Meeting of the Parliament

Meeting date: Tuesday, February 21, 2023

Official Report 931KB pdf

---

Budget (Scotland) (No 2) Bill: Stage 3

The next item of business is a debate on S6M-07968, in the name of John Swinney, on the Budget (Scotland) (No 2) Bill, at stage 3. As members will be aware, at this point in proceedings I am required, under 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 the case of this bill, in my view no provision relates to a protected subject matter. Therefore, the bill does not require a supermajority to be passed at stage 3.

I invite members who wish to speak in the debate to press their request-to-speak buttons, please.

14:19  

As we conclude the 2023-24 Budget (Scotland) (No 2) Bill process, I have reflected carefully on points that have been raised in Parliament and by a range of organisations, and have recognised the financial challenges that are faced at this time by individuals, households, businesses, the third sector and the public sector. I am also aware of the challenges that are faced as we manage our way through the cost crisis. The budget is designed to do as much as possible to assist, at this most difficult moment.

None of this is easy. This is by far the hardest budget process that I have led, with the effects of raging inflation being felt against the impact of more than a decade of austerity and Barnett funding having come down by 5 per cent in real terms since 2021-22.

I have been open and transparent with Parliament on the budget challenges that we are managing for the current financial year and the forthcoming financial year. On 7 February, I indicated to the Finance and Public Administration Committee that the 2022-23 budgetary position continues to improve; I am now confident of the path to balance for this financial year. That is the result of careful budget management and of taking hard decisions in order to live within our means, despite the ferocious pressures that are being created by high inflation.

I can report to Parliament two changes to our funding position that have enabled me to take further steps to increase commitments that were made in the draft budget. The first of those changes is that it has been confirmed by His Majesty’s Treasury that we will receive £125 million of additional funding as a result of Barnett consequentials arising from the United Kingdom supplementary estimates. Secondly, I expect to receive an additional £21 million for 2023-24 due to the correction of an error in our UK spending review allocation.

Will the Deputy First Minister clarify whether the £125 million of additional funding is in the current financial year? Will it be carried forward into the coming financial year and budget?

Because I have secured a path to balance for this financial year and because of the late arrival of the supplementary estimates figure, I intend to carry that money forward into the next financial year. I am about to make funding allocations accordingly, as a consequence of receipt of that finance.

Given that I am confident about the financial position for 2022-23—the point that I have just made in reply to Mr Johnson’s question—I am now able to consider some additional financial commitments for next year.

I fully recognise the budget challenges that local government faces. In my budget statement in December, I outlined the Government’s commitment to working constructively with local government to create an effective partnership to assist in meeting that challenge. I use today’s debate to reiterate the Government’s willingness to engage in that process and to work with local government to undertake the reform that is necessary to achieve that aim.

Along with the commitment to working together effectively, I am committing to providing local government with an additional £100 million to support local authorities and their expenditure. That funding is designed to assist councils in making a meaningful 2023-24 pay offer to non-teaching staff, in recognition of the critical role that those staff play in delivering front-line services. I hope that that will enable a swift agreement in the Scottish joint council pay negotiations so that relevant staff receive a pay increase as early as possible in 2023-24.

Will Mr Swinney clarify whether the money that he has just announced is part of, or the entirety of, the money that was announced last week to fund the increased offer to teachers that is already on the table?

The £100 million is additional to what was announced last week. I will come on to explain issues about the announcements that were made last week.

Last week, we confirmed that we would provide an additional £156 million from Scottish Government funds—£33 million in this financial year, plus a further £123 million next year—to support a new pay offer for teachers. That would see salaries rise by 11.5 per cent from April. I encouraged that proposition being put to teaching staff for their consideration. That additional funding for 2023-24 is on top of the £570 million increase in funding that has already been included in the local government settlement, and it takes the total additional funding for local government for next year to £793 million.

As a result of the decisions in this budget, the total funding that is available to councils to support local services will be nearly £13.5 billion, plus the revenues from any local decisions on council tax. That is equivalent to a 3 per cent real-terms increase from what was in the 2022-23 budget bill.

We are providing full discretion over £105 million of funding to allow councils to replace national empty property relief with, for example, more localised schemes. We will also increase the maximum fee levels that a local authority can charge for a penalty charge notice for parking infringements. That represents a comprehensive support package for local government within this challenging financial settlement.

It is welcome that progress has also been made in recent days on the agenda for change pay discussions. The Government is undertaking further work to put in place a public sector pay policy prior to the start of the new financial year.

I am still not very clear—I am sure that other colleagues in the chamber will also want to know this—where the £156 million that the Deputy First Minister has mentioned in relation to the pay offer has come from. The Deputy First Minister has gone to great lengths previously—not least in response to my interventions—to make it clear that he did not have any room for manoeuvre and that there were no flexibilities. Setting aside what he has said about the additional money that is going to local government, I ask this: where is that £156 million coming from?

I set out in my earlier remarks that £33 million is coming from this year’s budget. That money is available because I have taken decisions to enable me this year to balance the budget for this financial year, which has been extremely difficult. It has enabled me to free up, from within budget reductions that I have made and have required my colleagues to sign up to, £33 million this year to put into the teachers’ pay deal. That is where the money has come from in this financial year; it is there because I have forced my colleagues to take hard decisions.

The Government is allocating from the existing budget provision for next year a further £123 million to be made available to support the measure. The passing of the budget bill today is necessary to enable that money to be put on the table, so I hope that there is no mucking about and that members vote in favour of the budget that I am putting in front of Parliament for consideration.

The Deputy First Minister says that there is £100 million extra on top of the £500 million that he announced for local government previously. He knows that those figures are disputed. He must accept that there will be significant cuts in local government. Will he accept responsibility for those cuts? They will be a direct result of the decisions that he is making in his budget.

I have tried to explain to Parliament on countless occasions—I have explained this face to face to local government as well—that the financial comparison that is made is from budget bill to budget bill. From the previous budget bill to this budget bill, as a consequence of decisions that I have made today £793 million more will be available to local government to spend next year than was available this year. I think that, in anybody’s book, that must be something to welcome; I hope that it will be welcomed.

I know that Mr Rennie and I are on a bit of a roll when it comes to good will right now, so I hope that he will speak to endorse what I am saying. However, I see that Mr Cole-Hamilton’s lectern is up, so that makes me worried that Mr Rennie’s calm voice will not be heard in the debate. If he wants to intervene on me during my closing speech to welcome my announcements, he will be very welcome to do so.

I recognise the difficulties that our islands authorities are facing in managing the cost increases that their interisland ferry networks are experiencing due to the effects of inflation and rising fuel prices. That applies especially in Orkney and Shetland, and to a lesser extent in Argyll and Bute and the Highlands.

The Government gave a commitment some years ago to fully fund those services. The second commitment that I make today is that we will honour that commitment. We recognise that costs have increased, so my officials are engaging with the local authorities concerned on the level of funding that is required. Parliament will be informed once those discussions have concluded.

The third and final announcement that I want to make today is that, in the earlier Finance and Public Administration Committee debate on the budget, I acknowledged the call from Clare Adamson, the convener of Parliament’s Constitution, Europe, External Affairs and Culture Committee, to continue to sustain our investment in culture and the arts. The importance of that funding to the wellbeing of our society has always been passionately championed in the Parliament by Fiona Hyslop, who was a long-serving cabinet secretary for culture in the Scottish Government.

We had asked Creative Scotland to sustain investment next year by utilising £6.6 million from its accumulated national lottery funding reserves, in place of another year of additional grant funding, to compensate for generally lower lottery income. I am now in a position not to require that. I will provide Creative Scotland with an uplift of £6.6 million for 2023-24 to ensure that its reserve funding can supplement, rather than replace, grant funding. That means that there will be a substantial increase in the Scottish Government’s funding for culture and major events in the next financial year at a time when our country requires the inspiration that the culture and arts sector can provide for us all.

I have judged, based on the current financial position, that that is the absolute limit of the additional funding that I can provide. The detail of the budget revisions will be reported to Parliament as part of the autumn budget revision.

Together with our partners in the Scottish Green Party, we offer today a substantial budget package that will help those who need help most. The budget measures that we have brought forward are anchored in three major themes: first, our determination to end child poverty; secondly, the need to support the transition of our economy to net zero; and, thirdly, the requirement for sustainability in our public services.

The budget strengthens our social contract with every citizen of Scotland; they will continue to enjoy many benefits that are not available throughout the United Kingdom. The Parliament has already passed the motion on the Scottish rate resolution, which sets the tax rates for next year. The Scottish Government has taken the steps that we believe are appropriate to deliver fair and progressive taxation. We ask those who can afford to contribute more to support investment in our public services to do so. Those principles are reflected in our decisions to increase the top and higher rates of taxation by 1p each and to levy a higher rate of tax through the additional dwelling supplement. Those decisions mean that the majority of people in Scotland will still pay less tax than they would if they lived elsewhere in the United Kingdom.

Our progressive choices on Scottish income tax mean that, this year, the Government will deliver record funding of more than £19 billion for the health and social care portfolio, with more than £2 billion of funding being provided to deliver and improve primary healthcare services in the community.

The budget also delivers for businesses. The Government has responded to the biggest ask from business organisations, which was to freeze the non-domestic rates poundage. That will save ratepayers about £300 million next year. The package secures the lowest poundage in the United Kingdom, and it supports businesses with a package of reliefs that is worth about £744 million.

Delivery of support for people who are most in need in these difficult times is the foundation of the budget; the Government is doing all that we can to support individuals and families. That, in turn, supports a stronger, more resilient and more sustainable economy. The budget commits more than £5.2 billion for social security payments, which will provide support to more than a million people in Scotland. That represents an increase of more than £1 billion on last year’s budget.

The funding includes £442 million of investment in the Scottish child payment, which is a key support for eligible families. We provide £25 per week per child, and the payment is available only in Scotland because of the choices that the Government here has made to give a lifeline to families who face difficulties in our country.

Following the extension of the Scottish child payment from applying to children under six to applying to those under 16, can the Deputy First Minister set out how many families received the payment before Christmas?

I do not have that number to hand, but I will endeavour to send it to Pam Duncan-Glancy. What I can say is that there are families in this country who are surviving because of the child payment that the Government has provided. [Applause.]

Will the Deputy First Minister take an intervention?

I would love to take an intervention from Christine Grahame.

It is not a love match.

I am shocked that Tory members cannot even applaud the child payment, which is needed so much because of Tory austerity and outrageous inflation.

I must ask you to draw your remarks to a conclusion, cabinet secretary.

Christine Grahame is a wise and thoughtful member of Parliament, so I would not have thought that she would be so surprised by the Conservatives’ lack of reaction to the news of the Scottish child payment.

The decisions in the budget are designed to support people who are facing difficulty; to support businesses to make their way through the challenging transition to net zero that is required; and to ensure that our public services can meet the needs of the public. These are difficult decisions in difficult economic times. The budget that has been set out to Parliament enables us to invest in our public services to ensure a strong boost to local authority funding and to ensure that we help those who need it the most.

I move,

That the Parliament agrees that the Budget (Scotland) (No. 2) Bill be passed.

14:35  

I start with my usual generosity of spirit by crediting John Swinney for affording me the opportunity, on two different occasions, to chat through some issues about the budget process. I also thank him for setting out additional suggestions and policy commitments this afternoon, one of which I will come on to in a minute. I am particularly interested in the commitment regarding Creative Scotland, which is important, but he should not forget that he is putting back money that he had just taken away.

On the two occasions when I had conversations with John Swinney, I hope that he was at least listening, because what I was saying to him was exactly reflected in the views of many people across Scotland, who are concerned about, and in many cases profoundly in disagreement with, the direction of travel of the budget, given the wider implications for the economy. It is interesting that, in the substantial number of column inches that have been devoted to the First Minister’s resignation, which she announced last week, a large number of the reflections have been about where Nicola Sturgeon’s time in office has left the Scottish economy. Much of that, as well as much of the conventional statistical analysis that we have from the forecasters, does not make easy reading for John Swinney.

Let me start with what Mr Swinney has said. He cited recent comments from the Institute for Fiscal Studies that Scotland has the most progressive tax system in the United Kingdom. Principally, that is because the poorest 10 per cent will be £580 better off per year in comparison with their counterparts in other parts of the UK, and because Scotland provides a more generous benefits system—in that regard, I say to Christine Grahame that the Tories actually supported the child payment. Mr Swinney also points to free prescriptions in Scotland.

I ask Liz Smith to clarify the point that she has just made about the Scottish Conservatives’ support for the Scottish child payment. Does that mean that the Scottish Conservatives are going to vote for the budget? Unless they vote for the budget, the Scottish child payment will not happen. [Interruption.]

Thank you, members.

Mr Swinney can look at the parliamentary record—we supported the child payment. A budget is about far more than just one single policy. [Interruption.]

We will hear Ms Smith.

I want to go back to the commitments from the Scottish Government and from Mr Swinney in particular. He continues to make the case based on increased child benefits, free prescriptions and free university tuition but, unfortunately for Mr Swinney, that is by no means the whole picture. The Institute for Fiscal Studies also refers to the political choice—it is a political choice—that the Scottish National Party has made, which means that, to fund those policies, the SNP is increasingly reliant on taxing middle and higher earners much more and widening the differentials between the rest of the UK.

I will give an example. A young professional—perhaps one of those people in financial services to whom John Swinney spoke just a couple of weeks ago, which I have to say he did very well—will be up against it from the start. By staying in Scotland, that professional will pay considerably more in land and buildings transaction tax than they would pay in the equivalent stamp duty in England. Buying a £400,000 flat in Edinburgh would mean paying £10,000 to £20,000 more, and those people would pay a minimum of £500 and probably nearer £1,000 extra in income tax and higher council taxes. Those people matter because, as Mr Swinney knows only too well, Scotland is in desperate need of more well-paid jobs.

Taking that to the next step, presumably Liz Smith will now tell us, if she does not think that that is right, that she would change it and have a different position. She would, therefore, have to cut some of the spending that the Deputy First Minister has just laid out. That has to be the conclusion of her speech, presumably, and we look forward to hearing it.

I say to Shona Robison—I said this at stage 1 and again at stage 2—that I am well aware of the tight finances that we have just now, but one of the fundamental problems that we have in Scotland just now is that we do not have sufficient money to grow the economy because the tax take and the productivity are not sufficiently high to be able to do that. How marvellous it would it be if, one day, this Parliament could have lower taxes than those in other parts of the UK, but at the moment, we cannot do that.

