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Does the member recognise that the budget for this financial year will go up as a result of the spring statement?

Will the member take an intervention?

Liz Smith talks about the challenge caused by exogenous shocks to the fiscal rules. Is she suggesting that we should create more headroom in the fiscal rules? If so, how would she achieve that?

I welcome all the contributions to the debate. I will begin where Lorna Slater finished, because the topic of the fiscal rules has underpinned much of the discussion this afternoon. A very significant change in the fiscal rules was made following the UK Government’s autumn budget. There was a change in the amount of money that could be used for long-term capital investment and in how it was counted against debt. That radically changed the prospects for capital investment in this country over the years to come.

I disagree with many members in that, at a time when we are seeking economic stability and leadership, I do not think that it would be credible to radically change the economic rules again within a matter of weeks. That would not send the right signals to people who deal with the markets, given our highly indebted economy.

I fundamentally reject that conjecture that there is no strategic position. The Prime Minister is involved, day and night, in trying to deliver the best possible deal for the whole of the UK, and he is putting the interests of the country first in that regard. We must ensure that our economy can deliver the kind of public services that we need, and the UK Government is fully involved in conversations to ensure that we can get the best deal.

The Chancellor of the Exchequer’s long-term decisions have led to the UK’s growth forecasts being revised up for next year, for the year after that and for the remainder of the forecast period. The chancellor’s decision to invest for the long term is designed to secure not only our economy but our public services for the long term. To put it bluntly, she is engaged in a rescue mission for UK public services, given the inheritance that she received just nine months ago.

Will the member give way?

No, thank you, madam. I will make some progress, because I am a matter of seconds into my speech.

No economy, regardless of its size—major, medium or small—is immune to the challenges that are presented by this convulsion. Investor confidence in the debt markets is greatly impacted by this exogenous volatility.

Almost all of us in the Parliament—with some minor exceptions—want much stronger economic growth. The SNP Government has recognised in broad terms that our ability to extract further revenue from our existing tax base is limited. The real question is: what is our strategy in Scotland to grow our median wage and our economic productivity?

Last month, the Organisation for Economic Co-operation and Development warned that tariffs will take a significant toll on the global economy, as it cut its growth forecasts for a dozen G20 countries. At the same time, the OBR has upgraded its medium-term growth forecasts for the UK, as the UK Government seeks to drive the economy and make strategic investments to modernise our infrastructure and increase productivity.

On a point of order, Presiding Officer. I was not able to connect. I would have voted yes.

No, thank you, sir.

Rachel Reeves inherited an economy in which there had been no growth for 14 years and in which there was an in-year fiscal black hole, with the national reserve having been spent three times over in the first quarter. Public services were in a state of collapse and in need of immediate investment. That was the context in which difficult decisions were made.

We cannot return to soaring interest rates, which the Tories inflicted on us. Instead, under the Labour Government, there have been three interest rate cuts, providing vital help to people with mortgages. Any return to the chaos of vast unfunded and unfundable spending commitments—whether on services or on tax cuts; I am talking about both sides of the aisle—would lead to rapidly spiralling borrowing costs. As a highly indebted country as a result of 14 years of Tory Government, with national debt running at 100 per cent of gross domestic product, we do not have the fiscal space to contemplate that. The room for fiscal manoeuvre is extremely constrained, so the UK Government is facing up to the fiscal realities in front of it.

The cabinet secretary’s statement was replete with spending demands and rejections of revenue-raising measures. Her statement has to be considered in that context. Ever more borrowing is not available, and nor is it affordable.

In an increasingly volatile world, it is absolutely right that the chancellor has increased defence spending by £2.2 billion this year. That will result in more jobs, more investment and more security for Scotland if a genuine partnership can be built between the Scottish and UK Governments to deliver that. The SNP claims to welcome the increase in defence spending, but it cannot do so with any credibility when it has opposed every one of the chancellor’s revenue-raising measures. National security requires economic security. We cannot have one without the other. Countries that cannot afford to fight wars do not win wars, and they might struggle to avoid them. Labour will always put our national security first. Our economic security underpins our national security.

In the spring statement, there was a significant amount of focus on the changes to social security, and rightly so. The changes are significant and challenging for everyone across the country, particularly for those who rely on the support of the state. We have to be absolutely clear that a situation in which one in eight young people across the UK do not go into work or training when they leave school but, instead, rely on out-of-work benefits results in a huge loss to their personal potential, as well as a loss to our communities and our economy. The difficult fact for those of us in this Parliament is that that figure is even higher in Scotland.

The Scottish Fiscal Commission highlighted in its December 2024 forecasts the fiscal challenges and choices that are presented by Scotland’s growing social security bill. Every pound that is spent on social security over and above the block grant is a pound that is not spent on schools, hospitals and roads. Many people require vital support. We in the Labour Party are proud supporters of the Scottish child payment, which has been a great success. The state must be there for those who require it. However, we have to ensure that as few people as possible require that support, and our public services must be shaped in the direction of achieving that aim.

The UK has committed £1 billion up front to support people into work. Of course, today—this goes to the heart of the question about poverty—is day 2 of a new national living wage, which sees 200,000 Scots get a much-needed pay rise and an additional £1,400 in people’s pockets, with the lowest-paid getting an annual pay boost of up to £2,500. The UK Labour Government is also already getting on with fixing the national health service in England, and it will get more people into work via that route. It is already delivering on the promise of 2 million more appointments and is introducing structural reforms to make the system work better.

Meanwhile, in Scotland, we have a mental health crisis among young people and a child and adolescent mental health service that exists in name only. NHS Tayside reports that come directly from the management speak of waits of 13 to 14 years for young people to be seen by CAMHS. There is a direct relationship between that kind of performance on the part of our public services and the number of young people who cannot access work. They require public services that work in order to help them. The SNP might boast about meeting 18-week treatment time targets, but that is not the reality for young people in my region, with a service that is not serving them all.

I look forward to hearing the various contributions in the debate.

Will the member give way on that point?