Budget (Scotland) (No 5) Bill: Stage 3
The next item of business is a debate on motion S3M-7899, in the name of John Swinney, on the Budget (Scotland) (No 5) Bill. I advise members that time is pretty tight this afternoon—you all know what that means. I call John Swinney to speak to and move the motion. Cabinet secretary, you have 13 minutes.
14:34
Parliament approved the general principles of the Budget (Scotland) (No 5) Bill in last month’s stage 1 debate. Since then, I have continued to hold extensive discussions with all parties to build consensus around our spending proposals. I begin by recording my thanks to my counterparts in the other parties and to Margo MacDonald for their contributions to those discussions.
Since the stage 1 debate, I have also provided an early response to the Finance Committee’s report on the draft budget. The committee asked me to consider whether more measures could be taken to increase the impact of our decisions on economic recovery. I have set out to the committee the strength of our original proposals, but I have also considered what more can be done. My comments today will demonstrate that I have listened to Parliament. At a time when the financial resources available to Scotland are due to fall by £1.3 billion next year compared with this year, it is incumbent on all parties to work together to agree a balanced budget. Only by doing so can we provide certainty to public sector partners and the people of Scotland about spending in 2011-12.
As members are aware, the financial context for the budget places constraints on my ability to support additional expenditure. Parliament’s decision to reject the proposed large retail supplement has added to those constraints and I have had to take steps in order to offset the loss of estimated income of around £30 million. In the past few days, I have received updated forecasts of estimated income from non-domestic rates in 2011-12. As a result of those forecasts, which take account of estimates of losses from revaluation appeals and a considered assessment of growth, I believe that it is reasonable to assume a net increase in non-domestic rates income of £11.5 million in 2011-12 compared with the forecasts that underpinned the draft budget after taking into account the loss of projected income from the large retail supplement.
I have advised Parliament previously that my in-year financial management in 2010-11 would be focused on identifying ways of smoothing the scale of the reduction in public spending into the next financial year. My plan had been to carry over £100 million from this year to next year. Due to steps that I have taken to reduce expenditure this year, I have, in fact, made a carry-over provision of £130 million with Her Majesty’s Treasury, as set out in the spring budget revision. I have also been able to reprofile other spending programmes in 2010-11 and 2011-12 to free up resources. As a consequence of those decisions, I am able to support some new priorities today and to fulfil my statutory duty to balance our budget.
I wish to present a number of measures to Parliament today. First, I have reflected on the representations made by the Transport, Infrastructure and Climate Change Committee and the road haulage industry about provision for the freight facilities grant. I confirm today that I will increase by £2 million the funding for the freight facilities grant in next year’s budget. That will be funded through adjustments to the existing Transport Scotland budget for 2011-12.
One of the issues that has arisen in the local government settlement has been a negative implication for a limited number of local authorities—principally and significantly Argyll and Bute Council—arising from an updating of indicators agreed with local government that drive the distribution of supporting people funding. In order to temper the effect of that change, I intend to allocate £5 million to tackling the problem and have invited the Convention of Scottish Local Authorities to match that amount. The distribution will be agreed and undertaken in the local government finance amendment order in March.
In 2007, I introduced a capital city supplement for the city of Edinburgh. It has not been uprated since and I propose to increase the level by £400,000.
Last year, the Liberal Democrats suggested the establishment of a post office diversification scheme. That was a successful initiative and I have agreed to their proposal that we operate in 2011-12 a further round of that scheme at a cost of £1 million.
I have also reflected on concerns expressed about funding for urban regeneration companies. The chairman and board of Scottish Enterprise have made the fair point to me that their reduced budget is under significant pressure to support existing commitments and to address the need to support new priorities such as investment in the renewables industry. I confirm today that, by making use of an emerging underspend on the regional selective assistance budget this year and by Scottish Enterprise making some adjustments to the profiling of other areas of its planned expenditure in 2010-11 and 2011-12, we will enable Scottish Enterprise to increase its funding for the urban regeneration companies to £12.5 million in 2011-12. That is an increase of around £6 million compared with the plans in the draft budget. That will increase funding to the Clyde Gateway, Riverside Inverclyde, Irvine Bay and Clydebank Re-built urban regeneration companies. I fully recognise the constraints facing Scottish Enterprise and I appreciate the flexibility that it has shown.
I have received a range of calls for additional expenditure in the areas of learning, skills, training and employment, and I propose to respond in several ways. The Scottish Government has already put forward a substantial package of support for higher and further education and for skills and training. The draft budget that was published in November provided the resources to preserve university and college places while upholding our commitment not to raise university tuition fees or college charges. It supported the continuation of education maintenance allowances and it provided funding for 34,500 training places, including modern apprenticeships.
However, I acknowledge that we must create new opportunities, particularly for young people. I have agreed proposals that have been put to me by the Liberal Democrats that will provide for an additional 1,500 modern apprenticeships in 2011-12. We will make available an additional £15 million across 2010-11 and 2011-12 in funding for college bursaries and we will provide a further £8 million in funding to support an additional 1,200 college places in 2011-12. That funding covers teaching and student support costs. The Government will also support the provision of 7,000 flexible training opportunities in 2011-12—2,000 more than originally planned in the draft budget.
On the issue of employment creation, the Conservatives have been keen to maximise initiatives to support employment growth in the private sector. I am therefore pleased to announce a further £10 million in support for employment creation, focused on new starts and on encouraging sole traders and small firms to take on new employees by assisting with their employment and recruitment costs and with exporting opportunities.
More generally, I have considered representations made by the Conservatives—and others, including the Finance Committee—on the economic impact of investment in housing. As I have already confirmed in discussions with the Conservatives and through the publication last Friday of the Government’s strategy and action plan for housing in the next decade, we will take forward a range of measures to stimulate greater private investment in housing development in Scotland, including through the £50 million investment and innovation fund.
The Conservatives have proposed that the Government provide additional investment in the sector, and I can confirm today that we will invest a further £16 million in housing programmes in 2011-12. That will be delivered by expanding the open-market shared equity scheme, by introducing an infrastructure loans fund to ensure that stalled developments can take their course, and by developing the new supply shared equity scheme.
I have also considered what scope exists to generate additional efficiency and effectiveness across the public sector during the next financial year. I set out within the draft budget a package of measures including an efficiency target for next year of 3 per cent and the setting of a public sector pay policy for 2011-12 that will help to sustain public services and employment by bearing down on pay increases—including a complete freeze on pay for chief executives—while seeking also to protect the lowest paid.
However, I confirm today that the Scottish Government will examine carefully the Conservatives’ proposals for tackling absenteeism, to determine what additional interventions can be made to add to our work in this area. [Interruption.]
Order. I am sorry, but since the cabinet secretary began speaking, I have heard an almost non-stop running commentary from some members on my right, particularly Johann Lamont. I would be grateful if that would stop. If members wish to comment, they should do so through an intervention.
I have set out today a package of measures that I believe responds effectively to the issues that have been raised with me since the draft budget was published. They are fully funded, without detriment to the substantial package of investment that I announced in the draft budget in November.
The budget reaffirms our social contract with the people of Scotland by providing the resources to continue the council tax freeze and allow for the full removal of prescription charges. Those measures help households facing pay restraint and help to maintain demand in the economy at a time when we face increases in VAT and fuel prices.
We are delivering our commitment to pass to health spending in Scotland the consequentials arising from decisions on health spending in the United Kingdom spending review and we are continuing provisions for free personal care.
We acknowledge and share the Conservative party’s concern about continuing to improve access to drugs, including cancer drugs. We are happy to look at—and to discuss further with the Conservatives—how we make even further progress in improving access to drugs.
We have worked closely with COSLA’s leadership to agree a settlement for local government that maintains its share of the budget, to help maintain the delivery of vital local services and to maintain core commitments on police numbers, school education and adult social care.
This is a budget that supports new business growth, including by continuing the small business bonus scheme as part of a package of business reliefs worth £2.4 billion over five years.
We are taking forward strategic infrastructure commitments, such as the new Forth crossing, the new south Glasgow hospitals project and the school building programme, and we are protecting local government’s share of the capital budget.
I have announced a programme of infrastructure investment worth £2.5 billion in health, education and strategic transport interventions, which will be delivered through the non-profit-distributing model and will help to maintain construction jobs over the medium term despite the severe cuts that have been made to our capital budget. Those investments will all help economic recovery.
We will take forward the £70 million renewables infrastructure fund and, as the Finance Committee recommended, we will continue to make representations to the UK Government about the early deployment of the fossil fuel levy surplus in Scotland.
We remain committed to improving the energy efficiency of Scotland’s housing and to tackling fuel poverty, and are providing £48 million in support for the home insulation scheme and the energy assistance package next year.
I have two final announcements to make. I advise Parliament that I am now in active discussions with the voluntary sector about the establishment of a new initiative to create employment opportunities for those struggling to get access to the labour market. I expect to make an announcement on the proposal very shortly.
Finally, as a consequence of the budget negotiations with the Liberal Democrats, the planned number of modern apprenticeships stands at 16,500. Although that represents a significant commitment, I do not think that it is all that we can do to deliver opportunities for our young people. I therefore announce that the Scottish Government will increase that total in Scotland in 2011-12 to deliver 25,000 modern apprenticeships, which is a record number.
We are doing all these things despite an unprecedented cut of £1.3 billion in next year’s Scottish budget. That is why I believe that we have prepared a budget that best meets the needs of the people of Scotland and why I believe that Parliament should support the budget bill today.
The Government has listened to the calls that others have made of it and we have responded in the spirit of building consensus across the chamber.
Businesses and households across Scotland are acting to put their own finances in order at this most challenging of times, and it is essential for Parliament to do likewise. I commend the budget to Parliament.
I move,
That the Parliament agrees that the Budget (Scotland) (No.5) Bill be passed.
14:48
Of course, a Government’s budget is not only a list of spending commitments such as the one that we have just heard. Cumulatively, over the years, line by line in every budget, the figures add up to a statement of the Government’s values. Those values will give direction to all parts of Government and public services and, with the will of the people, they will plot the country’s course.
It is at that point that we and the Scottish National Party Government go our separate ways. This budget shows more clearly than ever that this Government’s values are not those of a Labour Government, and the direction set for the country is not one that Labour would set. [Interruption.] I am sure that that is not Johann Lamont shouting out.
One moment, Mr Kerr. You have made your point. The cabinet secretary was heard in relative silence and I ask that Mr Kerr receive the same treatment.
I have met Mr Swinney and his colleagues on many occasions in the past few weeks to discuss matters that are dear to our hearts. While we have been having those conversations, a lot has happened in our economy. Lloyds Banking Group has announced 200 job losses, mainly in insurance. Forestry Commission employees in Scotland fear for their jobs. There are threats to teaching and support posts at James Watt College. At the Scottish Refugee Council, 44 of the 59 staff could lose their jobs. Nearly 70 jobs are under threat at Robert Wiseman Dairies in Cupar. The list goes on. Each entry on the list represents a personal tragedy for those involved, who may be unable to provide for their families; of course, each also represents a social tragedy for the communities that are affected by the loss of jobs and services.
Rising unemployment is the signal failure of the SNP Government. When John Swinney laid out his first budget to the Parliament, Scotland had the lowest unemployment rate in the UK; at the time of this budget—his last—we have the highest rate of unemployment in the UK. Under Labour, between 2002 and 2007, Scotland outgrew the rest of the UK; under Mr Swinney, we lag behind the rest of the UK.
Does Mr Kerr acknowledge that unemployment in Scotland is falling, while unemployment in the rest of the United Kingdom is rising, and that the measures that I have announced today might help some of the people whom he is attempting to make political capital out of?
Mr Swinney offers box ticking on arrangements around parties. He offers half measures while Labour offers full measures. The SNP Government has been saved by the very coalition parties that seek to wreak havoc in our public services and economy in Scotland.
On four occasions John Swinney has stood up in Parliament to outline his budget and on four occasions he has been supported by the Conservatives. I hope that this is the last time. Annabel Goldie says that she wants a coalition with the SNP next time around. She already has a coalition with the SNP this time around. That is without mentioning the Lib Dems, who are on their knees in London and on their knees in Scotland to the SNP Government.