I am grateful to Liz Smith for giving way for a second time. I am interested in her economic thinking because I think that the quickest way to grow an economy is to grow the population. That would be helped if we had a more sympathetic migration regime. Just now, every sector that I speak to in the business community complains about the lack of people because of the restrictions of Brexit. When are the Conservatives going to sober up and recognise that migration is the problem that is undermining economic growth in our society?

Mr Swinney and I have had that debate before. He knows my views on Brexit. However, can we get to the absolute nub of the matter? I go back to some committee comments, which I have right here.

At stage 2, Mr Swinney said that there were three things that he felt needed to happen. I do not disagree with any of them. The first thing was a “development of entrepreneurship”. That is right. He also said, when it came to the necessity of productive development in the regional economies, that that was very important to growth. It is. Therefore, in a speech made by Mr Swinney’s colleague Richard Lochhead—on 7 February, I think—why did Mr Lochhead completely reject any of the levelling up fund because he felt that it was not doing Scotland any good? That levelling up fund is there precisely to help regional economies. Mr Swinney should perhaps ask himself why so many of his colleagues in local government are so keen to get their hands on levelling up funds. The third thing that Mr Swinney said was that it was vital to improve the situation around economic inactivity.

Those are the three things that Mr Swinney said needed to happen, but none of them will happen unless we are able to grow the economy. I am asking him to look at the other side of the economy. Helping people who are vulnerable is absolutely the right thing to do, but we have to make sure that we are also helping those who are at the very productive end of Scotland and who want to come to live, work and invest in Scotland. That is as important as looking after our vulnerable communities.

We also have to ask about some of the infrastructure commitments. Mr Swinney said that, by 2030, there would be £8 billion extra as a result of the national strategy for economic transformation. I ask him to consider whether that will happen if major infrastructure projects such as dualling the A9, so critical to improving road safety for all the reasons given by so many MSPs—Murdo Fraser and Fergus Ewing most prominent among them—do not happen. Those are essential to growth and productivity, as well.

This is a theme that I have often asked questions on. In terms of additional—what I would regard as proper—capital borrowing powers, is Liz Smith willing to support my call for those, because we all agree that infrastructure projects are fundamental to growth in the economy?

Michelle Thomson knows my views on that. There are discussions to be had, but if it is capital borrowing just for the sake of expanding capital borrowing, I do not agree with it. However, there are circumstances in which I think that we have to look at the arrangements within the fiscal framework, which will be up for negotiation fairly shortly.

I come to the issue of what we argued for very fervently and continue to argue for when it comes to the national care service proposal. Four committees in Parliament have now taken evidence on that and it is very difficult indeed to find any stakeholders who are in favour of that proposal.

We ask again, even at this late stage, for that money to be reallocated to the front line of local government, because it is at the front of providing health and social care in any case and I do not see how the NCS proposal is credible, given that so many people say that it is unworkable. That has cross-party support and, even at this late stage, the Deputy First Minister should consider that.

We also welcomed the announcement that the Scottish Government is freezing non-domestic business rates. We noted that, as a result of the measures that the chancellor announced to reduce the rates burden on business, £222 million of Barnett consequentials were available. Those should have gone to the 75 per cent rates relief package that is available elsewhere, but Mr Swinney told me that that would cost an extra £154 million that he does not have. However, he would and should have had a whole lot of extra money available if the Scottish National Party—over quite some period of time, let us be honest—had not been wasting vast sums of taxpayers’ money on failed Government projects.

Mr Swinney was right when he expressed his frustrations at the difficulties that were forced upon him by the UK mini-budget last September, accompanying all the other difficulties. If I recall rightly, he described it as the height of incompetence. However, when he declares that the budget predicament has been caused by Westminster, I will take him much closer to home because it is just not true. Yes, the budget was going to be difficult and tough, but many of the current budgetary problems have been made right here in Scotland by a Government that has, for months if not years, been well out of touch with public opinion when it comes to the economy.

14:47  

We have been away for a week. Has much changed since a week past Thursday? I see that the First Minister has already left this debate.

The past week has not only been a long time in politics, it makes the budget decision faintly ridiculous because the budget will not last. I do not see any of the leadership candidates leaving the budget alone once elected. It will last as long as the next summer budget revision.

We already have leadership candidates saying what they would do differently. It says in my notes that we have had one candidate denouncing cuts being made to Creative Scotland. Rather than talk about that, I should congratulate Ash Regan on the first victory of her leadership campaign. Another candidate is ambitiously pronouncing the need for more social prescribing, which would presumably be delivered through local government. I guess that that would need more funding.

In the past 24 hours, it has become unfashionable to agree with Kate Forbes, but I agree with her that the Government needs to focus on what really matters to people: the national health service and the cost of living. Therein lies the problem. I do not think that the blame for that lack of focus lies simply with the budget or the Deputy First Minister because the issues that we face are an accumulation of decisions over 15 budgets, three of which Ms Forbes set herself.

At the heart of those decisions lies a lack of detail and transparency. I welcome the additional funds for teachers’ pay but, when we make proposals, the obvious questions are asked about where the money will come from and what will be cut in order to afford it. However, the reality is that the only place that the budget changes that we are discussing are written down is in the Official Report that is yet to be written.

I will ask specific questions. Will the £100 million fund a 2.5 per cent increase for non-teaching staff or is that being funded by other money? Given Mr Swinney’s protestations, does he acknowledge the IFS analysis that shows that non-ring-fenced funding for local government has declined in the budget by 2 per cent? If he does, where does the budget revision leave that decline? Is it 1 per cent, because I think that that is roughly where it would be?

Ultimately, the budget process will work only if we have details and transparency. We were told that Derek Mackay’s magic money sofa was a thing of the past, but suddenly we have an announcement with no detail that gives us no real ability to scrutinise it.

I am grateful to Daniel Johnson for taking an intervention. If he wants to have a say in the SNP leadership contest, he should join this party.

The reason why these decisions have had to be made so late is that this Government cannot count on the money that comes from the UK Government. Will he support our calls for greater fiscal flexibility in Scotland?

The Government cannot count—we have it right there.

Budgets rely on transparency, and this is just one example of the lack of transparency. We do not have the detail on what is discretionary funding, what is demand led and what is to be spent on people or energy bills. We do not have clarity on that. For serious discussions and negotiation, we need greater transparency.

In truth, John Swinney has been asked to perform an invidious task today: to pass a budget that almost certainly will not last and that is being asked to deal with the consequences of decisions that are being made by other people. In all seriousness, I thank him for his engagement throughout the process. Although we do not agree on the specifics of the budget, there is agreement on the broader need for strategic choices, and I accept the huge pressures that the Government faces in setting budgets at a time when costs are spiralling and negotiations regarding pay are complex.

This budget needed to fix social pay. The front door of the NHS is blocked because the back door is shut: we cannot get well people home for want of social care workers, yet the budget does nothing to fix that issue. I know that John Swinney agrees with that analysis of the problem for the NHS.

The budget does nothing to prevent the long-term decline of local services, which have been undermined for more than a decade by cuts, squeezes and central Government diktats. I suspect that John Swinney agrees with me on the need for much more fundamental and urgent reform of how we deliver those vital local services, which, ultimately, will impact on our ability to deliver social care.

I make no apology for our focus on social care pay through this budget process. It is right that social care workers, who do an invaluable job, get wages that reflect that. It is an immediate issue for the NHS, but it is not a new one, which is why it needed to be fixed. Our proposals were costed, sourced and affordable. More importantly, at a time when delayed discharges are costing the NHS £150 million a year, it is vital for preventing catastrophe in our valued NHS. Instead, this Government is offering only an additional 40p an hour—less than the 50p an hour that was offered in last year’s budget—at a time when inflation is running at almost three times the 3.8 per cent that the increase of 40p represents.

In addition, the Government is continuing with its flawed plan for a national care service. Apparently, £65 million will be spent in this budget—not that we would know that from the details that are in the budget—on plans and centralisation, instead of on delivering care. Even if the Government does not accept our plans, it should consider what £65 million would deliver: it would take social care workers’ pay to more than £11 an hour. The Government does not have to take our plans, but it should at least change its own or do something else that puts money into the pockets of social care workers.

This budget will simply make the problems with the recruitment and retention of social care workers worse and the crisis in the NHS deeper.

The issue of pay is not restricted to the care sector or the NHS; it is emblematic of this Government’s inability to deal with strategic issues. Low pay is endemic in the public sector. There are almost 300,000 public sector workers in Scotland who earn less than £15 an hour. There are around 20,000 people in the Scottish public sector who earn less than the real living wage. We cannot build public services on low pay, and, when the public sector is close to half the economy, it impacts on the overall health of our economy.

Wage and employment growth are critical to our public finances, so we need a strategic workforce plan that plans for jobs and wages in the public sector and that manages the capacity and capabilities that we need in our public sector workforce. That is why Audit Scotland called for a strategic workforce plan. However, this budget does nothing; it does not even have a public sector pay policy.

On the subject of public sector pay, does Daniel Johnson agree that an 11.3 per cent increase over two years for our hard-working teaching staff, as announced with great fanfare by the Deputy First Minister, amounts to a real-terms cut for both this coming year and the year preceding it? It is derisory and a slap in the face for our hard-working teachers, who are having to accept the pay cut in the teeth of the aftermath of Covid.

Over the past decade, teachers’ real-terms pay has come under severe pressure. We must look closely at the reality of that and at the real issues that the numbers represent.

What does this budget ultimately say about not only the past year but 15 years of SNP Government and eight years of Nicola Sturgeon? The budget is the sum of that party’s time and her time in office. How will that be remembered?

It will probably be remembered for ferries. I am speaking not only about the hulks that lie unfinished and that will cost hundreds of millions of pounds more than was budgeted; I mean each of the ferries that should have been launched every year for the past 10 years to replace the fleet in a timely manner. This year alone, we have seen two ferries withdrawn from service because of rust, leaving islanders high and dry, because this Government cannot make the long-term plans that it must make to maintain connectivity for islanders.

Perhaps the 1,140 hours of funded childcare will be the First Minister’s most significant achievement, but even that policy is half formed. Although the overall number of people working in local authority settings is up, the number of people working in childcare is down. We have lost almost a quarter of our childminders and the total number of childcare settings has fallen. Childcare is vitally important, but that good objective has been undermined by poor policy and poor funding.

When we look at local government, we see the real damage caused by this Government. More and more funding is tied up by Scottish Government directives and ring fencing. The Convention of Scottish Local Authorities claims that the budget amounts to a cut when those things are included, and the IFS agrees.

When we look below the headline numbers, the results are even more alarming. The long-term erosion of basic services is stark. Planning and development budgets have been halved in the past 10 years, and roads and culture budgets have been cut by a third. Housing budgets have been cut by almost 40 per cent when housing is vital to combating poverty, developing regional economies and enabling us to reach net zero.

Please conclude, Mr Johnson.

It is no wonder that people from Shelter have been protesting outside Parliament today.

I set one challenge for the candidates in the SNP’s leadership contest. Candidates are right to pick holes in the focus and direction of this Government. Here is my challenge: if they are serious about change, they should vote with us, and against the budget.

You must conclude, Mr Johnson.

That is the only way to deliver the changes that Scotland needs and that Labour is serious about delivering.

14:57  

I remind members of my entry in the register of members’ interests: I am married to a teacher who is a member of the Educational Institute of Scotland trade union.

Throughout the budget process, we have been straight with the Deputy First Minister. I am grateful, as Liz Smith was, for the access that he has given us. We approached those discussions in good faith: I deployed the legendary good will of Willie Rennie during the stage 1 debate. If the budget package was right, we would support it. We stood by that principle. We have voted for previous budgets and we voted for this year’s income tax resolution.

During our meetings, I was very clear with the Deputy First Minister about the different choices that Liberal Democrats would make. I talked constructively about the issues that we care about. It is only right to give credit regarding the one issue on which the Government seems to have heeded us, but it is only one issue. There is a commitment to funding ferries for our island communities. When I met members of Shetland Islands Council a couple of weeks ago, they pointed out that the cost of running their ageing ferry fleet has gone up by £5 million. I do not doubt the magnitude of their ask and I hope that the Government will not cut that quantum.

The Government has not budgeted to the degree required to win our full support: the budget is just not good enough. There are decisions that we cannot overlook and that is a cause of some regret. It is essential to step up efforts to resolve the crisis in our social care sector. That would reduce delayed discharges and relieve some of the pressure, disruption and cost that is being heaped on the national health service.

Despite the evidence in reports from many committees of the Parliament and from local government, trade unions, charities and front-line workers, the National Care Service (Scotland) Bill has still not been abandoned. This budget was an opportunity to make progress with national bargaining and to deliver fair work years ahead of the SNP and Greens’ current schedule. The budget was an opportunity to put money into front-line services and staff, instead of putting down a significant deposit on a vast and unnecessary £1 billion bureaucracy. I was pleased to see that at least one of the SNP leadership contenders—as we have heard already—has recognised that the bill must be halted. I suspect that others in the SNP quietly agree.

When the NHS recovery plan was launched, one in five children were waiting too long for mental health treatment. The figure is now one in three. Young people are still battling with the long shadow of lockdown, and the rising cost of living is but adding to the pressure. To freeze the mental health budget on top of the £38 million cut this year is a recipe for more missed targets and scandalously long waits. This is the Government that promised to clear mental health waiting lists for children by March. That is next week, and we are nowhere.

I am still disappointed that, throughout the 158 pages of the draft budget, there is not one word on long Covid, nor was there anything on it in the Deputy First Minister’s remarks. Almost 200,000 people are suffering that debilitating condition, and the country is suffering, too. We have a downturn, low productivity and labour shortages. Scotland needs the talents of everyone to grow the economy and to make our country fairer, but we have uncovered that the Government is turning down requests from health boards for more money to help with long Covid—cash that could have helped people to get well and get on with life.

I turn to education. There can be few more pressing issues than that of the school gates being locked because of strike action. It is the last thing that our teachers want, but the Government has left them no other choice. School pupils have already lost 2.1 million days of education during this dispute alone. That is on top of the huge disruption that was caused to them in two years of pandemic lockdowns, and it will double if an agreement is not reached. All the while, life-qualifying exams come over the horizon.

