Meeting of the Parliament [Draft]

Meeting date: Thursday, February 12, 2026

Official Report 745KB pdf

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Budget (Scotland) (No 5) Bill: Stage 1

The next item of business is a debate on motion S6M-20720, in the name of Shona Robison, on the Budget (Scotland) (No 5) Bill at stage 1. I invite members who wish to speak in the debate to press their request-to-speak buttons.

15:25

I am very pleased to open this stage 1 debate on the Budget (Scotland) (No 5) Bill. The budget invests £68 billion in Scotland’s families; in the essential services that support them, such as the national health service; and in the infrastructure that underpins our national prosperity. With the support of members across the chamber, the choices that we have made will be felt meaningfully by people here in Scotland.

This budget will give every primary school child in Scotland the chance to learn to swim; it will establish new high street general practitioner walk-in centres and provide almost £22.5 billion to deliver and reform the health and care services that we all rely on; it will encourage entrepreneurship by providing support and funding to our young future business leaders; and it is expected to leave more than half of Scottish taxpayers with more money as a result of living here in Scotland.

Since the draft budget was introduced, the Government has engaged widely across the Parliament and beyond. We have listened carefully to the views of committees, local government, business, the third sector and wider civic society, and I have valued my constructive discussions with Opposition members and parties across the chamber. As the First Minister noted earlier, such engagement helps to ensure that we have the best support for the people of Scotland. I am therefore very pleased that the Liberal Democrats have confirmed their support for the budget.

Will the cabinet secretary give way?

I will give way to Craig Hoy, who, of course, has not managed to secure anything through the budget process. I am sure that he will be full of suggestions.

I would not want our party’s name associated with anything in this budget because, at the end of the day, this Scottish Government—[Interruption.]

Members!

This Scottish Government has just said that it has engaged positively with stakeholders. What does she say to the Convention of Scottish Local Authorities, which says that the budget is insufficient to avoid significant cuts or large increases to council tax?

I had an excellent meeting with COSLA group leaders yesterday, including the Conservative group leader, and I have had lots of messages today welcoming the money for the real living wage and the additional money for social care.

It will go on the record that Craig Hoy does not welcome anything in the budget. All the money for affordable housing, all the money to support businesses, all the money to support children and families—Craig Hoy does not support a penny of it. I think that that will haunt him for some time to come.

We have also been transparent that this is a budget in which we have had to make difficult choices. With increasing demand on public services and low funding growth, there have to be trade-offs. However, I am confident that the choices that we have made are ones that will secure a fair, healthy and prosperous society for Scotland’s people.

Tackling child poverty remains the Government’s top priority, and the budget sets out investment that will make a material difference to families across Scotland. For example, by August 2027, we will deliver a universal breakfast club offer for primary school children and will increase wraparound activity clubs for those children. We are also investing more than £111 million in our tackling child poverty fund and in whole family support to provide wraparound support to families in poverty.

Support for the most vulnerable includes universal services such as free prescriptions and university tuition—services that this Government chooses to continue to invest in.

I turn to non-domestic rates. I committed to passing on to hospitality any additional consequential funding from the United Kingdom Government’s recent announcement on business rates for pubs and music venues in England. We consulted the business community prior to finalising our package, and I confirm that the Scottish Government will provide 25 per cent additional relief for the next three years for licensed hospitality and music venues that are on the basic or intermediate property rates, including pubs, restaurants, hotels, nightclubs and licensed clubs.

Along with the 15 per cent relief for the retail, hospitality and leisure sectors for properties on the basic or intermediate property rate, which was announced at the budget, total relief for eligible licensed hospitality premises and music venues will be 40 per cent for the next three years—capped at £110,000 per business per year. The Scottish Fiscal Commission will cost that, but we estimate that it will provide about £9 million of additional support during 2026-27.

I have also listened to concerns that have been raised by those in the self-catering sector. I will introduce a specific revaluation transitional relief for that sector, which will cap increases in gross liabilities due to revaluation at 15 per cent year on year, up to the next revaluation.

Some would say that we are short of money for social work, care and other things while some hospitality businesses are very profitable. They are expanding, busy and doing very well, so why should they get more support?

I take John Mason’s point, but we also have to ensure that our hospitality sector, which is the life-blood of many towns and villages across Scotland, can continue. Given all the headwinds that it has had, such as the increase in employer national insurance contributions and the hike in VAT, which has put up the cost of all produce, we believe that the package is appropriate. We estimate that the measures will provide about £40 million in additional relief in the next three years, which demonstrates our commitment to supporting business.

I welcome the measures that have been set out. In my constituency, some businesses were going to have their profits wiped out altogether, so I hope that the changes will make a significant difference to them. It is not only for one year, either; it is for three. However, what lessons can we learn from the valuation process? We cannot come back here again to discuss the issue every time that we have a valuation problem.

Revaluation is an independent process, as agreed by the Parliament. There are always winners and losers in such processes, but I am sure that there will be reflection on how we ensure that transitional relief is received when it is required. There are always lessons to be learned.

Although the budget is rooted firmly in the Government’s priorities, it has also been shaped by meaningful engagement with others, with whom we identified many areas of common ground. That included a shared priority across parties to support our Scottish colleges. I welcome the positive recognition of the 10 per cent uplift on last year’s core budget by the Finance and Public Administration Committee, which reflects the response from commentators and the sector.

Some parties and members advocated for specific areas in the budget. I thank those members for their constructive approach. It means that we will deliver improvements in neurodevelopmental assessments and care of children and young people, which will see investment of more than £7.5 million in 2026-27 and growing future investment. We will also invest £9 million in the next three years to support communities that are impacted by the closure of the Fife ethylene plant at Mossmorran, and we will provide a three-year settlement for disabled people’s organisations, with £3.5 million of funding in 2026-27 and in each of the subsequent two years.

The draft budget set out an initial commitment of £6.5 million for hospices in 2026-27, with further engagement planned to understand what support would be required to deliver pay parity for hospice staff with the national health service’s agenda for change. I confirm that we will prioritise an additional £2.9 million for that sector.

In that spirit of listening and engagement, I can also confirm that—provided that the bill passes stage 1 today—the Government intends to lodge amendments at stage 2.

The fair settlement for local government came through cross-party discussions. We are proud that the budget includes almost £15.7 billion of funding for local government, which is a 2 per cent real-terms increase in 2026-27, compared to last year’s budget. However, since the budget was published, I have continued to engage with COSLA and listen to its concerns. As a result, I can confirm my intention to allocate a further £20 million to the local government settlement for social care, which councils can use to fund the real living wage for the adult and childcare sectors.

The investing in communities fund supports community-led organisations and deprived and fragile communities to tackle disadvantage and poverty on their own terms, delivering projects, services and activities that are identified and developed by communities themselves. Like members across the chamber, I have seen the value that those community projects have in our constituencies across Scotland. We recognise calls to provide stability for those organisations, which is why we propose to allocate a further £5.33 million of new resource funding and prioritise a further £1.6 million from within the budget, taking the total available funding to £9.13 million and extending the fund in full for 2026-27. That is in stark contrast to the UK Government, which has cut funding for local growth in Scotland.

As the First Minister announced earlier today, another amendment that the Government proposes is the delivery of a freeze to all ScotRail fares, including season tickets and flexipasses, until April 2027. That will be welcome news for many commuters. I will allocate £4.3 million of additional resource funding in 2026-27 to the transport portfolio to deliver the freeze to ScotRail fares. That will build on other measures in the budget, such as the removal of peak fares on the northern isles ferries for our island communities and the continued removal of ScotRail peak fares for good.

This afternoon, I will write to the Finance and Public Administration Committee to set out the detail of the proposed amendments that will be lodged at stage 2 for its consideration.

I remind members that, although the Government has set out a budget that delivers a strong economy, strong public services and stronger support for families, it remains a shared responsibility to deliver that for the Scottish people by supporting the budget bill.

I move,

That the Parliament agrees to the general principles of the Budget (Scotland) (No 5) Bill.

15:37

I am pleased to speak on behalf of the Finance and Public Administration Committee, following publication of our “Report on the Scottish Budget 2026-27”, and I look forward to receiving the stage 2 amendments that the Cabinet Secretary for Finance touched on a moment ago.

This is the final stage 1 budget bill debate in this parliamentary session, so I am keen to discuss issues that the committee has raised that have been key themes throughout our scrutiny over the years. I also wish to thank our excellent committee team of MSPs and clerks, who have worked so hard and with dedication throughout the past half-decade. I can see Liz Smith nodding in approval.

This year’s draft budget was published much later than usual, on 13 January 2026, as a consequence of the late United Kingdom budget. As the committee noted, that provided an unacceptably short time for parliamentary scrutiny of the Scottish Government’s proposed tax and spending plans for the next financial year. It is not the first time that the committee has called on the UK Government to give much greater regard to devolved budgets when setting the timing of future fiscal events.

