Seòmar agus comataidhean

As we are talking about taking money from front-line services and putting it elsewhere, if the Government sticks to its guns on welfare expenditure and continues to spend £2 billion more on welfare expenditure than it receives in Barnett consequentials, where is that money going to come from: front-line services or tax rises?

I will not, because I am almost over time.

Keir Starmer’s national insurance hike, which commenced yesterday, will mean higher prices for customers and job cuts or pay freezes for employees.

Scots are now at a breaking point. They simply cannot absorb the quadruple whammy of extra costs that were brought forward yesterday. In the 1970s, Labour squeezed the rich until the pips squeaked; 50 years on, Labour and the SNP are doing the same thing to lower and middle-income Scots.

The Deputy First Minister is shaking her head. She is, in part, an architect of the £800 million black hole in the Scottish budget, which is a result of the Scottish economy not growing in line with the UK economy.

The cabinet secretary’s statement proves that the SNP Government is simply not serious about growing the economy and is certainly not committed to cutting the soaring benefits bill. Getting people off benefits and back into work is good for growth, society, individuals and their families. Fixing Scotland’s broken benefits system is not just desirable but essential, which the Scottish Government does not seem to recognise.

Unless I can get the time back, I do not have time. I apologise.

High tax is now the biggest concern for businesses in Scotland. Analysis of the latest business insights and conditions survey found that 18 per cent of firms identified taxation as their main concern for April, followed by concerns about falling demand. As the cabinet secretary alluded to, tariffs will no doubt be weighing heavily on people’s minds.

In discussions with the Scottish Government, we in the Scottish Conservatives advocated for lower taxes to stimulate growth. The Confederation of British Industry’s Rain Newton-Smith agrees—she has warned that uncompetitive tax policies, including Scotland’s income tax gap with the rest of the UK, are a “handbrake on growth”.

From April, anyone who earns more than £30,318 will pay more income tax in Scotland than they would in the rest of the UK, which equates to £1,527 more in tax for someone on a £50,000 salary and £3,331 more for someone on a £100,000 salary. If the UK’s financial outlook is bleak as a result of the spring statement, Scotland’s outlook under the SNP is grounds for despair.

The cabinet secretary can chunter as much as she likes, but that is the ultimate long-term sustainable solution—the only solution—to resolving child poverty in Scotland today.

I close on a couple of very relevant issues that emerged from the spring statement. OBR data has revealed that tax receipts from North Sea oil and gas will slump from £5.4 billion to just £2.3 billion within five years. I echo the cabinet secretary’s call for progress on the Acorn project, but the sudden drop that is forecast in oil and gas receipts—do not forget that such receipts pay for public services—is a result of the political mood music that the SNP and Labour Governments have set.

I welcome the focus and commentary of the Scottish Government and the UK Government on public sector reform and efficiency, but do they really have the appetite for the dramatic and disruptive reforms that are required to drive the real savings that we need?

To close on the cost pressures that people in the real world, beyond the Holyrood bubble, are facing, the SNP Government’s chronic underfunding of local authorities means that Scots now face eye-watering, inflation-busting council tax and water bill rises. Households face an energy price cap rise, despite Labour’s promise—which has been broken—to cut fuel bills by £300.

It is a bit of a cheek to ask for an intervention 20 seconds into my speech when the cabinet secretary would not take an intervention for 20 minutes. I will take an intervention when I am further into my speech.

Before I turn to the SNP Government’s choices and the choice that it faces, I need to start with the spring statement, which was another broken promise, because it was the second major fiscal event in a matter of months. I will start with the positives, for there were some, if not many. We welcome the increase in defence spending. To those who question its necessity, I say that global security underpins economic security, as it prevents the sort of economic shocks that we saw when Russian boots landed on the soil in Ukraine, which here at home meant a £1,000 increase in energy costs for every British adult.

We also welcome and recognise the need for reform of the planning laws in England, which could drive much-needed growth, as the Office for Budget Responsibility says. However, how quickly will that happen? Will the same approach follow in Scotland, where, for example, recent data has shown that the number of new-build starts is now running at its lowest for a decade?

Will the member take a brief intervention?

Will the member take an intervention on that point?

Does the member think that this inflammatory language will help or hinder the UK and Scottish Governments’ attempts to reach a deal on tariffs with the United States of America?

It is coming through the system very slowly, and there are supply and labour issues that the SNP has not addressed through its skills agenda to make sure that we can get houses built.

I give a cautious welcome to public sector reforms but, to deliver those reforms, UK ministers must develop a backbone in the face of their union paymasters, and SNP ministers must be bolder in their approach. I listened to the cabinet secretary say that she welcomes the cost savings that the Scottish Government is going to make. I noticed that it is a 0.2 per cent saving over this year. A fifth of 1 per cent is hardly something to boast about.

Beyond the two or three items that we can welcome, the Chancellor of the Exchequer’s emergency budget was a grim moment for the country, because it is now clear that Labour’s political choices are making Britain worse off. Projected growth for 2025 halved from 2 per cent to 1 per cent. Inflation and unemployment are both set to increase. The tax burden is set to hit a historic post-war high of 37.7 per cent of gross domestic product. Just yesterday, businesses, charities and local government bodies, including the Scottish Government, were hit by Labour’s cynical jobs tax, as well as the change in thresholds, which is impacting many small businesses.

Although Rachel Reeves will blame anyone and everyone, the fact is that that economic misery is a direct result of her political choices—her choice to roll over to the unions on public sector pay, her choice to change the rules on borrowing and her choice to undermine growth and investment by breaking Labour’s pledge not to increase national insurance. I agree with Labour that the benefits bill in the UK is too high, and that applies even more so in Scotland. Any Government that prioritises benefits over growth is living in a parallel universe if it believes that that is anything other than unsustainable.

We need to question why Labour is doing this now. The action is not being taken because the Labour Government has had some Damascene conversion to small-state conservatism. It does so out of desperation and because Rachel Reeves has run out of the fiscal headroom that she thought she had only six months ago. I warn the UK Government that the Office for Budget Responsibility still notes that the spring statement has only a 50 per cent chance of restoring that headroom, because borrowing is soaring, debt is becoming more expensive to service and the revenues and savings that Labour expects are proving stubbornly difficult to achieve.