We will offer an economic, social, jobs-driven vision for Scotland that ensures that we resurrect our flagging economy. Mr Swinney did not get it right. The SNP manifesto said that the party would make Scotland the most competitive part of the UK, but he has failed in that process. Unemployment is higher now than when he came into office and growth is lagging behind that in the rest of the UK.
As Mr Swinney said, the process has been difficult. I have been involved in both sides of negotiations over the years and I understand the difficulty involved in making such decisions. Choices were hard during my time in government and, given the reckless ideological cuts being made by the Tories at Westminster, choices are even harder during the SNP’s time in government.
However, it is our sincere view that the cabinet secretary has made the wrong choices. When he seeks to meet party-political needs to get his budget through, he fails to understand that his half measures add up to 0.1 per cent of the available budget in Scotland. There is criticism of the budget from communities, academics and business people. The measures that he is taking are simply not good enough.
Our focus for today, tomorrow and the next day must be jobs, jobs and jobs. We do not have that in the budget today.
Will Mr Kerr share with Parliament which of the proposals that I have announced this afternoon he does not support?
We do not want half measures. Labour offers full measures and we will ensure that we deliver those in government.
The budget has moved 0.1 per cent. Let us remember what folk—they are not from the Labour Party—say about the budget. Peter Wood, director of Optimal Economics, said:
“I fear that the commitment to economic growth is more of a slogan than a reality.”—[Official Report, Finance Committee, 30 November 2010; c 2864.]
We heard more of that today.
Labour’s priority is the economy and jobs. Jo Armstrong from the Centre for Public Policy for Regions said that
“it is difficult to see the link between the headline of sustainable economic growth and the current budget allocations.”—[Official Report, Finance Committee, 30 November 2010; c 2864.]
Is the cabinet secretary trying to say that 0.1 per cent of movement satisfies those criticisms of his budget?
The cabinet secretary responded to the Parliament’s committees, but let us listen to what they had to say. They concluded that
“insufficient priority has been given to sustaining the growth of the economy in setting budget priorities.”
That is the tragedy of the opportunities that faced us in the discussions. The greatest resource for our country and our businesses is our people, but the cabinet secretary has cut education funding and done nothing to restore the thousands of teachers, the thousand classroom assistants and the 1,500 nurses who were lost under the SNP Government in the good times, along with the 2,500 vital national health service staff who have also lost their jobs.
The engine of innovation is our higher education and universities sector, but it is being slashed in this budget, leaving parents and young people in the dark about the future and the prospects for accessing a degree.
Will the member give way?
In a second, when the member might answer my next point.
We have been nothing but consistent in our view of this Government’s investment in infrastructure. It got things badly wrong from the outset; it has refused to change its position in four years; it emptied the pipeline of projects; it dismissed this party’s appeals about the Glasgow airport rail link; and it has never dealt with the disaster of the Scottish Futures Trust. Perhaps Mr Allan might want to justify the existence of that organisation.
Does the fact that the member has been unable to identify which of the cabinet secretary’s measures he disagrees with explain why he failed to lodge any amendments to the budget?
From my eight years in government, I recall that the SNP lodged only one amendment to the budget. I also recall that in the negotiations around the SNP Government’s first budget, we put forward 20 amendments, one of which—on police—was rejected by the SNP, which then went round by the back door and did a deal with their friends on the Tory benches. That is how the SNP acts in government. I thank the member very much for his intervention.
The basic requirements for our economy to thrive are infrastructure, the ability to move goods, services and people and our connection to the outside world. Even as we were having our conversations with the cabinet secretary, BMI announced the withdrawal of vital routes from Glasgow to Heathrow—and what did we hear from the Government? Absolutely nothing. That is the problem with this Government.
The SNP is implementing the Tory cuts, with the heaviest blows falling on areas such as higher education, enterprise and others vital to economic recovery, driving growth and creating jobs. The fact that the party in government today has been saved by the coalition parties tells us everything we need to know about its approach. The difference between it and us is that we have a vision for jobs, which we will set out—[Laughter.] If that vision is so bad that it makes members laugh, why is the cabinet secretary trying to deliver half of our own commitments? The SNP Government is copying our own vision. However, although it knows that we are right, it will not allocate sufficient resources to deliver the full impact of those measures.
It is our duty to say that this is not good enough for Scotland. Scotland deserves better and in 12 weeks’ time the people of Scotland will have a choice of a better Government—one that will deliver full measures to deal with unemployment and jobs. Labour has stood and will always stand by the working people of Scotland and their right to work and to wages that allow them to provide for families, and contribute to their communities and which allow the country as a whole to prosper. The cabinet secretary has chosen his priorities, and the country will soon be able to make its own choice.
The budget is a test of values; it is a test of who we are and what we stand for. For the past four years, the SNP has shown who it stands with—the Tories. It has no credible plan for growth and we cannot support it.
Our pledge is that if we win the election a Labour Government in Scotland will improve the budget and put our people and their jobs first. Among the many measures that we could undertake, we will create 10,000 future jobs fund opportunities, which will be advertised in our first 100 days in government. That is what we stand for; those are our values; and we will take them into government if we are elected by the Scottish people.
14:59
Mr Kerr was right in one respect: that was certainly a vision, although perhaps not quite the vision that he wants to portray to the Scottish people.
The budget is not a Conservative budget. Members will have to wait until 23 March for a Conservative budget, although that will, of course, be a Liberal-Conservative budget in the best progressive tradition of both our parties. [Interruption.]
Order.
It is obvious that the art of co-operation learned by the Liberal Democrats in supporting and working with us at Westminster has rubbed off at Holyrood, and I welcome that. The budget is a compromise, and it is the better for it. It is obvious that it is not a Labour budget, because it balances and does not add another £200 billion to our national debt.
The Government proclaims—as its predecessor did—that growing the Scottish economy is its top priority, but we did not think that that aim shone through the original draft budget. The Economy, Energy and Tourism Committee, the Finance Committee and many outside observers shared that sentiment. Changing the budget to promote jobs and growth was therefore vital. When I asked a panel of economists at the Finance Committee—some of whom have already been referred to—how the budget could be improved to promote economic growth and jobs, they were as clear as any group of economists could ever be expected to be. They said that investment in housing would have a quick and significant impact. Today, we have achieved significant additional investment in housing to provide additional jobs and help more Scottish families to get on the housing ladder.
The Conservatives have always believed that job creation does not come only from large firms; small businesses, including sole traders, have a part to play. Moving from being a sole trader to being an employer can be a big step, but, cumulatively, such moves across the Scottish economy can have a big economic impact. We all know that there is a well-established need to increase exports to grow the Scottish economy, so the support for exporters, start-ups and small firms in today’s announcement is good news for Scottish jobs. Together, those measures make a meaningful difference to what was in the draft budget.
Mr Kerr was keen to remind members about what has happened in this session. Over the session, the Conservatives have secured significant achievements: 1,000 additional police officers; a £60 million town centre regeneration fund; the reduction and abolition of business rates for tens of thousands of small businesses; transparency in Government spending—Scotland is the first part of the United Kingdom to have that; the Beveridge report, which changed the terms of the debate on public spending options in Scotland; and the council tax freeze. This year, in building on the draft budget, which protected NHS spending and froze public sector pay above £21,000 to protect jobs—both items were delivered by the Conservatives and the Liberal Democrats at Westminster—we now have action in two crucial areas in the budget in which we sought improvement: protecting and creating jobs and beginning moves to reform public services.
The new measures for small business job creation will help small businesses throughout Scotland to take on additional staff, provide additional assistance to those who wish to start up in business and give additional help to exporters. The additional funding for housing will not only allow families to get on the housing ladder, although that is crucial; it will provide a timely boost to the construction industry and create and protect thousands of jobs—more than 5,500, according to some estimates. Other housing measures that have been announced as a result of our discussions will help first-time buyers and allow developers to get on with delivering the additional housing that Scotland needs.
In his speech, the cabinet secretary referred to the reform of absence management. We believe that that has the potential to release multimillion pound savings and to provide those who are off work through ill health with the help that they need to get back to work as soon as possible. A two-day reduction in absenteeism across the devolved public sector in Scotland would save £138 million a year. That issue needs to be tackled.
We very much welcome the commitment to make progress on access to cancer drugs. I understand that further meetings will take place on that in the near future.
All of that, of course, is on top of the welcome rejection of the additional tax on shops, which would have put jobs and investment at risk. We have learned today that that tax was entirely unnecessary.
The measures fit against the background of the Liberal-Conservative UK Government’s reducing corporation tax, lifting the lower paid out of tax, reforming the welfare state to make work pay, and providing a national insurance holiday for new Scottish start-up businesses. That is a platform for economic recovery and job creation. The Scottish and UK Governments are working together with the same aim, which is surely what all of us should seek.
I know that all parties have considered college bursaries in the debate on the budget. Today, we have a solution for the coming year, which we welcome. However, we need a solution for every year. Students, whether in further or higher education, are rightly wary of promises that politicians make before elections. It is obvious to everyone that the current funding arrangements for further and higher education and student support cannot be sustained without reductions in student numbers or in the quality of education. We need additional sources of income for the FE and HE sectors, which is why the Conservatives would like to introduce a graduate contribution. Having protected the national health service and wishing to avoid council tax rises, few options are available to reduce spending elsewhere on the scale that is required to maintain existing funding models for FE and HE.
Overall, the package of measures that has been announced today moves the budget substantially in the right direction so, as Mr Kerr correctly predicted, the Conservatives will vote for the budget today. We have secured significant progress on delivering Conservative priorities, creating jobs and reforming public services. It seems as though the Labour Party does not support those. The budget takes effect from April, so the decisions that Parliament takes today will be implemented largely in the next session of Parliament. We hope to be in a position of still greater influence in that next session but, for the avoidance of doubt, I make it clear that, if a Government of any colour seeks to remove what we have achieved in the current budget or previous ones, there will be a high price to pay. Across a range of policy areas, we have delivered substantial achievements and we will vote for the budget to deliver more.
15:06
Yesterday, I spoke to a major employer in my constituency where there are major concerns about the future of a number of jobs. The company has a heritage that goes back well over a century in Galashiels and—the Borders being the Borders—I know some of the staff who work there very well. It is a profoundly important company for the local economy and it works in a global marketplace in which decisions around the world have an impact locally. That is the back-cloth to my thoughts this week as we come to the final stage of the bill.
The ramifications of the turmoil of the financial crisis, in which Scottish institutions were as implicated as any others, will be with us well into the future. That is why we on the Liberal Democrat benches take the view that the Scottish Government’s budget must do more for the Scottish economy and that its agencies must deliver more and do so better. In that regard, our stance at stage 1 was endorsed by the Parliament’s Finance Committee.
At stage 1, we had the inevitable sparring over the scale of the reductions in the Scottish budget. The SNP takes the view that the reductions are too fast and too deep. I fully understand why it thinks that, but it has never been straight with people and said what the reductions would be if they were not too fast or too deep. The First Minister had an opportunity to do so last week with the Deputy Prime Minister, but he did not take it. However, we now know from the cabinet secretary’s speech, which has provided welcome clarity, that the budget that we are debating at stage 3 has £41 million more for next year than when it was originally published, with £25 million of that for colleges and young people and £16 million for new housing. Any objective analysis would say that that is fair. I welcome the fact that the Government has listened to the views of others in the Parliament—or most of them.
There is a degree of denial from the SNP but, similarly, Labour now seeks to give the impression that there would be no reductions in Scottish spending, even though the UK coalition is reducing the growth in spending over the next five years, whereas Labour proposed to do so over the next seven years. Ed Miliband said some interesting things in his Fabian Society speech on 15 January. It sounds as though Mr Kerr and Scottish Labour were not listening, so let me help them out and remind them what Mr Miliband said. He said:
“Parties don’t suffer defeats like the one we suffered last May because of an accumulation of small errors.
They do so by making serious mistakes, and that’s why I have said what I have said on issues like Iraq, failing to properly regulate the banks, ignoring concerns about economic security and not doing enough to deliver on the promise of a new politics.”