The need for greater transparency in relation to budgetary information has been another consistent theme. The committee recognises improvements that have been made by the Scottish ministers throughout this parliamentary session in providing more budgetary data and presenting it more clearly. However, like many witnesses and commentators, we are frustrated and disappointed that, despite repeated requests, the Scottish Government has fallen short of baselining all routine in-year transfers. We therefore recommend that formal agreement be reached between the Scottish Government and the Scottish Fiscal Commission on how regular in-year transfers should be presented.

We also seek greater clarity on which elements of funding announces new money, to provide certainty for public bodies and local government and avoid the unhelpful and unnecessary confusion that has occurred this year, notably in relation to increased funding for the college sector and where money saved from mitigating the two-child cap will be spent.

The committee also expressed concerns that one-off ScotWind leasing revenues are being used to plug funding gaps rather than being allocated to net zero projects, as intended. As we note in our report, the Scottish Government appears to bank on the fact that it will not need to draw down ScotWind funds, because new moneys are considered certain to become available, particularly in the run-up to the next United Kingdom general election. The committee is not convinced that that is an efficient or effective way to manage Scotland’s public finances.

The committee’s 2026-27 budget report recognises significant financial pressures faced by the Scottish Government and its limited flexibilities to manage cash flow over years. We therefore believe that a comprehensive review of the fiscal framework is now urgent. It is encouraging that the two Governments are currently discussing the scope of that, and we welcomed the opportunity just before Christmas to input the committee’s views on the priority areas for the review. We support a continuation of that consultative approach while balancing the need for early resolution.

On Scottish Government spending plans, the college sector will receive a very welcome uplift in funding, which the committee had called for. Housing has had an even more impressive boost, and although we welcome the additional £20 million that has been announced today, the committee has significant concerns that pressures on local government finances may lead to large council tax rises and some local authorities struggling to meet their statutory obligations. We have therefore urged the Scottish Government in our report to discuss with local government how and where further support might be provided to ease such pressures if additional funds become available.

The sustainability of social security spending and its impact on other areas of the Scottish budget that are being squeezed is a long-term committee concern. It is disappointing that the Scottish ministers have yet to undertake the reviews that we asked for on the fiscal sustainability of social security spending, the extent to which it supports economic activity and the outcomes arising from universal payments and services. We therefore urge the incoming Government to undertake that work without delay.

On taxation, although we recognise the fiscal pressures on the Scottish budget, we have asked the next Scottish Government to consider the most effective way to ensure a fairer, more gradual and transparent approach to raising income tax revenues than continuing to use fiscal drag—a policy that has also been imposed by successive United Kingdom Governments. A further priority in the next session of Parliament should be reform of local government taxation—not easy, given the likely level of loss aversion, but necessary.

The committee has consistently urged the Scottish Government to recognise and respond to the long-term fiscal sustainability challenges that lie ahead, given demographic trends. Unfortunately, the Scottish Government did not, as requested, fully respond to the Scottish Fiscal Commission’s two key fiscal sustainability reports in 2023 and 2025.

Regarding the medium-term funding outlook, publication of the first Scottish spending review outcomes for both capital and resources this parliamentary session is welcome. Although that should bring more certainty to portfolios, public bodies and local government on the spending trajectory over the next three years, we agree with witnesses that more detail should have been provided and, despite our request, the Scottish Government appears not to have taken a zero-based budgeting approach to the spending review. Indeed, the document includes little detail on the approach taken, leaving uncertainty over the figures presented.

We will of course be taking evidence on the Scottish spending review and the infrastructure delivery pipeline in the weeks ahead. Witnesses shared concerns about whether plans to make £1.5 billion of cumulative efficiencies across the spending review period are achievable and how progress will be reported.

We urge the next Government to regularly report savings made, in order to allow scrutiny of progress towards overall efficiency targets and clarify any impacts on public service delivery. Although we welcome the Scottish Government’s infrastructure delivery pipeline, we had pressed for the document since December 2023, and it is, frankly, underwhelming. Detail should have been provided on costs, timelines and potential overruns for the projects.

In addition, the split between delivery and development casts doubt on exactly what will be delivered when and at what cost. Given that the UK Government will reduce Scotland’s capital allocation in real terms over the forecast period, inclusion of shovel-ready projects to optimise capital investment would be helpful.

We urge the incoming Scottish Government to flesh out both the pipeline and the Scottish spending review document with much more detail.

The committee looks forward to receiving a response to our stage 1 report ahead of stage 2 proceedings on the bill next week, and I look forward to hearing members’ contributions in today’s debate.

15:43

This budget does not add up. It does not add up for Scottish taxpayers, with more people dragged into ever-higher tax under the Scottish National Party. It does not add up for Scottish councils, which are now considering brutal cuts and blistering increases in council tax, despite the discovery of an additional £20 million today for social care. It does not add up for Scotland’s NHS, with health boards in effect facing no real-terms growth in spending. It certainly does not add up for Scotland’s pubs and shops, which, despite today’s U-turn on reliefs, still face crippling increases in business tax.

Does Craig Hoy accept that the one thing that this budget does do is add up, because it has to be balanced? Where would he find £1 billion?

The Scottish Government is under a legal obligation to make sure that this budget balances, but—[Interruption.]—before Mr Swinney has a breakdown, I will say that it is being balanced using non-recurring revenues, by raiding the ScotWind money to pay for recurring revenues.

Will the member give way?

I will not give way.

Where would it come from?

The only place where this—

First Minister, please let Mr Hoy continue.

If Mr Swinney wants to know where the £1 billion will come from, it will come from cutting the SNP’s bloated benefits bill.

Members: Oh!

It would come from getting rid of the pork barrel politics, where John Swinney is buying votes—

Mr Hoy, could you please resume your seat for a second. I say to members that I think that we would expect better behaviour all round. We should listen to Mr Hoy, who has the floor.

I do not know who has rattled Mr Swinney’s cage, but it is certainly rattled.

The only person the budget appears to add up for is Shona Robison, because she initially thought that it provided her with nearly enough coverage to get out the door in May, but analysts have warned that that will not hold. Whoever replaces her will, almost inevitably, be forced back to the Parliament with an emergency statement to fix the mistakes that she has made. [Interruption.]

Let us look at some of the detail in Shona Robison’s plans. The Government insists that it is properly funding our NHS, but do not take my word for it. David Phillips from the Institute for Fiscal Studies says that funding allocations for health in 2026-27 look—and I quote, Mr Swinney—“increasingly detached from reality.” Excluding social care pay, health and social care funding is up by only 1.6 per cent in cash terms, but down by 0.6 per cent in real terms. Agenda for change staff are due a pay increase of 3.75 per cent and resident doctors have been awarded 9.4 per cent. Something serious will have to give at the front line of our NHS.

Will the member give way?

No, I do not have time.

The cabinet secretary has repeatedly claimed that the budget offers a fair deal for Scotland’s councils, but COSLA begs to differ. It has admitted that some services that are offered that are “critical to population health” will be slashed this April. Despite her claims, for the period that is covered by the budget and the spending review, councils are set to see a real-terms cut in their cash settlement. That means more cuts and higher bills, not just this year but right through to the end of the decade. Therefore, is it any wonder that the Accounts Commission has warned that, combined, Scotland’s 32 local authorities face a budget black hole of nearly £1 billion by 2027, which is 500 times more than the £28 million that the Government has come forward with today? That means that there is a real risk of Scotland’s councils collapsing into bankruptcy by the end of the decade, while council tax bills for hard-working Scots are set to climb.

It is not just council tax that will rise as a result of this bad SNP budget. Yet again, the SNP is reaching for the only lever that it ever pulls: clobbering middle-income earners with higher income tax bills. By the end of the decade, one in three Scots will be paying the SNP’s higher rate of tax. A tax that is intended for the few will be paid by the many. Why is tax soaring in Scotland? Under the SNP, the benefits bill is, frankly, out of control. By the end of the decade, SNP ministers will be spending £10 billion on social security. The truth is that the SNP is happy to park people on benefits, many with treatable mental health conditions, because the culture of dependency creates political advantage for John Swinney. It is the crudest form of vote buying. It is cynical, unsustainable and, frankly, wrong.

Will the member give way?

I do not have time.

The sad fact is that this dismal budget will pass in the Parliament because Scottish Labour is too weak, too divided, and too distracted to stand up to the SNP. The SNP Government has shown itself unfit for office, but Scottish Labour has shown itself as incapable of real opposition. Meanwhile, the Liberal Democrats will back the budget, despite being conned last year by the broken promise of no spending on independence. In a smoke-filled room somewhere in Bute house, post-election promises are no doubt being made. Alex Cole-Hamilton will be measuring the curtains along the ministerial corridors. The man who bought a Tesla and then sold it to virtue signal is eyeing up the Government’s car fleet.

Beyond the cosy left-wing consensus and the dubious deal making, people out there in the real world are looking for a new approach.

Will the member give way?

