53.6 million next year and then falls to £51.4 million. Can the Deputy First Minister confirm that on-going support from the Government for the United Nations Convention on the Rights of the Child implementation programme will last three years and will go beyond the first quarter of next year?
Yes, I can—but, as I said earlier, we will come back to the matter of multiyear funding in May next year. Unfortunately, because of the difficulties of the autumn statement and the uncertainty around our fiscal position, we have only been able to set out one-year spending plans, by and large. Martin Whitfield will know that implementation of that programme is a key priority for us, and we will ensure that the resources are there to take it forward fully.
There are cuts to the Scottish Funding Council, the skills budget and student support for tuition fees. There are cuts across the board for all the things that matter most to the future economy of this country.
I will ask the Deputy First Minister about Barnett consequentials. Across the UK, the apprenticeship levy raises £3.5 billion annually. That means that the Scottish Government is receiving at least £300 million in Barnett consequentials for apprenticeships. How much does the Scottish Government plan to spend directly on apprenticeships this year? If it is not £300 million, as business would expect it to be, how much is it?
There was nothing for apprenticeships whatsoever in the £320 million of consequentials for 2024-25. There was £260 million for business tax cuts, a small amount for social security and £10.8 million for the NHS. There was no funding for apprenticeships, skills, education or colleges. If Stephen Kerr thinks that that is where the UK Government should prioritise its funding, he should have a word with UK Tory Government ministers, who clearly do not think that investment in public services, apprenticeships, skills or anything else is important.
Beatrice Wishart joins us online, to be followed by Graham Simpson.
The Deputy First Minister talks of support for a growing sustainable economy, but today it has been revealed that the Scottish Government is increasing the cost of lifeline travel on NorthLink Ferries, with an eye-watering fares hike of nearly 9 per cent. What comfort is there in this budget for families and communities in the northern isles who are faced with additional travel pressures that will impact businesses as well as individuals who are already struggling through the cost of living crisis?
I say to Beatrice Wishart that the ferry fares had been frozen for four years prior to this budget, but I will make sure that the Minister for Transport engages with her. There is absolutely no doubt that difficult decisions are having to be made because the money to fund every part of the Scottish budget to the extent that we would want to is simply not there, so we have had to prioritise front-line public services such as our NHS, our council services and our education system. Those are the decisions that we have had to take. If Beatrice Wishart or anyone else wants to come to me with different priorities, they can do so, but they will have to tell me where the money would come from.
The finance secretary has managed to deliver a £29 million real-terms cut to the transport, net zero and just transition budget. What will be the effect of that?
Tory members have today asked for more money for skills, education, housing, homelessness, transport and net zero. However, Graham Simpson may not have realised that the UK Government’s biggest cut to its budget is to the environment and net zero budget, and the UK Government cutting net zero budgets has a direct impact on the money that is available to this Government. He should look to the UK Government ministers on the decisions that they have made, and, if he does not like them cutting net zero budgets, he should make representation that they change their position. As I set out, this Government will continue to invest in meeting net zero targets and in our transport system, in stark contrast with Graham Simpson’s UK Government colleagues.
The cabinet secretary says that the Scottish Fire and Rescue Service will receive an extra £10.1 million for capital spending, but SNP ministers have starved the fire service of funding year after year. It would cost £800 million to fix the crumbling and dangerous estate. Does the cabinet secretary accept that firefighters will not be duped by her budget?
I know that our firefighters will not be duped by a UK Tory Government that has slashed the justice budget at Westminster. One of the biggest Westminster cuts after net zero, I think, was to the justice budget, but Russell Findlay is demanding that more money be spent on justice services. We will continue to protect our Scottish Fire and Rescue Service, and we are increasing the money for it—no thanks to any of the decisions that have been made by his UK Tory Government colleagues.
I can squeeze in a question from Mr Lumsden if it is very brief.
Thank you, Deputy Presiding Officer.
I note that the rail budget has been cut by nearly £80 million in cash terms. Can the cabinet secretary explain how a cut to the rail budget will encourage more people on to our railway?
We will invest £1.6 billion to operate, maintain and improve Scotland’s railway. We are investing £147 million in a prioritised programme for Scotland’s railway that includes major project enhancements such as East Kilbride improvements and the Levenmouth rail link, alongside development work for further electrification, and we will invest £488 million in the maintenance, safe operation and renewal of the Scottish rail network.
I say again that there is a 10 per cent cut to our capital budget over five years because the UK Tory Government is cutting capital budgets. How does that help Scotland’s railways? If Douglas Lumsden does not think that it does, he should have a word with his UK Tory Government colleagues. What we are seeing is incoherence, with Tory members coming here and asking for spend on just about all areas of the Scottish budget when not a single penny came for any single one of them from their UK Tory masters.
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