That was Ed Miliband talking about the Labour Party, and it was in stark contrast to Mr Kerr’s comments. Iraq, failing to secure regulation of the banks, ignoring concerns about economic security—those were full measures for which we are now getting a half-hearted apology from the Labour Opposition benches.
I think the member forgot to say that they also wrecked the public finances.
Well, indeed, but I had not finished quoting Mr Miliband’s Fabian Society speech. If Labour—
Will the member take an intervention?
I will in a moment, because I am sure that Mr Kerr will wish to reply to Mr Miliband, so I will give him the opportunity to do so.
If Mr Kerr’s vision has been unimpaired, I wonder whether he read Mr Miliband’s speech. Let me quote what he said about the Labour Party:
“We need to be honest: over 13 years in government we forfeited the right in too many people’s minds to be the natural standard-bearers for this progressive majority in Britain.”
I refer the member to my earlier speech. We stand for the progressive majority in Scotland, but on the point—[Interruption.]
Order.
What would he say to his UK coalition partners—the Lib Dems have made the biggest mistake in UK politics for a long time—about regulation? They advocated to Gordon Brown a reduction in regulation to create more avenues for the banks to make money, and their view was shared by our First Minister.
If Mr Miliband’s statement was a flip, that was definitely a flop, Mr Kerr.
When Scotland’s Colleges made a public statement that it was concerned that the reductions in funding over the coming years were “potentially disastrous”, we took note. Similarly, when the shortfall and planned reductions in bursary funding for some of the poorest students were laid bare by the National Union of Students and others, we took note. College student associations from across Scotland have worked hard on their campaign, and today shows that it has paid dividends. [Interruption.]
Order. There is still too much background noise on a continual basis from members right across the chamber. Let us hear one speech at a time.
It is not just a political gain for the Liberal Democrats or any other political party; it is a gain for students, such as the students at Borders College whom I met to discuss the issue last Friday. For one student, the planned reduction to their bursary under the draft budget would have meant that they would not be able to afford the rent on their flat. Another would not have been able to buy equipment to help them to secure a course. Another would not have been able to afford transport, and another told me that they might have had to quit their course altogether.
At Borders College alone, some 800 students are in receipt of bursary support. For those 800 learners, and thousands upon thousands more across Scotland, I am pleased that the Scottish budget has been improved at this final stage. The examples that I have given are reflected across Scotland.
Will the member take an intervention?
I am afraid that I do not have time.
Although I cannot say that the pressure has been removed, I can say that the fact that the Scottish Government has accepted the case that we presented to it is testimony to what can be done. With the additional college places and the security that many will now have to finish their studies and gain skills, the economy will gain as well as the country overall. As the cabinet secretary said, we have also secured funding for additional modern apprenticeships, and that will also create welcome training opportunities.
We are also pleased that for a second year we have secured funding for the post office diversification fund, which was our idea. Post offices are often the glue that binds local communities together, and that is positive.
It is most certainly not a perfect budget bill that the Parliament will pass today, but it is a better one. It is better for young people who want the skills that they and we need for the economy, better for the colleges that will be able to provide more opportunities, and better for the businesses that will have more opportunities to take on apprentices. It is better because of Liberal Democrat involvement.
We come to the open debate. Speeches should be of six minutes, please, and no longer.
15:13
The SNP Government’s budget is geared towards economic recovery and protecting jobs. We listened carefully to the ideas that Opposition parties put forward and approached them constructively. It is a sign of maturity and shows a spirit of consensus that some of the Opposition parties have given time and thought to the budget instead of simply dismissing it out of hand. I hope that the spirit of consensus and compromise will continue and we will reach agreement on a budget that will deliver the absolute best for Scotland during these difficult times.
Let there be no mistake: these are indeed very difficult times, with an unprecedented Westminster cut of £1.856 billion in real terms to the Scottish budget, rising inflation, an increase in VAT, an increase in national insurance and an increase in the already extortionate fuel duty. All of that increases the burden on public services and impacts on their delivery while simultaneously squeezing the budgets of Scots families and individuals as they struggle to cope with the greatest real-terms cut in their wages since the 1920s. It is our duty as members of this Parliament to do all that we can to help to cushion the blow and ensure that we invest in projects and initiatives that will protect and create jobs and help our economy to grow.
By the very nature of politics, we all have different ideas on how all that can be achieved. On the SNP side of the chamber, we say that Scotland should be in charge of her own resources and economy, as that would allow us to invest properly in infrastructure, energy projects, jobs and education, but that is a debate for another day. The depressing reality is that we have a limited pot of money, and we must agree on the most prudent way of spending it.
Although we all have our pet projects that we would happily advance at the expense of others, we are, I believe, broadly agreed on some of the main issues: protecting our NHS; providing world-class education that is affordable to everyone; maintaining record police numbers; and creating more jobs and training opportunities for our young people. I therefore hope that we can iron out our relatively minor differences so that we can pass the budget today.
I maintain what I said in the stage 1 debate: this is an outstanding budget, considering the extreme challenges that the cabinet secretary has faced. Local government spending has been reduced by only a fraction of the amount that many prophets of doom had warned that it would be and in comparison with the reductions down south. Concessionary bus travel has been not only protected but extended to injured service personnel. Free university education has been maintained, and the council tax has been frozen once again. Those are but a few commitments in the budget that will make very real differences to the everyday lives of Scottish people.
This Government, as is reflected in the budget, is truly committed to providing the best services for Scotland. That includes an absolute commitment to protect NHS budgets, in conjunction with the previous commitment to pass on any Barnett consequentials from the increased health spending in England to the health service in Scotland. The budget also includes an £8 million increase in funding to tackle hospital-acquired infections to ensure that our hospitals are as clean and safe as they can be. That funding comes on top of the £54 million that has already been committed to tackling the issue.
Further to our commitment to protect services, the budget puts in place measures that will boost our economy and create jobs. The additional £6 million for regeneration is particularly welcome. Perhaps the most successful of the measures that the Government has taken over the past few years has been the introduction of the small business bonus scheme, which has removed the rates burden from more than 63,000 properties, thereby allowing businesses to reinvest, employ more people and grow into the successful and dynamic businesses on which this country prides itself. In case anyone thinks that that is simply rhetoric, we should remember that Colin Borland told the Finance Committee that one in eight of Scotland’s small businesses would have gone bust during Labour’s recession had it not been for the small business bonus scheme. In maintaining that valuable scheme into next year, the budget will help tens of thousands of Scotland’s businesses during these tough times.
As we have heard, the budget will provide an additional 1,200 college places at a cost of £8 million, and an additional £15 million has been provided for college bursaries. That is £1 million more than the NUS asked for in its recent campaign. In addition, an amendment has been made to include a £10 million fund to support job creation in small businesses, which I know that the Conservative party was extremely keen to see happen. Most members will welcome that.
We have also made provision to increase the number of apprenticeship places by 25 per cent next year to a record 25,000. It must be said that there would be no demand or requirement for such a vast quantity of young tradespeople without the budget’s investment of £3.3 billion in the construction sector.
The SNP has listened to and acted on the various suggestions of Opposition parties, and it is disappointing that at least one and possibly two of those parties do not seem to be as enthusiastic for the budget as they should be. I believe that the cabinet secretary has bent over backwards to accommodate as many different perspectives and points of view as possible in an effort to help the people of Scotland and the Scottish economy. I therefore ask all members of the Parliament to support the budget today.
15:18
I welcome a number of the individual measures that have been announced today, but the way in which our final budget has emerged—following deals in what in the old days would have been smoke-filled but which these day are smokeless rooms—means that it is easy to lose sight of the longer-term trends. The last-minute deals on what are fairly small sums of money miss the longer-term trends in budget setting, and it is those longer-term trends that I want to focus on.
Over the past 12 years in Scotland, we have increasingly developed a treasury function. As this session of Parliament draws to a close, I want to look back at the budgetary progress that we have made over the past four years. At this stage four years ago, there was no shortage of promises, particularly from the current party of Government. Its success in keeping those spending promises is a matter of record, and I will not be tempted to revisit that.
Four years ago, the SNP made not just big spending promises but big budget promises. It promised to develop the treasury function as well as the spending function. First among the budgetary promises was the promise to abolish the council tax and replace it with a local income tax. Members will recall that the Scottish Government dropped those plans on the fair basis that it thought that they could not command a majority in this place. That might have been true, but the key issue is that the plans were never published.
We approach another election at which the SNP will offer plans for a local income tax, but with no figures, modelling or detail. Four years on—and despite all the resources of the Scottish finance directorate and the office of the chief economic adviser—the SNP still has no plans for a Scottish local income tax and no discussion document, green paper or white paper.
The second big budgetary commitment in 2007 was a promise to write off student debt. Again, four years on—despite all the resources of Government—the SNP has produced no discussion document, green paper or white paper, no detail and no modelling.
The third big budget promise of 2007 was to abolish public-private partnerships and replace them with not-for-profit trusts and bonds. Again, we have no discussion document, green paper or white paper.
The observant parliamentarian will spot the pattern. The Government came to power with three really ambitious budgetary promises: to introduce a local income tax, abolish student debt and replace PPP. On every one of those big three financial promises, it did not get as far even as laying out the detail. The truth is that the treasury role in Scotland that developed in the first eight years of devolution has been allowed to atrophy and not to progress under the current Government.
Given that record on budgetary promises in the past four years, what are the challenges for all of us in the next four years? The first is higher education finance. How will we in Scotland respond to the new system of higher education funding in the rest of the United Kingdom? The truth is that the future of our universities and colleges hangs in the balance. Arguably, that will be the biggest decision that we will face in the next four years. However, with weeks to go to the election, the SNP has produced no modelling, numbers or detail—members will get the picture.
The second challenge is building infrastructure. Four years ago, the Scottish Government’s website would have shown that dozens of projects were reaching financial close. I suggest that members who want an investment-led recovery go to that website today. It shows one project for which tenders have been advertised and four “potential” projects. Not a single project is in the pipeline. The Scottish Government has left an inheritance of nothing in the pipeline for whomever tries to stimulate an investment-led recovery.
The third big challenge that faces an incoming Government is the future of our public services. What progress has been made in the past four years on better delivery, improving effectiveness and service redesign? The SNP began well in 2007, when it published the Howat report, but nothing happened. In 2009, we had the Beveridge review. It reported in 2010, but nothing happened. Now, in 2011, we have the Christie commission and an invitation to wait and see until after the election.
Whatever small sums of money are reallocated today, the truth is that we have made anything but progress in budgetary terms in the past four years. The next Parliament needs to rise to the challenge that the Government has neglected, so that the spending machine starts to become the treasury function that we were promised, that the country needs and which the Scotland Bill will start to deliver.
15:25
Today, we find ourselves in a similar position to that of previous years: last-minute alterations are the norm as this minority Government tries to get its budget passed. The cabinet secretary has worked to build consensus across the chamber. Reaching consensus has been particularly difficult for him this year, given a budget that has, for the first time, been reduced in cash terms. Let us remember that two thirds of those cuts were planned prior to the Liberal and Tory parties coming into power at Westminster—they are cuts that Alistair Darling said would be deeper and harsher than those under Margaret Thatcher.
The proximity of the election in May has done nothing to make the process of negotiations any easier. However, despite the biggest ever cut to the Scottish block grant, this budget will deliver for the people of Scotland. We have the continuation of the council tax freeze and the small business bonus, funding to retain the extra 1,000 police officers and an end to the tax on ill health with the introduction of free prescriptions. All that is contained in the budget that is before the Parliament. The cabinet secretary attempted to take on board the contributions of Opposition parties, and the different ways in which they responded to his offers were plain to see in the opening speeches. In spite of the negativity coming from the Labour benches, I hope that, at decision time, Labour will do what is best for the people of Scotland by supporting the budget.
In past debates, Mr Gray and Mr Kerr professed great concern about a favourite couple of theirs: the fireman and the nurse. That couple and millions more across Scotland will be given support by this budget through the council tax freeze, yet Labour suggests that it may not support the budget. How times have changed. Will Labour really oppose its favourite couple getting free prescriptions that are part of the free health care that is one of many traditional Labour policies? Will it really propose a continuation of that tax on ill health? Is Labour really saying that it will oppose the Government’s protection of the health budget? It is clear that the fireman and the nurse have been dumped by Labour.
