Chamber and committees

That will depend on the invest to save proposals that come in to ministers, which Ivan McKee and colleagues will look at. They will be scored, essentially, against what they will deliver in terms of savings. At that point, we will be able to set out what that investment will deliver. I am sure that Ivan McKee will be very happy to keep Stephen Kerr and others updated on the detail of that, and I am sure that Mr Kerr will continue to be interested in it.

As I have said before, in order to see the benefits of this year’s Scottish budget, the Parliament must now vote for it. Following spirited discussions, whatever our other disagreements, the Scottish Green Party, the Liberal Democrats and Alba have indicated that they can support the budget, which is very welcome. I thank them for their pragmatic approach, which sees the budget contributing towards their priorities. This is a budget to improve services, tackle child poverty and bring new opportunities, but Labour, so far, will not back it. However, it is not enough to will the ends—we also have to will the means. [Interruption.]

Would Anas Sarwar like to intervene? [Interruption.] He needs to put his card in first—dearie me.

Will Liz Smith give way?

I have nothing further to add, Presiding Officer.

Amendment 1 agreed to.

Schedule 1—The Scottish Administration

Amendments 2 and 3 moved—[Shona Robison]—and agreed to.

This is a massive programme of investment—£300 million in the heat in buildings programme will support more than 20,000 households. However, that will happen only if people such as Sarah Boyack support the budget. If she wants investment in energy efficiency to keep people’s bills down, she has to vote for the budget.

Two points are important. First, we need to ensure that buildings are insulated and that the bills for running them are kept as low as possible, which is what the heat in buildings programme seeks to do.

Secondly, that work is part of meeting our climate obligations, which the Government considers very important indeed. It is one part of the journey to net zero, but it is an important part nonetheless.

The budget delivers £21.7 billion of investment in health and social care services and takes funding to a record level. We understand that challenges remain and that extra support is needed. That is why almost £200 million is being provided to reduce waiting times and support the reduction of delayed discharge.

The budget also recognises the importance of local government and provides local authorities with a funding package of more than £15 billion in 2025-26, which is a record level of investment for local government. Investment in public services must go hand in hand with reform, which is why I am making available nearly £30 million in 2025-26 to advance reform and enable future savings.

The UK Government’s decision to raise employer national insurance contributions is undermining our efforts to support businesses in Scotland, jeopardising jobs and hurting employees’ pay packages.

On 18 February, the Scottish Government published updated estimates of the impact of the increase in employer national insurance contributions on the Scottish public sector. Those estimates indicate that the combined impact on the public sector and commissioned services is more than £700 million. If the UK Government’s reported allocation is all that is provided, the UK Government will be short-changing services that the public depend on by more than £400 million.

I have raised with the UK Treasury our concerns about the impact on public services if the reserved tax increase is not fully funded. On 3 January, the First Minister and the president of the Convention of Scottish Local Authorities wrote to the Chancellor of the Exchequer with their concerns. They were supported by 48 public and voluntary sector organisations, which demonstrates the wide-ranging concerns across Scotland.

The Treasury has confirmed that we will receive only a Barnett share of funding for UK departments, which will undoubtedly fall far short of what is needed. I will raise that further with the Chief Secretary to the Treasury when we meet next week.

Before starting, I draw the Parliament’s attention to the procedural connection between this debate and rule 9.16.7 of the standing orders, which states that the Scottish rate resolution must be agreed to before stage 3 of the budget bill can proceed.

The rate resolution debate gives the Parliament the opportunity to take one step closer to the delivery of a budget that addresses issues that matter to this country, such as tackling child poverty and improving our national health service. In response to the unprecedented challenges that we have faced in recent years, we have raised revenue in a fair and progressive manner that has helped to sustain our investment in vital public services.

Despite the usual comments from the doomsayers, the Scottish economy remains resilient. Real-time information data for 2022-23 and 2023-24 shows that earnings growth per head was stronger in Scotland than in the rest of the United Kingdom. The Scottish Fiscal Commission’s 2025-26 budget report forecasts gross domestic product growth of 1.6 per cent, which is up from the 1.3 per cent that was forecast last year. It also anticipates earnings growing faster than in the rest of the UK over the forecast horizons. Those figures demonstrate the resilience of the Scottish economy, both now and into the future. Indeed, for the ninth consecutive year, the 2024 Ernst & Young UK attractiveness survey maintained Scotland as the top-performing region of the UK outside of London for foreign direct investment projects.

The budget and the rate resolution provide businesses with the stability that they need to continue investing in our economy. The budget and resolution do not contain the unfunded tax policies that other parties in the chamber seem all too happy to advocate.

First, we had the Conservative Party argue for a £595 million income tax cut without setting out which public services it would reduce to pay for it. Now, we have the Labour Party saying that it would raise the higher rate threshold to £50,270. We estimate that that change alone would cost more than £700 million in 2025-26. As the Fraser of Allander Institute pointed out previously, making that change revenue neutral would likely require increases to the basic and intermediate rates of tax. My challenge to the Labour Party is to set out how it would pay for that: would it increase tax for those in the basic and intermediate rates or simply cut public spending? Those are the questions that the Labour Party has to answer.

Let me turn to the proposed income tax policy for 2025-26. In the run-up to the publication of our tax strategy, we engaged with 65 different organisations across Scotland, including businesses, think tanks, academics, civil society groups and tax professionals. We listened to the views of those stakeholders and we recognise the importance of having certainty after a period of significant changes to our income tax system. Many have welcomed this approach, particularly our commitment to further evaluate the effects of previous changes in Scottish income tax policy.

Although annual policy will always depend on parliamentary support, we have made it clear that we wish to provide a period of stability for income tax for the remainder of this parliamentary session.

Will the member take an intervention?

It is an aspiration—