Meeting of the Parliament

Meeting date: Wednesday, January 25, 2017

Official Report 995KB pdf

---

Draft Budget 2017-18

The next item of business is a debate on motion S5M-03576, in the name of Alex Rowley, on the Scottish budget.

15:15  

In bringing this debate to the chamber, we want to encourage wider discussion in the Parliament and across the country, and to build a consensus about the kind of public services that we want in Scotland and how they are to be paid for.

We will make the case for using the powers of this Parliament to invest in public services. We will also make the case for using the resources that we have in the most effective and efficient way, to tackle the big challenges of deep-rooted poverty and deprivation that are faced in communities, through a comprehensive anti-poverty strategy for Scotland. We will make the case for more direct Government action to grow our economy and increase the resources that are available for investment.

At a time when too many of our public services are struggling to cope and some are veering towards crisis, Government should increase the tax take by asking people who can pay a bit more to do so. Alongside that, we must be more ambitious in driving our economy and increasing the tax take in the medium term by supporting more and more people into decent jobs.

As it stands, the budget does not and will not achieve those aims. Let me begin with local government. If we are to succeed in tackling poverty, closing the attainment gap, developing high-quality local services and growing the economy across Scotland, we need to do government differently. The fact is that Scotland is one of the most centralised countries in the western world, and the creation of the Scottish Parliament in 1999 did not lead to the continued devolution of power closer to the people. Instead, politicians in Holyrood have tried to control more and more and take power and decision making away from the local level. That centralist approach has led to a much weaker relationship between local government and central Government in Scotland, and all too often to a lower quality of service being delivered.

Does the member accept that the relationship between central and local government was extremely poor under the Labour-Lib Dem Administration, because of ring fencing?

It is a fact that the relationship between central and local government right now is extremely broken.

The failure to build on the relationship has resulted in a failure to bring together the key people and organisations who are needed to plan and drive our economy at local, regional and national level.

One-size-fits-all central control is not best for Scotland. We want a new approach of government of equals, accountable to and driven by local communities in a wider partnership, which recognises the role of the third sector, business and industry, trade unions, civic society and local communities in facing up to the big challenges of 21st century Scotland.

Will the member take an intervention? [Interruption.]

Can we have the member’s microphone on, please?

Sorry, Presiding Officer, it is my fault—

Mr Crawford, did you forget to put your card in the console? Start again.

I apologise to you and to Alex Rowley.

I think that Alex Rowley knows that I generally respect the way in which he does politics. However, does he understand that by forcing a decision on the budget at this time, Labour is undermining the role of the Finance and Constitution Committee in scrutinising the draft budget? That might not have been Labour’s intention, but if the Parliament takes a decision on the budget before the committee reports, what is the point of the committee having any deliberations at all on the matter?

I take on board Bruce Crawford’s point. I would hope that the Cabinet Secretary for Finance and the Constitution will listen to the parties in this Parliament and will be open to looking at our concerns so that we can find agreement on the best way forward. However, we will not face up to the big challenges in Scotland by cutting the budget for local public services by £327 million, as proposed by Derek Mackay in his draft budget. That cut of £327 million is confirmed by the independent Scottish Parliament information centre; the Convention of Scottish Local Authorities has made a similar calculation in arguing that the finance secretary should think again.

Since 2010, 27,000 jobs have disappeared from local councils across Scotland. The £327 million cut in this year’s budget will mean that more jobs will go and will lead to even greater pressure on staff and services that are already struggling to cope. Today, Labour wants to put forward an alternative. We are asking Derek Mackay to amend his draft budget and put 1p on the basic rate of taxation in order to raise an additional amount of nearly £500 million to invest directly into local public services.

I am very grateful to the member for giving way. I think that he knows that we share a lot of intent about the need to raise revenue to invest in public services and protect them from the cuts. However, why should that be focused on the basic rate? Can the Labour Party explain why low and middle-income earners should be asked to pay more tax rather than those who can genuinely afford to pay?

I will come on to that point—I had better make progress first.

Derek Mackay’s answer on taxation to date is that he will not increase tax for lower-paid workers. Let us therefore be open and honest about what our proposal would mean for people on different salaries. If someone earns below £21,000, they would not pay more. If someone is on the median salary of £28,000, they would be asked to pay just over £1 more a week—an extra £65 a year. A police sergeant on £41,000 would be asked to pay an extra £203 a year. An MSP in this place on £61,000 would pay an extra £526 a year. The First Minister, who is on a salary of £151,000, would be asked to pay an extra £1,786 a year. On Patrick Harvie’s point, it would be the collective power of all those individuals paying a little bit more—according to their means—that would pay for the much-needed investment in education, in home care, and in the future of our country.

Mr Mackay has attempted to hide behind a 3 per cent increase in council tax. He seems to think that he can blame councils for any increase in the unfair Scottish National Party council tax that he himself has factored into the calculation of the funding that councils are due to receive. You could not make it up—but Derek Mackay has.

Remember what Nicola Sturgeon said before the Scottish National Party came to power in 2007. She said:

“The fact of the matter is that council tax is unfair and cannot be improved by tinkering around the edges.”

She pledged:

“We’ll scrap the unfair council tax”.

Ten years later, the SNP is not going to abolish the council tax—it is tinkering around the edges and it is telling councils to put up the tax by 3 per cent. Let this Parliament be clear: the council tax was unfair in 2007 and it is just as unfair today. I believe that after 10 years of the SNP promising to get rid of the council tax and failing to do so, it is now fair for ownership of this unfair, failed tax to be put squarely at the door of the SNP.