I mentioned in my intervention on Mr Johnson that the Deputy First Minister announced with some fanfare the increase in budget to allow for an 11.3 per cent increase over two years. However, I need not remind you, Deputy First Minister, that inflation is a year-on-year event, and if it is 14 per cent this year and 14 per cent next year, the provision of 11.3 per cent over two years is asking our teachers to take a significant pay cut last year and a much bigger one next year. It just will not wash.

To get Scottish education back on track, we need to get the basics right. That means boosting pay and conditions for staff, permanent contracts, more time for lesson planning, and cuts to class sizes so that pupils get the support that they deserve. Instead, we still have a Government spending £17 million every year on national testing for children as young as four and five. We have a budget that School Leaders Scotland says will lead to class sizes increasing and subjects being removed from the curriculum.

The announcement a fortnight ago of a fresh regime of penalties further undermines local government. The education secretary is treating councils like an enemy that is determined to cut teacher numbers. That is nobody’s wish. The way to protect teacher numbers is to properly resource our local government and education departments.

The IFS said that, even if council tax is increased by 5 per cent, local authorities will still face significant real-terms cuts to their budgets, even with the extra £100 million that has been announced today. My colleague Willie Rennie was exactly right when he intervened on the Deputy First Minister to say that the maths that the Government is using to underpin all this is disputed by COSLA, which is still staring down the barrel of some pretty significant cuts.

The fresh ring-fencing regime means even deeper cuts to housing, libraries, leisure centres, roads and waste. To be frank, I am surprised that the Green Party has gone along with this. It is a party that shared our belief in the European Charter of Local Self-Government, which says that the political and financial independence of local authorities must always be upheld. We agreed with the Greens that priorities and policies must be developed and delivered in partnership, and we were told that this Government would value the unique role of local government.

Finally, I want to say a word about capital spending. There is nothing in the budget that is moving the debate on when it comes to the urgent programme of public works that we need to insulate every home in Scotland. An extra £10 million a year is not going to cut the mustard. In the face of the climate emergency and surging costs of living, we need to insulate our homes in Scotland to help our people.

We move to the open debate.

15:04  

Each year, finance secretaries are responsible for making the difficult decisions that governing requires. Since the SNP took office in 2007, the fiscal challenges to contend with have included the financial crash, austerity and Covid, requiring careful husbandry to protect public services and deliver prosperity.

However, the scale of the challenge is now even greater. Pandemic recovery, war in Ukraine and volatile energy prices, exacerbated by a UK failure to retain adequate gas storage facilities, Brexit and vicious Tory fratricide at Westminster, have put a match to the finances and the credibility of UK plc, with predictable knock-on consequences for this Parliament’s budget.

In that context, Professor Frances Ruane of the Economic and Social Research Institute told the Finance and Public Administration Committee that it is the responsibility of Government to provide

“as much certainty as it ... can”—[Official Report, Finance and Public Administration Committee, 20 December 2023; c 3.]

to businesses and households. This budget delivers that. The Scottish Government is forgoing £308 million in revenue to freeze the business rates poundage while ensuring that 100,000 businesses pay no rates at all—keeping the shutters up on shops and staff in work.

All Scottish benefits will be uprated in line with consumer prices index inflation.

The SNP Government introduced the Scottish child payment, which is unique in these islands. Initially £10 per week, it has increased by 150 per cent to £25 and will lift 50,000 children out of poverty, which the Joseph Rowntree Foundation described as

“A watershed moment for tackling poverty in Scotland the rest of the UK should take notice of.”

Labour suggested only a fiver per child four years ago.

Finding decent employment and career progression remains the best way to improve household finances and wellbeing. I am therefore pleased that the cabinet secretary has committed £69.7 million to the parental employability support fund, providing intensive personalised support for parents to gain work, upskill, retrain, increase family income and lift themselves out of poverty.

The thumping increase of £1,117.7 million in health and social care spending is also welcome, as is £100 million extra for our councils.

Opposition parties have opportunities throughout the budget process to set out a vision—not an unfunded wish list, but a serious, thought-out, costed and balanced budget, detailing their very own difficult choices, so that they can at least pretend to be an alternative Government in waiting. However, we have not seen that.

Astonishingly, at stage 1, Miles Briggs talked about housing shortages and homelessness without at any point acknowledging UK Tory cuts this year of 9.8 per cent to our capital budget, which is almost £500 million, with a further £185 million next year. At a time of rocketing construction inflation, that takes some brass neck.

Much as the Tories bluster and deflect, UK financial chaos has impacted Scotland’s budget. What a farce it has been: three Prime Ministers in three months—managerial turnover such as one might see at a football club battling relegation—and a mini-budget that removed the Office of Tax Simplification and the cap on bankers’ bonuses, brought the entire UK economy to the brink of meltdown and led to scrabbling to find billions to shore up public finances and avoid a collapse in pension funds. Those were policies that Tories in this chamber demanded that the SNP emulated.

Will the member give way?

I am happy to give way. I was hoping to give way to Miles Briggs, frankly, but I will take you.

I think that you mean “Mr Fraser”.

I am always delighted when Mr Gibson accepts an intervention. I am afraid that his narrative is somewhat out of date. I do not know whether he has checked the news today, but last month the UK public finances were £5.4 billion in surplus. The UK economy is doing much better than the doom and gloom being predicted by Mr Gibson and his colleagues.

That was desperate stuff from Mr Fraser. What we have in the UK is a national debt of £2.6 trillion, which is £91,000 per UK household. The Office for Budget Responsibility says that debt interest payments alone will be £116 billion this year—a figure that is five times Scotland’s entire public sector pay bill.

Sadly, the party that brought us Truss and Kwarteng does not have the humility to admit that it was wrong and is moving swiftly on.

From Labour, it is the same old, same old—it is attempting to be all things to all people. Increasing hourly social care pay to £12 would cost £275 million, as set out in correspondence to the Finance and Public Administration Committee, and that is excluding the millions more that would be required for social care workers employed by local authorities.

Of course, since early 2021, Labour has demanded that we aim for £15 an hour—a figure that has not increased with inflation since, incidentally. That is on top of hundreds of millions of pounds of demands, such as halving rail fares and giving more money to councils—without saying how much more. As always, Labour offers no credible source as to where the money should come from. Indeed, Labour once favoured 3 per cent annual top slicing of all council budgets.

Daniel Johnson suggested at stage 1 that £95 million be transferred from the national care service. However, as the Deputy First Minister made clear, only a maximum of £50 million is committed to the NCS next year. According to Labour, another £100 million would come from somewhere in the NHS, apparently. Throwing a bone to the future, Mr Johnson suggested that

“scrapping the council tax and non-domestic rates and replacing them with fairer and more progressive levies ... could raise as much as £450 million”,—[Official Report, 2 February 2023; c 74.]

but what are those new levies and who would pay? That is uncosted, fantasy politics and Scotland sees through it.

In Wales, Labour rightly blames Westminster cuts, but in Scotland it is blind to Tory failings. In all four stage 1 Labour speeches and again today, there has been not a single word—not one—criticising the Tories. It seems obvious that Labour’s Holyrood ambition is for a Labour-Tory-Lib Dem coalition, such as we already see de facto in Edinburgh city and Fife councils.

Meanwhile, the SNP delivers. When we took office, social care workers were being paid a measly £5.35 an hour, during a year in which Labour tried to hand back £1.5 billion to Westminster. Today’s budget sees £100 million of investment to bring that hourly wage to £10.90—a 104 per cent increase in carers’ pay over 16 years. That is almost twice the rate of inflation.

Where Labour could act, what did it do? On Glasgow City Council, Labour’s big decision was which law firm to give £3 million of city funding to in order to deny for years the equal pay that female care workers deserved—a matter that the SNP put right.

This year’s budget necessitated hard choices to help people through difficult times: combating child poverty, protecting public services and meeting net zero ambitions.

Sadly, this challenging year is not a blip. We will be here again next year and beyond, for as long as this Parliament remains hitched to Westminster—and, for as long as we cut ourselves off from our European partners, we will be locked into a slow decline that Scotland’s people do not deserve. We should bid farewell to Westminster chaos and set an independent course that can realise Scotland’s full potential.

I say: support the budget.

15:10  

This feels a bit like groundhog day although, in the film, Phil predicted six more weeks of winter and in Scotland we face three years more of doom and gloom under the SNP-Green devolved Government. There is extra money for local government at the last minute, from the Derek Mackay sofa—once again, groundhog day. Higher taxes, reduced local government spending, a lack of support for business and a lack of focus on economic growth paint a dismal and bleak picture for the economic prosperity of Scotland over the next couple of years, regardless of who the new leader is.

Today, I will concentrate on the crisis that is faced by our colleagues in local government. Regardless of what the Deputy First Minister says today, it is a crisis. I have been in local government and, now, the Scottish Parliament for six years, and budget time is always one of the most depressing of times. The Scottish Government tells us how great the local government settlement is; local government sets the record straight; then there is some last-minute cash, just as we have seen today. That is hardly a case of partnership working—and this year is no different.

Is Douglas Lumsden going to tell us that money for local government should come from the NHS, or would he increase taxes?

No. The money should come from the national care service.

The Deputy First Minister was quoted as saying:

“we are providing councils with a real terms budget increase of 1.3% next year”.

That has now been revised upwards to 3 per cent—which sounds great until we look at the details. Most of the extra cash is for the pay settlement, and £105 million is for the devolution of empty property business rates relief—not new money but an accounting exercise that has moved it from a central Government spend to a local government spend. There is other cash for Scottish Government political priorities, after which, COSLA believes,

“Local Government will see an uplift of only £71m once policy commitments are taken into account.”

That £71 million is far below what is required to ensure that services continue at their current levels. I do not see that changing after the Deputy First Minister’s intervention today.

In his analysis, I wonder whether Douglas Lumsden remembers that, during his time as one of the leaders of Aberdeen City Council, he left the council with a debt of £2 million, which the people of Aberdeen are still paying off. As I recall, that was for projects that, in many cases, have still to be delivered.

Members: Oh!

Douglas Lumsden, I can give you the time back.

Members say, “Oh!”, but I feel that I led a council of ambition, unlike the SNP-Lib Dem coalition that is in place just now.

Members should forget the nonsense of a real-terms budget increase. The budget is a cut to local government funding when those extra commitments are factored in.

COSLA has made a series of statements over the past few months with dire warnings over the future of services in our local communities. It has described the budget settlement as having

“a detrimental impact on vital local services”.

Over the past week, we have heard a lot about legacy. That is some legacy—cuts to local services, to the detriment of our communities. We know that many local authorities are planning for significant job losses as a result of the cut to their budget. According to a COSLA report, up to 7,000 jobs will be lost should the budget be passed today. Many of those will be in education, which we know to be in crisis.

However, the Scottish Government has now come in with threats and intimidation. Rather than funding councils properly, it is threatening to withhold funding for any that do not toe the line. One can imagine the outcry if the UK Government imposed as many conditions as this Government is imposing on the local government budget. That is shocking behaviour from this Government. Instead of valuing and working with our local government friends, it threatens and intimidates. Instead of the Government meeting COSLA leaders to discuss a way forward, they have been faced with a blank wall. Ministers are refusing to meet with leaders and are turning their backs on local government.

I welcome the U-turn today on Creative Scotland funding; I hope that the Government now recognises the value in culture. However, I did not hear anything about men’s sheds. SNP members have signed the Deputy Presiding Officer’s letter condemning cuts to the men’s shed budget, and yet they will vote today to cut that funding.

We always get warm words from SNP colleagues but, when push comes to shove, they will fall in line and vote for these appalling measures.

This budget does not plan for growth—it plans for decline. That means decline in our public services; in our councils; in our communities, towns and villages; and in the amount of money in the pockets of hard-working Scots.

Nonetheless, the Government continues to pursue policies that everyone thinks are a bad idea. The national care service is a prime example; I can only hope that the new First Minister swiftly puts a stop to that policy and diverts the money to local authorities. I welcome Ash Regan’s comments in the press today that she would pause the roll-out so we can have a proper co-design process.

Trade unions can see it, and even the SNP back benchers see it: the national care service is a disaster waiting to happen, and it will be the Scottish taxpayer who will have to pick up the tab. Delaying that vanity project until we have a new First Minister would surely be the most sensible approach.

In closing, I once again appeal to the Deputy First Minister to reconsider, even at this late stage. He should meet council leaders to discuss their concerns and listen at first hand to what the impact of the appalling cut to their finances will mean for the essential services in our communities: the impact on early intervention and prevention, social care, education, school building programmes, refuse collection, community funding, men’s sheds and music tuition in schools. He should reallocate the money that is set aside for the national care service, and he should plan for growth, reinstate the cuts to men’s sheds and give local authorities the money that they need to continue to deliver the vital services on which we all rely.

I advise members that we have a little bit of time in hand. Most speakers so far have taken interventions, and I encourage members to continue to do so. I discourage members, however, from making sedentary interventions and hurling abuse around the chamber. That goes for those on all sides of the chamber.

I call Michelle Thomson.

15:17  

Sorry, Presiding Officer—just give me a minute to fix my microphone.

I am getting a tut-tut there, I see.

The Scottish Government, and the acting finance secretary in particular, have faced huge challenges with this budget and have acted in the interests of the majority of the Scottish people. The balance that needs to be struck is very difficult to achieve, and I fully support the Budget (Scotland) (No 2) Bill. Given the context of high inflation, a lack of borrowing powers and a decades-long failure by successive UK Governments to address issues of economic growth, the acting finance secretary has done a remarkable job in constructing a budget that protects Scotland from some of the worst potential effects of a decline in the UK.

I take the opportunity now to address a regular theme of mine that is not directly relevant to today’s budget but concerns the wider picture. That is the need to do much more to support women’s entrepreneurship to drive economic growth and social equality. In both the Finance and Public Administration Committee and the Economy and Fair Work Committee, I have regularly called for better data collection and analysis, and for a recognition of the many cultural barriers to participation. We need to remove all the barriers to women’s entrepreneurship, so I was delighted to see the publication yesterday of the report by Ana Stewart and Mark Logan, “Pathways: A New Approach for Women in Entrepreneurship”. It is an excellent report.

I also congratulate Kate Forbes, whose initiative it was as the Cabinet Secretary for Finance and the Economy, on her appointment of Ana Stewart to lead the inquiry. In my opinion, the report’s 31 recommendations all deserve support. Some of the historical barriers for women—which I have experienced, such as the misogynistic belief that having a young family should constrain the ambitions of women but not men—are directly addressed, along with calls for various education initiatives.

