Seòmar agus comataidhean

I go back to David Bell’s point about attracting investment and the cuts to the enterprise agencies, although this question might be too specific. Are the enterprise agencies necessarily the best place for us to put money in order to attract investment? I am thinking of the coverage, over the past couple of days, of the incredible success of our film and TV sector, which, I would argue, is driven largely by the fact that responsibility for state support for that sector has been taken away from the enterprise agencies and given to a bespoke unit in Creative Scotland: the new, or new-ish, Screen Scotland.

Has Scottish Enterprise, in particular—given that Highlands and Islands Enterprise and South of Scotland Enterprise are different, and have a justifiable return—really been able to demonstrate that the spend that we put into it has resulted in increased investment?

David Bell pointed out that spend on Scottish Enterprise has actually gone down at the same time as foreign direct investment in Scotland has gone up.

I am jumping around somewhat, but I want to go back to Chris Birt’s earlier points about capital funding for affordable housing and his highlighting of the roads budget as an area that could be reprioritised. If you listen to my Conservative colleagues, apparently my party has already done that, because the roads budget has gone down significantly. In fact, it is up this year, but that is due to the exception of an amount of money for the A9. I am not enthusiastic about that, but it is a small amount and it is mostly for safety-critical infrastructure.

Does that, though, not raise a wider point with regard to affordable housing? Nobody would defend the budget going down by £196 million or thereabouts as a good outcome of the process. However, affordable housing is an area of capital spend where other policy levers are available. For example, there has been an emergency rent freeze and cap; there are eviction protections; there are permanent rent controls coming in; and there is regulation of short-term lets—which should, it is hoped, free up more housing—and the doubling of council tax on holiday homes.

In other areas of capital spend, however, there is no legislative policy alternative to reach the same eventual outcomes. As David Bell pointed out, net zero targets cannot really be achieved in any way other than hitting capital spend. As much as the decision on affordable housing is unpleasant, therefore, and nobody is saying that it is a good outcome, there are, in the limited context of devolution, other levers that the Government can pull, and other options to meet our ambitions for housing, excluding capital spend. Is that correct?

That goes back to the point that João Sousa made about affordable housing. If we had made decisions in every portfolio area purely on the basis of what would generate the best long-term return in that area, we would almost certainly have ended up with a budget that did not add up. Ultimately, the budget had to add up one way or another.

That was a very pertinent point. The challenge, perhaps, is that, although it is well within the Parliament’s power to legislate for targets, we are limited in the range of powers that we have to reach them. You are right, though, that we have not fully utilised those things.

I just want to touch on a couple of specifics and, first of all, go back to the discussion that we had early on about income tax changes and the splitting of the higher rate. My first question is for David Bell. Is it not somewhat strange to have a higher rate that applies between £45,000 and £125,000? Is that not a massive range to be taxing at the same rate? I acknowledge that the withdrawal of the personal allowance from £100,000 obviously has an effect, but even in European terms, is it not somewhat unusual to have such a big range covered by one rate?

I have sat in on some public sector pay negotiations and union reps quite reasonably say, “Well, hold on, the newspapers this morning say that you have £2 billion, but you will not give us £200 million to settle this,” but, actually, there is not £2 billion.

I am aware that every year—concurrent to the budget process for the following year, roughly—we start to get reports of the Government underspend in the current financial year, so I have a question for Audit Scotland on transparency and public understanding. Do we need to have a different kind of discussion, use different language and present things differently when we are talking about underspend?

Two or three years ago, there was a £2 billion headline figure for the underspend, the vast majority of which was just a change in how student loans were accounted for. No cash remained unspent at the end of the year.

If we are talking about public understanding and expectations, we constantly have this issue, every spring, when people think that a big pot of money has not been spent, for no particular reason. However, it is much more complicated than that. Do we need to have a discussion about how we talk about the underspend from each financial year going into the next?

I would like to go back to the convener’s original line of questioning. Collectively, what we have heard so far this morning are arguments that the budget does not prioritise economic growth enough, it does not prioritise tackling poverty enough and it does not prioritise reaching our net zero targets enough. There is specific criticism of the lack of funding for skills and training, university places, affordable housing, the Scottish child payment, enterprise agencies, the Scottish National Investment Bank and so on. There is also scepticism about tax rises to raise additional revenue.

However, is that not the problem? It is easy to identify what the budget does not do, but there is little in the way of solutions to that. To be fair, Chris Birt identified almost straight away that the money for the council tax freeze could instead have been spent on increasing the Scottish child payment. My criticism of the council tax freeze is on the record, and I would agree with him on that.

However, cumulatively, the Government went into this with a £1.5 billion gap, and what I have not yet heard this morning is a clear identification of where the Government is spending money on the wrong things and what could be reprioritised to fill all the gaps that you have all quite fairly identified. I think that there is a consensus that we should spend more money on all those areas, but the point is that there is not more money. What I have not yet heard this morning is an identification of where that money could come from, especially if it is not going to come from pretty swingeing tax rises.

To make the numbers add up.

I have taken up quite a lot of time, convener. Do I have time for one more question?

Yes.