Chamber and committees

I said that I would give way to Stephen Kerr first.

—because of the failure of the economic management of the United Kingdom Government, which is the problem that I am wrestling with today.

I think the fact that the work is under way should be reassurance to Mr McArthur’s constituents. I recognise the significance of the issues that are involved and the necessity of there being reliable interisland ferries and connections for his constituents. We have embarked on the work that is necessary to explore those issues, and we look forward to sustaining that work with Orkney Islands Council.

I agree very much with Liz Smith about the significance of the population issue and the working-age population. Earlier in her remarks, she mentioned the labour-market implications of Brexit. Does she therefore agree that one of the implications of Brexit has been a reduction in the eligible working-age population? The Scottish Government will do all that we can to boost employability, but does Liz Smith agree that the strategic impact of a measure that has undermined population growth in Scotland is undoubtedly a factor that will undermine economic growth in the forthcoming period?

It is really important that Government ministers do not interfere in the business of committees, so I shall resist the temptation to get myself into trouble, which I constantly try to avoid. [Laughter.]

On that subject, I want to explain to members how the budget operates, because I think that a few members, including Stephen Kerr, have struggled with the concept today. I think that Mark Griffin struggled a little bit, too; I am normally very appreciative of his contributions, but perhaps his cold put him under the weather today and derailed his speech.

When we get Barnett consequentials, they flow into the total funding envelope that is available, and then the total funding envelope gets allocated. What is in the budget document is the sum total of all the resources that are at my disposal. Therefore, when Stephen Kerr asks me where the £100 million of education consequentials from the UK Government are, the answer is that they are fully allocated in the budget. I will give two examples of where they have ended up.

This is a difficult issue for the Government to judge upon, because the legislation to establish commissioners is essentially a matter for Parliament. Parliament also, through the work of the Scottish Parliamentary Corporate Body, has to regulate, or advise on the regulation of, the financial assistance that is made available to office-holders. That is a difficult issue for the Government to control, because doing so would potentially mean the Government intruding on the right and proper space that is available for Parliament to determine these issues. I am acutely conscious of the necessity to respect that boundary.

Having said that, all of us—whether we are members of the Government or of the Opposition—have a duty to recognise the pressures that exist on the public finances. That should be reflected in the financial support that is available to office-holders and the number of office-holders that we have in place.

The transport minister and I had a useful meeting with representatives of Orkney Islands Council earlier this week. We discussed a range of matters about how best to support the Council with the challenges that it faces in delivering its ferry responsibilities, and we look forward to continuing discussions.

As with all things—[Interruption.] As with all things, there will be full transparency from the Scottish Government—[Interruption.]

The Scottish Government, like Governments all over the world, has been faced with a difficult set of choices in setting its budget. As I indicated to Parliament when I addressed the budget settlement in December, the volatile financial environment, including record levels of inflation and a cost of living crisis, have combined to create an exceptionally difficult fiscal landscape. The International Monetary Fund’s report on Tuesday reflects that and indicates that the United Kingdom is predicted to be the only major economy that will shrink this year.

Against that very challenging backdrop, we have taken decisive action to deliver a meaningful and progressive budget for the year ahead that delivers for the people of Scotland. With the powers that are available to us, we have chosen to commit substantial resources to prioritise support for families and the most vulnerable, invest in our public services and support businesses through these difficult days.

A central tenet of the budget is that we have asked the people of Scotland to contribute a fair share of their taxable income—and in the case of higher earners, to pay slightly more than they have in the past—to help to create a fairer society in which we all want to live and where we can enjoy a range of benefits that are not available throughout the United Kingdom. Whether that is free prescriptions, tuition fees, personal care or concessionary travel, the people of Scotland have access to a social contract with the Government that delivers so much more to each and every person who chooses to live in Scotland. Together with our partners in the Scottish Green Party, we are working to create a progressive path for Scotland.

The 2023-24 Scottish budget supports an ambitious path for Scotland that focuses on eradicating child poverty, transforming the economy to deliver a just transition to net zero and providing sustainable public services for the people of our country. The Government leads by example in the bold steps that it is taking to address poverty in Scotland. That is demonstrated through our social security system, which has been developed with dignity, fairness and respect at its heart.

We are committing £442 million in the year ahead to our unique Scottish child payment, which is the most ambitious child poverty reduction measure in the UK. I am proud that the Government has not only delivered the child payment but has expedited its increase, early and above inflation, to £25 per week per eligible child from November 2022. That is an increase of 150 per cent in eight months, and it is providing practical support to families who are most affected by the cost crisis. Indeed, the Scottish Fiscal Commission forecasts that around 387,000 children could benefit from the Scottish child payment in 2023-24.

The Scottish Government recognises that the burden of high inflation is felt most by households that are on the lowest incomes, which is why we are uprating all remaining Scottish benefits by 10.1 per cent from April 2023. We have also gone beyond the energy support that is being provided by the UK Government to provide £20 million for the fuel insecurity fund to help households that are at risk of disconnection, and are continuing that funding into 2023-24, as energy prices continue to bite.

There are two things that I would say to Mr Rennie. The first is that the Scottish Fiscal Commission’s projections about tax indicate a strengthening of the income tax base in Scotland, which is a reflection of the strengthening of the economy that the Fiscal Commission expects. The second thing is that the contents of the national strategy on economic transformation, with its focus on entrepreneurship and on the development of strong regional economies, form a foundation for the economic strategy that will deliver for the people of Scotland. Mr Rennie is right to raise the issues of economic performance, because they lie at the heart of being able to generate the revenues to create the fair society that I have talked about.

Next year, we will support our investment in ensuring that children get the best start in life by investing around £1 billion in high-quality early learning and childcare provision, with a further £42 million to be invested in holiday food provision and expanding our support for school-age childcare.