I will not give way; I do not have the time, unless I will get the time back, Presiding Officer. There is no time. [Interruption.] I would be very happy to enter a smoke-filled room to find out what other deals are being done.

Ultimately, we go into the election campaign with a clear set of tax pledges. On income tax, we would raise the higher-rate thresholds, bringing them into line with the rest of the UK over the next parliamentary session.

Scotland’s tax rates are too complicated and uncompetitive, so we would cut the basic and intermediate rates of tax to 19p. In recent weeks, we have also outlined a serious package of support for business that goes way beyond that of the SNP Government. We would pay for that by lowering the ballooning SNP benefits bill. Our welfare proposals will make work pay.

The cosy left-wing consensus here in Holyrood wants to keep taxes high and, along with Reform, it also supports more benefits spending. However, in 85 days, Scottish workers will have an opportunity to vote for a party that will both cut tax and reduce the benefits bill. That party is the Scottish Conservative Party.

15:50

On 13 January, the Cabinet Secretary for Finance and Local Government announced a deeply underwhelming budget that tried to fix just a few of the SNP’s mistakes. I said then that it would find favour, whether over a peace pipe or not, with the Liberal Democrats and the Greens, and so it has proved.

The Budget (Scotland) (No 5) Bill will be agreed to at stage 1 today. Labour will not stand in the way of police officers and nurses continuing to be paid, and local services continuing to be paid for, at the start of the new financial year in just a few short weeks. However, we all know that the budget will not last the year. Independent experts from the Institute for Fiscal Studies and the Fraser of Allander Institute are unanimous in their view that, as a result of the SNP’s decisions, for whoever forms the Government in May, an emergency budget is now a racing certainty.

We know what chaos was wrought by three consecutive years of emergency budgets from the SNP, which was forced to rip up its plans mid-year due to its own incompetence. Only today, we have heard from David Phillips at the Institute for Fiscal Studies that the budget looks

“increasingly detached from reality … This does not feel like credible fiscal and public spending control to me!”

Well, he is right. It is not credible, and, because of that, the budget bill does not deserve to be passed by the Parliament.

Will the member take an intervention?

No, thank you, sir.

To compound the mess, we found ourselves in the ludicrous situation in which the finance secretary published a three-year spending review to supposedly provide certainty to public services yet, within days, told the Finance and Public Administration Committee that it was not worth the paper that it was written on and that she fully expected it to change. It is budgeting on a wing and a prayer.

The hallmarks of 19 years of John Swinney budgets are creative accounting, financial sleight of hand and swingeing cuts to local government.

Will the member take an intervention?

No, thank you, sir.

The truth is that the SNP Government has decimated Scotland’s public finances and taken treasured public services, such as our NHS, to the brink. Hundreds of thousands of Scots are on NHS waiting lists, and more than 10,000 children are in temporary accommodation.

Will Mr Marra give way?

No, thank you, sir.

We have a housing emergency, a justice system that is past breaking point and an education system that is going backwards.

Will the member give way?

No, thank you. The health secretary should listen to this.

There is a culture of secrecy in which public sector managers offer bribes and holidays to grieving families rather than honest answers and accepting responsibility.

Will Mr Marra give way?

No, thank you.

This budget changes none of that. Instead, the SNP tinkers round the edges and tells us all, in the face of all the evidence to the contrary, that the NHS is turning a corner. It is ludicrous. The SNP has decimated local services and taken local authorities to the brink. If the SNP gets back in in May, it plans to cut nearly £0.5 billion from councils.

On non-domestic rates, yet again the SNP Government has failed to go far enough, leaving many businesses in dire straits. Today’s announcement is an improvement on some of the measures that were announced on 13 January, but it does not properly address the looming revaluation. The Government should call time on that revaluation today. Scottish Labour supports an immediate pause to the new rates revaluation. The Government should act now.

Will the member take an intervention?

Yes, sir.

Members: Oh!

I am very grateful. I understand that, ahead of their impending leadership contest, Labour members are the primary audience for Mr Marra’s speech—[Interruption.]

What I am confused about is why, given the great many flaws that he has apparently identified in the budget, Mr Marra did not propose a solution to a single one of them before the Labour Party decided to abstain, which will allow the budget bill to be passed, regardless of what the Greens or the Liberal Democrats negotiated. If the budget is so terrible, surely he would have proposed a change before allowing it to sail through. [Interruption.]

I can give you the time back, Mr Marra.

I gently say to Mr Greer that I would not believe every word that the cabinet secretary says. Over four meetings, I set out a list of things that we wanted to see in the budget. At the end of that process, she said, “We’ll get back to you.” I am afraid that she never did. As I am used to saying, I do not take it personally when I am ghosted in such a way, but if we are going to dance, it takes two. [Interruption.] The Government has to be willing to strike a deal.

Shall we?

No, thank you—we can maybe dance later.

The fact remains that this SNP Government will never take the bold, decisive action that is needed to fix what it has broken in our country. The real opportunity for change will be on 7 May, when we finally kick out this knackered SNP Government and choose a new direction for Scotland with Scottish Labour.

I will allow a little bit of reaction, but we still need to hear the member who has the microphone.

15:55

In our time in Opposition, the Greens have always taken a constructive approach to budget negotiations. We have always believed that our job is to make Green change happen. That is what we told voters we would do if we were elected here, and we were elected here. Making fiery and impassioned speeches can often feel very satisfying, but it does not save a single species, reduce emissions, create jobs or feed children. Change does that. Negotiating in good faith to deliver what the people of Scotland need and what our planet needs does that.

Most of the past decade has been one of minority Government, and I am very proud of the huge achievements of the Greens, through our budget negotiations, during our time in Opposition over the past decade. I have always appreciated the Scottish Government’s constructive approach. It has been easier for us to come to agreements in some years than in others, but I have always found the Government’s default position to be a willingness to talk and engage with the ideas that we put forward.

Members can see across the country the impact of the changes that the Greens have secured. Even just in the past few weeks, the impact of our budget negotiations last year has been felt. Starting on 31 January, those who commute on the bus in Shetland are now benefiting from the fact that single bus fares are capped at £2. This month and next month, that is being rolled out across the rest of the Highlands and Islands. Particularly for those who have to commute by bus over long distances—the only public transport option available in many rural areas—that is already resulting in huge savings, which will quickly add up to hundreds of pounds for commuters. That is the real impact of constructively engaging in the budget process.

That policy builds on previous Green successes, the most obvious example of which is free bus travel for everyone under the age of 22. Hundreds of millions of journeys have now been taken by Scotland’s young people, and genuinely life-changing opportunities have been made available to them as a result of that.

We also scrapped peak rail fares, which has saved commuters hundreds—and, in a few cases, thousands—of pounds a year. During a cost of living crisis, that is a policy that not only delivers for our planet by reducing private car use, but delivers for the public, because it helps families to save money.

This year, through our discussions so far, we have secured more money for bus franchising, bringing our buses back under public control and ending a four-decade-long Thatcherite experiment in privatisation. I am quite sure that that is what is holding the Labour Party back from giving its full support to the budget, given who is cutting the party six-figure cheques these days.

However, the Scottish Government and Scotland as a whole are still failing when it comes to reducing our transport emissions. We need to go further. That is why the Greens put forward other proposals for the budget, and why we are still keen to see more progress on that front.

I welcome today’s changes in the budget. On 27 January, Gillian Mackay raised with the cabinet secretary the need for more funding for social care, and I am glad that the Government has made that possible. On 7 January, Maggie Chapman raised issues around the investing in communities fund, and I am glad that the Government has been able to find a solution to that.

Earlier today, I announced that, at this point, the Greens would be abstaining on the budget. I am proud of what we have achieved so far and I believe that agreement is possible with the Government, but our job is to be the challenger. Our job is to push the Government to go further, and often to push it to go outside its comfort zone, because we know that change is still needed. We know that people across the country are really hurting. We know that families cannot afford skyrocketing bills, the cost of the weekly shop and the cost of their daily commute, regardless of what form of transport they use.

We know that further change is possible. Yes, the powers of devolution are limited and, yes, Scotland’s public finances are under a huge amount of pressure, but there are options still available to us. There is more that we can do to reduce the cost of childcare and public transport, and there is more that we can do to protect our planet. There is more that we can invest so that we can, once again, become a world leader on climate action and nature restoration. I believe that an agreement is still possible between the Greens and the Government. If the cabinet secretary is willing to continue those discussions, we will engage in them in good faith, and I hope that we will be able to reach an agreement before stage 3.

15:59

The late Jim Wallace commented on the great cross-party efforts that brought about devolution in the first place. He said that he hoped that we could have a “new style of politics”, because the founding principles of this Parliament were collaboration, consensus and compromise. There were cross-party talks in a Parliament in which no single party was ever meant to have a majority.

When the Parliament first convened, Donald Dewar, another great, said that we should be

“striving to do right by the people of Scotland”.

