Chamber and committees

We have sought to protect all local authorities from the impact of the United Kingdom Government’s increase to employer national insurance contributions by providing record funding through the local government settlement. In 2025-26, Aberdeen City Council will receive £505.1 million to fund local services, which is an additional 8 per cent compared with the 2024-25 budget. A further £5.4 million will specifically contribute to meeting the increased costs of the UK Government’s changes to employer national insurance contributions, as was confirmed at stage 1 of the budget bill.

The Scottish Government will absolutely continue to press the UK Government to fully fund the increase in employer national insurance contributions. It is not just Scotland that is affected—all the devolved Administrations have a gap in funding between what is being provided from the Treasury through the Barnett formula and what the actual cost is. I would certainly welcome support from across the Parliament in that respect, as Jackie Dunbar has suggested. I do not believe that Scotland should be penalised for investing in public services, and the UK Government must therefore fully fund the actual cost of the increase for the public sector in Scotland. We will continue to press the Treasury on that issue.

That £1.5 billion in emergency funding is the Tory legacy for local government funding. The local government finance settlement provides local authorities with an additional £1.1 billion in funding, which is a real-terms increase of 5.5 per cent, along with full discretion over council tax. We will continue to work in partnership with the Convention of Scottish Local Authorities and with local authorities to make sure that local authority finances are sustainable and that communities across Scotland continue to receive the high-quality front-line services that they expect and deserve.

I know that the First Minister has already set out some of the detail. The aim is not only to expedite any of the potential solutions that will be set out in the project willow report, but to consider proposals made by Unite and its members, for example, and to continue to pursue other options, including as yet unknown potential investments.

We want this money to work as quickly and as flexibly as possible to give the opportunity to secure jobs at the Grangemouth site. However, we must also see an urgent decision on the Acorn carbon capture and storage project if a just transition at Grangemouth is to become a reality. Amendment 1 therefore amends section 4 of the bill to increase the Scottish Administration’s overall cash authorisation by £25 million to cover the additional portfolio spend that is provided for by amendment 2.

Amendment 2 amends schedule 1 of the bill to increase the maximum spend of the net zero and energy portfolio by £25 million to create the just transition fund for Grangemouth. To take account of that additional authorised spend, amendment 3 amends schedule 1 of the bill to increase the total amount of resources that the Scottish Administration is authorised to use by £25 million.

I urge all members to support amendment 1 and the other amendments in the group.

I move amendment 1.

I thought for a minute that Anas Sarwar was going to abstain from his intervention, just to keep the record of sitting on the fence going.

As Anas Sarwar knows fine well, our objection was to the tax on jobs through the hiking of employer national insurance contributions, which is being felt the length and breadth of Scotland. Those job losses can be laid at the door of Anas Sarwar and his Labour colleagues.

As I said, it is not enough to will the ends—we must also will the means. I invite Labour members, even at this late stage, either individually or collectively to vote for the budget today and show that they are participants in change and not just spectators. With that in mind, I urge Parliament to support the budget.

I move,

That the Parliament agrees that the Budget (Scotland) (No. 4) Bill be passed.

I do not fundamentally disagree with Liz Smith’s point. Incidentally, though, I do not think that Craig Hoy identified any of those points. Is not one of the pieces of evidence that has come to light recently that, out of the whole of the United Kingdom, Scotland is the only place where child poverty levels are falling—they are rising elsewhere? Surely that is a concrete piece of evidence that this Government’s investment is working.

I am pleased to open the stage 3 budget debate. The budget is delivering record national health service investment; record local government funding; £4.9 billion in climate-positive investment; a universal winter fuel payment for the elderly; and the decisive steps that are necessary to effectively scrap the two-child benefit cap in 2026.

The budget has been made stronger through engagement across the Parliament to build the broadest possible support. As a result, there is progress on a range of matters that will help to make Scotland a better place, not least the funding for neonates affected by drugs and the piloting of a £2 bus fare cap.

I hold no expectations, of course, that the Conservatives will abandon their downward spiral as they chase the spectre of Nigel Farage—there is nothing new there. However, I still hope that Labour members will back the budget, thereby supporting the scrapping of the two-child cap, the reintroduction of a universal winter fuel payment, investment of £34 million for culture and investment in primary care, among other matters that they suggest that they support.

