Chamber and committees

Will the member give way?

I think that Stephen Kerr has demonstrated that he does not have a single clue about how the public finances of Scotland work. I am not going to explain it again; he will have to go and read the Official Report, because I have just given the explanation. He has demonstrated that he is singularly unfit to contribute to today’s debate. It is absolutely appalling. The same explanation applies to Mark Griffin’s point about the £550 million for local government.

In the course of the debate, Kenneth Gibson made the fair point that, where alternative choices are suggested, there must be a funding source for them.

I will marshal what the Conservatives have said. They have said that they want more money for housing—Miles Briggs said that. They want more money for city deals—Douglas Lumsden said that. They want more money for local government—Miles Briggs and Douglas Lumsden said that. They want more money for business rates—Douglas Lumsden and Liz Smith said that. They oppose the tax increases. I point out, for the sake of completeness, that if we did not make the tax increases, we would have less money available to us. Stephen Kerr wants education to get more money and Miles Briggs wants health to get more money.

I simply say to Parliament that that is economic illiteracy of the highest order, because no source has been identified for those funding resources. [Interruption.] I would give way, but the Presiding Officer wishes me to close my remarks.

I will happily engage with Mr Rennie and anyone else who wants to talk about which area of the budget we can take money from to allocate to another to support priorities, but it is not helpful to the dialogue and the discourse in Parliament to put forward proposals that play to a gallery or a lobby, but which do not have a hope of ever being delivered, because the money does not exist—

In his speech to Parliament this afternoon, the convener of the Finance and Public Administration Committee asked me to provide an update on the current financial year and the degree to which I am wrestling with securing a path to balance. For completeness, I say to the convener that, at this stage—a very advanced stage—of the financial year, I am still wrestling with an estimated overspend of approximately £100 million. We are still working to secure balance despite the steps that we have taken in the course of the year to reallocate public expenditure, which will be reflected in the spring budget revisions that I put to Parliament and to the committee for scrutiny.

I thank Willie Rennie for his constructive contribution to the debate and assure him that I will follow up the points of dialogue that he raised in today’s discussions. He raised serious issues about the mental health budget and long Covid, and I agree with his reflections on the energy market and the significant opportunity for windfall taxation that has arisen out of the ludicrous profits that energy companies are making at a time when our constituents are facing such hardship. I very much welcome Willie Rennie’s constructive contribution, and we will try to build on that.

I obviously value the support that our partners in the Green Party are giving to the budget—Ross Greer referred to this budget as “progressive”—and I welcome the party’s contribution to ensuring that the issues of taxation are properly considered in the budget process and result in our being able to afford our priorities. That would not have been the case had we not taken those decisions, so the Green Party’s input into the discussions has been welcome.

It is not the first time in life that Kenneth Gibson has found himself in some controversy, but let me try, as always, to be the peacemaker in Parliament. [Laughter.] Murdo Fraser took great exception to the contribution of my colleague and friend Kenneth Gibson and asked whether members of the committee supported the reflections that Mr Gibson was putting on the record. I want to put on the record the words that I was met with when I went to the Finance and Public Administration Committee on 4 October 2022, in the aftermath of the disastrous and catastrophic Kwarteng budget. I was met with:

“Good morning, Deputy First Minister”,

which is always a nice warm welcome, from my friend Liz Smith. She then said:

“I put it on record that I understand and accept that your job is much more difficult because of the difficulties that have been introduced by the Westminster Government, particularly with regard to the forecast.”—[Official Report, Finance and Public Administration Committee, 4 October 2022; c 8.]

It is important that Murdo Fraser’s bravado is disarmed by the calm and realistic contribution of Liz Smith to the Finance and Public Administration Committee debate, which I appreciated, because she was right: at that moment, I was wrestling with significant difficulties, and I continue to do so. I am, of course, delighted to hear more from Liz Smith.

It is nice to see that Mr Halcro Johnston is able to summon up a really warm welcome for the Government’s dialogue with Orkney Islands Council. [Interruption.] It really is another further descent into the miserableism of the Scottish Conservative and Unionist Party. There is an abundance of miserableism on the Scottish Conservative benches on a constant basis.

The financial resources that are sought by such office-holders to support their respective functions are provided for in relevant acts, which are a matter for the Parliament. It is a simple matter of fact that the more office-holders there are, and the more resources they utilise, the less will be available for public services.

I have been open with Parliament about the scale of the pressures that we currently face in the public finances, and it is vital that all public bodies and office-holders contain their costs.

I think that that demonstrates a spectacular level of ignorance on the part of Stephen Kerr. Is Mr Kerr unaware that education in Scotland is fundamentally delivered by local authorities, which have seen a £550 million increase in their budget, in addition to the extra money for colleges and universities that the education secretary just put on the record? [Interruption.]

