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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 4 May 2021
  6. Current session: 13 May 2021 to 2 February 2026
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Displaying 1109 contributions

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Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

Yes.

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

I want to pick up on the idea of the Scottish Government increasing its borrowing capacity and the risk that could be associated with that.

Additional funds have flowed to the Scottish Government for the removal of the two-child benefit cap, to which it had allocated £155 million. That equates to its having an extra £126 million. When the Scottish Government received that money, it said that it was more than it was expecting, so it would spend the additional money on tackling child poverty, rather than on cutting tax or putting those funds elsewhere.

Given the way in which the Scottish Government approaches public expenditure, is there not a risk that, if its borrowing capacity were to be significantly increased, rather than looking at its budget, it would just use the increased borrowing capacity and, rather than going cold turkey, it would simply continue to spend in the way that it is doing at the moment?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

Other analysts of productivity have said that it would be heroic for the Government to meet its productivity targets in light of everything in the budget. Based on recent experience, it would be heroic for the Scottish Government to go into a room with trade union officials and come out having negotiated, presumably, a net real-terms reduction in pay. That will not happen.

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

Is there also a risk, given the current structure of the Scottish tax system, that, as public sector workers move into higher rates of tax, the trade unions who are negotiating on their behalf will be tougher, because they know that, in effect, 50 per cent of any pay increase will be handed back to the Scottish and UK exchequer in tax and national insurance?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

We have also discussed the fact that, by freezing thresholds at the higher level, more and more people are being pulled into tax. That is now happening in the rest of the UK. How does that compare with other nations of our size and net wealth?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

On that £475 million, the finance secretary said last week that local government was looking at 2 per cent year-on-year increases in real terms. Where would that figure have come from?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

So while councils say that they will potentially have to increase council tax and the Government says that they will not have to, you are clear in saying that there is a real-terms cut coming to council budgets—up to 2028-29, did you say?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

Could the Government not simply build in more headroom year on year in the way that it approaches its budget, for example by using the reserve? Would that not be a more prudent way to approach the issue? A moment ago, my colleague said that the UK Government has hardly got a good reputation when it comes to its borrowing levels, either, but the Treasury borrows on behalf of the whole of the UK. In some tough years, some of the real-terms increases in the Scottish budget have emanated from increased borrowing at Treasury level.

12:45

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27

Meeting date: 20 January 2026

Craig Hoy

In the same way that you would get a bad credit rating if you were to fully utilise all your credit cards, so, too, would the Scottish Government if it were to fully utilise its borrowing powers or pull the Scottish money down—well, I will not get into the credit rating argument.

I will turn to local government. Last week, the Cabinet Secretary for Finance and Local Government said that, budget to budget, she is delivering a 2 per cent real-terms increase to local government. She described that as

“a settlement that is fair, and which recognises the important role of local government”.

She said that that is “a reasonable deal” given cost of living pressures and urged

“local authorities to translate the settlement into reasonable decisions on council tax.”—[Official Report, 13 January 2026; c 16.]

Having been able to interrogate those numbers further, do you think that that is a reasonable deal for Scottish local government? Should it mitigate above-inflation increases in council tax, if councils are to meet their statutory obligations?

Finance and Public Administration Committee [Draft]

Budget Scrutiny 2026-27 (United Kingdom Context)

Meeting date: 13 January 2026

Craig Hoy

One of the dominant themes running through the Scottish budget and the UK budget is the on-going issue of the cost of living. In paragraph 1.9 in the “Economic and fiscal outlook”, you say:

“Growth in real household disposable income per person is projected to fall from 3 per cent in 2024-25 to around ¼ per cent a year over the forecast”.

Given that many households still feel that there is more month than money, is that a reality check to the effect that people are not going to feel better off for the foreseeable future?