However, some parties choose not to engage. They choose not to sit down and negotiate and fight their corner for the causes that matter to them. Perhaps they have their sights set on May’s election. Looking at the polls, I do not blame them, because the only cosy consensus that I can see is on the complete evaporation of members on the benches opposite.

Where are we on the budget? On health, properly funded social care is important. Why? Because it frees up beds in hospitals and it gets people out of hospital and back home. Social care providers told us that they wanted a fairer funding deal to pay their staff properly. Let us be honest—the Government mucked this up the first time. The Government knew it, the sector knew it, and so did I. That is why the issue went top of my list of asks.

That extra £20 million to ensure that every social care worker in Scotland is paid the real living wage matters. Will it fix the wider issues in the care sector? No, I do not think that it will, but it matters to those care providers who have been lobbying us fiercely these past two weeks.

On the issue of waiting lists, autism and attention deficit hyperactivity disorder assessment waiting times in Scotland are ridiculously and unacceptably high. Some people are waiting for six years, and 65,000 people are on an assessment waiting list. That is why the issue has been the subject of a long-standing Lib Dem campaign, and we are proud of that. The extra £7.5 million that has been announced that we negotiated will help to tackle the backlog, but we need to see progress speed up.

Every one of us has a hospice in our local community. They provide invaluable care for people who are at the end of their lives. It is a very live debate, but they did need extra cash. I asked for extra cash—£6.5 million in the draft budget, topped up today by the nearly £3 million announced by the First Minister. That takes us to about £9.5 million, which will help places such as Ardgowan hospice in my community.

I received an email this afternoon from Hospice UK. It was just one line, thanking me for fighting its case. The question is, how many other parties got one of those emails this afternoon? I know that the budget is all theatre, but it does matter. The reason that this stuff matters is that every penny counts towards supporting—

Seriously?

Yes, seriously, Ms Baillie. Would you like to intervene, because you are shouting at me from the front there. Did you get an email from the sector thanking you for supporting it?

Through the chair.

I actually did. The difference is that this is not the first time that I have stood up to support hospices or social care; I have done so consistently over a number of years.

The big difference, Ms Baillie, is that you walked away from the discussion and negotiation on day 1.

Through the chair, please.

The budget was going to pass anyway, thanks to Mr Marra and members on his front bench.

There is stuff in this budget that I am concerned about. For example, I called for a complete freeze on business rates for all hospitality businesses, as has been done in Northern Ireland. At the end of the day, this is not my budget; it is the Government’s budget, and it must make and own those decisions. The £178 million relief package that we got was far more than what we had when I started the negotiation. The same goes for the funding for the college sector, and the same goes for the funding that we achieved for young entrepreneurs.

Will all of that save the Scottish economy from its perilous state? No, it will not, but the main difference between my approach and the approach of others in the chamber is simple: I did not walk away from this game with nothing.

Will Jamie Greene take an intervention?

Daniel Johnson (Edinburgh Southern) (Lab) rose—

The budget was always going to pass, but the question for Opposition members, including Mr Hoy, is, what did they get out of this budget? I got £300 million. As far as I can see, that is £300 million more than anyone else in the chamber got.

We now move to the open debate.

16:24

First, I note that I am disappointed at the length of the debate. The budget is absolutely at the heart of any Government activity. For it to be conducted on a Thursday afternoon in what some people consider the graveyard slot, and with such restricted time, is not good enough. I therefore apologise in advance to all members that I will not be able to take any interventions due to time, although they are absolutely the point of the debate.

On that note, what a week! Whoever promised Anas Sarwar that he would live in interesting times was not wrong. The release of the WhatsApp messages on Monday this week between Anas Sarwar’s old friend Peter Mandelson and Wes Streeting told us a lot of things. Notable, of course, is Streeting’s explicit criticism of his own Labour Government for having “no growth strategy”. That confirms what I have argued since its election. Although the UK Government holds most of the levers that are needed to create a coherent growth strategy—control of the tax regime and of key regulators, borrowing-to-invest powers and, of course, overall fiscal and economic powers—it has failed to use them. Here in Scotland, we have been captured within the chaos and failure of successive UK Governments’ making.

Within those challenges, we face the massive challenge of a fixed budget. It is therefore disappointing that, yet again, the Labour Party in Scotland refused to bring any proposals forward during budget negotiations and backed an abstentionist position. [Interruption.] Mr Marra may wish to heckle from a sedentary position, but he can intervene if he wants to and tell us why the Labour Party could not be bothered and, in fact, sought to abstain on the budget even before it was brought forward. Is he able to give me the compelling reason for doing that?

I certainly am. Over four meetings, we set out a range of areas in which we wanted to see investment. I was told that I would hear back on that, but we heard nothing. As I have said already, it takes two to dance.

Och, he is a wee lamb, is he not? For goodness’ sake: the fact of the matter is that the Scottish Labour leadership appears to knife its own Prime Minister in the back, but it fails at every single turn to put the interests of the Scottish people first.

This is the context in which the Scottish Government has had to produce a draft budget in short order without knowing precisely what funding it will have to operate with as we still await clarification on consequentials.

I will dwell for a short time on two criticisms that I have previously shared regarding the constraints of the fiscal framework. First, I have said consistently that restricted borrowing powers limit the Scottish Government’s ability to respond to in-year inflation, pay pressures and unseen events. The framework also constrains our ability to borrow to invest, which is fundamental in addressing productivity challenges.

Secondly, I continue to be concerned that the challenging context has led to a reliance on one-off funds—most noticeably, ScotWind money being called on to fund day-to-day spending. I have been consistent in calling for those funds to be used for long-term investment. Therefore, there needs to be—and I think that Mr McKee will have a view on this—an even stronger focus on public sector reform and on setting clear priorities.

On that point, too often cries from Opposition parties to increase spending across many areas of Government are not accompanied by explanations of where that money is to come from—witness Craig Hoy’s remarks earlier. Frankly, that reveals that they are not ready for the challenges of Government.

As this is my last budget speech, I want to finish by recognising the work of the Scottish Fiscal Commission under the leadership of Professor Graeme Roy. Its analysis is critical for us all in supporting evaluation and evidence-based decision making. It does a super job. I am pleased to note that the commission is continuing to broaden its analysis and improve data quality, and I thank the commission for that.

Given earlier remarks, it is perhaps worth reminding the chamber at this point that the timing of the debate was agreed at the Parliamentary Bureau and was subsequently agreed to by Parliament. I do not recall there being an amendment to the business programme.

I can also tell the chamber that there is a little bit of time in hand, so recompense for interventions will be given for the foreseeable. How long that will last, I do not know.

16:09

The convener gave a very good summary of the concerns that the Finance and Public Administration Committee has expressed about the budget process. Before I move into my speech, I want to add some context from six of the expert analysts who attended the committee on Tuesday this week. They raised some very important issues that we should be thinking about.

First, there is not sufficient detail about Scottish Government policy priorities and how well they deliver on the intended outcomes, and, as a consequence of the very tight fiscal constraints, which policies have been deprioritised and why. Those points have frustrated the committee from time to time. Professor Heald made the particularly interesting remark that the Scottish Government is often more generous in its approach to spending than Governments in the rest of the UK. However, seldom do we see the reverse of that, and we certainly do not see where the money is coming from. That situation is at the heart of the policy decisions in the budget.

Secondly, the Auditor General strongly made the point that there is no credible long-term plan to address the very significant challenges that arise from the bloated welfare state budget and the demands of health—which David Phillips spoke of today—and of social care. The Scottish Government appears to favour the short-term fix. We have concerns about the lack of a baseline in the budget and the fact that it is extremely difficult to track where money is being spent effectively.

Thirdly, the analysts said that local government is facing a very serious issue of fiscal unsustainability in the long run, which definitely puts front-line services under threat. There is also the threat of significant council tax rises in April.

Those are all very important points that do not come from me or from the Scottish Conservatives but from highly respected experts—I agree with what Michelle Thomson said about the Scottish Fiscal Commission—who do a deep dive into the Scottish budget. We should listen to what they have to say.

In the light of those experts’ concerns, we have to ask why policies have been adopted in successive Scottish budgets that undermine the Government’s stated overall objectives, especially when it comes to economic growth. Why on earth does the Scottish Government believe that its policy on the non-domestic rates issue—although it is good to see some mitigation and relief in that regard—its visitor levy and its removal of the small business bonus for deer management businesses and some rural businesses will provide greater economic growth?

The Cabinet Secretary for Health and Social Care has just left the chamber, but three budgets ago, when he was Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, we had an 8.3 per cent real-terms cut to the economy portfolio. We have had an increase in college funding, although the figure for it is disputed. However, there has been a 20 per cent real-terms cut in college budgets since 2021, when it is colleges that have to address the skills agenda and ensure that we get many more people back into the labour market.

Those are the concerns with the budget. This is not just about different party-political angles or about what policies would be better in which places. There are fundamental issues, some of which the convener has raised in the Finance and Public Administration Committee’s report and some of which are being raised by the analysts who scrutinise the Scottish budget. We should be listening to what they have to say, because these are serious challenges, not just for this budget but for the next Government, whichever colour it might be.