Last week, Labour had a new couple: the playboy and the chief executive officer. It told the chamber that the largest businesses, such as Tesco and Sainsbury’s, could not possibly have an increase in their business rates, yet it seems that it is just fine and dandy for Labour that couples across the country—pensioners, firemen and nurses—pay extra in council tax.
Will the member inform the chamber of the weekly savings that a band D household in Dundee will make from the council tax freeze? When it came to the retail levy, we listened to the views of the Union of Shop, Distributive and Allied Workers—the workers’ representatives.
I have spoken to a number of workers who are USDAW members and who were surprised at the union’s stance. It would be particularly interesting to find out what consultation Mr Kerr and his colleagues in the Parliament had with Labour Party members across Scotland, many of whom are appalled by the Labour Party’s stance in supporting Tesco.
In Dundee, the average saving this year will be £150. Of course, that has to be added to the savings that council tax payers had last year, the year before and the year before that. That might not be a lot of money for Andy Kerr, Iain Gray or David Whitton, but it is a lot of money to my constituents who are suffering because of the economic mess in which Mr Kerr’s Government in Westminster left this country. It is for those on the Labour benches to explain why they opposed the retailer tax and why they will not support the council tax freeze—a measure that supports hard-working households across Scotland. The reality is this: Labour has no answers. Its finance spokesperson spoke for, I think, 10 minutes. He talked of a vision, but we heard nothing—not one single idea.
At the core of this budget is a commitment to support Scotland’s economic recovery by increasing employment, strengthening education and promoting new business growth. A sign of the efforts to which the cabinet secretary went is that he listened to contributions from all parts of the chamber, including the Labour Party, and strengthened the budget on the areas that they raised in spite of the difficult economic pressures that we face.
As a Dundee MSP, one important commitment in the budget for me is the commitment to funding for the Victoria and Albert museum project at Dundee. That project will, in itself, help to achieve the aims of economic growth and increased employment. Let us be perfectly clear: the future of the V and A at Dundee project would be less certain without the commitment that the Scottish Government has made in the budget. Voting against that commitment would make the project less certain. The project will provide a major boost economically as well as culturally to Dundee. Inward investment is already being generated for the city because of it, with a positive uplift for the local economy that will continue to grow as we move towards the planned opening in 2014.
We have heard from the cabinet secretary that the budget will create 25,000 new-start apprenticeships—more than have ever been created before. I have mentioned the funding for the game-changing V and A at Dundee and the continuation of the council tax freeze, but there is also the new fund to protect jobs and services in the voluntary sector. Are we really to believe that the Labour Party is against all those initiatives?
This is the right budget for Scotland. It will protect jobs and front-line services and support economic recovery. The Government is taking the steps that it can, within the Parliament’s limited powers, to protect jobs and to offer new opportunities in the coming years. I urge all members to support the budget this evening.
15:31
I am grateful for the opportunity to contribute to the budget debate. Although I want to focus on health, I want first to take issue with the cabinet secretary’s comment about Argyll and Bute Council.
Let us be clear—councils across Scotland have lost supporting people funding. Argyll and Bute Council has suffered worst, followed swiftly by West Dunbartonshire Council. The cabinet secretary’s announcement fails to close the gap in the allocation. Mr Swinney knows that the COSLA leaders’ meeting of 19 November agreed the formula for distribution, which is very different from what has subsequently emerged from the Scottish Government. Under that formula, Argyll and Bute Council expected to receive £6 million more. As I understand it, the cabinet secretary is giving back £1 million to the council, but where is the missing £5 million?
Dick Walsh, the leader of Argyll and Bute Council, wrote to me:
“it is clearly disappointing that my Council is now in a position of having to make cuts to services that it would not have had to make.”
Argyll and Bute is represented by an SNP MSP who is a minister. There is an aspirant SNP candidate who is a cabinet secretary. Surely they could have convinced the Cabinet Secretary for Finance and Sustainable Growth. If the position does not improve, they will be accused of being responsible for wholly unnecessary cuts to services for some of the most vulnerable people in Argyll and Bute. This is entirely a debate between COSLA and the Scottish Government about the formula that was agreed on 19 November; it sits separately from the wider debate on the budget. I look forward to the cabinet secretary resolving the matter.
Of course, the SNP already has form in this regard. What about social care? The true scandal of the SNP term of office is exposed when we consider what it has done with social care. When the SNP came into office, it inherited a social care budget of £3.2 billion. However, in a few short years that budget was cut to £2.8 billion—£400 million less. [Interruption.] I am disappointed that the cabinet secretary is sighing about the issue, because we are talking about £400 million that has been taken from the most vulnerable in our community.
I am sighing because Jackie Baillie continues to produce duff numbers in the Parliament.
I look forward to the cabinet secretary’s apology, because the numbers come from Audit Scotland. It is not for me to cite duff numbers—that is more the province of the Government.
Will the member give way on that point?
I have already given way.
Although the Scottish Government has introduced a £70 million change fund, the strong view on the ground is that that will simply substitute for the cuts. There will be cuts to community and voluntary organisations on the ground and to care-and-repair projects. Funding for pensioners lunch clubs will be halved. Mental health services have changed so dramatically that workers are now on zero-hours contracts. New charges will be placed on services for people with learning disabilities. All those measures will have a negative impact on people in our communities, driving them into the formal care system more quickly than would otherwise have been the case. That is the consequence of passing the budget today.
There will be no protection for older people who require care, those with learning disabilities and those who require support due to mental illness.
What about the much-vaunted protection for health? In the previous budget debate I challenged the accuracy of the SNP’s promise, which was made by the First Minister on the day of the party’s election launch. He told us that he would spend £1 billion extra over the next parliamentary session.
The Cabinet Secretary for Finance and Sustainable Growth is always keen to intervene when I get something wrong—he is always keen to correct me. I see from the Official Report of the previous debate that, remarkably, he did not take the opportunity to do so on that occasion. Let me give him that opportunity again.
The First Minister said:
“We’ve protected the health service in real-terms ... and we’re now extending that commitment to the next four years.”
That is just not accurate. I will tell members the facts. The SNP’s health budget will drop by £8.6 million in real terms. That is a real-terms cut, not an increase and not protection. Here is another fact: the SNP’s 1.6 per cent cash increase for the NHS in this budget equates to a 0.3 per cent cut in real terms, so there is a reduction of £33.9 million this year—a cut, not an increase.
Jackie Baillie is establishing an excellent parliamentary tradition of continually providing duff numbers to Parliament. What she has said is not the case.
I love the cabinet secretary’s assertion, but do I prefer to believe his rhetoric or the independent information from the Scottish Parliament information centre? There is no contest: SPICe every time.
The pledge that the SNP made on the very day of its election launch now lies in tatters. It is just not accurate. The present settlement is the lowest for the NHS since devolution. If the budget was set to rise, as the SNP claims, the Scottish Government would not be implementing plans to cut thousands of nurses and other front-line staff. Four thousand staff are gone from the NHS—1,500 of them nurses—this year alone, and that is before the budget bill is passed. That is in the good times, before the UK coalition’s budget cuts have begun to bite, and the cuts are entirely down to the SNP. Shame on you.
15:37
This is not the budget that we would have chosen to put before the Scottish people had we been in government, but the duty of a reasonable, responsible Opposition at this time, of all times, is to work with Government to try and deliver an improved budget that we can support. That is what the Liberal Democrats—and, indeed, the Conservatives—have sought to do.
As we emerge from recession, we need an able and skilled workforce that is ready for the new industries and challenges of the future. Delivering that able, skilled workforce should be a fundamental component of this year’s budget. Instead, the Scottish Government’s budget delivers concerning cuts in both higher and further education, with a real-terms cut of 7 per cent for colleges.
The contribution that Scotland’s colleges have made in helping the country to turn the corner and to exit recession must not be underestimated. In many areas across the country, colleges have responded quickly and effectively to local demand for courses, whether from school leavers or from individuals seeking retraining to enter new vocations following redundancy. Our colleges have consistently met the demand for training and upskilling when unemployment has hit, and they have been at the heart of the partnership action for continuing employment initiative. Their flexibility and the fact that they are rooted in our communities are real strengths, which is why Liberal Democrats feel that they are uniquely placed to play a leading role in Scotland’s push against youth unemployment and in our economic recovery.
We welcome the agreement of Scotland’s colleges to keep student numbers at current levels despite the cuts that are being imposed on them, although we understand how difficult it is to deliver that request from the Government in reality. Last year, the Liberal Democrats fought for more college places in the budget and secured 7,500 additional places. In this year’s budget negotiations, too, we have sought to support Scotland’s colleges, students and those who seek to undertake modern apprenticeships and other training. I am delighted that the cabinet secretary has agreed to our proposals that there should be an additional £15 million for FE bursaries over two years including this year, to provide additional support to existing students, as well as £8 million of additional funding in 2011-12 to provide an additional 1,200 college places with appropriate support. That represents a substantial boost to the college sector.
Our colleges have an excellent track record of attracting poorer students and older students with family commitments into further and higher education. Twenty-nine per cent of college teaching takes place in Scotland’s most deprived postcode areas, so it is essential that those who struggle the most financially to access FE and HE are given the support that they need. That is why we made the issue of student support and college bursaries central to our discussions with the Cabinet Secretary for Finance and Sustainable Growth. We share the concern of NUS Scotland and Scotland’s Colleges that the draft budget proposed a cash-terms freeze in bursary funding, which meant that more than 40,000 of the poorest college students faced the prospect of real-terms cuts to vital living costs support, at a time when living costs are going up and part-time job prospects are going down.
Will Margaret Smith give way?
No.
Bursary funding is not a new problem. There have been problems for many years and there have been understandable calls for a new, guaranteed approach to bursary funding, so that students and potential students can have certainty about the funds that they will receive to get them through the academic year and their course. NUS Scotland said that we face a £14 million shortfall in bursary funds and colleges will be unable to support all the students whom they are asked to take on. Liberal Democrats do not think that that is acceptable for our students, our colleges or our country as we try to climb our way out of recession.
Twenty-three out of 39 colleges reported this year that they would be unable to meet their student targets given their initial bursary allocation. They said that without additional bursary funding they would be unable to afford to take on enough students. Many colleges have dipped into core funding to subsidise bursaries in the past and we hope that the extra bursary funding that Mr Swinney announced on the back of the negotiations that we undertook will protect core funding for college learning.
If we are to grow our way out of the current economic situation, it is important that we lead the way in training individuals in growth areas such as renewable energy. I am delighted that 500 of the 1,500 new modern apprenticeships that will be delivered as part of our successful negotiations with the Government will be in the renewables sector. I am pleased that the Scottish Government has gone further, to deliver more modern apprenticeships, which is good news for business and individuals. I also welcome the additional 2,000 flexible training opportunities that have been announced following our discussions.
Training and employability should be at the heart of the budget. I encourage the cabinet secretary and the Minister for Housing and Communities to reconsider their decision on the capital city partnership in Edinburgh. Unemployment in Edinburgh is at its highest level in more than a decade, and job seekers from areas such as Muirhouse, in my constituency, are feeling the effects of the recession particularly hard. Edinburgh has the worst level of positive destinations for school leavers, so young people are experiencing difficulties in finding work. The CCP has been praised by the Government as an excellent example of joined-up working, which has attracted a great deal of matched funding. It helps thousands of people every year and focuses on people who have employability issues. I appreciate that we need to simplify and streamline the training landscape, so partnership working makes sense. We are in difficult economic times, but it makes sense to consider supporting an initiative that is working successfully.
The Scottish Liberal Democrats are serious about education and skills. That is why we put record resources into higher and further education when we were in government, and it is why in opposition we have signalled our willingness to work with the Government, other parties in the Parliament and people outside the Parliament, to provide proper support for Scotland’s colleges, universities, training providers and students.
By accepting the Scottish Liberal Democrats’ proposals, which reflected concerns that were expressed by NUS Scotland and others in the education and training sectors, the Scottish Government has improved the budget. I hope that the Parliament will support it.
