Seòmar agus comataidhean

The main reason for holding this evidence session prior to stage 2 is to go through our report and the responses to it. I will not go through all of those, because I know that six colleagues want to come in on certain areas. However, I will touch on some aspects and other members might wish to build on those.

The first aspect was covered in recommendation 41 of our report, which was on the potential impact on business and the economy of the differential income tax policies in Scotland and the rest of the UK. In your response, you said that

“the move to a five-band system, alongside additional government spending as a result of the policy change, had a relatively negligible impact on the size and growth rate of the economy in the short-term.”

What long-term work is being done on whether those policies will have longer-term impacts, whether they be positive or negative?

I am keen to move on and to take us back to the report.

I thank colleagues. As I have said, I have been very generous with time today—and particularly with your time, Deputy First Minister—so we have been asking questions for an hour longer than was proposed.

Thank you, Deputy First Minister, for answering so many questions in such detail. Of course, I think that we were all probably guilty of wandering off the report at certain points.

We know that stage 3 of the budget is next Tuesday. Given some of the questions that have been asked and the comments that have been made, can you tell us whether any Opposition parties have come forward with alternative fully costed budget proposals?

That is why I said that there is politics involved—

I will move on, because colleagues want to come in. In paragraph 144 of our report, we requested

“an update on when the Scottish Government will seek to schedule a parliamentary debate”

on the long-term sustainability of Scotland’s finances. The response says:

“The Scottish Government continues to support a debate ... on the long-term sustainability of Scotland’s finances as confirmed by the Deputy First Minister on 3 October 2023.”

That was five months ago, but we still do not have a scheduled date.

Let us be honest—some of the debates that we have had in the chamber have not exactly been thrillers. I have been in the chamber many times when the Presiding Officer has said, “I will allow the member a very generous six minutes,” because there is no great enthusiasm to speak. Debates that could last an hour are being extended to two hours and 20 minutes or whatever, whereas debates such as the one that we have requested, which are important, are not being scheduled.

There is a lot more to cover, but we have a full house, so I will open up the discussion to colleagues.

Our second agenda item is to consider the Budget (Scotland) (No 3) Bill at stage 2. There are no amendments but, under standing orders, we are obliged to consider each section and schedule of the bill and the long title and to agree to each formally.

We will take the sections in order, with schedules being taken immediately after the section that introduces them and the long title last. Fortunately, standing orders allow us to put a single question where groups of sections or schedules are to be considered consecutively and, unless members disagree, that is what I propose to do.

Section 1 agreed to.

Schedule 1 agreed to.

Section 2 agreed to.

Schedule 2 agreed to.

Section 3 agreed to.

Schedule 3 agreed to.

Sections 4 to 11 agreed to.

Long title agreed to.

Welcome to the eighth meeting in 2024 of the Finance and Public Administration Committee. We will consider the Budget (Scotland) (No 3) Bill at stage 2 today. However, before moving to our formal proceedings, we will take evidence on the Scottish Government’s response to the committee’s report “Budget Scrutiny 2024-25”.

We are joined by Shona Robison, the Deputy First Minister and Cabinet Secretary for Finance. The cabinet secretary is accompanied by Scottish Government officials Dr Alison Cumming, who is the director for budget and public spending; Ian Storrie, who is the head of local government finance; and Lorraine King, who is the deputy director of the tax and revenues directorate. I welcome our witnesses to the meeting.

Last Friday, members received copies of the Scottish Government’s response to our report. Before we move to questions from the committee, I invite the cabinet secretary to make a short opening statement.

That leads me on to something that I was not going to ask about, because other colleagues will probably want to come in on it. You have talked about whether reliefs will be retained in England. A lot of people have asked about whether the council tax freeze will be baselined into the local government settlement. Will that be the case?

That would be very welcome, and the sooner it could be introduced, the better.

Enterprise is obviously an issue. If one were to read the response without actually looking at the budget, one would think that everything was pretty hunky-dory in terms of the Government prioritising enterprise. However, what is said in the response is not really reflected in the budget figures. For example, in response to paragraph 102, you said:

“we have prioritised funding for the enterprise agencies to the extent possible given the extremely challenging settlement.”

You said “to the extent possible”, but I am looking at a 15 per cent reduction, which is pretty harsh. If we look at the overall settlement, the Scottish Government’s budget has not been reduced by that. The committee is of the view that we need a widening and growing tax base, which you refer to in other areas of your report. It seems to me and colleagues that 15 per cent is a pretty severe cut at such a time.