16:13

I thank the Scottish Government for the announcements that it made today regarding additional resource for different policy areas.

Every budget is about challenges and choices—the challenges that the Government of the day faces and the choices that it proposes in order to deal with those challenges. A decade and a half of Westminster-imposed austerity, coupled with high inflation, has significantly eroded the value of the Scottish Government’s block grant funding. That, in addition to an ageing population and strong global economic headwinds, has left our public services having to meet growing demand within increasingly challenging settlements. Those issues are not new to any of us in the chamber.

During the 2024 UK election, Labour campaigned to get rid of the Tories in order to stop austerity. I say to Mr Marra that Labour members cannot have it both ways: they cannot claim that austerity came from the Tories at Westminster and also claim that it did not have an effect on the allocation of budget to the Scottish Parliament. That economic illiteracy is an example of why Anas Sarwar was right about the Prime Minister not being up to the job. However, it also tells me that the Prime Minister, Anas Sarwar and now Michael Marra are making the case for Scotland to be an independent nation.

In both this financial year and the next financial year, the block grant has a £5 billion increase. Is that the member’s definition of austerity?

A decade and a half of austerity: that is the point that I made.

The Tories made a complete mess of running the Government, and Labour, with its massive majority in the House of Commons, is now doing likewise. The national insurance contributions increase last year is a prime example of that, and £400 million has come out of the Scottish budget to deal with it.

The Scottish Government put £2.2 million to Inverclyde Council last year to try and offset the problem.

Michael Marra rose—

I am sorry, Mr Marra.

The 8.5 per cent council tax increase would have been a lot less if there had not had to be that £400 million for the national insurance contributions increase. Thanks to Labour, Inverclyde council tax payers are paying a lot more money, and that will no doubt remain the case going forward. [Interruption.] I am sorry, Mr Marra, but I have already taken one intervention.

With the limited powers of devolution, the budget delivers on a range of things that will and do matter to my constituents. It delivers vital support for families facing cost of living pressures and strengthens the public services that we will be relying on. The new cost of living measures to support families across Scotland, including the delivery of the new universal breakfast club offer for primary school-age children and additional funding to extend wraparound activity clubs in the afternoon and early evening, are to be welcomed.

The health service will have the resources that it needs to continue reducing waiting times. With waits for hip and knee operations at record low levels, the longest waiting lists have fallen for seven months in a row. I welcome the commitment to replace the ageing Port Glasgow health centre, and I thank the Cabinet Secretary for Health and Social Care for accepting the invitation to visit the existing facility last summer. Only in the minds of Labour members can a positive announcement be turned into a negative. I greatly welcome today’s announcement of additional resources for hospices. I am in regular dialogue with the chief executive officer of Ardgowan Hospice, and I know that he will be pleased with that. However, I believe that there is still a discussion to be had about a more sustainable funding method for hospices across the country.

Unlike Craig Hoy and the Tories, I welcome the increase in the Scottish child payment to £28.20 per week and the introduction of the premium payment of £40 per week for eligible children under 12 months. That will help many of my constituents. That is part of the “bloated benefits bill” that Mr Hoy spoke about earlier. The payment helps people in my community and the communities that he represents. I also welcome the extra funding to help keep more children out of poverty from funds that were initially set aside to mitigate the UK Government’s two-child cap.

I am conscious of the time, but I want to touch on one other point: the additional resource for neurodevelopmental assessments of the care needs of children and young people. I was a substitute on the Education, Children and Young People Committee when it undertook work on that last year. I have had a lot of engagement with constituents in Inverclyde about children with additional support needs. That additional resource will help families in my community, and I warmly welcome it. I also welcome the additional investment for changing places toilets, which will help people who have children with additional support needs and disabilities to get out and about in their communities, rather than being stuck in the house.

I warmly welcome those investments, in addition to the other ones that I have touched on—and there are others in the budget. I commend the budget to the Parliament.

16:18

Having such a short time to discuss a budget allocating £68 billion is unsatisfactory, but I will not waste any more of my four minutes debating that point. However, I will repeat one thing:

“funding allocations for health in 2026-27 look increasingly detached from reality.”

That comment was made by David Phillips of the Institute for Fiscal Studies. Excluding pay, funding is down by 0.6 per cent in real terms. That is a cut. However, there are pay rises of 3.75 per cent, going up to almost 10 per cent, and it is NHS services that will pay for the gap.

I do not begrudge staff a penny of that—they are really hard working—but we need to ask the Government where the money is coming from. The SNP cannot tell us, because it has no credible plan. Instead, the NHS is having to slash services because of efficiency savings totalling a staggering £1.1 billion next year. The Scottish Government is giving with one hand and taking away with the other.

The SNP’s approach is to expect public services to deliver even more for even less, which is putting an intolerable strain on staff. Services are being slashed, and nowhere is this more evident than in social care.

There is little money for social care packages. We are told that social care requires £550 million to plug the funding deficit this year alone. Next year, the level of need is anticipated to be £750 million. There is not a penny in the budget to meet the pressure on some of the most vulnerable people in our society—older people, the sick and disabled people. More than 11,000 Scots are waiting for a social care assessment—an increase of almost 28 per cent on the same time last year. More than 2,000 are stuck in hospital with their discharge delayed. People in my constituency are unable to get a care package in Argyll and Bute because they are waiting for people to die so that funds for new care packages can be released. That is how dreadful the underfunding of social care has been, and the buck stops with the SNP Government.

I have another constituent, this time in West Dunbartonshire. He has advanced dementia and is in a nursing home because his family are desperate to give his wife respite, and they paid for it themselves. He requires round-the-clock supervision, and has been assessed as requiring nursing home care, but the health and social care partnership was not prepared to release funding for him. It wanted to send him home today to his wife, who has terminal cancer. He has seriously endangered himself in the past and the strain on his wife is profound at an already difficult time for her. I have intervened to make sure that he remains in the nursing home, but what intolerable stress that places on families, and it is down to a lack of money. That is the reality of social care in SNP Scotland.

Yesterday, I met social care providers that are deeply concerned about the Government’s approach. On the one hand, it says that it wants to work in partnership with the sector on fairer funding; on the other, it plans to cut £19 million from the staffing budget. The irony is not lost on the sector. The consequence of that cut would have been job losses, the slashing of services, some organisations going to the wall and returning to institutionalised models of care from the past.

I welcome what has been done on social care, and I also welcome hospice funding. I would say to Jamie Greene that some of us have been arguing about this for a long, long time. I am pleased that the SNP has now U-turned, but I have to ask what that says about its motivation in the first place, given how damaging the original decision would have been. It tells me that this Government is failing health and social care, it is funding crisis, not prevention, and it is asking health and social care workers to operate in intolerable conditions, risking burnout without the resources that are needed to provide quality care.

Let me finish on a note of consensus, with Michelle Thomson and Liz Smith. We need to thank the Scottish Fiscal Commission, the Institute for Fiscal Studies and the Fraser of Allander Institute for their work in shining a light on what is a less-than-transparent budget and for highlighting the challenges for the future.

16:23

I welcome the approach that some are taking to the process of pulling together the budget—particularly the Liberals, but also the Greens, who are actively engaging with the Government to help shape what might come out of the other end of the budget. That is the approach that should be taken. The inability of others to engage seriously with the process of shaping and forming the budget baffles me, because it shows that, through the process of engagement, we can make a change and influence what is in the budget.

Any party that seeks to engage with the Government will always be able to say that the budget does not contain absolutely everything that they would like to see in it, but this is about the art of compromise that Jamie Greene was speaking to. I would go as far as saying that not attempting to shape the budget is an abdication of responsibility.

Will the member give way?

Mr Marra is looking very exercised, so I will give way to him.

I appreciate the member giving way. He is making a fine point to those on his Government’s front bench, telling them about the process, and about how to negotiate and come to a position. When people go to them and they say that they will get back to them, they should probably get back to them.

I have known Mr Marra for the best part of three decades, going back to our university days. He has never struck me as someone who would be shy in coming forward and saying, “Are you going to get back to me?”

On Mr Marra’s line about it taking two to dance, as I say, I have known him for a long time. I never took him for much of a dancer back in the day, but I certainly would have thought him capable of telling the cabinet secretary that he would like to continue the conversation. That is a very weak line of argument, Mr Marra.

I think that there are many things to welcome in this budget. Craig Hoy says that there is nothing to welcome, so I will pick up on a few things that we can welcome.

First, there is the funding for GP walk-in centres, which is something that Craig Hoy clearly does not welcome. Those are already being rolled out: there is one in Wester Hailes. I am engaging with my local health board because I would like to see one in my area. I would have thought that GP walk-in centres are something to welcome.