I note that the recommendations cross different portfolio areas and will require significant responses from a wide range of institutions, including Scottish Enterprise, councils, primary schools and universities. What is proposed is welcome, but the institutional challenge will be real and must be faced. The incoming First Minister—or, indeed, the acting finance minister—will therefore need to ensure appropriate ministerial oversight of the report’s implementation. My key point is that the success of creating more women entrepreneurs will undoubtedly help our economic growth and therefore will help to sustain Government finances, but it will need the whole-hearted support of all branches of Government to implement and monitor the recommendations.

I agree entirely with what Michelle Thomson says about entrepreneurship. She also spoke eloquently in our recent debate on women in science. What are her reflections on the recent report from Professor Mark Priestley, which suggests that the squeeze on subject choices in schools will be a real problem in trying to inspire more young women to go into such areas?

The challenges of continuing to encourage young women to go into science, technology, engineering and mathematics and to stay there came out in that debate. They remain fairly acute, and we must continue to focus on them.

If the Stewart report is a cause for cautious optimism, we know that the state of the UK economy is not. We have heard it quoted previously that the UK is expected to be the worst-performing state economically among the G7 and G20 countries—worse than even sanctions-hit Russia. UK economic growth has lagged behind the average for large and small advanced economies over the past four decades, with the small advanced economies experiencing cumulative economic growth that was double that of the UK between 1999 and 2019. Those are all facts that cannot be chased away. Measured by gross domestic product per head, the gap between the small economy average and the UK had grown to more than £12,700 per person by 2019.

For the record, I point out that fiscal powers for achieving such economic growth reside squarely with the UK Government. In this context, the efforts of the acting finance secretary should be applauded. I have spoken previously about the multiple ways in which the devolution settlement ties his hands. I thank Ms Smith for taking my intervention on restrictions on borrowing powers, which we discussed earlier. I agree that the terms of reference for the fiscal framework might look at that again, but, if members do not mind my saying so, it has taken a very long time. Frankly, I do not think that the Scottish Tories need to be told what to think by the London Tories in calling for increased targeted capital revenue-raising powers.

At the same time, we must acknowledge that the UK Government is hellbent on furthering legislation that is a direct threat to our limited economic powers. We need full fiscal freedom to act in Scotland’s interest. This is about growth, job creation and wealth creation, and it is utterly vital.

My final point concerns Brexit, which we have hardly mentioned today. We must abandon the little England mentality in favour of re-engaging fully with Europe and the wider world. Every day, Brexit damages the lives of Scots, putting barriers in the way of trade with Europe and destroying supply chains. It is damaging our prospects for economic growth and, in a multitude of ways, it places an added burden on Scotland’s finances. Scotland needs full borrowing powers, a complete range of fiscal powers and a reinvigorated international outlook. I think that we could call that independence.

15:23  

I refer members to my entry in the register of members’ interests.

This budget will not address the cost of living crisis that our constituents are having to deal with, the aftermath of the Tories trashing our budget and crashing our country’s economy, and the cumulative impact of funding cuts to our councils over the past decade, all of which have hit our communities hard. Even SNP council leaders are admitting that this year. I want to highlight the damage that the budget will do to my constituents in Edinburgh and the Lothians. We have seen waiting times for accident and emergency, cancer services and operations rising, and our health services have been under pressure for years.

The national resource allocation formula means that we do not see the funding for services to address the pressures in our region. Given that our health services are already at capacity, we urgently need new investment to ensure that the increasing population in our region will be supported. We will have 84 per cent of Scotland’s projected growth by 2030, which is why we need the investment now.

New buildings such as the eye pavilion are vital, but we must also invest in general practitioner services to support patients rather than make cuts. We must also ensure that we have NHS dentists. Earlier this year, dentists warned that there could be a “wholesale exodus” from the profession. There is a serious risk that dental treatments will be available only to those who can afford it, and that is not acceptable. As has been mentioned by several members today, we urgently need action to deliver care so that people can be given the care and dignity they need in the place that is best for them, whether that is at home or in a home. That means funding.

It is time for the SNP-Green Government to admit failure and stop its centralising national care service, which not only will cost a huge amount of money—£1.3 billion—but will not deliver the additional carers that we need or see them being paid £15 an hour. Crucially, it will not give carers new career opportunities, which is what we need in order to keep people in that sector. As Daniel Johnson said, the failure to deliver care for people when they need it is hitting our NHS hard, as people are stuck in hospital, which is not good for their health and limits access to NHS services. The budget does not address that issue.

We are also seeing the impact of the failure to invest in housing. Earlier this month, I met Shelter, which paints a grim picture of the housing emergency that we are facing in Scotland, and in Edinburgh in particular.

Will the member take an intervention?

If you would like to comment on Edinburgh’s housing crisis, I would be delighted to take your intervention.

Please speak through the chair, Ms Boyack.

I cannae really comment on Edinburgh, because I represent the South Scotland region. I am interested in hearing what the member thinks about the impact of Brexit on carers, who are needed in our caring communities across the whole of Scotland, including in Edinburgh and the Lothians.

We have a shortage of care workers across Scotland, but, if you look at the housing crisis across Edinburgh—the rocketing rents and the cost to people who want to buy a home—you will see that it is impossible for them to live here. People have to leave the city and move further out into the region. The basic cost of living crisis is fundamental. That is why not delivering £15 an hour will not help our care service to recover. We need urgent action, and it is not in this budget.

The £133 million cut to investment in energy efficiency in our homes, which was announced in November, is appalling. During a cost of living crisis, when people’s bills are rocketing and we need radical action to address the climate crisis, it defies belief.

There is a little bit of good news in the budget. I note today’s U-turn on what would have been the biggest percentage cut in the budget, to culture. That cut would have put a quarter of the organisations that are regularly funded by Creative Scotland directly at risk. I thank the 15,000 people who signed a petition organised by the Scottish Trades Union Congress and the culture unions to warn about the irreversible damage that could have been caused by the proposal and would have put 8,500 jobs on the line. That is on top of the fact that a quarter of artists and freelancers who responded to a survey by the Scottish Contemporary Art Network said that they have already left the sector or have been forced to seek additional or alternative work. Today’s crisis is a result of a decade of standstill funding for culture.

I am delighted to see that the culture minister is listening to me intently. Let us look at the situation. The funding for our five national performing companies has been £22 million since 2016-17. That is a freeze in investment when we need more cultural opportunities for our young people.

We have already lost many cultural organisations, and the impact of defunding our arts has been felt across the country. Over the past year, we have lost Edinburgh’s Filmhouse, the Belmont in Aberdeen and Inverness Ironworks—a beacon of live music that is being demolished to make way for a £30 million hotel. We can see that our arts and culture organisations are already under huge pressure. As Edinburgh Sculpture Workshop said, reductions in the culture budget will wreak havoc but will not reap significant savings.

That is the challenge. On top of a decade of cuts to our councils, we have the cost of living crisis and rocketing costs. In Edinburgh, our Kings Theatre urgently needs investment to make it fit for purpose. It is a national treasure with a huge economic impact, and it is a key part of our cultural offer in the international festival. However, the cost of living crisis has pushed up costs, which means that we urgently need funding from every level of government—our city council, the Scottish Government and the UK Government.

Culture is who we are: it is critical to our health and wellbeing, our economy and tourism. There is so much more that needs to be done to support our councils and cultural organisations. Daniel Johnson mentioned social prescribing, which is an excellent idea. We know from research that it works, but Humza Yousaf told the Constitution, Europe, External Affairs and Culture Committee that we will have to wait until 2026. That is not good enough.

This budget does not address the perfect storm. We need a recovery plan for our arts and culture sector, but it is not in this budget. We need that action now.

15:30  

I am happy to speak again at this stage of the budget process. I may repeat themes from my previous speeches, but I am sure that Murdo Fraser will be quick to pick it up if I have said something before.

Let us start with the economic backdrop. The International Monetary Fund has predicted that the UK will be the only major economy to shrink in 2023. We can blame Covid, Brexit or whatever, but it is clear that we have had a succession of incompetent Westminster Governments—Labour and Conservative—that have failed to keep up with our European neighbours.

If the supposed lack of growth in the UK economy is a sign of incompetence, to what does the member put down the fact that the Scottish economy has, since 2014, grown at only half the average UK rate? I ask Mr Mason who is responsible for that.

I still say that Westminster is primarily responsible for the economy. In fact, Scotland compares very favourably with most of the UK, apart from the south-east of England.

It is worth reminding ourselves of how Labour approaches budgets—not least at Glasgow City Council last week, apparently with the endorsement of its alleged national leadership. Glasgow set its budget in incredibly difficult times, and we would all, of course, like our councils to have more resources to use in meeting the great needs that they face, but for Labour councillors not even to attend the budget meeting strikes me as totally irresponsible.

Kenneth Gibson rose—

I led the Opposition in Glasgow for some years, albeit as part of a fairly small group including Mr Gibson’s mother. However, we always sought to take part in the budget process and come up with suggestions as to how the administration’s budget could be improved.

Can Mr Mason explain the difference between Mr Sweeney talking to an empty George Square and a few Labour councillors and what happened in Tony Blair’s first budget, when Labour cut 9 per cent of the city’s budget—£97 million in a single year—and 3,000 workers were sacked? Thousands more were at George Square, being spoken to by me through a megaphone, and Labour councillors had to be smuggled out the back door. There is a difference, is there not?

I thank the member for that intervention. He has made his point.

When I led the Opposition in Glasgow City Council, we sometimes made just a few admin savings in order to provide more front-line services, but we did attempt to make the then Labour budget a bit better. However, in Glasgow last week, Labour councillors could not come up with even one improvement to the SNP budget. We should take that as a compliment to the SNP administration in Glasgow, because, despite the difficult challenges that it faces, Labour effectively endorsed the SNP budget.

The Scottish Government, the Scottish Parliament and our local councils have to produce balanced budgets. None of us likes the budgets that we have to set—we would all like to spend more nationally and locally on education, health, arts and culture, and so on.

Will the member take an intervention?

I have taken enough interventions, unless I will get a lot of time back.

I can give you the time back, Mr Mason.

Does the member think that Labour councillors should have stayed to hear about cuts to social care, cuts to burying dead people, cuts to education, cuts to psychological services, cuts to museums and cuts to—and closures of—swimming pools, or should we have gone out and stood with the people of Glasgow?

If Labour councillors thought that the SNP administration could have done anything better, they should have suggested that. They left because they could not think of anything better than saying that money should come out of thin air. I see that as totally irresponsible, undemocratic and anything else that people want to call it.

The reality is that we do not have the resources that we would like to have, and we must live within our means. If Labour MSPs would like to copy their Glasgow councillor colleagues and leave the chamber at this point during my speech, I will not take it personally. [Interruption.] Okay—half of them are not here. However, I warn them that they would look just as irresponsible as their colleagues did in the city chambers last week.

Moving on to some specific parts of the budget, I very much welcome the slight increases in income tax for those who can afford them. Let us be realistic: although some people in our society are really struggling, others are doing very well and have ample money to spend. For example, a new restaurant opened in my constituency at the turn of the year; it is solidly booked at key times, and I still have not managed to get a meal there. Some people in our society are clearly comfortably off and can afford to pay a little more in tax. That means that we can use the extra money for those in greater need.

It is reckoned that Scotland would have £1 billion less in revenue if we were to match income tax rates in the rest of the UK. The Conservatives seem to favour that approach but, so far, they have failed to say where they would cut that extra revenue. Would it be cut from the health services or from local government, for example?

The Conservatives also argue that we need to be competitive with the rest of the UK. Of course, we need to be competitive, but that does not mean just in the amount of tax that we pay. It means being competitive in a host of other things. People choose to live and work in particular places for a host of reasons. Those include being near family and friends; being where there is reasonably priced housing; being where there are good-quality schools, colleges and universities; being where there is a good health service; and being where the environment is cleaner. I suggest that people also choose to live and work where they have a Government that at least tries to make life fairer and better for ordinary people.

On the expenditure side, as has been said, we need to make choices. Of course, we would all like to spend more money on the NHS, primary healthcare and preventative measures, local government, colleges, house building and public transport. However, if the money is not there and it cannot be raised in the short term, we must live within our means. I agree that, in the longer term, we need to look at replacing the council tax and potentially introducing some new taxes to fund public services, but that will not happen in the next six weeks, before we start the new financial year.

For that matter, the fiscal framework is not likely to improve in the near future. It still seems to me that the system is fixed against us and that it is incredibly difficult for us to compete with London and the south-east of England. I wish the new First Minister, Deputy First Minister and finance secretary—whoever they may be—well in negotiating all of that with Westminster.

I welcome the £100 million extra for local government and the £6.6 million for arts and culture, and I am pleased to support the budget. I urge all members to vote for it at decision time.

I am pleasantly surprised that Labour members are still here—although I accept that they could walk out at any moment.

I urge members to support the budget.

15:37  

The relatively compressed nature of our budget processes these days puts those of us involved in the situation of having three very similar debates in very short order—at stages 1 and 3 and on the rates resolution. If we count the local government settlement debate, there are four.

The context for this year’s budget is as we have previously discussed. It is by far the most difficult in the history of the Scottish Parliament and the Scottish Government. However, this afternoon’s update from the Deputy First Minister is very welcome and, probably to the relief of journalists assigned to covering the debate, it gives us some fresh points for discussion.

I know that the additional £100 million for local government will be warmly welcomed, particularly if it is used as intended to support pay. However, I would appreciate it if the Government could respond later on to inquiries that I have received from some of my party’s councillors this afternoon. On a practical level, I have been asked when the new local government circular will be circulated, because some councils are setting budgets today, tomorrow and over the course of the coming week.

Councils are under immense pressure at the moment, and I would not pretend that the settlement solves all the challenges that they face. The budget gives councils a significant cash-terms funding increase. However, we are all familiar with the impact of inflation on public sector pay, the spike in energy and food prices, the growing demand for services such as social care services, and the myriad other challenges that local government faces.

The Scottish Government faces the same challenges without the full fiscal and economic powers that are needed to handle them. One long-overdue solution to that problem—although it certainly would not resolve all the challenges in and of itself—is the replacement of the council tax. It is mad that the primary lever of local taxation in Scotland is largely set nationally and that it is based on valuations from before I was born. Most people pay the wrong council tax rate because valuations are so tragically out of date.

Four of the five parties in this Parliament have published proposals for a council tax replacement at various points in recent years. Some of those have been based on income and others on land and property values. By the mid-point of the previous session of Parliament, we were closer than we had ever been before to agreeing on a replacement, before the pandemic derailed that process.

