Chamber and committees

As one of my colleagues commented, the member makes the same speech every year about the record sums of money that are coming to the Scottish Government. When did he last sit down to work out the cumulative effect of inflation and compare the Scottish Government’s budget against it? It is as though he is living in isolation.

Mr Hoy is, along with me, on the Finance and Public Administration Committee. When the Scottish Fiscal Commission was in front of us yesterday, I specifically brought up the terminology “economic performance gap”. If Mr Hoy had been listening in that evidence session, he would have heard the Scottish Fiscal Commission making it clear that that gap is nothing to do with the actions of the Scottish Government. That is on the public record, so I invite you to reread that. Is that further evidence of the Conservatives’ Hetty Wainthropp style new front bench?

Today, we are being asked to debate, at best, half a motion. Some of its points have been eloquently dealt with by many in the chamber, and I add my voice to those who are dismayed by the attempt to isolate asylum seekers and deny them support.

The rest of the motion is full of sound and fury—rather than signifying nothing, it shows a lack of any coherent analysis or proposals. The Tories imply that they are concerned about growth but, by arguing for a significant reduction in tax take—while lacking any precision on the scale of that—they offer us in effect a return to austerity. They are unable—or is it unwilling?—to specify precisely where their main cuts will fall, and that is the rub.

Much of what is in the Scottish budget has been widely welcomed—not, of course, by the Tories, but by many key groups in our society. As the Scottish Fiscal Commission has specified, there is a considerable uplift in many critical areas, including 11.1 per cent real-terms growth in the net zero and energy portfolio; 3.7 per cent real-terms growth in the Deputy First Minister’s economy portfolio; and 3 per cent real-terms growth in education and skills. Those three areas are central not only to growth but to the type of sustainable growth that is much needed in Scotland; all speak to the focus on the type of investment that is needed to support sustainable growth. How much of that would the Tory’s proposals compromise? Their motion is silent on that point, which tells us much about this latest version of the Tories—not so much a shot in the arm as a shot in the dark.

Of course, I would want us to move further in the opposite direction from the Tories to enhance growth. Projections at both UK and Scotland levels suggest that the available increased expenditure from the capital budget will provide stimulus for growth but that it will be noticeable primarily in the short term. For the medium and long-term growth that we require, we must find a way to further increase investment for growth.

In that regard, I say again that the constraints on Scottish Government borrowing in the current fiscal framework are unwelcome. I have regularly argued that we need the freedom of independence to maximise our capacity for investment, because the unionist parties are opposed to giving the Scottish Government the necessary freedom to borrow in order to invest. That said, I continue to watch with interest the potential for a bond for capital investment, and I am sure that we will hear more about that in due course.

Given my interest in music and culture, and as chair of the cross-party group on music, I very much welcome the Government’s commitment to a significant increase in the culture budget. Scotland’s cultural assets are not simply nice to have; they make a huge contribution to the attractiveness of Scotland—not least for the tourism sector, as a place to do business and for highly skilled individuals to develop careers. That is investment for the enhancement of our quality of life and I applaud the Government’s actions in that area.

I also very much welcome the reinstated investment commitment for housing. Indeed, investment in house building and renovation not only has benefits for individual living but is a particularly effective form of investment for encouraging growth, with a significant multiplier effect.

Members will know that I have long made commentary on ScotWind money, so I was pleased to note that the £300 million will be protected going forward, and I was pleased to note the allocation of £25 million for green supply chains. I will continue to retain an interest in the effective use of those funds.

My final comments reference the Labour Party amendment. Of course I agree that it is important to address long-term challenges of fiscal sustainability, but I remind the Labour Party that the Scottish Government has had to abide by an age of austerity that was ushered in by the Tories and has now regrettably been adopted with enthusiasm by the Labour Party, which appears to be making the very same mistakes as the Tories did, with its low-growth budget and continued adoption of Brexit.

When I searched your report, I found that you mentioned “risks” in a number of paragraphs, including those relating to the pay bill, pay policy, NICs, the income tax net position, the mitigation of the two-child cap, energy prices, supply chains and interest rate rises. However, from reading those paragraphs, because they are in long form, I did not necessarily get a great sense of what you consider the probability of each of those risks to be and what the impact will be if those things happen.

For example, on page 71, there is a throwaway comment about energy prices and supply chains, and you mention that there could be trade wars as a result of the election of the new US President. If something like that were to happen, that could have a pretty catastrophic impact. Could you give a sense of that impact? Your report is already quite lengthy, but I did not necessarily get a sense of your thinking from reading it, so perhaps you could give us a bit more flavour.

Good morning. Thank you for joining us.

On page 9 of your report, you state that there is

“a material limitation to information available to the Scottish Parliament for its scrutiny of the Budget and in the spending analysis we can do.”

I think that that is in reference to the £1.3 billion resource increase. Following on from Michael Marra’s comments, what is your assessment of the data gaps in the budget that pertain to that statement? What is your general sense about that?

London will always grow strongly relative to everywhere else, so that is a baked-in inconsistency. Anyway, I feel that we have strayed off topic, but thank you very much for that.

For my last question, perhaps you can confirm for me something about rates relief. When we are looking at the reliefs in Scotland compared with what is happening in the rest of the UK, the finance secretary suggested somewhere—unfortunately, I could not find her exact comment; perhaps it was in the question-and-evidence session after the budget statement—that the relief could not be projected or put in place in quite the same way as it could in the rest of the UK because of a material difference. Could you give us a bit more information as to why that was the case? We know that some reliefs have been put in place in rural areas and so on.

I think that my colleague Ross Greer wants to come in on that, so I will leave it there.

Yes—especially in the context of a yearly fixed budget.

I want to pick up on some language in the report that I think is slightly disingenuous—I hope that you do not mind me saying that. You use the term “economic performance gap” in a number of places, and you are making the point that the Scottish Government will raise an additional £1,676 million in income tax but will benefit by only £838 million. My challenge to you is that, if every region of England was subjected to the same fiscal framework mechanism, there would always be an economic performance gap, because of the gravitational economic pull of London and the south-east. That is a function of the fiscal framework. I would appreciate your thoughts on that. I know that, technically, what you have said is correct, but there is a multitude of reasons why that situation occurs.

Yes. The Scottish Parliament information centre made that comment in its assessment of the budget. Things have moved forward, but there is still further to go in terms of tracking actual spend.

You have commented that the amount of capital funding that is available is much clearer but that the rate at which it can be spent is less clear, because it is front loaded. Does that add to the overall opaqueness?