Secondly—this has been mentioned already, but I want to refer to it again—there is an extra £2.9 million for the hospice sector. I recently spoke with Mags McCarthy of the Scottish hospice leadership group. She is also the chief executive of Strathcarron Hospice, which is not in my area but serves it and carries out absolutely outstanding work. Jamie Greene was right to say that we all know about the excellent work that hospices do in our localities. That money will make a massive difference to those organisations, but that, again, is something that Craig Hoy thinks is not worthy of welcome.

Thirdly, there is a 10 per cent uplift in funding for colleges, which is another thing that Craig Hoy does not think is worth welcoming. I used to have the privilege and pleasure of being the minister with responsibility for further education and I was able to go around seeing the tremendous work that our college sector does. I know that colleges need additional funding, because that will enable them to be more responsive and adaptable to meet social and economic need. I am pleased to say that we see excellent college provision at New College Lanarkshire in my constituency, and I know that that funding will go a long way towards helping that college to continue doing its good work.

The fourth area that I welcome is that, building on the abolition of peak rail fares, there will be a freeze in rail fares for the coming year. That is something else that Craig Hoy does not think is worth welcoming. I know who will welcome that: the many thousands of commuters who travel daily from my constituency, many of them going into Glasgow to work, and who rely on rail transport and will not have to pay any more than they do right now.

The fifth and final thing that I specifically welcome, which the cabinet secretary mentioned, is the funding being deployed towards providing breakfast clubs in all primary and ASN schools in Scotland. That will benefit 25,000 children in North Lanarkshire, where my constituency is. When we talk about the budget, we tend to talk about millions, but I want to bring down the numbers a little and talk about thousands. There are 25,000 children in North Lanarkshire who will benefit from that funding. Craig Hoy does not see fit to welcome the funding, but I welcome it and families in my area will welcome it.

For all those reasons, and more, this is a budget to be welcomed and is one that we should be supporting.

16:27

In my time today, I will focus on two key challenges that the budget fails to address and on which the next Parliament will have to act.

The first is the long-term sustainability of our education sector. It is increasingly clear that the challenge to the future sustainability of our university and college sector is one that the Parliament will have to face and that the next Government must address.

On the specific funding that the Government has provided for colleges, the £70 million uplift in the budget might seem positive, but it is misleading. The Education, Children and Young People Committee sought clarification and found that that figure includes the £30 million spent on the Dunfermline learning campus in 2025-26, which means that the uplift is £40 million.

It is telling that, after 19 years of the SNP in government, the Colleges Scotland briefing ahead of the budget was titled “A Budget to Save Scotland’s Colleges”. It talks about saving our college sector. We know that many of those institutions are in financial jeopardy. The budget might save them this year, but it will not do so in future years. Institutions across the country, such as Dundee and Angus College, remain in limbo regarding which investment plans they can take forward. With a significant backlog in maintenance and investment in our college estates, there is no clarification about which investments can be realised, and the sector now risks losing investment opportunities, too.

We need a vision for our education sector. I welcome the cross-party review of university funding involving Universities Scotland and the Government, but the next Parliament will have to decide whether to save some institutions if they are not to go to the wall. The budget certainly does not seem to take account of that.

The second key issue for me, as an Edinburgh and Lothian MSP—I hope that other members who represent that area and will be voting on the budget understand this—is that the budget does nothing to address the underfunding of Lothian. The City of Edinburgh Council remains the lowest-funded council per head of population, and NHS Lothian remains the lowest-funded health board per head of population.

We cannot ignore the fact that we are seeing a significant change in Scotland: a movement of population from west to east. The fact that our constituency boundaries have been redrawn during this parliamentary session demonstrates that, and 84 per cent of Scottish population growth over the next—

Will the member take an intervention?

If I get some time back.

I can give you the time back if the intervention is brief.

I am wondering what engagement Miles Briggs has had with the cabinet secretary to get more money for Lothian. I appreciate that I did not get as much as I wanted, but at least I got some money for Lothian. What engagement did he have?

Jeremy Balfour knows that I have been lobbying the Government on the issue for the past decade. Sadly, the Government has not implemented the structural changes that we need. If the budget had taken into account population adjustment, I would have welcomed it, but we have not seen anything like that.

Jeremy Balfour highlighted some scraps from the table that he managed to achieve. The budget does nothing to take into account the growth in population and the negative impact that that is having on our public services. He should know as well as any of us who represent this great city do that a growing number of children are living in temporary accommodation and that the majority of that is linked to the crisis with our funding, which the Government is doing nothing to address.

Members across the chamber who represent Lothian need to understand that. The next Parliament needs to look towards—

Will Miles Briggs take an intervention?

No, he will not.

I am not able to, sadly—if only we had more time, this would have been a much more enlightening debate.

This is a budget that will get the Government through an election. That is fine, and it is clear that it will pass this evening. It might also lay the ground for Deputy First Ministers Greer and Cole-Hamilton in the next Government. However, this is not a Government for growth or for reforming our public services. The budget will not address the challenges that our country faces, so we will not vote for it at decision time.

16:32

In Scotland, we have a relatively fixed budget to share out and, not surprisingly, almost everyone wants more. We should not be giving our limited funds to those who shout the loudest. That is my problem with the hospitality sector. It is very organised, it gets a lot of media coverage and it shouts very loudly. However, I use restaurants and pubs reasonably regularly, and it is clear that many of them are doing well. Groups such as DRG are expanding. If we cannot afford to give care workers a decent wage, there is no way that we should be further subsidising the hospitality sector.

I will support the Government’s budget today, but I am disappointed at the slow pace of reform in relation to replacing council tax. I know that the SNP and almost all other parties are reluctant to upset voters or even to have a revaluation of properties. Such a revaluation would mean that roughly half the population would be winners and half would be losers.

However, the lack of action on council tax is not victimless. The current winners are those whose homes have gone up proportionately more in value since 1991. The victims are poorer folk in constituencies such as mine whose homes have not gone up much in value. The Greens have argued consistently for a major change in local taxation—they are the only party who has argued for it—so, if they are going to be kingmakers after the next election, I hope that they will make that a central demand of any agreements that they make.

Finally, we are trapped by a fiscal framework that is flawed and biased against Scotland. The major downside of devolution is that, at the end of the day, England—or the UK—makes all the big decisions. It makes decisions that suit it, and that does not include treating Scotland fairly. Historically, we have not been able to compete with London and the south-east of England, and, as we were reminded by Professor David Heald at the Finance and Public Administration Committee’s meeting this week, if bonuses rise in the City of London and English Premier League footballers secure higher relative salaries, there will be increases in the income tax block grant adjustment for Scotland. Fundamentally, something has to change in our financial relationship with the UK.

16:34

I was not called to ask a question when the finance secretary gave her budget statement on 13 January. That was a pity, because it would have been the first time that she and I had engaged on the matter—or, indeed, on any matter. I did not have the opportunity to dance with Shona Robison, although it is never too late. What was not a surprise was that the Lib Dems would support the budget. That was never in doubt. What we have seen is a pre-election charade—and we will probably see a post-election one—from the Lib Dems.

Had I been called, I would have asked about college funding. I would have pointed out that colleges have been underfunded for years and that the increase that was announced in the budget is just a case of playing catch-up and might not prevent colleges or campuses from closing.

I would have asked about business rates and pointed out that the budget does little for the hospitality sector, which is still on its knees. We have heard from Stephen Montgomery of the Scottish Hospitality Group that

“The inflation-busting rises faced by licensed hospitality in Scotland are simply unaffordable and unacceptable.”

I would also have asked what council taxes we might expect, because every year, under the SNP Government, local government has screamed that it does not get enough, and every year it has been right. This year, some councils are predicting that council tax could go up by as much as 8 per cent. John Swinney says that that is unacceptable, but he stayed silent on a similar rise in water charges by SNP-run Scottish Water. We are going to see council taxes soar and councils being trimmed to the bone.

I do not think that the budget does anything for hard-pressed people, and it does not help businesses. I will not support it.

We move to the closing speeches.

16:36

I start by saying to Graham Simpson that, if he wants the Government or anybody else in this Parliament to speak to him, perhaps he should not have joined a party whose former Welsh leader turned out to be a Kremlin puppet and whose current star by-election candidate suggested that people born in the UK but with minority ethnic backgrounds are not necessarily British. Maybe he should take some responsibility for that.

I want to talk about tax—

Will the member give way?

No. Time is far too short. [Interruption.] In fact, if the member would like to own the racist comments made by his party colleague, he is more than welcome to intervene.

Ross Greer ought to reflect on his insulting comments. Anyone who knows me knows that I am easy to deal with and I do not fit the description that Ross Greer has just given. He should apologise.

If the member has joined a racist party, he needs to own the decision he has made. He might be embarrassed about it, but he is unwilling to distance himself from it.

Scotland has been on a journey on tax over the past 10 years. We are now touching on having £2 billion of additional revenue for our public services, such as our health service, as a result of the progressive income tax changes that we have made over the past decade—changes proposed by the Greens and accepted by SNP colleagues. We are a wealthy country, but that wealth is held incredibly unequally. Recent Scottish Government statistics show that the top 2 per cent have more wealth than half of the population, or 2.5 million people, combined. However, we are making some progress on fair redistribution of that wealth, and it is not limited to income tax measures.

