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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 5 May 2021
  6. Current session: 12 May 2021 to 12 November 2024
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Displaying 465 contributions

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Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

Oh, the national care service.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

I will make some progress, then come back to the member, in a moment.

If the SNP had done that, the minister would, this year alone, have had £600 million of additional revenues to spend to tackle some of the challenges that she mentioned.

Sadly, however, the SNP has time and again adopted a “Cross your fingers and hope for the best” approach to the public finances. As a result, we now see both the Scottish Government’s budget and the medium-term fiscal position unravelling before the minister’s eyes.

The Government has repeatedly been warned to change course. It has been warned by the Auditor General for Scotland, the Scottish Fiscal Commission, the Fraser of Allander Institute, the City of London Corporation and many other groups, and it has repeatedly been warned by my Scottish Conservative colleagues. However, ministers have ignored some simple truths. We cannot increase tax on medium and higher earners and expect no behavioural change. We cannot deliver on ambitious net zero policies without setting aside the billions that are required to pay for them.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

There is a ticking time bomb at the heart of Scotland’s finances. In fact, there are four: the tax system, public sector pay, the Scottish welfare system and the parlous state of the Scottish economy—and that is without mentioning the well-documented demographic challenges that have been outlined by the minister. If we do not act soon, those four bombs could blow Scotland’s public finances apart and shatter any hope of achieving fiscal sustainability.

As our amendment makes clear, a significant change in political direction is now required to deliver sustainability in Scotland’s public finances. It is clear to every commentator, except some MSPs who live in the Holyrood bubble, that sustained economic growth is essential for future financial sustainability. That is why we are deeply concerned that the Scottish National Party has failed to deliver the growth and the pro-business policies that would drive growth and which are needed to achieve it now and in the future.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

No, I will not. I am short of time.

Before I close, I will explore one more area. When we talk about the public sector in Scotland, the Scottish Government wants us to think of nurses and teachers, but not of the army of overly superannuated spin doctors. Only this week, we found out that the number of staff employed by the Scottish Government has almost doubled in the past decade. Public sector pay now absorbs more than half the entire Scottish budget. By boasting that it will avoid strikes at pretty much all costs, the SNP has given public sector unions the whip hand in future negotiations.

We are now way beyond the point of asking whether the size of the public sector workforce in Scotland is truly fiscally sustainable. Scotland has more public sector workers per head of population than the rest of the UK. On average, they are paid more than £2,000 more than their UK counterparts. Even if the Scottish Government receives significant Barnett consequentials as a result of public sector pay rises in England in tomorrow’s budget, it will still face a significant funding shortfall because of the structure of the public sector in Scotland.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

No, I will not.

The SNP is not learning the lessons. It commits billions to the consequences of poverty, but not to the causes. It simply now has to find a way of re-engaging the many people who are no longer active in the labour market in Scotland. The SNP’s decision to slash the budgets on employability, addiction services and affordable housing will, ultimately, undermine efforts to grow the economy. We need a strategy to boost productivity, drive wage growth, increase skills and labour market participation and, in short, through time and as best we can, get many people off benefits and back into work.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

Given that year-on-year increases in the social security budget have accompanied a reduction in the number of people who are available for work, and given that, post-Covid, there has been a significant increase in people on health-related benefits in Scotland and the UK but no similar rise in equivalent nations, we have to question what the underlying causes are. I put it to the Scottish Government that its inability to deal with chronic disease over 17 years and its inability to bring down national health service waiting lists are surely factors in people moving from being available as part of the labour force to being on long-term disability benefits. That is busting the Scottish Government’s budget over time.

On welfare, the SNP has made a political virtue of the way in which it has used devolved powers over benefits to meet political goals. That is a decision by the Government. However, as was referenced earlier, the Government will soon be spending £1 billion more on social security than Barnett consequentials allow for. The minister dresses that up in the language of investment. If it is an investment, what economic return does she see?

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

I will, in a second.

However, ministers might not want to do that, because a simplified tax system is also a transparent one, because the smoke and mirrors are removed. Reducing tax over time would reduce the administrative burden on both our Governments and on His Majesty’s Revenue and Customs. It is basic economics that, if we reduce tax over time, we could still increase the tax take over time.

I give way to Mr Johnson.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

I will not take an intervention, at the moment.

Ireland has just two tax bands—20 per cent and 40 per cent. I accept that there are countries where the tax bands are more complex, but they are often where tax is lowest. Singapore has 13 tax bands, but the top rate of tax is only 24 per cent and it is paid only on earnings of over 1 million Singapore dollars. It is clear that there are significant savings to be achieved by making tax simpler.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

We cannot grow the Scottish economy if we increase regulation or abruptly turn off the taps on North Sea oil and gas. We cannot dramatically expand the footprint of the welfare state without finding sustainable tax revenues to pay for it. We cannot expand the public sector workforce and increase its pay in real terms without fundamentally reforming working practices.

Meeting of the Parliament [Draft]

Fiscal Sustainability

Meeting date: 29 October 2024

Craig Hoy

No. I am saying that we would grow the economy to a position in which, through time, those benefits would not be as necessary as they now are. We have to ask why, in real terms, child poverty has not fallen over the 17 years for which the SNP has been in government.