15:43
I welcome the opportunity to speak in the budget debate.
Given the £1.3 billion reduction in the Scottish Government budget for next year, which follows the £500 million reduction this year, I am sure that all members acknowledge that the cabinet secretary faced a massive financial challenge. John Swinney deserves every credit for producing a balanced budget in these straitened times.
Today’s announcements include an increase in apprenticeship places to 25,000, an additional £10 million for the supported jobs fund in the voluntary sector, an additional £15 million for college bursaries, the £1 million post office diversification scheme, and the additional £2 million for freight facilities grants.
My favourite announcement was about the reintroduction of moneys for urban regeneration companies in Scotland. The population of Inverclyde and Ayrshire will be happy to learn that the SNP Government appreciates URCs and, in particular, the excellent work of Riverside Inverclyde, which will continue. Alf Young, the chairman of Riverside Inverclyde, said in the Greenock Telegraph on 24 January:
“I have always been told by the politicians and their officials this was a 10-year mission to take 20-odd years of dereliction and do something about it, and that they would back us”.
Today, John Swinney continues that progress and the work of turning around 20-odd years of dereliction in Inverclyde, as Alf Young highlighted.
The cabinet secretary knows of my genuine interest in safeguarding Riverside Inverclyde. I raised the issue with him in the Economy, Energy and Tourism Committee last week and met him last Thursday afternoon. In addition to that, I wrote to him and Alex Neil about it and raised it in the committee when Scottish Enterprise officials gave evidence on 19 January.
The future of Inverclyde’s economic success depends on our regeneration. Other parties and individuals have made representations on the URCs and Riverside Inverclyde in particular. However, I am content that John Swinney and the SNP Government have listened to the arguments.
On a different matter, I whole-heartedly welcome the increase in apprenticeship places to 25,000 for next year. That record number will provide new opportunities for our population. Those new modern apprenticeship starts will be welcomed throughout the west of Scotland and Scotland as a whole.
Other beneficial aspects of the budget include the freezing of the council tax for the fourth year in a row, as already mentioned, and the maintenance—indeed, the extension—of the concessionary travel scheme. I know many people who value the travel scheme, which not only helps people to get out and about in their communities but helps the tourism industry in Scotland.
Another welcome element concerns the health budget. Ensuring that the Barnett consequentials on health go to the NHS is a welcome addition to the budget. Many of my constituents warmly welcome it as they fully value the NHS and the services that it provides.
During the Economy, Energy and Tourism Committee’s budget scrutiny last year, I asked the panel of witnesses, which included Professor Brian Ashcroft and Alf Young:
“What one thing would you recommend be changed in the budget? Obviously, there would be knock-on effects, but if the Government was to change one thing, what should it be?”
Professor Ashcroft answered:
“Can I get in first? The Government should not ring fence spending on health.”
Alf Young’s response was:
“I would choose the same thing.”—[Official Report, Economy, Energy and Tourism Committee, 24 November 2010; c 4367.]
There is much to welcome in the budget. I am sure that John Swinney would have preferred to have the additional £500 million, £1.3 billion and even the £30 million from the retail levy. Think how much more John Swinney could deliver for Scotland if he had that money. If he had more, I am sure that it would be invested wisely.
The £30 million retail levy was contentious in the Parliament. In recent weeks, I spoke to many people in the small business sector. They were disappointed with how the Parliament voted last week, but they realise who is on the side of the small business sector in Scotland.
John Swinney has proposed this Scottish budget to the Parliament in financially straitened times. However, I am sure that the Parliament can rise to the occasion and not only agree to the budget unanimously this evening but ensure that the Scottish people appreciate that it is a budget for Scotland in financially challenging times. I am sure that they will appreciate the hard work and effort that John Swinney has put into the budget. I hope that the Parliament will rise to the occasion and back the budget to ensure that Scotland and its economy can move forward.
15:49
I welcome the revisions to the budgets for the urban regeneration companies. I lobbied Mr Neil on that matter on behalf of all the regeneration companies—in particular, Clydebank Re-built—and will be interested to know the detail of the additional money that Mr Swinney has made available.
The revisions to the bursary funding that the cabinet secretary announced are welcome for people who will complete courses in the current academic year and those who will undertake courses next year. However, in the context of a 10.4 per cent reduction in college funding and a similar reduction in university funding, it is hard to argue that the budget is good for further and higher education or for students.
My welcome for something for which Labour consistently argued is therefore a bit muted. Unlike the Liberal Democrats, I see it not as a great victory, but as a pragmatic step that will bring benefits to thousands of individual students who should never have been denied bursary support as they were in the original SNP budget. However, thousands more students will encounter fewer lecturers, poorer facilities and less support because hundreds of millions of pounds have been cut from college and university budgets.
In colleges throughout Scotland, lecturing and support jobs are being lost, mostly through voluntary redundancy, although some are going through compulsory redundancy. In universities, as we saw in the announcement from the University of Glasgow yesterday, departments are being closed, specialisms are being dropped and students are losing out.
College and university principals were told before Christmas to adhere to the line that the cuts were only 5 per cent and that that was a good settlement for further and higher education. They did not rock the boat, but the truth has now dawned on them. The percentage cuts in higher and further education in Scotland are higher than those that the Tory-Lib Dem coalition has imposed in England.
Will the member take an intervention?
The facts are undeniable: the further and higher education sectors in Scotland have been particularly badly bruised by this SNP budget. While the Liberal Democrats claim a great victory—as I am sure Margaret Smith is keen to do—which they hope will offset the anger at their betrayal on tuition fees south of the border, closer examination reveals their support for another betrayal, this time of students and staff here in Scotland.
By signing up to this project, the Lib Dems have put their names to the worst settlement anywhere in Britain for students and the further and higher education sectors. If anyone wants proof of that, they should speak to the representatives of students or staff at their local college or university.
I will ask Des McNulty a clear question: did the Labour Party make any representations to the Government to ask for any improved funding for bursary support students? Did it, or did it not?
We absolutely did, and if Margaret Smith was in the debate two weeks ago, she will have heard me make that point.
In colleges, people know what the real financial situation is and what the settlement means. In Clydebank College, the grant is being reduced from £11.5 million to £10.3 million. It is happening across Scotland: in James Watt College in Greenock, in Banff and Buchan College in Aberdeenshire, and in the University of Stirling and the University of Abertay Dundee.
In future, because of the SNP Government’s decisions, we will end up with fewer places for more applications. All the strong-arm tactics that Mr Russell employed to buttress his claim that the cuts will be no more than 5 per cent will not hide the pain that the budget will bring for the sector.
I turn to the school sector. When this Government came in, it announced the end of ring fencing for local government. All the funded programmes in the national priorities action fund were to be rolled up into the local government general grant, which was then held back to force councils to accept the Government’s council tax freeze.
A series of policies was to be supported by budgets, such as increasing the number of teachers; reducing class sizes; implementing the Education (Additional Support for Learning) (Scotland) Act 2004; introducing initiatives such as better behaviour and hungry for success; implementing the Scottish Schools (Parental Involvement) Act 2006; and ensuring continuing professional development.
On top of that, the SNP promised a raft of additional commitments, including a reduction in class sizes to 18 in primaries 1 to 3, the maintenance of teacher numbers, the abolition of student debt, additional hours of nursery education and so on. When we look at what has happened to those budgets, we see that they have disappeared. The £56 million that was supposed to support keeping teacher numbers at 53,000, and keeping down class sizes in English and maths, has simply gone. We have 3,000 fewer teachers, and most local authorities are abandoning the secondary class size pledge because the resources to deliver it have been taken away.
There was £25 million in the budget to support improvements for pupils with low attainment, with a focus on social inclusion and equality. On speaking to anyone in the authorities that have those types of schools with those types of pupils, one finds that that money is away too.
Money was supposed to be set aside to implement the Education (Additional Support for Learning) (Scotland) Act 2004, but the Government has not implemented the act. There was £13.5 million to help with the continuing professional development that was needed to support curriculum for excellence; many teachers are wondering where that has gone. There was £17 million to increase the number of support staff in schools, but in Aberdeen, for example, those staff are all apparently to be sacked by the SNP-Lib Dem council.
A total of £250 million, rolled up into local government budgets, has been taken away and has disappeared. It has been stripped away from education in Scotland, and that is only part of what has gone; we know that the mainstream budgets, too, have been stripped to the bone. That is the reality of the budget under the SNP, and that is why the Labour Party will not support it.
15:55
John Swinney began by saying that he had sought consensus with all political parties in the chamber on the budget. Even when I disagree with Mr Swinney—in fact, especially when I disagree with him—I try to give credit where it is due, so I will go as far as to say that he has always been pretty straightforward with other political parties during budget negotiations. But consensual? Not this time. The reality is that John Swinney does not need a consensus to get a budget through; he needs 65 votes. That is what he has sought to get, and it appears that he will get past that mark today. We do not, though, have consensus and we never have had it on the right response for Scotland to the Tory cuts down south.
I have made the Green position clear repeatedly and I will run through it one more time in case anyone is unclear about it. The cuts agenda that the UK Government is pursuing is not only economic vandalism but social vandalism, and it is unnecessary. There are also wrong priorities within the Scottish budget, with some cuts being more harmful than others. John Swinney has protected the road building programme with enough enthusiasm to make Jeremy Clarkson proud, but he has brought us a £94 million cut to the housing budget. For him to come to the chamber today and talk about a £16 million addition to that budget, as though it is some great stimulus measure that will blind us to the fact that there has been a £94 million cut to that budget, is simply not credible.
Beyond that, revenue raising is necessary to protect public services and the investment in a low-carbon Scotland that we need. I believe that that revenue raising can be done within existing powers fairly and progressively if we are prepared to be creative, as we have sought to be. We have produced proposals on bringing empty properties into non-domestic rates and on bringing urban vacant land—land banks—into business rates, which could generate income. We have talked about an additional way of using a large business supplement that would have got over some of the arguments that we heard last year from the other Opposition parties against the retail levy. We have talked about progressive ways to raise revenue and about some of the unnecessary priorities that the Government is pursuing. Just delaying the pursuit of the replacement Forth road bridge by a year or so, until we hear the results of the engineering work on the existing bridge, would allow us to know whether that spending was necessary and we might be able to reverse a huge number of the cuts that are being made to the higher and further education budgets and to the housing budget, as well as plug the £30 million gap and commit to a full-scale home insulation programme. However, the SNP has rejected those proposals, not out of necessity but out of political choice.
I am sure that Mr Swinney will be happy to see his budget passed, but is he happy with the new political alignment that he has fostered to achieve that? Around the turn of the year, I wrote to John Swinney urging him to take a stronger stance against the UK Government’s cuts agenda. I told him that if he was not willing to take that stance, he should look for support for his budget not to us, but to the parties behind that ideological cuts agenda. That seems to be exactly what he has done.
The Tory position is consistent—it is deeply harmful, but it is consistent. However, the Lib Dems’ position on the budget is every bit as two-faced as their 2010 election campaign was. Desperate to rehabilitate themselves with the generation of students whom they have just betrayed, they come here and tell us about the importance that they place on bursaries—something that they know full well not a single party in the chamber would oppose, but they are using it as a pretext to vote for a budget that slashes the overall funding for higher and further education. Again, that is utterly not credible.
Last week, I read an interesting article in The Herald. It said:
“The SNP at Westminster is to ... make greater use of the phrase ‘Conservative-led government’ in describing the Tory-LibDem Coalition. The nationalists will limit their use of the term ‘coalition’, believing that it fails to suggest sufficient responsibility for swingeing public spending cuts.”
The article ends:
“A senior SNP source said: ‘It is definitely language that you will see used more often.’”
I think that we can start using it today because, if this budget is passed—a budget that implements Tory cuts that Scotland never voted for—it will not much matter whether the cabinet secretary who proposed that budget is a blue Tory, a yellow Tory or a tartan Tory; he will not deserve to be forgiven for offering Scotland a Tory-led budget. There will be countless voters—many of whom voted SNP for the first time in 2007—who hoped for much better and who are being badly let down by the Scottish Government today.
From now on, I will restrict members to five minutes, which is one minute more than they might have been expecting.