Last week, the First Minister set out further amendments to the budget to provide an additional £25 million to support the Grangemouth industrial cluster, and I am pleased that Parliament has supported those. That takes Scottish Government support for Grangemouth to almost £90 million. I welcome the Prime Minister’s subsequent announcement of the allocation of £200 million from the national wealth fund to investment in Grangemouth. Our funding will be available immediately in the new financial year and can be utilised without match funding; I hope that the national wealth fund moneys will be offered on a similar basis.

Carbon capture and storage is vital for a just transition to net zero. Advice from the United Kingdom Climate Change Committee describes carbon capture, utilisation and storage as a “necessity, not an option”. The Acorn project and the Scottish cluster are central to our environmental commitments and our economic ambitions, and that is why I continue to urge the United Kingdom Government to confirm the Acorn project as a matter of urgency. I back both the funding from the UK Government and the new funding that we are putting forward.

We have worked constructively with the UK Government as we try to secure a just transition for Grangemouth. The question for Labour members is whether that constructive approach be repeated today. Will they join us in delivering nearly £90 million for Grangemouth in the final budget vote? I certainly hope that they will.

Our distinct, inclusive approach to social security aims to tackle child poverty and support disabled people and carers. We are proud of the increases in social security expenditure that we are delivering, helping around 2 million people. That includes £644 million in our package of benefits and payments that are available only in Scotland, including the game-changing Scottish child payment.

As I have said many times, we will make sure that we prioritise the funding for social security spend, and I will set out further details in the sustainability delivery plan. However, the Tories have to tell us who, out of the 2 million people who are currently receiving support, they will stop giving support to. When the axe falls on support for people, who will be affected? They have to set that out.

In social housing, we are increasing supply by investing £768 million in affordable housing in 2025-26. Growing our economy is central to the delivery of all our priorities, and the Government will invest more than £7 billion in our total infrastructure package. The 2025-26 Scottish budget prioritises major capital investment in the foundations of our economy, such as housing, transport, digital connectivity and the delivery of critical infrastructure.

In delivering the wider investment that Scotland needs, the new 2025-26 Scottish budget will include more than £300 million of ScotWind funding, which will deliver substantial investment in jobs and in measures to meet the climate challenge, investing in the long-term success of our nation.

I want to make some progress, but if I have time, I will do so.

The budget invests more than £2 billion in our colleges and universities and in the wider skills system. However, one institution in particular—the University of Dundee—is facing an immediate challenge. I thank Joe FitzPatrick for the efforts that he has made to raise the circumstances that the university faces. Other members, including Michael Marra, have also contacted the Government about that.

I can inform members that up to £15 million of financial transactions will be made available to the Scottish Funding Council to support the sector and universities such as the University of Dundee. Further work on the matter will be on-going in the coming weeks, and the Minister for Higher and Further Education will keep Parliament updated.

I know that Joe FitzPatrick, having raised the issue, will back the budget, which will help to sustain the University of Dundee. The question for Michael Marra and his colleagues is simple: will they put the city or their party first? Will they back a budget that gives the university a future, or will they sit on their hands? Dundee will be watching what they do.

On tackling the climate emergency, in 2025-26, we are committing £4.9 billion of investment with a positive benefit for the climate. That includes improving our built environment by investing more than £300 million in our heat in buildings programme, supporting more than 20,000 households to save up to £500 on their energy bills a year and making their homes warmer and more comfortable. That is very important, given that we are now seeing a third rise in household bills, which means that Labour has failed to deliver on the cut to energy bills that the public were promised during the election campaign.

The three amendments proposed today update the Budget (Scotland) (No 4) Bill to include an additional £25 million to support Grangemouth, which the First Minister announced to Parliament on 18 February. That additional financial support will be funded through ScotWind revenues. It will be used to establish a Grangemouth just transition fund, and it will be made available immediately in the new financial year to support businesses and stakeholders.

The aim of that additional funding in 2025-26 is to expedite any of the potential solutions that will be set out in the project willow report, as well as to support other proposals that will give Grangemouth a secure and sustainable future. I also welcome the United Kingdom Government’s £200 million investment in Grangemouth. It is important that our collective funding responds to the needs of business, the workforce and the community, which are central to Grangemouth’s future.