Chamber and committees

It is important in answering Mr Rennie’s question to reflect the fact, inherent in his question, that there are a number of elements to this matter—it is not just about a financial redress decision.

I had a conversation, which will never leave me, with the advisers who work with Future Pathways. That organisation predates the redress scheme and the advisers are allocated to support survivors of historical childhood sexual abuse. I asked them how they go about it. One of them said to me, “We walk alongside the individual.” What more do we need to know? Those people are probably the first reliable, trusted ally that the individual has had in their life.

I will never forget that conversation and it has gone into the thinking behind the scheme. This area of policy is quite unfamiliar to me. When it all kicked off, when Marilyn Livingstone raised the issues in the cross-party group 23 or 24 years ago, when the Parliament was founded, I thought, “Historical childhood sexual abuse? What?” but, of course, although it was not part of my experience as a child, we now know so much more as a society. I have learned a lot. That concept of walking alongside people has never left me, so the scheme has been designed so that, when we work with people, we walk alongside them to try to help them to a conclusion.

That is the thinking. It is one big thing that I have learned from the process, but I will talk about another thing that struck me. I mentioned that there had been a number of requests for a written apology, which is part of the scheme. That is not about money. One survivor who asked for that and got it, then phoned up their caseworker and asked whether they would mind reading it over the phone to them because they wanted to have it read to them by the state. The caseworker told me that it was a profoundly moving encounter, because they felt that, in a sense, they were conveying to that individual the state’s apology.

I have stood up in the chamber and given an apology on behalf of the Government, which I know survivors value, but there was an applicant asking for a couple of minutes of someone’s time for them to read over the phone the apology from the state. I do not know the individual involved, but I hazard a guess that that is more important than the cheque. At least one survivor has asked the First Minister to write to them, and we have arranged for that to be done. A letter has been sent from the First Minister, signed by her own hand.

Mr Rennie is right to highlight that the scheme is a broader consideration. A wee bit of me is in my usual mode of evidence-based transactional data, but there is an awful lot more to the scheme than that.

It is difficult for me to give a specific answer to that, because the applications are so individual and come in at such different stages of development. Some applications come in with quite a lot of information and evidence, and they can be processed and passed to Redress Scotland quite quickly. Once an application goes to Redress Scotland, the process time for determination is something of the order of 21 days.

It is difficult to give a figure for the stages prior to that, because the evidence base and the quality of the applications vary significantly and caseworkers might well be actively involved with an applicant in trying to source additional information. An individual might submit an application and be allocated a caseworker, and the caseworker might have to work with them to develop a sufficient evidence base to make the application as strong as possible. That will influence the amount of time that is deployed and the turnaround time on individual applications.

With all the available evidence, the extent of the economic damage that is being done by the Brexit that was imposed on Scotland by the United Kingdom Conservative Government is becoming very clear. Among the specific areas in which we are suffering is that of free trade with the European Union. Companies are suffering in that regard, so it would be an advantage for Scotland to be an independent country with the ability to rejoin the EU.

Given the failures in the energy market, the ability to redesign the energy market would be an important attribute for Scotland to have. The ability to use employment laws to ensure fairer work would be an advantage, as would the ability to have a migration policy that was designed to boost our working-age population. That can come only with Scottish independence, given the UK Government’s hostility to such approaches.

Mr MacDonald correctly highlights the severe economic damage that is being caused by Brexit and the opportunities that Scottish independence would give to create much more fiscal flexibility for the Government in Scotland.

I have not yet met with the current chancellor and I did not have the opportunity to meet with either of his two predecessors. I last met the Chief Secretary to the Treasury on 17 November, after the United Kingdom autumn statement.

Happy new year to you, convener, and to members of the committee and its parliamentary staff.

When I set out the budget in December, I indicated that it was a particularly challenging one to construct. We are managing a range of unprecedented circumstances due to volatility from global factors, the impact of inflation and the cost of living crisis, and the consequences of the September fiscal statement from the United Kingdom Government.

Across the Government, through the emergency budget review in this financial year, we have taken difficult decisions that have resulted in a total of £1.2 billion of reductions in public expenditure, which has allowed us to meet the costs of increased public sector pay and to provide further help to people who have been most impacted by the cost of living crisis. I am still working to ensure that we can forge a path towards balancing this year’s budget, and have applied the assumption that there will be no carryover of resources into next year’s budget from this year.