A new process is under way, which is co-chaired by one Green and one SNP minister and by a COSLA representative. I was genuinely pleased to hear Daniel Johnson’s comments at stage 1 that Labour is prepared to re-engage with that question. Agreeing a replacement for the council tax could be one of the key achievements of this session of Parliament.

I am confident that the process that we have established through the Bute house agreement will lead to that replacement being developed and agreed between the parties of Government. However, I know that that would be stronger with the engagement of the Opposition, so I hope that Liberal and Conservative colleagues will join Labour and put forward proposals. I am sure that Mr Arthur and Mr Harvie would welcome the contribution of any new ideas to the discussion.

One other matter from earlier debates that I want to pick up was the point made by Liz Smith about labour market participation, on which I think we can all agree. We have increasing evidence—in particular, the evidence shown in a study by Sheffield Hallam University—that a significant number of people on incapacity benefit in Scotland want to work. I emphasise a distinction. A number of people on incapacity benefit are unable to work and this is not about pushing them into work that they are unable to do. However, there is significant evidence that a number of people are on incapacity benefit because they cannot find a form of work that meets their needs.

For that reason, I welcome the increase in the funding for employability programmes in the budget, in particular, the programmes for parents who are looking to re-enter the workforce. That goes back to Michelle Thomson’s point around the gendered impact of inequality in labour market participation. The Greens have worked hard during the budget process to push for an increase in the parental employability support fund, so I am glad to see that that is included in the budget.

Despite the challenges that are outwith our control, this is the greenest ever budget. Scrapping peak-time rail fares will save travellers hundreds of pounds and end what the Associated Society of Locomotive Engineers and Firemen—ASLEF—has correctly labelled a tax on commuters. Twenty thousand more children will be eligible for free school meals, and £80 million will be invested in expanding school catering facilities, so that eligibility can be expanded to even more children as soon as possible.

There is more than £2 billion to tackle the climate and nature crises. That includes increased funding for nature restoration, our national parks and environmental agencies. In addition, the £25-a-week game-changing Scottish child payment will be fully rolled out.

As the Institute for Fiscal Studies has confirmed, Scotland will have the most progressive tax and social security system anywhere in the UK. Raising the higher rate of income tax and the additional dwelling supplement means that the highest earners, and those buying holiday homes and extra properties, will pay a bit more to fund the public services that are so desperately needed during this cost of living crisis.

Scotland has extremely limited devolved taxation and revenue-raising powers. Although we certainly need more financial powers, it would be wrong simply to make that argument without making best use of the powers that we have.

We might be in a cost of living crisis, but there are plenty of people on high incomes and wealthy people in this country who can afford to pay a bit more. Those on the highest incomes can afford an extra penny on the tax rate that is paid on the top slice of their salary and those in the position where they can buy a second home or holiday home can absolutely afford to pay a bit more on that purchase. I am proud that the budget will see the higher and top rates of income tax and the additional dwelling supplement on land and buildings transaction tax rise.

Between those rate changes and freezing income tax thresholds, more than half a billion pounds extra will be raised to support public services and to deliver vital additional interventions such as free school meals expansion. That builds on the progress that we made in 2018, making income tax and council tax that bit more progressive.

Despite the challenges, the budget delivers for the people and for the planet. It includes a record £2.2 billion to tackle the climate emergency, it delivers more affordable public transport and it provides essential support to children and families—and it does so by having the wealthiest in our society pay a bit more. That is something worth voting for.

15:43  

As members will be aware, this is my foray back to the Parliament as part of my phased return to work. I thank those from all corners of the chamber who contacted me to wish me well. That shows that, underneath the mask of a politician, a real human being often lies—not always, but often.

Although it has been a while since I was last here for a debate, nothing much appears to have changed. We still have Labour and Tories listing off all the things that we should have done, while forgetting that they have not bothered to implement them in the parts of the UK where they are in power. It would be nice while listening to the debate if we could put aside party politics—members might need to disregard the rest of my speech, then—remember who we are and who we are here to represent, and accept that it is essential to agree on the budget if we want to deliver a fairer and more prosperous Scotland.

I am the first to admit that the budget is not what I would like it to be. However, unlike the Labour and Tory parties, I am still unaware of where that money tree is planted. As a reminder to every member in the chamber, I point out that Scotland works within a fixed budget. We must have the money to implement everything that we commit to. If we want to spend more money on schools, we have to find that money from another service. We cannot luxuriate in the fantasy of an uncosted wish list at budget time, and neither should any serious Opposition party.

This has already been touched on by John Mason, my fellow ex-councillor, but I know how hard it is to get a budget through as an opposition leader. When I was leader of Glasgow SNP, I put forward a budget that cost me my finance spokesperson and led to a tonne of misery for some people in my group. Some of it was caused because I had not included their pet project, and some of it was caused because I had not cut enough. However, I still put forward that budget, because we were a serious opposition party with ambitions to take on governance of Glasgow City Council.

It is a shame that neither of the main Opposition parties had the guts to do that. If people listened to some Opposition speeches today, they would forget how essential delivering the budget is to improving the lives of those who are most in need and to the aims of eradicating child poverty, transforming the economy and creating sustainable public services—aims on which the people of Scotland expect us to agree.

Let us not forget that, according to the IMF, under the Tories’ watch, Britain will be the only G7 economy to shrink in 2023, which will make life harder for millions of people. We should remember that today’s proposals will result in social security spending increasing to more than £5.1 billion per year and will continue to provide the most ambitious child poverty reduction measure in the UK: the Scottish child payment. Such measures are making a real difference to those facing hardship and poverty. The Scottish child payment has risen by more than 150 per cent to £25 per week. Benefits will also be uprated by 10.1 per cent in order to support those who are struggling with the cost of living crisis. According to the Office for Budget Responsibility, total spending on social security will be more than £770 million above the funding that will be received for social security through the block grant adjustment.

I have listened to other views on the shortcomings of today’s budget, but if people are serious about tackling the issues, they should support calls for Scotland to have full control over its finances—anything less will simply show those parties to be too beholden to the union to put the needs of the people of Scotland first.

It is important to remember that today’s budget maintains a number of commitments of which we are, rightly, proud, including free higher education and free bus travel. Last week, we heard that patients in England are failing to collect prescriptions—or, heartbreakingly, asking pharmacists which ones they can do without—because they cannot afford prescription charges, which stand at a staggering £9.35 per item. Let us not forget that prescriptions are free in Scotland and that today’s budget continues that policy.

Only the other day, London’s mayor announced that free school meals would be provided for a year, which was described as a “game-changing” plan. I welcome that announcement, but let us not forget that, rather than being game changing, that is the norm in Scotland, and not only for a year.

I realise that my speech is shorter than usual—I have obviously lost my timing, Presiding Officer, so I apologise for that.

It is time for the Parliament, which is under threat like it has never been before, to rally behind the needs of the people of Scotland, demand full control of fiscal powers and support the budget to ensure that the people of Scotland continue to benefit from the decisions that are made in this Parliament. Support the budget, please.

Thank you, Mr Dornan. Welcome back. Clearly, time goes more slowly when you join us online.

15:48  

I, too, welcome James Dornan back to the Parliament. Those of us who serve on the Social Justice and Social Security Committee get to see him every week on the television, but I welcome him back to the Parliament in person.

Over the past few hours, we have heard a new word in politics: “de-endorsement”, which can be applied to many SNP members’ decisions about the party’s leadership. Today, I welcome the acting finance secretary’s de-endorsement of many parts of his budget. I welcome the fact that he has listened to the many concerns that were raised and has changed some spending commitments in the budget.

In recent weeks, I have met councillors across Scotland from all parties and have listened to their concerns. I thank all those who work in local government across our country, because they have gone the extra mile during the pandemic to support all our communities, but they still feel that they have not been given the support that they need to carry on and to recover from the pandemic.

For many in local government, it feels like the challenges and pressures on local services have not passed and are very real today, and that those services have not recovered. After 15 years of the SNP Government underfunding local government in Scotland, there are increasing concerns over long-term financial sustainability and the problems that councils across the country face.

Put simply, for council leaders who I have spoken to across Scotland, there is nothing more that they can cut, beyond core services, to balance their budgets. They will welcome the additional £100 million. Many will start balancing that with the funding floor, which will probably result in the finance secretary giving with one hand and taking away with the other.

Despite that additional money, councils will be setting their budgets in the coming weeks and will still have to make significant cuts to services. In Clackmannanshire, councillors are considering reducing home to school transport and the amount of money that is spent on the delivery of secondary school subjects. In Kenny Gibson’s area of North Ayrshire, the Arran outdoor education centre could be shut to save cash. Beyond education, leisure services will face cuts in many areas. Inverclyde Council is looking to close Greenock sports centre and Port Glasgow swimming pool. In my region, West Lothian Council has suggested cuts for library services, including in West Calder. In West Dunbartonshire, the council is thinking about reducing opening hours for recycling centres.

Many charities are worried about the loss of grant funding from local authorities. That is concerning many people in our third sector, who feel that they could be the last in line to receive vital funding for the services that they deliver. Like most councils, Aberdeen City Council and West Dunbartonshire Council are considering increasing many charges. East Ayrshire Council is now looking at a 4 per cent increase in rent charges for temporary accommodation. In East Renfrewshire, there is already a £40 charge on top of council tax for households who want additional garden waste removed, and that will go up to £60.

The finance secretary talked about a better deal and working with councils and council leaders. We really need to move towards that. In the most recent budget round, councils have looked in many imaginative ways at changing their funding and at how they can reprofile council debt, especially around public-private partnership schemes. I do not see anything else that they can do in future for which they will not need Scottish Government support to balance budgets.

I am grateful to Mr Briggs for his recognition of the substance of my point about the need for a more collaborative arrangement. I made that proposition in the budget statement in December, and I followed it up with dialogue with council leaders. I put on record my and the Government’s willingness to engage in that proposition to ensure that we meet the financial challenges by having a more collaborative approach to addressing the issues.

I welcome that, but we need to formally embed that partnership between the Scottish Government and local authorities.

The Barnett formula ensures that the Scottish Government budget is linked to UK Government spending. The UK Government has bailed out the Deputy First Minister to the tune of £146 million of additional spend, which I believe is now available, but our councils are not necessarily seeing the same uplift in their budgets. We need to seize that vital opportunity and ensure that our councils are properly funded as we ask them to deliver more and more policy commitments. It is not just about one year; it is about how we take forward those policies. The Local Government, Housing and Planning Committee hears again and again that local councils cannot match the proposals with policy delivery, because the resources are not forthcoming.

One key issue that I raised in the stage 1 debate, and that Sarah Boyack touched on, is the housing crisis and the cut to the housing budget. We need to reflect on that. It is not just Labour and Conservative politicians who are warning against that cut—representatives of Shelter were outside the Parliament today to outline their concern. We have record levels of people living in temporary accommodation.

Will the member take an intervention?

If I can get the time back, I will.

First, I point out that the Arran outdoor education centre will be saved.

Secondly, does the member not see that there is a direct correlation between the United Kingdom Government cutting Scotland’s capital allocation by £0.5 billion this year and £185 million next year and a reduced ability, at a time of high inflation, to build more houses?

I take the member’s point that there are a number of competing factors, but I will not apologise for pointing out that we are in a housing crisis and that we have the highest number of children and pregnant women living in temporary accommodation. Here in the capital, we are seeing levels of homelessness that we have never experienced before, and the response from the SNP-Green Government is to cut 16 per cent from the housing budget and to underfund the City of Edinburgh Council and our health board.

On delivering outcomes, ministers really need to consider what they are not doing for Edinburgh. I make no apologies for raising that in Parliament today, because decisions that are taken to cut affordable housing supply programmes at the very time that we are seeing those increases will come back to haunt the Government. I think that, in the autumn, we will see a housing crisis in Scotland and the potential collapse of the housing market here in Edinburgh, and SNP and Green members will be held responsible for that.

It is critical that we now move towards ways in which local authorities can meet the cuts and consider what impact that will have on our communities. We will be hearing about that in the coming days. However, it is clear that this SNP-Green budget is a pay more, get less budget, which is not something that we can endorse. As my colleague Liz Smith says, after 15 years of SNP government, it is clear that ministers have no fresh ideas to help grow the Scottish economy and that, ultimately, Scottish taxpayers are paying the price for that failure to stimulate our economy.

15:55  

Governing—leadership—is about choices: who and what you prioritise, the principles that you stand by and the choices that you make about where to place limited money and resources. I am proud to be in a party that unashamedly and consistently prioritises tackling poverty, climate change and social inequalities.

I led a debate just before recess on Financial Times analysis into the unacceptable level of income inequality in the UK. Instead of the UK Government tackling the massive gap between the richest and poorest, it is ensuring, by design, that the gap gets bigger.

In this budget, we are tackling the cost of living crisis and, in particular, child poverty with targeted benefits that are unique in the UK and a progressive taxation policy that will redistribute wealth. There is £428 million in social security, including uprating of devolved benefits, supplements to reserved benefits and measures such as the Scottish child payment, which is unique in the UK. That money is going directly to those who need it to tackle poverty, particularly child poverty. In terms of supporting the economy, the money is going to people who will spend it, not just store it away.

New benefits and top-ups to UK-wide benefits mean that, by April, the poorest tenth of Scottish households are set to have incomes £580 per year higher than they would have under the system in place in England and Wales. Among the poorest 30 per cent, Scottish reforms are set to raise the incomes of households with children by around £2,000 per year, on average.

It is a good budget for the Highlands and Islands, too. In addition to benefiting from the national policies that I have just outlined, I know that many of my constituents will strongly welcome the news that the Scottish Government intends to take action on funding inter-island ferries. The increased cost of fuel, among other pressures, is really testing the budgets of local authorities in my region, which I am sure will appreciate that support.

I echo Emma Roddick’s praise for the Government for funding inter-island ferries and the uplift that they require. However, does she agree that we are sustaining an ageing ferry fleet and that, particularly in the Shetland isles, it is time that we started talking about funding fixed links—short tunnels—to connect those islands?

Yes, absolutely. I am looking forward to the new islands connectivity plan, which will look at fixed links as well as ferries only.

I hope that the change will reopen the door to ministers considering extending under-22 free bus travel to the inter-island ferries, to put our young islanders, particularly those who live in outer islands, on an even footing with mainlanders.