Mr Kerr is shouting at me, “Where’s the £100 million?”. Local government budgets have gone up by £550 million and they deliver education in Scotland and the budgets for colleges and universities are up—[Interruption.] Would Mr Kerr please keep up with the budget, and then we might make some more progress? [Interruption.]

Scotland is built on the foundation of our public services. For those reasons, the Government has prioritised investment in the national health service and I am delighted that we are in the position to provide an increase of more than £1 billion to the health service in Scotland. That will provide more than £13 billion for NHS health and social care services, supporting NHS boards to continue to drive forward our five-year recovery plan.

We are delivering £1.7 billion of improvements for social care and integration as we prepare for the introduction of the national care service, and we will support the delivery of the £10.90 real living wage for adult social care with an additional £100 million.

Investment in local services continues to be a priority and we have reconfirmed our commitment to working with local government, recognising the importance of collaboration, partnership and accountability in delivering high-quality and person-centred public services. The budget provides more than £13.2 billion for local government in Scotland, which is an increase of more than £570 million for essential public services that are delivered by councils.

We will also invest almost £3.4 billion across the justice system in 2023-24, including an additional £80 million for the Scottish Police Authority.

As we look to a more sustainable, greener future in Scotland, our ambitions to deliver economic growth must be achieved through delivering a just transition to net zero. More than a decade ago, the Government led the way with its inspiring climate change targets. As we now work to deliver a net zero future, the Scottish Government will continue to lead the way by investing more than £4.6 billion in our net zero, energy and transport portfolio. That includes more than £1.4 billion to maintain, improve and decarbonise Scotland’s rail network, ensuring that that critical infrastructure continues to serve the needs of the people of Scotland.

We have provided substantial funding to help households face the cost of living crisis. Next year’s budget will continue with that and we will spend more than £366 million across our heat in buildings and fuel poverty budgets.

Protecting Scotland’s natural environment continues to be a priority and we will spend almost £467 million on restoring our peatlands, expanding Scotland’s forests and tackling the causes of climate change and biodiversity loss, which will all contribute to the achievement of the net zero ambitions.

I am pretty sure that the Cabinet Secretary for Net Zero, Energy and Transport and other ministers are regularly engaged in the discussion about rail, but we will reflect on the comments that Monica Lennon has put on the record because she is right to say that it is important that our rail network and infrastructure meet the needs of those who require to use them. That is why we are pleased to bring forward our proposals on peak rail fares, which should remove some of the disincentives to the full utilisation of our rail network.

The Scottish Government is committed to sustained investment to support businesses and our economy, which is why we are providing the Scottish National Investment Bank with an additional £244 million to continue its investment in Scottish businesses, projects and communities. Over the next five years, we will invest £42 million to boost entrepreneurship by supporting start-ups in Scotland through our national network of tech-scalers and pre-scalers—that will be one of the most significant investments that the Scottish Government will make in that regard.

Of course, as we manage the transition to net zero, we must ensure that communities are well supported, which is why we are investing £50 million in the just transition fund for the north-east and for Scotland.

In the course of the pre-budget dialogue, businesses asked me to freeze the business rates poundage, and the Government has been able to do that. It is expected that that will save ratepayers £308 million in the forthcoming year, which, combined with the transitional reliefs that will be applied to the forthcoming revaluation and the continuation of the small business bonus scheme, will remove 100,000 properties from business rates altogether. That ensures that Scotland has the lowest poundage in the UK for the fifth year in a row and supports a package of reliefs worth an estimated £744 million.

This budget delivers the priorities of a progressive Government. It provides us with an opportunity to demonstrate how we can collaborate successfully as a Parliament, in the most difficult of times, to deliver the best outcomes to the people of Scotland.

I believe that this budget represents a fair and ambitious package, and I urge all members across the chamber to support it.

I move,

That the Parliament agrees to the general principles of the Budget (Scotland) (No. 2) Bill.

I am grateful to Mr Johnson for giving way so early in his speech. I just want to be clear about the line of argument that he has begun. Is Mr Johnson saying that, should the United Kingdom Government, which has proper responsibility for management of the energy market, fail to deliver support for paying the outrageous energy bills that members of the public are facing, the Scottish Government should use its resources to support such an endeavour? That is exactly what he has just put on the record.

Oh, no. Let me finish the explanation, because Stephen Kerr needs to hear it—he is desperately in need of hearing this explanation. The £100 million of education consequentials are allocated to support the expenditure in the budget that will result in an increase for universities and colleges of £46 million and an increase in the local government budget of £550 million. Local government are the people who deliver education services in our country. I hope that that helps Stephen Kerr to understand the situation.