On council tax, I absolutely associate myself with John Mason’s remarks. However, the limited progress that we have made there has had an impact. With the council tax surcharges on second and empty homes, as well as the increase in the additional dwelling supplement, we have raised hundreds of millions of pounds for public services, and that has resulted in there being thousands fewer second and holiday homes and, indeed, empty properties across the country. Thousands more homes have become available for people to live in. The progressive changes that we have made are helping to tackle the housing crisis.

I want to take a moment to defend Scotland’s social security system—a system that means that Scotland is the only part of the UK where child poverty is falling rather than rising. Craig Hoy and his Conservative colleagues are calling on us to cut that system. I point out that the most recent substantive study in the BMJ showed that, as of 2022, Conservative austerity at UK level had led to more than 330,000 excess deaths. If the Conservatives want to take ownership of possible cuts to the social security system, they need to acknowledge what the consequences of those decisions would be.

The Greens went into the negotiations with more money for colleges at the top of our list of priorities, and I am glad that we were able to secure that. I recognise that it was also a priority of Lib Dem colleagues. The opportunity to study at college can be life changing for people. Colleges are essential to local economies and to our wider society.

Will the member take an intervention?

I am afraid that I do not have time, Mr Briggs.

Alongside the budget, we secured a separate agreement with the Government on the conditions attached to college funding, which need to be explored in a much wider context.

Scotland’s public finances are under huge pressure. If we want to hit our climate targets or our child poverty reduction targets, we require far higher levels of spending than are currently available to us—unless we change how we spend that money.

We have set new conditions for colleges and universities on eliminating the use of inappropriate zero-hours contracts and tackling the gender pay gap. Huge amounts of public money go out the door to the private sector and large institutions such as colleges and universities every year, much of it with no conditions attached at all. However, in another context, a couple of years ago, we decided to make it a condition of any enterprise grant that employers must pay at least the real living wage. Many workers across the country are now able to live above the poverty line as a result of that change. We need to start making such fair work conditions mandatory criteria for the many contracts, grants and other ways in which the Government sends money out the door every year.

We also need to recognise that, much as we would like to have the resources that are directly needed to hit our objectives on child poverty, the climate or anything else, realistically we do not have that resource available to us. The money that we are spending, however, could be used to far better value if we were to set conditions of the kind that I mentioned.

16:41

I always seek to strike a consensual tone. If there is one point from this afternoon’s debate that we can all agree on, it is Jamie Hepburn’s observation that no one wants to see Michael Marra dance. I strongly suspect that Shona Robison is not the first person to reject such an offer from Mr Marra.

I also think that we need to listen to the calmer voices in the chamber. Liz Smith, in particular, made a very important contribution. We do have some very important institutions in this country. The Scottish Fiscal Commission is a relatively new body, but, alongside Audit Scotland and the Fraser of Allander Institute, it provides real insights into Scottish public finances. It is clear from the insights that those institutions have provided that this budget does not deal with the long-term problems that all those bodies consistently identify.

This is not a budget with solutions. It only adds up if there are cuts in education, justice, rural economy and local government. If members do not believe me, they should simply look at figure 6 in the Fiscal Commission’s summary paper on the budget. It shows a cut of more than £400 million to local government funding, too,. That is the reality of this budget, and that is what the Government is asking us to vote for this afternoon.

I, too, commend the work of the Scottish Fiscal Commission. Does Daniel Johnson believe that we should listen to it carefully on Scotland’s fiscal framework in the years ahead? Doing so would give us far greater results and flexibility when negotiating and agreeing budgets in the Parliament. The Fiscal Commission’s advice could be a very important part of that process.

That is all very well, but the Government negotiated the fiscal framework and then re-signed up to it. Indeed, when it was first agreed, John Swinney held it up and claimed it as a victory for Scotland, so any retrospective revisionism simply does not add up.

This budget is symptomatic of this Government. It follows 18 similar budgets in which difficult decisions have been deferred and exceptional revenues have been plundered. It is no wonder that the IFS—as referenced by Michael Marra and Jackie Baillie—has said that, on the health provisions, the budget increasingly looks detached from reality. I say gently to members who are holding up their so-called budget wins to look very carefully at them.

This time last year, Liberal Democrat members proclaimed that they had found the funding for the Edinburgh eye pavilion. We still do not know where that funding is—indeed, we have only heard in recent weeks that that money is not confirmed.

The Government holds up the provision of £7 million to deal with the delays in autism assessments, but £7 million will barely touch those delays. It is a one-off payment for something that affects tens of thousands of people. We simply do not have the psychiatrists or the clinical psychologists to undertake those assessments, so the Government should not tell me, or everyone else, that that will fix the problem.

Miles Briggs is absolutely right. Until the budget deals with the deep structural problems of the health service, not least of which is the underfunding of services in Edinburgh and the Lothians, it is not a budget to take seriously. If it makes members feel better to vote for the budget, they should by all means do so, but they should not pretend that it is a solution, and they should not use a sanctimonious tone towards those who have objections to the budget.

The reality is that, according to the Fraser of Allander Institute, there is an underlying deficit of more than £650 million.

Will the member take an intervention?

Do I have enough time, Presiding Officer?

You can have the time back for Bob Doris’s intervention, but I cannot give you any more time.

That sum of £650 million is quite astonishing. There is a simple question for this budget. As I pointed out to Stuart McMillan, the Government has, over this year and last year, received more than £10 billion in the block grant. The simple question is: where has that money gone? It has certainly not gone into improving public services, because there are hundreds of thousands of Scots on NHS waiting lists. We have a justice system that is well past breaking point, an education system with declining standards and the scandal of more than 10,000 children living in temporary accommodation.

The problems that we have stem, in part at least, from a failure to grow the economy. The deficit could be wiped out overnight if we had a Government that was focused on increasing jobs, wages and opportunities for Scots. The Scottish Fiscal Commission estimates that this year’s performance gap—that is, the price that we pay for slower growth in earnings and employment in Scotland relative to the rest of the UK—is £800 million. Every 0.1 percentage point of additional growth in Scotland relative to the rest of the UK would deliver £25 million to spend on public services here. That would pay for about 750 qualified band 5 nurses, a new community hospital or, if this Government were in charge of roads, about a kilometre on the A9. Where are the measures to improve productivity, grow wages and reduce economic connectivity? They are certainly not in this budget.

This is yet another disappointing budget, which will undoubtedly lead to yet another emergency budget revision along the lines of the three previous ones in this parliamentary session. That is why Scottish Labour cannot support another budget that simply kicks the can down the road and asks for the SNP to be elected again in May to fix the problems that it has created.

16:47

It is always a pleasure to follow Daniel Johnson, and I agree with much of what he said. What really confuses me, though, is that if the budget is so bad, why will the Labour Party not oppose it at decision time? I remember budget debates in the chamber being full of drama. I remember Wednesday afternoons when we were on tenterhooks to see whether the budget vote would pass. Here we are, in a three-quarters-empty chamber on a sleepy Thursday afternoon, and there is nobody out there paying any attention whatsoever, thanks to the Labour Party selling the pass on the budget weeks ago.

Does the member agree that the one guaranteed consistency that we can rely on is that the Conservatives achieve absolutely nothing out of these budgets?

Well, I have been here a lot longer than Kate Forbes has and I can well remember the Conservatives supporting Mr Swinney’s budgets, in a previous iteration, when they were delivering good things for Scotland. The problem is that this budget does anything but that, because what it delivers is tax rises for the Scottish public.

Will the member give way?

Oh yes—I will give way to the First Minister.

Was that not at a time when more considered members from the Scottish Conservatives were carrying out the negotiations than the ones who spectacularly failed to get anything out of this budget process?

Maybe it was a time when we had a more considered First Minister, who was prepared to accommodate the reasonable choices of the Conservatives.

The budget proposes tax rises that will cost the Scottish public £1.8 billion next year, although some at the lower end will see a tiny reduction in their bill—not even enough to buy a second-class stamp once a week. Meanwhile, as Craig Hoy pointed out, spending on benefits continues to balloon out of control, rising to £7.4 billion in the coming year. Local government funding is being squeezed and services are being cut. As we heard, NHS spending is being cut in real terms, but the benefits bill continues to grow and grow.

My primary concern is about the impact on business and the economy. Today, thanks to the current non-domestic rates revaluation, businesses in Scotland are facing unaffordable increases in the rates that they will pay.

Earlier this week, I had at my surgery a constituent with a small business in the provision of self-catering accommodation in Perthshire who has seen her rates bill go from zero, because she was eligible for small business rates relief, to £20,000 annually. That increase is simply unaffordable, and she told me that it will leave her having to close her business. That situation is repeated across the self-catering sector.