I also welcome the announcement about Creative Scotland’s funding. I have a very cheery Clare Adamson sitting next to me. I understand the initial decision to expect the organisation to make use of its reserves, rather than continuing to top them up. It is very exciting to think of what its funded organisations will be able to do with the continued extra funding as well as those reserves. My region is incredibly rich in arts and culture, and I look forward to seeing what Eden Court and creatives across the Highlands and Islands will do with the financial and confidence boost that the Deputy First Minister has given them today.

However, I know that the Scottish Government would like to go further, and that it is unable to because of the constraints of devolution. Perhaps mitigating, successfully, so many of the worst UK policies, over and over, has given people an inaccurate sense of how possible and easy it is to do that alongside governing to the best of our ability on devolved matters.

So much of our limited budget is going towards protecting people from another Government’s welfare cuts. That is unsustainable and just plain wrong. We need the powers here to tackle the problem at source and I am disappointed, although not surprised, to hear Opposition members call for more public spending with no suggestion of what to cut and no support for calls for greater fiscal flexibility.

To me, £20 million for a referendum would have been incredible value for money. Indeed, it is less than the correction of the error that the Deputy First Minister informed us about earlier. I have said this before, but it is incredible when you think about it, so I will repeat it: we expect to spend £770 million this year on mitigating UK Government decisions such as the bedroom tax. That is 38 referendums but, as the UK Government has refused against democratic sense to allow us to ask the people of Scotland whether they have changed their minds, I can think of no better use for that money than to extend the fuel insecurity fund. That fund is vital for the Highlands and Islands, where people are being left to suffer fuel poverty as a direct result of Whitehall’s failure to regulate the energy market and address unfairness in the system, such as that which means that my constituents face higher standing charges than people elsewhere in the UK.

We also know now more than ever that volatility in the market and interest rates is not the only challenge that we face. We heard in the Deputy First Minister’s opening speech that an error in the spending review meant that we are working to different figures than we were the last time that we discussed the budget. Last year, I and every other SNP MSP were asked on multiple occasions to welcome increases to the budget and then, later, comment on the fact that those increases were no longer happening.

I do not envy the Deputy First Minister his role in trying to deal with the ever-changing promises on the size of our budget and I hope that the people of Scotland will see how ridiculous it is that we cannot overspend, borrow or react to events during a fiscal year but are expected to deal with someone else doing those things and the impact that it has on our spending decisions.

The Scottish Government, in setting the budget, has also set an intention of the kind of country we want to be: fairer, greener and stronger. I hope that, very soon, we will not just have to imagine what we could do if we had power over energy policy, immigration, income-based benefits and the economy.

16:02  

Once again, we come to the chamber to discuss a budget that Labour members know is failing our communities and that, I am afraid to say, illustrates an inability or unwillingness to protect the people who need it the most. It is a budget that the SNP-Green Government has engineered against a backdrop of hundreds of thousands of Scots struggling to put food on the table, parents going hungry so that their children do not have to and households turning their heating off so that they can afford to eat and, in some cases, being unable to afford to do either.

We face the worst cost of living crisis in memory. Prices are rising but wages are not, businesses are closing because running costs are so high, people are losing their jobs and money advisers are going home with the same worries that they have been advising clients on. The budget should have defended the Scottish people against deepening inequality and tackled the scourge of poverty that exists. It should be reducing pressure on families, making work pay and empowering local councils to take decisions that protect their communities. Instead, the SNP-Green budget does none of that.

The Government has brought before us a budget that is not serious about addressing inequality. We all know the saying, “Don’t tell me what you value. Show me your budget and I’ll tell you what you value.” By that measure, looking across the budget, in which equalities scarcely feature, it is clear what the Government does not value.

A budget that was serious about inequality would have addressed women’s poverty by valuing women’s work, ending the scandal of poverty pay in the female-dominated social care sector and boosting social care wages to £12 an hour immediately. That is what Scottish Labour would have done because we value our social care workers and know that they deserve more than a measly lower-than-inflation pay rise that translates to just 40p in real terms.

We also know that unpaid carers deserve more. A Government that is serious about tackling women’s inequality should be prioritising reducing the number of unpaid carers who live in poverty, which is currently 44 per cent. Instead, the budget is bereft of measures to reduce that number. It fails to double the carers allowance supplement despite the Government’s own commitment, cuts local authority budgets, threatens respite services and fails to target any cost of living support, all while the Government continues to leave carers allowance in the hands of the Department for Work and Pensions rather than using the powers of devolution to make a difference to unpaid carers’ and women’s lives.

This is a budget that has nothing to offer disabled people, either. There is no targeted support for them to defend themselves against the rising cost of living, and there is a failure to use the roll-out of the new adult disability payment to ensure that social security payments reflect the additional costs that disabled people face or to ensure that people with fluctuating conditions such as multiple sclerosis do not miss out on the money that they deserve because of unfair measures that are still in place, such as the 20m and 50 per cent rules.

A Government that was serious about tackling inequality would not present spending plans that did not even acknowledge Scotland’s personal debt crisis. Things are so bad that people are no longer just borrowing for luxuries; they now have no option but to borrow to cover essentials. The situation is dire. Debt causes financial instability, homelessness and mental health issues. It leaves people stressed, drained and overwhelmed. It is not morally or economically sensible for the state to aggressively pursue public debt, which a lot of the debt is, or to cost itself money as a result of the way in which it does that, especially when we know that most of that debt is never recovered. There is not a single measure in the budget to address that. We should help people to get out of and stay out of debt, and we should not make things worse. Public debt enforcement should never push people into hardship.

The need for money and debt advice has never been more important, but the sector is currently oversubscribed and underresourced. Waiting lists are growing and lifeline services are threatened. The budget shows that the SNP Government is willing to let those life lines go to the wall and for inequality to deepen as a result.

It is not just money and debt advice that the Government is starving of cash. Cuts to public bodies, local government and the third sector will all exacerbate poverty and inequality. In Glasgow, I have been campaigning on making our cities safer for women. A cornerstone in that is ensuring that reliable, affordable and safe transport options are available, but failing to properly support bus travel means that organisations such as Strathclyde Partnership for Transport are having to find millions of pounds to plug gaps. Organisations have already warned that they cannot keep doing that, and, without further support from the Government, they will not be able to prevent service cuts. It is women who will suffer.

Councillors across the country are being forced to make heart-breaking decisions about which vital services to cut. For example, in Glasgow, the removal of funding for the Food Train has left pensioners across the city fearful, because they do not know how they will access food; the numbers of education staff and educational psychologists are being cut, threatening not just jobs but our children’s education; community groups such as Partick Thistle Charitable Trust are scrambling to replace funding to keep their programmes running; childcare charges are increasing for already struggling families; libraries and sports facilities are reducing opening hours or simply not reopening their doors; and previously public-funded museums that provided free entry are now introducing entry fees.

Will Pam Duncan-Glancy give way?

Can I get my time back, Deputy Presiding Officer?

Yes, you can.

Thank you. I will take the intervention.

Like me, Pam Duncan-Glancy represents a city that has experienced some of the highest increases in homelessness in recent months. What impact will the budget have on that?

I am terrified about the impact of the budget on homelessness. We have seen what happens when cuts to local authorities mean that they cannot meet homelessness targets or put people in homes. The number of people in temporary accommodation in Glasgow is growing, so I am terrified about what the budget means for homeless people across the city of Glasgow and other cities in Scotland.

The budget that is before us today does not just fail to address inequality at central Government level or tie the hands of councillors to act in local authorities; it will slowly erode the last line of defence that people have against inequality.

Last year, more than £1 million was cut from the third sector’s budget. This year, the Scottish Government is upping its demands on the sector but is not increasing its resources accordingly. The SNP is waxing lyrical on fair pay but handing responsibility to the third sector without providing the money, leaving the sector to pick up the bill. The sector stepped up during the pandemic, and it is doing so again. A budget that does not recognise that threatens lifeline services and damages the ability of the sector to provide a safety net.

It is crystal clear that this budget is not serious about addressing inequality, and none of this is helped by the fact that the Government does not have the necessary data to assess the impact that budget decisions have. That means that neither Audit Scotland nor equalities organisations can tell us where spending is helping priority groups. A witness from the equality and human rights budget advisory group at a meeting of the Equalities, Human Rights and Civil Justice Committee said that it is difficult to “follow the money” through the budget. She said that allocations are repeated, the origin of budget line spending is unclear and the narrative does not align with the tables that it talks about, which all make it harder to assess whether spending has gone up or down. It feels as though the Government cannot possibly know whether its spending is making a difference to inequality. The witness said that even navigating the budget was like an “art form”.

This budget provides a legacy of entrenched inequality, with minority groups scrapping for crumbs and getting bills instead. It is a legacy that the First Minister will leave behind, and I suspect that it is one that her successor will vote for.

Enough is enough. Delivering the change that Scotland needs starts with getting serious about tackling poverty and inequality, and it is clear that neither the SNP nor, I am afraid, the Greens have made that a priority.

16:09  

As we are all fully aware, this has been a challenging budget to prepare in a time of extreme economic pressure. Although very difficult decisions have had to be made, I am pleased to support the budget. I welcome the additional £100 million for local authorities and, alongside many of my constituents who support the Gaiety theatre in Ayr, I welcome the announcement of the £6.6 million investment in culture through Creative Scotland.

If it was not for the restraints of devolution, we could have gone much further. It is disappointing, although expected, that the UK Government’s autumn statement failed to address the pressures on devolved budgets to help people with the cost of living crisis, support public services and finance fair pay offers.

To add to the challenge of pandemic recovery, we find ourselves in the most turbulent economic and political times that most of us can remember. While Putin continues his barbaric attack on Ukraine, energy prices continue to soar, crippling households and businesses, and inflation continues to rise, adding to everyday household bills. There are workforce shortages in every sector as a result of Brexit, and there is the infamous mismanagement of public finances by the UK Conservative Government.

This Scottish Government continues to do all that it can with the powers that it has to deliver for the people of Scotland. Because we are in such volatile times, it is critical that the budget can tackle poverty, protect our NHS and make us a fairer and greener society. I will highlight some of the key ways in which the budget addresses the problems that we are facing after the crises of Brexit and the pandemic.

I begin with our young people. We know that the pandemic has hit some of our children hard. Their lives were completely changed by lockdowns and restrictions and it is imperative that we address the challenges that they face. With the limited powers that it has, the Scottish Government is doing more than any other UK Administration to tackle child poverty. It is estimated that the expansion of the Scottish child payment to under-16s will take 50,000 children out of poverty. After the increase in that groundbreaking payment to £25 per child, the budget invests £428 million to uprate all other devolved benefits in 2023 in line with September’s CPI rate of 10.1 per cent.

The budget also provides additional support for our education system by ensuring the expansion of free school meals to pupils in primary 6 and 7 who are in receipt of the Scottish child payment. Living in poverty impacts negatively on children’s educational outcomes and subjects families to increased stress, but free meals in our schools promote wellbeing and equity. Food is a key part of the day and can make a big difference. According to the Child Poverty Action Group, 16 per cent of schoolchildren in Scotland who are growing up in poverty are not currently eligible for free school meals. The roll-out to pupils in P6 and P7 will further reduce that percentage. We should note that 31 per cent of schoolchildren currently living in poverty in England are not eligible for free school meals. That stark difference in political decisions really makes a difference.

The budget will also deliver for our young people by ensuring that their parents and guardians are supported through the cost of living crisis. I am sure that all members will be able to relate to the emails that my office has received from constituents who are worried about turning on their heating over the winter and who have to make the heartbreaking choice between heating and eating. That is the reality, but it should not be happening in a developed country in 2023. All that is happening as energy companies announce record profits, which I find absolutely obscene. The use of food banks across the UK continues to grow. The UK Conservative Government has failed to take decisive action to deliver for households who are really struggling to get by.

The Scottish Government, on the other hand, is the voice of hard-working people whose monthly income has been eaten away by rising bills, causing many families real hardship. The budget commits £20 million to extend the fuel insecurity fund, providing a lifeline to the most vulnerable households to protect them from rising energy prices. We are choosing to take a different path from that of the austerity-obsessed Tories, using a fair tax system that sees the majority of Scots paying less than they would if they lived elsewhere in the UK and invests in our public services.

We all know that those public services are under considerable strain. One of the biggest problems is the damage that Brexit has caused to the labour market. Many of our vital services just do not have the staff numbers that they need. As has been said, with powers over our immigration—

Will the member take an intervention?

I will.

Will the member acknowledge that there are now more European Union citizens living in Scotland than there were before 2016—at any point? There is a record level of EU citizens living in Scotland. Will she acknowledge that?

Sorry—I cannot acknowledge that because I do not recognise that figure. However, I see independent countries with immigration policies, such as Australia, Canada and New Zealand, that are trying to get our doctors and nurses to move over there. We do not have the powers to do it in Scotland at the moment, so my answer to the member is no.

Our NHS saw us through Covid and we now have the duty to protect it for future generations and ensure that the quality of people’s healthcare is not dependent on their income. The budget delivers more than £13.7 billion for our NHS boards, as well as £2 billion to establish and improve primary healthcare services in our communities. Overall, the budget provides record funding of more than £19 billion to the health and social care portfolio.

Can I get the time back for the intervention, Deputy Presiding Officer?

You can get some time back.

Thank you.

The policies that are announced in the budget add to several benefits that people in other parts of the UK have been unable to take advantage of under the Conservative and Labour Governments, including free prescriptions, free higher education and free bus travel for under-22s. I long for the day when we will have the powers to go further. I ask members to please support the budget at decision time. Thank you.

16:16  

I assure Siobhian Brown that what I shared in my intervention is factual. As it is true for the whole of the United Kingdom, it is true of Scotland.

I note that, in her speech, Siobhian Brown used an important word that has not, I think, appeared in any previous speech in this debate, which is “Ukraine”. In this week of all weeks, it is fundamental that we unite to acknowledge the impact that Vladimir Putin’s aggression in Ukraine is having on—obviously, in the first instance—the people of Ukraine, but also on the entirety of Europe and the entirety of the world economy, which is impacted by what is happening in Ukraine in terms of energy and food security. That is the backdrop to this budget and to the UK’s budget as well.

Having said that, I agree with something that I heard earlier, which is that budgets show political priorities. This budget, whatever else it does, shows that the SNP’s political priority is not education and skills. It is not about our young people. If we take higher education as an example, this budget represents a real-terms funding cut of 0.7 per cent for our universities, and it includes a 2.7 per cent cut in capital investment. We are in real danger of Scotland’s universities falling further behind those in the rest of the United Kingdom and being more dependent on revenue from international students’ fees in an increasingly volatile global market.