16:01
The budget that is before us today is £1.3 billion less than the budget that was passed in 2010. I believe that the 2011 Scottish budget cuts are a product of Labour’s disastrous handling of the UK economy and of the Conservatives in London cutting too quick and too deep. However, we are where we are, and political parties in Scotland need to move beyond the blame game and towards fixing the problems that we face. That is what the Scottish public expect.
As a minority Government, the SNP must, as a matter of political reality, seek consensus and compromise. That is how we seek to govern, and always have done. The fact that Labour appears to have done all that it can to block a budget that is in Scotland’s national interest tells me that it is not fit to govern after May this year.
I never wanted £1.3 billion-worth of cuts, but there is still £30 billion to be spent, and we should never forget that. Despite that, what we hear from Labour is constant negativity. Andy Kerr made it crystal clear that Labour lacks vision and has no ideas. I would like to speak about how we are using some of that £30 billion, which is a significant amount of cash. Before I do so, I note that Labour cannot even suggest how it would transfer even one single penny of it.
I am proud to see the SNP Government delivering a record number of apprenticeships for 2011-12. Those 25,000 apprenticeships will give our young people vital training opportunities, which will be welcome in Glasgow and across Scotland. The SNP has a strong track record in the area. Through the four budgets that we have had passed, we will have delivered 76,000 new apprenticeships. I note that that contrasts rather favourably with Labour’s last four years as the Scottish Executive, during which it delivered 73,000 apprenticeships. We should remember that the Labour Party delivered fewer apprenticeships during a time when the budget was rising significantly, and that we are delivering more apprenticeships during a time when the budget is shrinking drastically. The facts speak for themselves.
I genuinely urge Labour to support the Government’s budget. Do Labour members really want to vote against a record number of apprenticeships? That is the question that is being asked this afternoon.
We want more.
I hear a Labour member saying from a sedentary position that they want more apprenticeships. I ask her why Labour delivered fewer apprenticeships when it was in government and had more money than is available to the SNP Government, which is delivering record levels of new apprenticeships with less money.
Do Labour members want to vote against a council tax freeze that will support under-pressure pensioners and hard-working families? Do they want to vote against Scottish students from poor backgrounds and attempt to deny them access to an additional £15 million and 1,200 extra student places? I hope not, although we will find out at decision time this evening.
I praise the NUS for organising the hundreds of FE students in Glasgow who have contacted me with concerns about bursaries, and I look forward to telling those students that the SNP has worked across party lines to address their concerns and to deliver for them.
Will the member give way?
I do not have much time. I am sorry.
I want in the time that I have left to talk about the large retail supplement. This budget does not include everything that I wanted, as an SNP politician, because I wanted it to include an additional £30 million. I suspect that Labour did not, because it cannot say how it would spend one penny. I ask the cabinet secretary to say whether, if the SNP is re-elected in May this year, the Government will continue to progress the idea of having a large retail supplement. I certainly have ideas about that, including about finding ways of allowing large cities to retain more of that levy, and I am happy to work with the Christie commission, my own party and across parties to flesh out those ideas.
We are standing up for small businesses in this budget, so I am delighted that the Conservatives have belatedly come on board in relation to that. I thank them for their constructive work on the £10 million fund to support small and medium-sized enterprises and employability. The budget and the help that 74,000 small businesses get through the small business bonus will be received with enthusiasm in the streets of Glasgow, in places across the city such as Maryhill Road, Springburn Way, Dumbarton Road and Victoria Road, where we are standing up for small businesses and not kneeling before the large corporations, as Labour would have us do.
16:05
I welcome the opportunity to contribute to the budget debate.
There is no doubt that this is a flawed budget, which delivers £1.3 billion of cuts. It will be backed by a triple Tory alliance of the Tories, the tartan Tories and the new Tories in the form of the Liberal Democrats. The budget is flawed both in policy terms and in relation to its process.
Will the member give way?
Let me develop my theme.
Consider the budget’s political priorities: it does not prioritise economic growth and it will not do enough to create jobs in our communities and protect them from the cuts. Stuart McMillan mentioned economic regeneration in his speech, and the cabinet secretary said that he is committing an additional £6 million to the regeneration companies. Let me tell members that Clyde Gateway, in the area that I represent, is already having to make £22 million of cuts next year, so £6 million across the regeneration companies will not be enough—[Interruption.] It will not be enough—I say to Mr Doris—to stop the cuts at Clyde Gateway, which are a threat to the legacy of the Commonwealth games.
This budget is also flawed in terms of process. The cabinet secretary told us that there will be 3 per cent efficiency savings. That amounts to about £1 billion, but nowhere in the budget document can I see where the efficiency savings will fall and what changes will result in budget lines, which means that there is a £1 billion black hole in relation to efficiency savings alone.
The report last week from Audit Scotland on capital infrastructure revealed how the Government budgets, and the point was reinforced by the cabinet secretary in his speech. An overallocation of £100 million has taken place. That is not only not prudent and effective budgeting but is, in effect, a £100 million Swinney slush fund, which he can use to buy off political parties during stage 3 of the budget process.
I was at the same Public Audit Committee meeting, when we spoke to the Auditor General for Scotland about the £100 million. Does James Kelly recall that the Auditor General agreed that that is a normal accounting tool that is used widely, that it is a sensible way to use it and that it does not mean that £100 million is just floating around waiting to be used?
The Auditor General for Scotland said that it would not be possible to specify which projects the £100 million was allocated to, therefore there is a lack of transparency. I repeat my point that that money represents a £100 million Swinney slush fund, which has been used to buy off the other political parties.
When we follow the process on to the justice budget, we can see that it is flawed. The SNP tells us that it will maintain police numbers. Even if it maintains police officer numbers, there will be fewer police on the beat because—as we were told at the Justice Committee—there will be a cut of up to 1,200 support staff, which means that police officers will be taken off the beat to backfill the work of the support staff. We heard earlier in the week that complaints about antisocial behaviour have rocketed to half a million. We want police on our streets fighting crime, not manning the filing cabinets.
The approach of SNP members on so many issues has been to sit on the sidelines. They are spectators—not participants. The budget fails on policies, on priorities and on process. It is not fit for purpose for Scotland in 2011 and I urge Parliament to vote it down at 5 o’clock this evening.
16:11
I will not pretend that I like every last jot and tittle in Mr Swinney’s budget. However, had it not been for our ban on fox hunting, I would have been sure that the start of the Labour Party’s contribution to the debate sounded like foxes being shot. In later speeches, though, I realised that there was something more to what Labour had to say.
In an echo of something that Wendy Alexander alluded to, we could start by calling the budget by its correct name. It is not a budget, so why do we not settle for a name that does not flatter to deceive? How about the Scottish Government’s spending programme or cap-in-hand day? I would even suggest kidology day, because that is what just about every member has been doing, with the honourable exception of Patrick Harvie.
However, the minister is to be congratulated on his sense of fairness in doling out the local authority share of his spending money, especially following the unprecedented weather that has probably left every council in Scotland with a bigger roads repair bill than it might have anticipated. One of my personal tests of Mr Swinney’s performance was how he met a genuine dilemma on how best to use whatever amount of the block grant he allocates to Scotland’s cities. It is almost impossible to calculate a share of the money that is available to the minister that everyone would agree is fair, when our local authorities have such different locations, needs and other factors.
The cabinet secretary knows the case that I have made for an enhancement of the capital city supplement, given the extra effort that is required to address the damage to the capital city’s appearance and infrastructure that has been caused by the severe winter weather. I thank him for the extra money that he has levered in via the capital city supplement. There are quite a few weeks left, so he might find that there is a bit more left in the kitty. I am willing to share with Margaret Smith, who made an excellent case for the city partnership. I know that other members from the Lothians region agree.
However, I am mindful of the fact that members have a duty to contribute to policies that impact on areas outwith their constituencies and regions. It was a happy coincidence that Dalry baths was there to provide an excellent case study for Campbell Christie’s commission’s consideration of ways in which we might better deliver public services and keep services in the public sector. I thank the cabinet secretary, because he smoothed the way towards my having a meeting with the commission last week, and we are well on the way to using Dalry baths as a template.
On the subject of the responsibility of members to contribute to wider interests, I have asked the minister to instigate a review of private finance initiative and PPP contracts. I am extremely serious about the issue, and I am certain that people outwith Parliament think that it is ridiculous that some companies are making profits while other people’s contracts—whether commercial or personal employment contracts—are having to be renegotiated. I have not given up on that.
If the cabinet secretary carries out such a review, will the member also ask him for a forward look on his adoption of PPP for the building of major road projects?
The short answer is yes. The public sector and the public are being ripped off and—we are told—it is going to be 10 years before we get back to the economic circumstances that we had in 2007. It is just too long to be taken for doolies.
That said, I am almost entirely persuaded to support the spending programme, especially the move towards the colleges that I and others approve of and which Jeremy Purvis—to give him his due—has pursued. My views in that respect are sympathetic and positive. However, he has been lucky; it looks as though we have the best of the Liberal Democrats north of the border. It is just a pity that their colleagues south of the border do not take their example from them. I also thank, and am grateful to, the cabinet secretary for levering a bit of money into the Midlothian ski centre, through sportscotland.
In the end, I did not do all that much swithering. I have swithered in the past about voting for the plans that have been set out by Labour and the SNP, but this time, at least, the SNP put figures to its proposals. Labour did not and I suggest that its members listen to Douglas Alexander’s comment that they might well be a Government in waiting, so they should not only be oppositionist but offer alternatives. They did not do that in this debate.
16:16
There are not many occasions when it is so important for members to take their time and consider carefully the issue that is before them. A particular set of circumstances has led us here—the formation of a minority Government, the collapse of the UK economy, a change of Government at Westminster, and the ensuing large and rapid cuts—so we must, as a result, take today’s voting decision with extra care, thought and some humility.
My colleagues on the SNP group and the cabinet secretary, John Swinney, have come here today will all that in mind. It was quite clear to me that Mr Swinney had listened and, against the background of the cuts, had balanced as far as possible a reasonable and good budget for Scotland that, as he said, will give people certainty. It has also happened despite the opposition to the supermarket levy. I have to say that I still cannot understand why the Lib Dems and Labour oppose that move but, as I think Bob Doris also said, we are where we are.
The Tories, the Lib Dems and, of course, Margo MacDonald have been very reasonable in thinking about the way forward. Derek Brownlee is always fairly reasonable and Jeremy Purvis was as reasonable as it gets, which is always a bonus. What did we get from Labour? It was all so predictable. We got the usual negativity, a lot of bluster, no real substance and certainly no ideas. Andy Kerr might well get up and talk about the “full measures” that Labour want, but his glass is half empty. I hope that when David Whitton speaks he will be a bit more reasonable, considered and thoughtful and, indeed, show some humility in what he puts forward.
We also keep hearing an awful lot from Labour about what it would not do, but what would it do? What is its policy? Perhaps its policy is to shut accident and emergency units to pay for GARL. I do not know, but I certainly think that people should be told.
We have heard all that despite the fact that John Swinney has come to the chamber with some really important initiatives and compromises. He has listened. I am delighted, for example, to hear about the voluntary sector initiative, which will be really important. There is also money for the freight facilities grant and urban regeneration companies. All of those measures have been taken against the background of the maintaining of the council tax freeze and pledges on prescription charges. Such moves constitute a crucial social contract with the people of Scotland. After all, it is important that people have confidence in the way that their Government acts in moving forward: I certainly think that people have confidence in this Government.
The other big issues include apprenticeships. The increase in the number of apprenticeships from 20,000 this year to 25,000 next year is really good news. That is against the background of having exceeded last year’s target of 18,500 modern apprenticeships: more than 20,000 were delivered.
Many members have said that we have had a lot of lobbying from students who have been concerned about bursary cuts. We are all in the same boat. Again, the cabinet secretary has listened, and I am pleased about that. There will be an additional 1,200 college places at a cost of £8 million and, of course, the bursary bill has been raised to give confidence to young people who are pursuing further education in our colleges.
Will the member give way?
No, thank you.