In developing my approach to the 2023-24 Scottish budget, I have taken the necessary steps to continue to maximise the Scottish Government’s support for people in Scotland during the cost of living crisis. The pressures on this budget cannot be overstated. We have chosen to act to do everything in our power to deliver for the people of Scotland. We are confronting the challenges that we face by increasing taxation for those who are most able to pay, to enable additional investment to be made in the national health service at this critical time. With this budget, we are choosing to invest in Scotland and focus on eliminating child poverty, prioritising a just transition to net zero and investing in our public services.

I welcome the opportunity to meet the committee to discuss the Scottish budget in more detail and to assist in its scrutiny process.

It is not for me to explore or explain the numbers from SPICe. I have put forward the Government’s numbers and our assessment, which we have made in a transparent way. That indicates a number of points.

First, the impact of inflation can be viewed and judged in a variety of ways. If I recall correctly, when I was last at the committee, I was asked whether I would use the GDP deflator and I indicated that I would, because that was important for consistency in the way in which budget documentation is presented. Having said that, what the Office for Budget Responsibility and the Fiscal Commission said to the committee is accurate. The GDP deflator is a measure of comparative effect from year to year, but the effects of inflation will present themselves in a variety of ways to different aspects of the public services and public finances. Although the numbers that I present are underpinned by the GDP deflator, I cannot ignore the fact that, in reality, the ability or capacity to spend is eroded by the effect of inflation.

On the details of the numbers in the budget, the budget documentation clearly shows that, between 2021-22 and 2023-24, there is a real-terms fall of 3.2 per cent in the Barnett resource funding that the Government has available to it. We have taken steps in the budget to address some of that impact. Through the decisions that we have taken on tax, we have tried to overcome some of the effect of the erosion of the contents of our financial settlement and the capacity to spend as a consequence of the effect of inflation.

Of course, convener. As a consequence of our decisions on tax alone, £519 million is available to be spent in the Scottish public finances that would not have been there had we not taken those decisions. According to the Fiscal Commission, in this financial year, the budget benefits to the tune of about £1 billion as a consequence of the cumulative effect of the decisions that I and my predecessors in the role have taken over the past few years.

Convener, you are correct that the philosophy behind all of this is that we must take a balanced approach to ending child poverty. We take into account direct financial support to families and efforts to maximise families’ income, and, crucially, we emphasise the move into employability and employment for individuals and families. It is essential that those three elements are kept in proper balance because, as you correctly put to me, convener, if there is an imbalance in those measures, there is a danger and a risk of creating a disincentive for people to enter employment. For example, there could be and is pressure on me to increase the child payment to a higher level than it currently sits at, but that would not be an appropriate step because it would risk disincentivising employment. A properly calibrated balance has to be established in that respect, and I think that we have found that balance in our proposals.

In relation to the timescale, we are obviously anxious to make as much progress as we can, and we have statutory targets to meet in that respect. The statutory targets are essentially the milestones that we have to achieve, but the Government is working to make progress within an earlier timescale. Given that, comparatively speaking, we have a lower level of child poverty in Scotland than exists in other parts of the United Kingdom, I am optimistic that the measures that we are taking are working effectively in that direction.

Any budget has to balance all those factors. We are—correctly, I believe—taking steps to support people who face significant vulnerability and hardship; equally, we are investing to increase the productive capacity of the economy. For example, the commitments that have been made to sustaining investment in the Scottish National Investment Bank demonstrate the Government’s support of exactly the agenda that you are talking about. I have made specific provision in the budget to fund the Techscaler programme. The enterprise agencies have had budgets that provide them with stronger resource settlements than they would have anticipated in the resource spending review. The expanded investment in our university sector is designed to assist in that respect, too.

The medicines manufacturing innovation centre venture that you talked about will be a collaboration involving universities, private companies and various other organisations. In the nature of that collaboration can be found some of the most substantial opportunities to enhance the productive capacity of the economy.

If you look at the totality of the budget measures, whether it is the support that we are providing to assist new ventures, the investment through the SNIB or the investment to support employability that is about broadening participation in the labour market, you will see that we are taking a range of measures to ensure that Scotland is an attractive place for investment. The data speaks for itself in the sense that, outwith the south-east of England and London, Scotland remains the most attractive and successful destination for inward investment of any other part of the UK.

Discussions on the local governance review are part of the invitation that I have made to local government to work with us on constructing what I have described as a new partnership between national and local government to work collaboratively on shared endeavours, which is what we did on the Covid recovery strategy. Inevitably, that will be part of those discussions.