Chamber and committees

I will carry on, if the member does not mind.

It is claimed that cuts to overseas aid are to fund a rise in defence spending. Yet, by comparing the composition of cuts and increases, we see that overseas aid is being cut by £3.2 billion in day-to-day spending, which counts against the main fiscal rule, whereas the rise in defence spending is very different, with only £0.6 billion in day-to-day spending. The planned increase in defence spending is over 90 per cent capital, which is completely different from current patterns of defence spending, in which only 35 per cent is capital. In other words, the net effect of the changes to overseas aid and defence is to contribute £2.6 billion towards restoring the headroom target.

Even after all that effort, the OBR gave the current plans only a 54 per cent chance of achieving a budget balance by 2029-30. Even that 54 per cent is predicated on an end to fuel duty freezes, which we all know will not happen.

The spring statement also shaved more off the earlier announced plans for departmental budgets. It is assumed that the UK Government administration budget will be cut by 15 per cent, but details on that are scarce. Previous Labour Governments made regular efforts to achieve governmental savings, but none ever materialised. Indeed, in almost all cases, expenditure on administration rose. As the Fraser of Allander put it, the spring statement is riddled with “optimism bias”.

There is a very large elephant in the room: how could we address the need to generate economic growth as a means to improve our economic health and tackle the international uncertainty that has been born of wars and Donald Trump’s tariffs? Perhaps a pre-spring statement survey from YouGov can help. Closer trade links with the EU were seen as the best option even by Labour voters, 65 per cent of whom thought it would pay greater economic dividends compared with a mere 15 per cent who favoured benefit cuts. The electorate seem to have a better grasp of economics than the chancellor.

Presiding Officer, you know that I favour using quotes to illustrate my points in a speech. To draw this time from the musical “Wicked”, Scotland is

“through with playing by the rules of someone else’s game.”

To quote the show again, I go as far as to say the fiscal event is a load of “old shiz”.

I would just like to note that it is extremely unlikely that the UK would be able to rejoin the EU by 9 pm this evening, when the announcement about tariffs will be made. On a serious note, does he recognise that the UK has left itself between a rock and a hard place—aligned to the US, with Trump at its helm, and outwith the EU? That must surely be a concern for Murdo Fraser.

I will restrict my remarks to the spring statement. It was sold as a little bit of tinkering to help people, which perhaps sounds kinder than what it really was: a full-on attack on the most vulnerable in our society—and on the most vulnerable of those, in the form of disabled people. A week before the spring statement, cuts to PIP were announced. A week later, the overall cost of PIP was further cut by the announcement of a freeze for existing recipients. That change had nothing to do with rational policy reform and certainly nothing to do with helping people into work; rather, it had everything to do with reaching the chancellor’s headroom target.

The most revealing aspect of the spring statement is that it has resulted in restoring the anticipated headroom to exactly £9.9 billion. As Paul Johnson of the IFS said,

“The Treasury has clearly worked overtime to ensure ... precisely the same fiscal headroom”.

He went on to comment that that is not a terribly sensible way of either using the IFS’s time or making policy. That understatement gently points out that it is the chancellor’s restrictive fiscal rules that are driving policy, rather than the aim of doing the right things for people and the economy.

It is increasingly likely that the headroom will vanish well before the next fiscal event and might be wiped out entirely by the coming of tariffs. On tariffs, Sir Keir Starmer claimed today:

“we have prepared for all eventualities”.

If that were so, an indication of strategy or scenario plans would have been set out in the fiscal event of last week, but there was none. The cost of borrowing has seen a rise in interest on 20-year gilts to around 5.5 per cent, and debt interest in the UK is now approaching £111 billion each year. That is not the result of emerging world uncertainty; it is a result of structural issues in the UK economy, compounded by Brexit. Those payments for debt dwarf the entire Scottish Government budget. The spring statement could ultimately lead to a further cut of around £900 million for the Scottish Government.

[Made a request to intervene.]

Okay.

I will quickly pick up on your climate change report. I know that we have already covered that a wee bit, but you may recall that I was impressed by that targeted focus on a specific policy area. Do you intend to refresh that report? I know that we have talked about other policy areas as well, but what is your intention with that work?

That is helpful.

The main gist of what I want to ask, which will probably not come as a surprise to you, is about your annual report on diversity and inclusion. I do not want to sound a little rude but, to be honest, it read to me as saying that you were definitely going to do something at some point but that that point is undetermined in terms of specific dates or saying that you are going to take action X by this date. It would be useful if you could walk me through your plans.

I appreciate that there are constraints; I appreciate the environment and economics and so on. However, let us start from board level and take it down. My particular concern is about giving representation to 51 per cent of the population, whose voices we simply do not hear.

Good morning, and thanks for joining us. I will follow on from the convener’s commentary about the challenge of building and sustaining MSPs’ knowledge of—and the critical importance of understanding—where money is coming from, where it is going and the wriggle room therein.

Given your slight underspend on staff costs, have you ever thought about consulting with a public affairs company? I appreciate that, as a public body, you probably do not want to be in the business of paying a very expensive company on an on-going basis, but it might be possible to get one to set up an initial strategy that you could then run with. I appreciate the complex challenge of messaging.

I have one last wee question on a different area before I hand back to the convener.

I know that it is always hard to get a picture of risk assessment with annual reports, because they represent a fixed point in time, but I did not really get a sense of the dynamic flow of the probability of a risk occurring and I found it hard to grasp. I do not know whether you have thought about how you would represent that. I appreciate that what is in the report is fixed, but there is nothing on the probability of such an occurrence.

I think that we all agree about that concern. I was thinking about the creative and adaptive ideas that a public affairs company might be able to come up with, which we, collectively, have not thought of yet. If it were me, I would think that it might be worth having a chat with them. They will try to sell you chapter and verse, which you will obviously resist, but you might get some hot tips in the meantime.

I would like to hear a wee bit more about that, but I suppose that I would have liked to have seen a much clearer recognition of that in the annual report itself, with at least something more about the specific actions that you might take. It read to me as though you were just saying, “Yeah, this is a problem and we’re definitely going to do something at some point.”

My understanding is that you can look to widen things out beyond economics, and that will clearly have a benefit with regard to cognitive diversity, which is the other side issue of having all men in these positions. Can you give us a bit more of a flavour of what you are thinking? Having cognitive diversity on boards or via your commissioners will be a good thing anyway, regardless.