The Scottish Government has also chosen to continue the education maintenance allowance. In East Kilbride, where I live, that fund increased by 6.3 per cent in 2009-10; the number of people who received the allowance went up from 585 to 620. That is all good news. The budget also contains small business bonus funding, which has been important over the past few years and is one of the reasons why business start-up figures in Scotland have been maintained.
There is much in the budget that will benefit Scotland, and advances that we have seen in the past few years that should be protected are being protected. A balancing act has had to be performed by responsible politicians putting aside partisanship for the sake of the country and how we will move forward. Scotland expects that every MSP will do their duty, so I ask that they do so.
16:21
I well understand Patrick Harvie’s frustration and anger about what he has heard today—about the lack of aspiration and clear intention in dealing with disadvantage throughout Scotland. I am sure that his anger has been made even worse by the fact that he helped to put the Government in place, and it is now badly letting down him and the people whom he represents.
Like Wendy Alexander, I could not argue against many of the cabinet secretary’s proposals. I welcome the £2 million for the freight facilities grant, the additional supporting people funding and the £400,000 for the capital city fund. Previously, the First Minister and the permanent secretary refused Edinburgh capital city fund money to help creditors who were affected by the gathering 2009. That money might go some way towards allowing those people to do what they suggested to the permanent secretary they would do. I also welcome the money for the urban regeneration fund and modern apprenticeships, for example.
However, what marks the budget out is a clear lack of ambition and a clear unwillingness to deal with the deep-rooted problems that we face. It marks an unwillingness to tackle disadvantage and is a refusal to undo what the Government has done in the past few years in shifting money and resources to better-off people at the expense of those who are most disadvantaged. That is why I cannot support the budget. It fails to measure up to addressing the needs of Scotland.
Andy Kerr highlighted issues that have been brought about by rising unemployment. He spoke about wrong choices and pointed out that the budget has moved only 0.1 per cent for a series of half measures.
Does the member believe that the money that is available in the devolved circumstances under which we govern is enough to do what he thinks should be done to redress the imbalances that exist and to grow the Scottish economy?
It is clear that I do not think that the money is enough, and that I think that we are suffering because of the disastrous policies of the Conservatives and the Lib Dems, who are cutting too far and too fast through the recession that is now starting to develop. However, the money that we are squabbling and arguing about today is a pittance compared with the overall budget. Much more can be done.
James Kelly was right to highlight issues that we considered in the Public Audit Committee. On good accounting practice, the Auditor General has said that he cannot say where the money was allocated to and whether it was put aside to help the cabinet secretary to offer the sweeteners that he has offered to Opposition parties today.
The reality is that we are now seeing real cuts in services that are affecting the unemployed, social work and the voluntary sector. On housing, there is a mere pittance to try to undo some of the damage that has been caused by the SNP’s failure in the past three or four years. The money for the colleges is but a drop compared to what is needed. If the Lib Dems think that their justification for supporting the budget will undo the untold damage that they have done to students, they are kidding themselves. Students will not forget their betrayal in a hurry.
In councils, we are seeing the disastrous effect of the SNP budget and Government. In Renfrewshire Council, 10 per cent of the school week is being removed from teachers and the council proposes to bring in the long-term unemployed, put them through a European social fund training course and then to deliver the curriculum for excellence. That is a dilution of quality education simply to save money, as that council has admitted.
The effect of the budget is to reduce services, standards and quality and it shows complete poverty of ambition and complete lack of aspiration. Andy Kerr has outlined some of the priorities that a decent Government should pursue, and I look forward to that happening after May.
16:26
Hugh Henry is right that we Liberal Democrats have struggled in a coalition against a party to get a better deal for students. We sought in a coalition to prevent fees from being introduced for students in Scotland. We worked hard in a coalition against the introduction of fees and we tried, although I admit that we failed, to persuade coalition partners on the introduction of a graduate payment. We have learned the lessons from our coalition with the Labour Party in Scotland, which is why we make no apologies—none whatever—for the contribution that we have made to the budget process or for working with students in Borders College and other colleges in Scotland.
In a debate of divisions among members, there have been areas of broad agreement and consistency of approach. Some SNP back benchers have said that members who vote against the budget are against everything in it, whereas Labour members have said that, if we vote for the budget, we are in favour of everything in it. Of course, neither of those is the case. If so, we would not have had the comments that we had from Patrick Harvie, with his partners in the Dublin Green-conservative coalition and its austerity budget, which we have talked about previously in the chamber. In most of the speeches, unsurprisingly, there was a rehearsal of the platform of the parties for the election in May. Mr Harvie rehearsed his stump speech for his campaign against George Galloway. However, there was not much from Labour members about their work in seeking changes to the budget from stages 1 to 3 of the process.
Wendy Alexander’s comments were significant. One could be mischievous and say that, because her thesis is that the SNP has not delivered its policies, Labour must have learned from that and chosen not to have any policies at all. If we had a suspicion that that might be the case, it was confirmed by Mr McNulty’s speech and, if there were any nagging doubts, Mr Kelly’s contribution removed them all. However, Wendy Alexander highlighted fit and proper concerns about budgets since the SNP came to office. We have sought to make improvements, although we consider that the budget continues to have deficiencies. As Margaret Smith said, the bill is not the one that we would have presented to the Parliament. However, we have tried to persuade the Government and other parties to make changes. With regard to bursaries and colleges, we have used our judgment, given the pressures that face the economy.
I began my earlier speech by talking about a discussion that I had with a key local company in my constituency whose workforce is potentially facing redundancy. Regrettably, that will be a pattern in the economy, because it remains fragile. It is no good being in denial about that, as Labour is, and it is no good saying that the budget is perfect. We know that there are still considerable challenges.
I sat and listened to every single Labour speech in the debate. It was a bit rich of the previous Labour speaker to say that there is a lack of ambition, because that is what we have heard from Labour members this afternoon. We have brought a debate to the Parliament, bringing forward ideas for a regional development bank and saying that it is time to thank those in Scottish Enterprise for their contributions during its 20 years in existence but to indicate that it is not a fit body to take us to the next stage of the economy in Scotland. That is our radical proposal, which we have published, debated and laid open for business and other organisations to see and test.
Similarly, we believe that Scottish Water can be financed differently to free up badly needed resource to invest in our economy and support businesses. We have an ambition that Scotland should be the most entrepreneurial and innovative economy in the world by the end of the decade. That means that, from May, whichever Government is formed in the Parliament, the considerable task of reform must start. The economy was supposed to be—and perhaps still is—the Government’s Purpose with a capital P but, as the Finance Committee has identified, there are now some frayed edges to the strategic priorities in the budget. I hope that the next Government, whichever parties contribute to it, will continue to have the economy as its purpose.
Finally, there was a tinge of the debate that caused me an element of disorientation, because both Linda Fabiani and Margo MacDonald were extremely nice to me. Linda Fabiani said that I was as reasonable as it gets, and Margo MacDonald said that she gave me my due. My mum is going to be very proud if she sees the Official Report. However, I will end while the going is good on that. Margo MacDonald said that, in her view, we have the best of the Liberal Democrats north of the border. I will not make any further comment other than to say that I will send the Official Report to Michael Moore.
The budget that we are debating at stage 3 is not perfect, but it is a better one. We have made our contributions and we have listened to the concerns. We still face challenges, but at least 800 students in the area that I represent and thousands upon thousands more across Scotland will be helped in the year to come. That is a major contribution not only for them personally but also for the businesses that we hope will employ them and the public sector that will rely on them. Given that, we are satisfied with the contribution that we have made to improving the budget.
16:33
The budget that we are debating at stage 3 is definitely an improvement on the budget at stage 1. It protects many of the commitments that the Scottish Conservatives secured in previous budgets, and those are things that we continue to value highly—the 1,000 extra police officers across Scotland, the council tax freeze and, indeed, the small business bonus, which helps more than 70,000 small businesses throughout the country. I was reminded just last week, at the Federation of Small Businesses reception, how important and beneficial that policy has been. I spoke to businessmen at that event who said that their business had survived in the main because of that policy, so it is critical that it remains.
At stage 1, the Scottish Conservatives said that the Government had to do more on jobs and more to help grow the Scottish economy using the powers that we have, and that sentiment was echoed by the Economy, Energy and Tourism Committee across the parties, so we welcome the measures that the cabinet secretary has put forward today.
In particular, we welcome the commitment to employment support for SMEs and start-ups and the £10 million that is being allocated to that. It will be of particular interest to sole traders and microbusinesses that want to get over the important hurdle of taking on their first employee. About half the small businesses that are sole traders want to take on an employee but are nervous about doing so and need some assistance to give them that final push, and I think that the Government’s employment support policy will help them with that. It is particularly welcome that an allocation has been included specifically for exporters. Such measures will help this country to have an export-led recovery and to start punching above its weight again in exporting, and they will add to the excellent work that is already being done through the smart exporter initiative.
We welcome the announcements on housing. My colleague Derek Brownlee mentioned the evidence that the Finance Committee heard that doing more on housing would have a significant economic impact. The £16 million that has been allocated to that is particularly welcome. I am told that it is estimated that the part that has been allocated to infrastructure connections could result in the creation of about 5,000 jobs in building new houses and getting mothballed projects moving again. That will certainly go down very well with the construction industry. The provision of more new-build shared equity and the extension of the open market shared equity scheme will allow first-time buyers to get their foot on the ladder, which is overdue.
We welcome the commitments to examine carefully the proposals to target absenteeism in the public sector. That is an important move. If the estimate of my colleague Derek Brownlee is right and just two days per year per employee were saved, that could lead to savings of £130 million, which is a pretty substantial sum. If even a fraction of that is achieved, it will be a positive policy.
It is an interesting concept. A lot of money is at stake for the budget if the Government can make it work, but just how will that money be delivered on the back of the promise?
As the member heard, the Government is to examine carefully how the proposals can be made to work. It is not 100 per cent written down; they are initial estimates. Given the sums involved, the idea must be worth pursuing, so I hope that Mr Henry welcomes it.
We also welcome the commitment to look at how access to cancer drugs can be progressed through the cancer drugs fund, with an eye to what is being done south of the border.
Mr Henry’s intervention reminded me that I must make some comments on the Labour Party’s position in the debate. I do not think that it has been the party’s finest hour, or even its finest two and a half hours. At stage 1 and all the way through stage 3, it has made demands for more spending on just about everything. Andy Kerr wants more money for enterprise, energy and tourism, higher and further education, rail links to two airports, a future jobs fund and regeneration. Jackie Baillie wants more money for the NHS and an extra £400 million for the social care budget. Des McNulty wants 3,000 more teachers. James Kelly wants more money for the policing budget and for community justice authorities. Two weeks ago, David Whitton wanted more money for environment and rural services and for Skills Development Scotland.
I am struggling to find any portfolio in which the Labour Party does not want increased spending. In addition to all that extra spending, it also sought a guarantee from the cabinet secretary that no budget would be cut. Andy Kerr has an MBA, apparently, so surely he knows that, if you increase spending on one portfolio, you have to decrease it elsewhere in that portfolio or in another portfolio. His big clarion call was, “We don’t do half measures—we offer full measures.” We did not hear about many full measures. All that I want Mr Whitton to tell us in his closing speech is how he is spelling the word “full”. [Laughter.]
16:39
In the case of Mr Brown, the word is spelled F-O-O-L.
So it comes to this: the fourth and final budget of the financial wizard known as John Swinney—the man with a plan. He sends letters to Opposition spokespeople, but I am sorry to say that he will receive a “Dear John” letter from Labour today.
I am happy to acknowledge that negotiations took place and that offers were considered. All that was done in John Swinney’s usual cordial and courteous manner. Beer and sandwiches were not provided, but at least we got a cup of tea—[Interruption.] I am sorry—what did Nicola Sturgeon say? Does she want to intervene? She is stunned into silence—that is a first.
The Deputy First Minister and Cabinet Secretary for Health and Wellbeing (Nicola Sturgeon) rose—
Nicola Sturgeon can sit down now—she is too late.
As I said, I had courtesy and a cup of tea from Mr Swinney, which I venture is more than I would ever get from Nicola Sturgeon. However, Scottish Labour cannot accept the budget, even with the proposed amendments, as we are not prepared to vote for the damage that will be done to public services and our economy the length and breadth of Scotland.