There has been an 84 per cent increase in the number of Scottish students being refused entry to Scottish universities since 2006. That cannot be right. Educating young Scots is not the priority for this Government, but it ought to be.

I wonder whether Mr Kerr would care to complete the picture by recognising that there is a record number of young people from Scotland going to university, and a record number of young people from deprived backgrounds going to university as well.

I welcome the fact that we are catching up with the rest of the United Kingdom in relation to access to university for people who come from disadvantaged and difficult backgrounds.

The reality is that, in tertiary education, the lack of parity under the SNP between universities and colleges is writ large, given the differential payments for students. Colleges will be forced to make redundancies of 25 per cent this year.

The member will know well, and he will, I am sure, wish to confirm to Parliament, that we have both raised the issue of the disparity in funding between colleges and universities at the Education, Children and Young People Committee. We know that the Scottish Funding Council is doing due diligence work to bring forward real-life data to address, we hope, that funding gap. Does he support that?

I can support the fact that we need to remove the disparity of esteem that exists in relation to the choices that young people face. The road to universities should no longer be paved with gold when the other pathways that are available to young people do not have the same degree of commitment and support. I repeat: colleges will be forced to make redundancies, and SNP and Green members should be ashamed. Members will well know that universities receive £7,500 per student, whereas college students attract only £5,000. Those are the numbers behind the situation—such is the disparity of esteem.

On apprenticeships, the Scottish Training Federation has pointed out repeatedly that the Scottish Government has frozen places. Perhaps someone on the Government benches would like to tell me that it is wrong.

I am happy to. I do not have the figures in front of me, but the latest set of figures shows an increase in the number of starts in quarter 3 compared with quarter 2. Mr Kerr says that there is a freeze, but it seems that apprentices are still being recruited this year.

The Scottish Training Federation is now being accused by the minister of not knowing what it is talking about. It says that there is a freeze and that training organisations will be forced out of business completely. This SNP—[Interruption.] The Deputy First Minister has lost the head. He has lost the head.

Please resume your seat, Mr Kerr. Could I have less sedentary hurling of abuse, as I think the previous Presiding Officer in the chair described it? Mr Kerr, please resume.

Thank you, Deputy Presiding Officer.

The SNP clearly does not see further, higher or technical education as a priority. It ought to be.

Governments commit resources based on their priorities.

Will the member give way?

I will give way, although I am conscious of the fact that I might be running out of time.

A wee bit extra time will be given back.

Some important points have been made about the future of apprenticeships. I know that the minister has paid a lot of attention to the cross-party group on construction, but in the week before recess, serious concerns were raised about the future of plumbers, electricians, decorators and other trades. Concerns were raised that apprentices might not get jobs after their apprenticeships end. Those are important points. Perhaps the minister, who is listening, would engage with the group urgently, because there are genuine concerns out there.

I am glad to facilitate Monica Lennon’s plea to the minister. By the way, I endorse what she said. Combined with the cuts for colleges and the cuts for Skills Development Scotland, that is not the direction that this country should be travelling in, given the economic backdrop that we are dealing with. Whatever John Swinney says—usually at length and at the top of his voice, as members witnessed earlier, especially when he speaks to me—this SNP Government does not prioritise the future of our young people. It does not put its money where its mouth is.

It looks like it will be no fun growing up in SNP Scotland over the next few years, because we know that there is a real shortfall in council spending and that young people will bear the brunt of the cuts in their communities. If anyone on the Government benches is going to stand up and tell me that this local government settlement is good and generous and will help to make our children’s communities the best places for them to grow up in, I would be delighted to hear from them.

The Deputy First Minister, on cue, stands.

I am very grateful for the opportunity to say to Mr Kerr and the chamber that a local government settlement that gives local government £793 million more than it was expecting is undoubtedly a very good deal for it given the financial chaos inflicted on us by the Conservative Government.

Oh dear—it is the same old broken record.

Where are the additional 3,500 teachers that were promised in the SNP manifesto? There are actually fewer teachers this year than there were last year. Where are the additional 3,500? Even with the threats of sanctions looming over councils, the fact is that the actual number of teachers is falling and, as we read yesterday, the University of Stirling says that the narrowing of subject choices has impacted negatively on the life chances of our young people.

Councils have been forced to make other cuts because of the threats that have been issued by Shirley-Anne Somerville. If the chair will indulge me for one moment longer, I will say what the impact of that is. Falkirk Council’s SNP administration has proposed cuts to school transport that will affect 600 children, who will have to walk on busy roads for miles and miles without transport. That is the same SNP administration that is closing four swimming pools.

Meanwhile, councils of all political persuasions and sizes are looking at a host of savings and cuts that will impact on young people.

Mr Kerr, I ask you to conclude, please.

I will conclude.

I have been pretty generous.

I appreciate that.

There are cuts to youth services, summer play opportunities and swimming lessons. There are cheaper ways of making school meals. There are cuts to social interventions. Thanks to the SNP cuts to local authorities, Scotland will become a land of rusting play equipment, closed community centres and cancelled futures. That is not good enough.

Emma Harper will be the last speaker in the open debate.

16:25  

To govern is to choose, and the Scottish Government has made its choice. Emma Roddick stated that very well. Eradicating child poverty, transforming the economy in order to deliver net zero and creating sustainable public services are the key aims of the Scottish budget this year. Families, businesses and our public finances are under sustained economic pressure, and the Scottish Government has acted decisively to provide what support it can within the resources that are allocated to us.

Steps that the Government takes now will help to ensure that Scotland emerges from the current crisis a stronger, fairer, greener and more equal country. I welcome James Dornan’s description of that in his speech, and I welcome his return to the chamber.

Of course, the Scottish Government would like to go even further, but the cost of living crisis has laid bare the fiscal constraints of devolution and the need for Scotland to take its place as a normal independent nation.

Using the current fiscal powers and right through the budget, the Scottish Government is, more than any other UK Administration, acting to tackle poverty. Scotland is the only part of the UK to have introduced a child payment: the Scottish child payment has now been increased to £25, which is a 150 per cent increase in eight months. The budget extends the payment to all under-16s, which will, it is estimated, lift 50,000 children in Scotland out of poverty. The Joseph Rowntree Foundation said that

“The full rollout of the Scottish Child Payment is a watershed moment for tackling poverty in Scotland, and the rest of the UK should take notice.”

Indeed, a recent report from the Child Poverty Action Group shows that the cost of bringing up a child in Scotland has been significantly reduced, thanks to Scottish Government interventions including the Scottish child payment, free school meals, best start grant payments and free bus travel.

However, that progress is being undermined by the actions of the UK Government. The same report states that

“Scottish policies are immensely important in reducing the level of financial strain and hardship on families ... but they are fighting a rear-guard action”.

They are fighting a rearguard action, Presiding Officer.

Difficult decisions are required, and the budget ensures that resources are targeted at where they are most needed and can secure maximum value for every pound that is spent. However, the choices that are faced are all the starker because of the UK Government. Economic projections show the staggering cost of continued Westminster control. As the Deputy First Minister has rightly mentioned, the International Monetary Fund recently predicted that the UK will be the only major economy to shrink in 2023. That is a devastating indictment of the UK Government’s management of the economy, and will only exacerbate further the significant challenges that are faced by the Scottish Government.

The UK Government’s disastrous approach to Brexit has damaged the labour supply through the loss of the free movement of people and has undermined frictionless trade with our nearest markets.

At no stage since the reconvening of the Scottish Parliament in 1999 have the conditions been more volatile and the dangers more severe. In autumn, the Scottish Government had to make unprecedented reductions—totalling £1.2 billion—to its spending plans, midway through the current financial year. The Scottish Government had to do that because, in the absence of borrowing powers to address in-year volatility, and in the absence of the ability to alter income tax, once a financial year commences the Government operates within a fixed total budget, unless the UK Government allocates additional money to Scotland.

In addition, for the first time since the SNP Government took power, the finance secretary has announced a budget for the next financial year that assumes that the Scottish Government will not carry forward any fiscal resources from this year to next. For comparison, I note that the Scottish budget for this year was underpinned by £450 million of resources that were carried over from the previous year. The absence of such a carry-over increases the financial challenges that the Government faces.

On the national care service, I am not sure where Douglas Lumsden was sitting in the committee room when we took evidence at the Health, Social Care and Sport Committee from the many people who support a national care service—especially the people with lived experience who want their care to be more joined up and more about what they choose. I wonder whether he wants to ignore and disregard the voices of lived experience when we take evidence at committee.

It is not so much about people with care experience. Obviously, changes are needed, but at this point the Government cannot even tell us what the service is and how much it is going to cost. We have had a financial memorandum; it came to the Finance and Public Administration Committee, but it was completely inadequate and had to be thrown out. We are calling for clarity on what the national care service is actually going to be.

Am I hearing that Douglas Lumsden is actually now in favour of a national care service? The framework bill is in progress; we have not even had our first report from the Health, Social Care and Sport Committee. Perhaps members should be a wee bit more patient and get on board, including with the lived experience of folk who say that we should take forward the national care service. Maybe the member should look at the evidence, instead of believing what he reads in the papers.

I have one final point to make, on local authority funding. Councils and their employees play a crucial role in our communities across Scotland and deserve the fairest possible settlement. Within the most challenging budget settlement since devolution, the Scottish Government is providing nearly £13.5 billion in the local government settlement this year.

From my notes on what the Deputy First Minister said earlier, I remind members that the additional funding for 2023-24 is on top of the £570 million increase in funding that has already been included in the local government settlement, and that the total additional funding for local government for next year is £793 million.

I am conscious of the time, Presiding Officer. In conclusion, I say that I support the budget. I will vote for it at decision time and I encourage my colleagues on all sides of the chamber to support it, too.

We move to closing speeches. I call Jackie Baillie to wind up for Scottish Labour.

16:31  

I start on a note of consensus and welcome the additional money for Creative Scotland and for teachers’ pay.

The budget will shape the next SNP leader’s priorities in Government. Nicola Sturgeon’s replacement has a choice to make: vote against the budget or continue her legacy of cutting local government, slashing public services and continuing the crisis in health and social care.

Perhaps that is wishful thinking on my part; after all, many of the candidates have, for years now, been sat around the Cabinet table, agreeing to successive cuts to local government. Kate Forbes has been the Cabinet Secretary for Finance and the Economy for three years. On her watch, council budgets have been hit year after year. She had an opportunity to transform the wages of social care workers, but she failed to do so.

Humza Yousaf, as Cabinet Secretary for Health and Social Care, should have spoken up for social care staff and services years ago, but instead he voted for the budgets that have crippled them, and looks set to do the same again today. Ash Regan has voted for every single council-cutting budget since she was elected in 2016. I am not sure whether she is the one who gets the credit for securing the U-turn on funding for Creative Scotland or it is down to the efforts of the Scottish Trades Union Congress and the creative sector itself.

Let us move on, however. With the announcement today, the Deputy First Minister claims to be passing on a £700 million increase to councils. According to the Institute for Fiscal Studies, however, when ring fencing is removed, it amounts to no more than £71 million. That is equivalent to a £304 million real-terms cut. I see that the Deputy First Minister is shaking his head, but disagreeing with the IFS is not a clever thing to do.

I have to highlight the cheek of Humza Yousaf in coming to West Dunbartonshire to launch his campaign when SNP cuts are forcing the council to cut £21 million from essential services. More than 7,000 jobs across Scotland are under threat because of those cuts. Councils are considering selling off buildings, outsourcing services to make savings or even cutting back on children’s services. Whomever is lucky enough to take over from Nicola Sturgeon will have to answer to striking teachers and poorly paid social care workers, and to their own SNP councillors, who have been forced to break ranks and speak out against the damage that is being done because they know that this budget is bad for Scotland.

We cannot begin to tackle the problems that Scotland faces without addressing the crisis in social care. The lack of ambition for social care that the budget displays compounds the catastrophe that is engulfing the NHS, and will serve to weaken social care further. The NHS crisis will not be solved if patients cannot be discharged quickly and safely when their stay in hospital comes to an end.

Neither will the crisis be solved if we fail to invest in primary care—in the GPs and health professionals who serve our communities. There are too few GPs to cope with demand. The British Medical Association estimates that we are 1,000 GPs short, so people inevitably end up at accident and emergency departments because they cannot be seen at their local surgery. The bottleneck at the back door of our hospitals because of the lack of beds is causing long waits at A and E and lengthy ambulance waiting times. That bottleneck is entirely because of the crisis in social care. Staff vacancies are increasing exponentially as people leave in droves to take jobs in hospitality and retail. The safety of the people who are receiving care is being compromised as a result.

The Scottish Women’s Budget Group and the Coalition of Care and Support Providers in Scotland have been absolutely clear that the Scottish Government must pay social care staff more than the insulting 40p per hour rise that they have been given. Just yesterday, a supermarket announced that it would pay its staff a minimum of £11 per hour, but the SNP cannot even manage to match that for social care staff. That is truly shameful. It is no wonder that staff are demoralised and exhausted.

Labour’s proposals for paying a rate of £12 per hour immediately while continuing the fight for £15 per hour have been costed and are affordable. That would make a huge difference to sustaining care in our communities. Instead of paying staff a fair wage, the SNP continues to plough ahead with the deeply flawed National Care Service (Scotland) Bill, which lacks vision and will not actually make a difference to care. Pausing the establishment of a national care service and funding urgent priorities such as staffing, ending non-residential care charges and increasing respite provision would make a real difference to care providers, staff, carers and the people who are cared for.

There are still unanswered questions about how much the national care service would cost in VAT. Just imagine paying 20 per cent to the Treasury and not spending it on care. What about the pensions of the 70,000 public sector workers who will be transferred from local government to an organisation that they know so little about? There has been no answer from the SNP. It is not unreasonable for workers to ask who will pay their pensions and how they will do so. However, the Government seems to think that those people do not deserve answers about such important detail.

Where is the budget to deliver the fair work nation or the 2019 commitment to fair work in social care? Where is the budget that will deliver on promises that were made to the trade unions about collective bargaining and fair pay? It is not this budget, and it will not be the next one. As with so much that we have come to see from this SNP Government, it has promised lots but delivered little.