The finance secretary said today—if I heard her correctly—that she will cap the increases at 45 per cent over three years, but that still means that that business will go from paying zero to paying thousands of pounds that it cannot afford. Businesses will close as a result of the choices that have been made by the finance secretary.

We see the same situation in the hospitality sector. Pubs, hotels and restaurants face horrendous increases of up to 400 per cent in their rates bills. We brought that issue to the chamber last week, asking the Government here to do the same as the Northern Ireland Executive did recently and put a pause on those revaluations. Whether it is self-catering, pubs, hotels or restaurants, the entire tourist and visitor sector of our economy faces a catastrophe. We will see business closures and job losses across the country, particularly in rural areas. We have an SNP Government that is hellbent on destroying our tourist sector because of the choices that it is making.

The reliefs that have been announced today are welcome, but they go nowhere near far enough to address the increases that many businesses face. The cabinet secretary will preside over the death of Scottish tourism unless she thinks again.

SNP members are groaning, but I think that they should get out more, talk to people in the sector and hear the case studies that we have heard, because that is what is going to happen. Businesses that pay nothing at the moment will see increases of thousands of pounds in their bills.

Retail is also impacted. The SNP manifesto at the last election pledged to restore parity with England for firms liable to pay the higher property rate. However, for the coming financial year, all premises liable for the higher property rate will pay £226.5 million more than equivalent-sized businesses south of the border. That gap has dramatically increased, because it is just £54.7 million in the current financial year—the figure is going up by more than four times.

As Liz Smith pointed out, we have an issue in the rural economy because of the removal of the small business bonus scheme from sporting rates. Sporting rates are charged on sporting rights, whether they are exercised or not. Most farms across Scotland have sporting rights and will be getting a rates bill for the first time ever. They will never have had one before, because they were eligible for small business relief. The Government says that it is interested in rural Scotland, but it does not look like that from where I am sitting.

As those taxes go up, services are being cut. Professor David Bell, giving evidence to the Finance and Public Administration Committee, said of the council settlement:

“The overall position is severe, and it will become critical.”—[Official Report, Finance and Public Administration Committee, 20 January 2026; c 49.]

We are likely to see record-breaking increases in council tax set by local authorities across Scotland, meaning that it will not be just income tax and business rates that go up.

Overall, this budget hikes taxes, damages the economy and sees cuts in local services, and the only gainer will be the welfare bill. It is not a budget that deserves our support, so it is disappointing that it will pass nonetheless.

The Labour Party has given this budget a free pass. It will let this ruinous budget go through, damaging local services, hitting councils and ruining the economy. As for the Lib Dems, this is a preview of what we will get later this year if the SNP ends up as the biggest party, with the Lib Dems selling their souls to put the SNP back into power. Alex Cole-Hamilton has spent the past two years courting Anas Sarwar and now he is suddenly courting John Swinney. He wants to be the Nick Clegg of the current decade. Anybody thinking of voting for the Lib Dems at the election needs to reflect on whether they want to put the SNP back in power. We will not do that—we will stand up against the SNP and oppose this budget.

16:54

This Government is proud to bring forward a budget that is underpinned by our priorities of placing families at its centre and delivering a more prosperous future for the people of Scotland.

The decisions that we have made continue to protect this Government’s social contract—free prescriptions, free bus travel for 2.4 million people, free tuition for students and more than £6,000 in early learning and childcare support for each eligible child.

The budget goes even further for families, with increased wraparound support, more investment in activity clubs and a universal breakfast offer for all primary school pupils. It will make sports more accessible for children, with £20 million for a summer of sport programme. Taken together, those measures will reduce cost of living pressures, support children to move more and eat healthier food, and enable their parents to get to work.

Other child poverty measures include a new annual £50 million whole family support package contributing to our ambition to eradicate child poverty. There is a £49 million boost to the tackling child poverty fund, taking it to a total of £61.5 million. The budget makes a commitment to begin work towards introducing a new Scottish child payment premium, which, it is estimated, will benefit the families of around 12,000 children. In addition, there is a commitment to provide further funding for the next financial year for the investing in communities fund, which supports the vital work that community groups do across our country. It is clear that the budget, taken in the round, is underpinned by the Government’s top priority of eradicating child poverty.

The minister and I do not agree on much of what he has said. Research by the Scottish Government shows that behavioural changes are emerging as a result of the Scottish child payment, including parents turning down pay increases, working less or putting more money into pension salary sacrifice schemes. Is the best way to lift children out of poverty not their parents having good, well-paid jobs rather than turning down work?

The member should recognise that that is an in-work benefit. It is very clear that we are starting to get more details from the Conservatives as to which parts of the welfare bill its members would want to cut. I am sure that the people of Scotland will not thank the party for that as its members attempt to take steps to reverse the reduction in child poverty that this Government has delivered.

The budget recognises the vital role that public services play in the day-to-day lives of our citizens and in Scotland’s future. It invests more in community justice services and more in health and social care services, delivering a record £15.7 billion to local government. The cabinet secretary has set out how we are going even further to support local government by allocating a further £20 million, which local authorities can use towards funding the real living wage for adult and child care sectors.

The budget offers a new approach to public services, with new high street GP walk-in centres an example of us thinking differently to ensure that much-needed services are accessible. Work will also be taken forward to develop a new approach to supporting individuals with complex care needs to move out of hospital, and to reduce inappropriate hospital admissions and out-of-area placements by providing tailored, community-based support solutions.

The budget also includes funding to deliver more efficient services across our public sector, with £29.9 million of funding to support the invest to save programme in the year ahead. Alongside our public service reform strategy and portfolio efficiency plans, the budget supports the Government’s efforts to deliver better services more efficiently for the people of Scotland.

Economic growth is essential to ensuring the sustainability of strong public services, and the budget supports that by investing £47 million to strengthen local economies and support the regeneration of local communities and town centres. It provides £2.4 billion for post-school learning, to enable everyone to reach their full potential, and £93 million to build critical offshore wind infrastructure and develop the supply chain. It also provides, for the next three years, 25 per cent in additional relief for licensed hospitality and music venues including pubs, restaurants, hotels, nightclubs and licensed clubs that are liable for the basic or intermediate property rate. We are providing more support for those businesses than the UK Government.

The budget takes the total relief for eligible licensed hospitality premises and music venues to 40 per cent over the next three years, capped at £110,000 per business per year, plus the specific relief that has been offered for the self-catering sector.

Will the member take an intervention?

Will I get the time back, Presiding Officer?

I can give you the time back.

A case in Glasgow has recently been brought to my attention. A major hotel in the Finnieston area has just had a rates revaluation, which resulted in a 250 per cent increase in its rates. As a result, it is pausing a major investment of £25 million, which would create 100 jobs. Clearly, no one wants to see that investment paused. Will the minister look at that case and see whether the business can have a bit more leeway in the adjustments?

Paul Sweeney will know that the process for assessing rates is carried out independently by the assessors, but I have no doubt that the relief package that we are putting in place will be of benefit to that business. I would be very happy for him to write to me about that.

I have news for Daniel Johnson. Scotland’s economy is growing faster than the UK’s economy is growing under his Labour Government. I am assuming that it is still his Labour Government and that he identifies as a supporter of it. If he does not, he might care to let us know.

The budget includes an investment of £5 billion of climate-positive spend in 2026-27. The First Minister’s announcement earlier today that all ScotRail fares will be frozen is just another example of us supporting investment to make our public transport more accessible and to promote sustainable travel choices.

Aside from the support for the priorities of the people of Scotland that the budget delivers, we have shone a light in the budget process on how politicians in the Parliament approach that most important matter—how we raise and allocate the resources that people out there rely on. Jamie Greene put it well when he talked about the “new style of politics” and the contrast between those who work constructively to make a difference and those who carp from the sidelines; the relevant and the irrelevant; and those who choose to tango, as some have put it, and those who choose to sit it out. The people of Scotland will notice that.

This Government looks forward to continuing to have constructive engagement with all parties that choose to engage with us. I have news for the “shy” Mr Marra, as he was described by Jamie Hepburn. The budget process works on the basis of Opposition parties coming forward with proposals, which are then negotiated with the Government. Jamie Greene, Ross Greer and Jeremy Balfour get that, but Michael Marra chooses not to.

A minute of the meeting of 2 December that Michael Marra took part in said that further engagement will take place subject to receiving proposals from the Scottish Labour Party that we can consider in more depth. We are still waiting. Throughout this afternoon’s debate, Mr Marra has been asked to provide examples of what he is asking for. All that he asked for was more and more data—he never came forward with any concrete proposals.

I will turn briefly to Mr Hoy. At least he made no pretence of seeking to engage. Mr Balfour got more out of the budget than all his ex-colleagues put together. Mr Hoy just made more incoherent calls for more spending and a £1 billion cut to benefits.

The budget will strengthen our infrastructure, improve our public services and, ultimately, make life better for Scottish families. I hope that members will recognise the benefits that the budget will bring for the people of Scotland and vote in favour of the bill.