Financial damage is being caused by Con-Dem cuts that go too far, too fast. It has also been caused by successive SNP budget decisions that have pandered to the right-wing agenda of the SNP’s friends the Tories, with the addition this year of their London lapdogs, the Liberals. [Interruption.] Before SNP members become overexcited and start shouting—as Bob Doris did—about what we would do, I will tell them. We are happy to go to the electorate in May and tell them then. Our manifesto will lay out the Scottish Labour alternatives. [Interruption.]
Order.
We will let the people of Scotland decide who is best able to protect them from the deep and damaging cuts that the Conservative-led coalition in London has introduced.
Mr Swinney has always made great play of the fact that he is the finance minister of a minority Government. His fans in the media tower praise his negotiating skills in getting successive budgets through, but what has the reality been? In his first budget, 500 police officers became 1,000 to buy off the Tories. That has caused many of his problems ever since. [Interruption.]
Order.
Although chief constables the length and breadth of Scotland have said that the numbers are unsustainable in the economic climate that faces them, the SNP would prefer 1,200 civilian police workers to be made redundant to allow it to stick to its press release promises. Who will replace those 1,200 civilian staff? As James Kelly said, trained police officers will replace them. Instead of bobbies on the beat, as claimed by the First Minister, we will have bobbies on their backsides in offices doing jobs that others should do.
I am not surprised that Mr Swinney has stuck doggedly to that promise. After all, it is one of the few left that the SNP has not broken. The SNP has managed to maintain its assault on local government finance with the Tories’ help. To paraphrase David McLetchie, Scotland does not need a Tory-led Government when it has an SNP Government to introduce the Tories’ policies for them.
That was one of my finest.
That was one of David McLetchie’s finest—absolutely.
The Finance Committee’s report on this year’s budget says all that we need to know about the council tax freeze. Our budget adviser, Professor David Bell of the University of Stirling, said:
“The differences in household outgoings between freezing the council tax and increasing it in line with inflation are relatively small for most households ... the main beneficiaries are those”
on middle incomes.
“There is no case that it supports economic growth and its fairness implications are certainly not clear cut.”
The Finance Committee asked Mr Swinney to explain how he believes that the freeze supports economic growth. He said:
“the ... freeze has provided welcome relief to hard pressed households across Scotland. That additional cash has been available locally for households to spend in their own areas”.
Members: Hear, hear.
SNP members say, “Hear, hear.” What has been the result of that relief for hard-pressed households? It has been hard-pressed councils—teachers have not been recruited and some have been made redundant; classroom assistants have been sacked; care budgets have been cut; and libraries are to close. Councils also face massive bills to repair roads that have suffered damage because of the winter weather and have no extra cash to pay them.
Will David Whitton accept an intervention?
The second budget, for 2008-09, brought deadlock. In that year, the Tories again crowed about their gains.
Come on.
Mr Gibson, please sit down.
After the tied vote, the Liberals sold out for the price of a stamp and a budget review that was largely ignored. Last year brought the great Glasgow airport rail link sell-out. A scheme that was promised as part of the Commonwealth games bid was casually thrown aside along with £40 million of public money. That was a scheme that would have created 1,300 much-needed jobs, many of them modern apprenticeships. Members need only look at a headline in The Herald today—“Recession creating a lost generation of young Scots”.
Will the member give way?
No, I will not. I do not have much time left.
I draw the cabinet secretary’s attention to another story, this time in The Scotsman. It sets out that Glasgow airport is having to scale back expansion plans due to falling passenger numbers, that one contributory factor is congestion on the M8—the main access route to the airport—and that that congestion would have been greatly eased by building an airport rail link.
The key question that faces the budget this year is whether it supports economic recovery. The answer from the Parliament’s Economy, Energy and Tourism Committee was that it does not. As Mr Kerr said in his opening remarks, the committee stated that
“insufficient priority has been given to sustaining the growth of the economy in setting budget priorities”
and concluded that
“this budget is not best geared to promote economic growth.”
As I said in the stage 1 debate, that was a unanimous committee view, which was supported by the SNP members of the committee. Will Messrs Rob Gibson and Stuart McMillan and Professor Christopher Harvie—a very learned man—vote for the SNP motion today? The question is why anyone would vote for a budget that has a major faultline running through it. Mr Swinney claims that he can balance the budget with 3 per cent efficiency cuts. I would love to know whether the Government’s chief economic adviser believes that that target can be met. If not, there will be a 3 per cent black hole for the next finance minister to fill—whoever they are.
Wendy Alexander put her finger on major flaws in the SNP’s four years of budgets. As she said, none of the big planned challenges that she outlined has been met. Jackie Baillie’s contribution clearly got under Mr Swinney’s skin. He had the temerity to say that she was using “duff numbers”.
Will the member give way?
No, I will not.
We have had many sets of figures from the chief economist that I might call duff whereas figures from SPICe are generally regarded as being on the mark.
Des McNulty detailed the damage that has been done to the education sector, as did Hugh Henry.
Scottish Labour will not support the budget today. We have said that this is a matter of choices and priorities. Our choices and priorities are different from those of the SNP and those of the Tories and Liberals. This time round, as ever, the Tories and Liberals are supporting SNP choices. I could not have put it better than Patrick Harvie did when he spoke of blue, yellow and tartan Tories all working together. We on this side of the chamber believe that Scotland deserves better. In May, the people of Scotland will have their say on who is right.
16:48
I begin by addressing an important point that Margaret Smith made on the role of the capital city partnership in Edinburgh. I have had representations on the issue from Kenny MacAskill and Councillor Tom Buchanan of the City of Edinburgh Council. Margo MacDonald also highlighted the issues that Margaret Smith raised. Just for completeness, I should say that I have also had representations from Lord Foulkes on the matter—I have probably had representations from everybody. The Government is acutely aware of the points that Margaret Smith raised. The issue has been examined. The Government will do what it can in the circumstances. I hope that Margaret Smith accepts that the initiatives that I set out in the budget this afternoon include a range of provisions in addition to the capital city partnership funding that will assist individuals who face the challenges of training and employment. I welcome the constructive contribution that she and her colleagues made to facilitating this agreement.
While I welcome the increase in the capital city partnership funding, does the cabinet secretary agree that it would be useful for the fund to be used to pay off the private creditors of The Gathering 2009 Ltd?
The City of Edinburgh Council determines what it uses its resources for. The matter is one for the council.
Margo MacDonald raised the issue of examining the contents of private finance initiative contracts to identify whether there is a way to release further value for the public purse. It is a point with which I have enormous sympathy. I asked the Scottish Futures Trust to look into the issue and it has already done some work. I must caution Margo MacDonald about the scale of savings that may be achievable, because many contracts were negotiated in a fashion that locked out any entitlement for the public sector to require reassessment of the contracts’ financial provisions. I find that a rather strange proposition in value-for-money terms for any of my predecessors to have signed up to, but they did so on plenty of occasions. Those questions will be examined in due course.
I may have got the balance of my opening speech wrong, because in it I concentrated on the Conservatives and the Liberal Democrats. For the sake of fairness and completeness, I intend in the remainder of my speech to concentrate on the Labour Party.
Yesterday I told the Scotland Bill Committee that some of the bill’s provisions, especially on no detriment, were a bit of a mystery tour. I am finding discussions and negotiation with the Labour Party a bit of a mystery tour into the bargain. It is normally helpful to change one’s stage 1 speech at stage 3, if things have changed during the intervening period. During the stage 1 debate David Whitton made the criticism—which he has repeated today—that the Government’s budget did not focus on the economy. He said that we were a minority Government and must therefore listen to the Parliament.
We have gone away and talked to all the political parties. I accept what Mr Patrick Harvie said; he has a fundamental disagreement with the Government about the premise of the budget, so our discussions were limited. However, we have had extensive discussions with all the other parties. I focused on the key point that the Finance Committee and the Economy, Energy and Tourism Committee put to me—that the budget in its original form apparently did not do enough for the economy. I have agreed with other parties significant reforms to the budget to reflect our priorities and to strengthen provision for the economy.
What does that mean? It means that we have put in place resources to expand the freight facilities grant and to increase funding for urban regeneration companies.
It would be interesting if the cabinet secretary could provide more detail on the reinstatement of 50 per cent of the regeneration budget and how that will impact on the River Clyde urban regeneration company.
I will be delighted to provide Mr McNeil with the evidence and information that he seeks. I am sure that Stuart McMillan will be delighted to tell the people of Greenock and Inverclyde that Mr McNeil will not support that provision in the budget this afternoon, which makes it utterly ridiculous for Mr McNeil even to ask me a question about the subject.
I mentioned the funding for urban regeneration companies. There are also 25,000 modern apprenticeships, £15 million in bursary funding, 1,200 new college places, 2,000 extra flexible training opportunities, £10 million of support for employment creation in the private sector and £16 million of investment in housing. Those are the substantial elements of the budget that have changed, by agreement with other political parties. I would have thought that Mr Whitton might have acknowledged that the parliamentary majority might have shifted. If the criticism during the stage 1 debate was that the budget did not do enough for the economy, and there is—I hope and believe—a parliamentary majority for the budget now, surely there must be confidence in the Parliament that the Government’s budget is doing enough for the economy.
Apparently, all that I have just announced is not enough for the Labour Party. That is a really interesting proposition. This is what I offered the Labour Party. I offered Labour a proposition that reflected all—and more—of the issues that were raised with me. I offered 6,500 additional modern apprenticeships—we are getting 25,000 now; a future jobs fund with 3,000 places, which Labour turned its back on; 2,000 flexible training opportunities that are being delivered; additional bursaries in the further education sector that are being delivered; additional funding for urban regeneration companies that is being delivered, Mr McNeil; and additional funding of £2 million for the freight facilities grant. That was all offered to the Labour Party, yet, somehow, it is not enough. That represents all and more of what Labour asked of me.
Andy Kerr delivered a speech saying that there was not enough money for education, that Labour wanted more money for 1,000 classroom assistants, more money for nurses, more money for the HE sector and more money for enterprise funding. Good old Jackie Baillie wanted more money for social care and the health service. Why did Andy Kerr not ask me for any of those items in any of the discussions that I had with him? Why not?
The cabinet secretary reads out our list for us, but what he says does not reflect the conversations or discussions. In my speech at stage 1, I quoted from what was said at the Economy, Energy and Tourism Committee. Respected academics and businesspeople were saying that the Scottish Government’s budget did not do enough for the economy. Now we know, however, that the Con-Dem partners think that the Scottish Government’s budget does do enough for the economy, so they should have no complaints about getting into bed with the SNP Government.
Every single thing that I was asked to deliver by the Labour Party I offered to the Labour Party. The Labour Party cannot with any credibility come to the Parliament and present a list that includes funding for education, classroom assistants, nurses, the HE sector, enterprise funding, social care and health funding without having raised those issues with me in budget negotiations. It is the second day this week that the Labour Party has been caught in utter hypocrisy. Richard Baker was caught redhanded in total hypocrisy on “Newsnight” the other night and Andy Kerr has been caught in total hypocrisy today.
In every stage 3 budget debate in which the Labour Party has participated since that magnificent day in 2008, when it handled the budget so well with Iain Gray in charge, Labour has mentioned apprenticeships. Iain Gray’s speech that year mentioned apprenticeships. In 2009, Andy Kerr mentioned apprenticeships. In 2010, Andy Kerr mentioned apprenticeships again. Today, we heard a long, long speech from Andy Kerr, apparently riddled with ambition, that did not include the word apprenticeships. Why? Because this Government has delivered the highest number of apprenticeships ever in Scotland.
In his budget speech in 2008, Iain Gray had a go at me and other parties, saying that the budget process was
“a kind of strictly come budgeting, without the revealing behind-the-scenes shots of any mis-steps, tears or tantrums”.—[Official Report, 6 February 2008; c 5864.]
That sounds like the Labour group’s internal processes this week. The Labour Party cannot decide whether it wants to support a budget that backs economic recovery and delivers progress for the people of Scotland. It is posturing, and the people of Scotland will find Labour out in May and return this Government.