Even Nicola Sturgeon herself has admitted that local government is struggling with the financial constraints that the SNP is handing to it. Its share of the cuts is worse than anything that the SNP itself has experienced. Scottish people are being asked to pay more, but they are getting worse services. They are being asked to foot the bill for 15 years of SNP neglect of their local communities. This SNP Government is turning its face away from social care and from the crisis in the NHS in the hope that sticking-plaster approaches will work. It is also turning its face away from people who are struggling with the cost of living crisis.

Presiding Officer, the SNP Government is out of ideas, out of vision and out of time. The country is crying out for change, and Labour will deliver the change that Scotland needs.

I call Murdo Fraser to wind up on behalf of the Scottish Conservatives. You have around eight minutes, Mr Fraser.

16:39  

Jackie Baillie was doing so well until she got to the final line of her speech.

The annual budget debate is a highlight of the parliamentary calendar. Normally, it is when we get to hear all the parties’ big hitters deliver their great lines. In that respect, it is very disappointing that, as far as I have seen, none of the candidates for SNP leader—and First Minister of Scotland—has even appeared in the chamber, let alone contributed to the debate. We would have enjoyed hearing speeches from them all, setting out their vision for Scotland.

Never mind. We heard a barnstorming speech from my good friend Kenneth Gibson, who never disappoints the Parliament with his colour and energy. I say to Mr Gibson that it is not too late—he has until Friday to attract the necessary nominations. We would welcome him putting his hat in the ring.

There is something of a tradition around the budget process, which dates back to Derek Mackay’s time as finance secretary. At stage 1, the finance secretary comes to the chamber and says, “Every single penny has been allocated and not another penny can be found. If Opposition parties want to spend more money, they need to tell us exactly where in the budget they would take it from.” As Opposition parties, we say, “What are you hiding?”, and we are told, “There’s not a penny to be found.” Despite that, every single year, we get to stage 3 and—miraculously—more money appears. Members will remember the running joke about Derek Mackay’s well-stuffed sofa.

Mr Swinney has not disappointed us this year. He has come up with an extra £125 million in Barnett consequentials, thanks to the UK Government. He says that he has found that money to provide more money for teachers. We are still not clear what that means. Does that mean that a new offer is to be made to the teaching unions, or is it just money to back up the offer that was made last week, which has already been rejected by the EIS? It would be helpful if Mr Swinney could clarify that point when he responds to the debate.

The overall picture in relation to the budget is that we have a record block grant from Westminster in the current financial year. Despite the increase in inflation, the Fraser of Allander Institute has said that the budget for the coming year is more or less protected against inflation—that was before the extra money was found. We also have a Barnett formula that delivers more than £2,000 per head of population of additional spending here in Scotland compared with the UK average. That is extra money coming to Scotland, thanks to the union dividend. We should never forget that.

As many members have made clear, a budget is about choices. At stage 1, we set out our alternative approach; we would do things differently. The planned national care service, which it is estimated will cost £1.3 billion over the next five years, is something that we would scrap. I do not know where Emma Harper has been, but four committees of the Parliament have produced reports slamming the plan for a national care service and pointing out its weaknesses. Now, even a candidate to be First Minister—Ash Regan—is calling for a rethink. We have a growing consensus that includes all the Opposition parties and even a candidate for First Minister saying that the plan for a national care service does not add up. It is time for the plan to end so as to free up resources for elsewhere, such as local government.

There is a more fundamental point to be made about the size of the budget. Fiscal devolution means that the amount of money that the Scottish Government has to spend is directly tied to the performance of the Scottish tax base relative to that of the rest of the UK. We know that, since 2014, on average, the Scottish economy has grown at half the rate of that of the UK as a whole—I made that point to Mr Mason earlier. If we had at least matched UK growth, we would have had hundreds of millions of pounds more to spend on public services than we currently do. Tackling economic underperformance must be a priority for the Scottish Government.

I was very pleased to see another candidate for First Minister of Scotland—the current finance secretary, Kate Forbes—saying in the newspapers at the weekend that she is to put a

“rescue plan for the Scottish economy”

at the heart of her leadership campaign. The current finance secretary is saying that we need a rescue plan to save the economy from her own Government, which has been in power for the past 16 years—you could not make it up.

Despite today’s announcement on more money for teachers’ pay—on which we still need clarification—local government core funding is being cut in real terms. Several members from across the chamber told us what the real-terms impact of that will be as councils set their budgets in the coming days and weeks.

Sarah Boyack talked about the impact on the community that she represents. Miles Briggs talked about cuts to home to school transport and outdoor education. Stephen Kerr talked about the possibility of four swimming pools in Falkirk closing. Others talked about cuts to recycling centre hours. Pam Duncan-Glancy talked about cuts to the third sector in Glasgow and increasing charges. That message is coming from every council in Scotland. Even SNP council leaders are revolting at the prospect of what the Government will do to them in cutting their spending.

The stand-in finance secretary talked about the child payment. As Liz Smith said, we welcomed the child payment, but we have to look at what else the budget will deliver for those who are disadvantaged. If at the same time as there is a child payment, councils are cutting breakfast clubs for disadvantaged children, cutting free swimming lessons for young people, as a result of which they will be unable to learn to swim, closing libraries and closing arts programmes, that is no way to help the disadvantaged. In this budget, the Government is giving with one hand and taking away with the other.

Mr Swinney mentioned the social contract. He mentioned the fact that there are services that are available for free in Scotland that are not available elsewhere in the UK. That is true in so far as it goes, but the problem is that those free services are rationed. NHS dentistry is free in Scotland, but it is impossible to find an NHS dentist who will give you an appointment. I had a letter this morning from a constituent in Kirkcaldy making exactly that point to me and blaming it on Humza Yousaf—yet another candidate to be First Minister.

Higher education is free, but thanks to the SNP cap on numbers, many talented youngsters, as Liz Smith and Stephen Kerr said, simply cannot get a place at university. We have free parking at hospitals, but it is often impossible to get a space. We have free bus travel for young people, but bus services are being cut across the country, so there are no buses for them to travel on. That is not a record to be proud of.

This budget does nothing for the economy, is not the rescue plan that the finance secretary has called for and does not deliver the 75 per cent cut in rates for retail, hospitality and leisure businesses that applies south of the border—the same businesses that are reacting in horror to the introduction of the ruinous deposit return scheme, which is yet another calamity from the Government.

The budget delivers higher taxes and savage cuts to council funding. As councils meet in the next few days and weeks to slash services, close libraries, close swimming pools, cut leisure centres, cut breakfast clubs and cut funding to the third sector, it is clear that Mr Swinney and his Government have to take responsibility for all those cuts, which is why we cannot support the budget and will vote against it at decision time.

I call Deputy First Minister John Swinney to wind up on behalf of the Scottish Government. If you could take us to decision time, please, that would be great.

16:47  

I begin by recognising Miles Briggs’s opening remarks, in which he generously welcomed James Dornan to the chamber. I associate myself very much with that welcoming back of James Dornan to the chamber. Miles Briggs did so in the spirit of generosity that is necessary and appropriate in a Parliament, and frankly, we need a bit more of that in this Parliament. I commend Miles Briggs for that welcome, and add my words of welcome to James Dornan. It is lovely to see him back in the parliamentary chamber.

There are a few points of detail, if I can put it as mildly as that, that I would like to correct in the statements that have been made by colleagues. Douglas Lumsden mustered up the motivation to say that he would have to vote against the budget because of the cut that has been made to the men’s shed movement. I assure Parliament that the men’s shed movement has been offered the same amount of funding in the next financial year that it was given in this financial year, so there is no cut there. Mr Lumsden has just lost one of his reasons for voting against the budget.

The second reason that Mr Lumsden gave was about the condition of school buildings. When the Government came to office in 2007, 63 per cent of pupils in Scotland were being taught in good or satisfactory buildings. That is from the school estate survey. I remember the former Presiding Officer lecturing me in 2007 when he was a Labour spokesperson that “not a brick”—those were his words—would be built by the SNP under our school building programme. Now, more than 90 per cent of school pupils are being educated in good or satisfactory school buildings. That removes another excuse from Douglas Lumsden about his ability to support the budget at decision time.

A number of members have commented on the situation in relation to funding for culture and the arts. In particular, I refer to Sarah Boyack, who tried to intervene on me on that point in the stage 1 debate—I was unable to take her intervention. The difficulty that arts and cultural organisations face is a perfect storm. There are challenges in the public finances, in lottery income and in relation to the purchasing of tickets and financial support to cultural organisations because of the cost of living crisis. Those are all coming together.

I have to be candid with Parliament: the Government cannot solve all those challenges. That is why I have intervened to the extent that I have today. No cut has been made to arts and cultural organisations in the Government’s budget. We have asked Creative Scotland to use its reserves to provide stability, but we have put in new money to ensure that those reserves can be used to enhance provision and provide some respite in the perfect storm that the arts and cultural organisations are experiencing. The Government will continue to act in that fashion wherever we can.

There are other things that the Scottish Government could do—if we had the time to debate that, we would. For example, the tourist visitor levy would not fix everything, but that modest change could be brought in if councils wanted to do so. I will send the Deputy First Minister the report on my culture round-table discussion in October, as some very good practical suggestions were made in it by the sector.

I would welcome that. I know that the culture minister will be happy to engage with Sarah Boyack on that point.

The legislative provisions are being prepared for the tourist visitor levy, to be introduced to Parliament. Parliament will therefore have the opportunity to scrutinise legislation on that relatively shortly. I am sure that such a measure, which will empower local authorities, will be warmly welcomed on all sides of the parliamentary chamber—just like the workplace parking levy legislation, which was so warmly welcomed by the Conservatives.

Emma Roddick made a significant point. She highlighted the amount of money that the Government is spending in Scotland to mitigate the United Kingdom Government’s welfare policies. She put things into common parlance by illustrating that the total amount of money that the Scottish Government spends on mitigating UK Government welfare policies amounts to 38 times the cost of a referendum—the thing that the Conservatives banged on about. We could have 38 referendums in exchange for the welfare cuts that are being inflicted on the people of Scotland as a consequence of the UK Government’s policies.

While we are on the subject of measuring things by referendum costs, I remind the Deputy First Minister that he proposed earlier to expend twice as much on a referendum as he has on the entirety of the budget for 200,000 sufferers of long Covid and that the budget does nothing for them.

We are spending £19 billion on the national health service, with a £1 billion increase in one year, because we have taken tough decisions on tax.

Part of the difficulty and challenge that lies before me—not least in balancing the budget this year—is in the competing propositions that we hear from different sides of the chamber. For example, Liz Smith demanded that I spend much more of the budget on supporting the productive end of the economy, which she defined as high and middle-income earners. She ignored the fact that those individuals benefit from the social contract of early learning and childcare, free personal care, free prescriptions, free eye tests, and no tuition fees for their children should they go to a Scottish university.

However, Pam Duncan-Glancy said that there is nothing in this budget whatsoever to tackle inequality, managing to skate past the £450 million that the Government is spending on the Scottish child payment. That illustrates that the Conservatives want to undermine the budget by not supporting the progressive tax agenda that we are taking forward, while the Labour Party does not want to support us in our journey to try to tackle inequality through measures such as the Scottish child payment. That illustrates the scale of the absurdity of the propositions that I am facing.

There is no absurdity whatsoever in many of the statistics that the forecasters have set out about the need for Scotland to have many more higher-paid jobs so that we are improving productivity and attracting people to live and work in Scotland. In terms of all the things that the Government provides, there is no absurdity in that either, because we desperately need that increase in tax take and productivity so that we are able to do far more things.

Has Liz Smith not read the Scottish Fiscal Commission’s report on the budget and the tax projections? That makes clear that the projected income earnings growth in Scotland over the next five years is a source of great encouragement. Why cannot the Conservatives welcome that as an indication of the progress that is being made here in Scotland?

Much of that gets to the heart of the choices that this Government has made in the budget. In approving the budget, the Government believes that we are investing in Scotland now and in the future. The budget has been created in partnership with our colleagues in the Scottish Green Party and this Government’s decisions have created a tax and benefit system in Scotland that is considerably more progressive than that in the rest of Great Britain.

Presiding Officer,

“Scottish reforms to the income tax and benefit system are set to raise the incomes of households with children by around £2,000 per year on average.”

I say to Jackie Baillie that those are not my words; those are the words of the independent Institute for Fiscal Studies. They are a vindication of the policy decisions that we have taken to advance that agenda.

Anyone who votes against the budget today is voting against the substantial steps that this Government has taken to use the powers of this Parliament to make Scotland a more progressive country.

Seeing as the Deputy First Minister is quoting the IFS, I will highlight that it states clearly in its report on the budget that, when compared to 2009-10, local government funding is 5 per cent lower per person and, once ring fencing is stripped out, it is 8 per cent lower. Does he recognise that analysis? What difference does the announcement that he has made today make to that analysis?

We have gone round the house several times on that this afternoon. First, has Mr Johnson obliterated from his recollection the decade of austerity that we have suffered at the hands of the Conservative Government? We have been wrestling with that all the way through. Secondly, I know that there is a great debate about ring fencing, but I have just announced a budget settlement that increases local authority funding by £790 million for the coming year. Why could not the Labour Party welcome that during the debate?

I would like to get clarity from Mr Swinney on the extra money that is going to local councils to support teachers’ pay. Is that to reinforce the offer of that has already been made to the teaching unions, which the Educational Institute of Scotland has already rejected, or is it there to support a fresh offer?

It is there as the Government’s contribution to the existing offer that has been put on the table to local authorities.

Mr Fraser can bang on all that he wants about the teachers’ pay deal, but what suggestion is he offering today about how much money we should put on the table for that deal and where that should come from? Essentially, Mr Fraser has spent £1 billion this afternoon and he has not come up with one sentence about where the money would come from.

Mr Fraser has the brass neck to talk about leadership elections. He has failed in every Conservative Party leadership election that he entered, just like he has failed in every election to try to defeat me in Perthshire North, where I have beaten him every time. [Interruption.]

Thank you, members.

The budget changes that I have announced today respond to the points that have been put to me by political parties and stakeholders. Today is the day when the Parliament must decide. Is the Parliament prepared to put the finances in place to pay the Scottish child payment? Is the Parliament prepared to put the resources in place to support the transition to net zero? Is the Parliament prepared to put increased resources into health, education and policing to meet the needs of the public? The Government is prepared to do that in partnership with our Green Party colleagues. The challenge for the Opposition parties is this: will they recognise the scale of the challenge that we face and support the budget, or will they posture and provide no answers to the issues that we face as a society?

I am proud to commend the budget to the chamber, and I urge all members to support it.