Derek Mackay says that he is willing to talk to other parties about alternative local taxation; we say that the starting point of any talks must now be an agreement that the SNP council tax has to go and that a timetable needs to be agreed on for its abolition. Nothing else will do.

When it comes to funding local public services, in the short term, we must agree additional new money—nothing else will do. The draft budget would have us believe that the answer is wider public service reform. As I said at the beginning of my speech, it is Government reform that we need—we must reform the way that we do government. However, we should be clear that no amount of tinkering with structures will make up for the fact that we need more investment in our local public services. Take, for example, the debate on raising educational standards. John Swinney seems oblivious to what is staring him in the face. We need more financial resources going into education to support our children’s learning.

Will the member give way?

I am sorry, but I do not have time.

John Swinney can mess around with the structures till doomsday and can pour out rhetoric about empowering headteachers and patients, but the fact remains that we need more money going into classrooms to support teaching and learning.

I know that Mr Swinney visits schools. I do not know what teachers tell him but, when I visit schools and ask teachers what their priorities are, they consistently tell me that they need more classroom assistants and more support in the classroom to support teaching and learning. We need a Government that will listen a bit more, and it can start that process by listening to what teachers have to say. The money that is being promised for schools in the budget is simply not enough. Today, we call on the finance secretary to reintroduce the 50p top rate of income tax for the richest 1 per cent in our society, and to put that money into the education of our nation’s young people.

In his introduction to the draft budget, Derek Mackay states:

“This budget renews the Scottish Government’s commitment to public service reform, guided by the recommendations of the Christie Commission on the future delivery of public services”.

At their heart, the Christie commission’s recommendations were about tackling poverty, deprivation and inequality and shifting the priority to a more preventative approach. The Christie report said:

“A cycle of deprivation and low aspiration has been allowed to persist because preventative measures have not been prioritised.”

It went on to say:

“It is estimated that as much as 40 per cent of all spending on public services is accounted for by interventions that could have been avoided by prioritising a preventative approach.”

We cannot invest in preventative measures and bring about the transformation in the way that Government delivers public services if we continue to cut the budgets that are being cut.

The confusion at the heart of the Scottish National Party Government is summed up by its proposal to reduce access to the free bus travel that gives mobility to older people all over Scotland while, at the same time, offering a tax cut to those who are getting on aeroplanes. You really could not make that up.

Our NHS and community care is in crisis and the SNP Government wants to do nothing. It says that the situation is not as bad as that in England—that seems to be the extent of this Government’s ambition for our country. We have record levels of older people who are well enough to go home from hospital but who cannot get the care package that would enable them to do so. Labour supports community care, but we are clear that community care was never meant to be care on the cheap. None of us knows what the future holds or what support we or our families will need in the years to come. This generation has a chance to shape the future provision of care services. We have the chance to give young people a better future.

A lack of educational achievement, care services and investment for the future—is that really the price that we are all willing to pay in order to avoid a small increase in income tax? Let us have that discussion. Let us have that debate. Let us talk about the kind of society that we want, the kind of public services that we want and the kind of Scotland that we all want to live in.

I move,

That the Parliament does not support the Scottish Government’s Draft Budget 2017-18 in its current form.

15:29  

On 15 December, I presented the Scottish Government’s draft budget for 2017-18 to the Scottish Parliament. At the outset, I recognise that this is a Parliament of minorities, where compromise and finding consensus are a necessity. The Government, short of a majority, is still formed from what is by far the largest party in the Parliament. In looking to find agreement in the on-going talks, we should all be mindful of the mandate that the electorate gave the Parliament.

This will be a historic budget. For the first time, we use the powers that were devolved through the Scotland Act 2016, set against a backdrop of demanding political and economic conditions. As we know, the discretionary budget that the Scottish Government has available to spend on day-to-day public services will decline by about 9 per cent in real terms between 2010-11 and 2019-20.

Last week’s blog from the Fraser of Allander institute set out its views on the long-term trajectory of the Scottish Government’s discretionary budget. Using the institute’s definition of the Scottish Government’s discretionary spend between 2010-11 and 2017-18, it confirmed that there will have been a real-terms cut of 3.8 per cent. That is clear evidence that, no matter which definition of the Scottish Government’s discretionary budget is used, there will have been a real-terms reduction. That is before we take into account the impact of the United Kingdom chancellor’s planned £3.5 billion of further cuts to budgets in 2019-20.

Will the cabinet secretary confirm that Fraser of Allander also found that, if we take as the base year 2007-08—the year that the SNP came to power—there has been no reduction in real terms in the Scottish Government’s discretionary spending over the 10 years to 2017-18?

Murdo Fraser cannot get away from the fact that the Government has faced a reduction in our discretionary spend. He repeatedly cites the use of annually managed expenditure. The Fraser of Allander institute, especially when citing Audit Scotland’s figures, has shown that AME is not real money that can be spent on goods and services. That is the kind of source that Murdo Fraser chooses to ignore—[Interruption.]

Mr Fraser, would you please keep your voice down when you are shouting from a sedentary position? If you must shout, could you please shout in whispers?

To be fair, Presiding Officer, Murdo Fraser is doing his day job of standing up for the Tory Government in Westminster while shouting at the Scottish Government for trying to protect public services.

Despite the challenging financial circumstances, the Scottish Government is proposing to invest significant additional resources in public services—additional resources that would be under threat should the budget not be passed. Let me be clear that the Government proposes an additional £700 million of investment in our public services for next year.

Our tax proposals are fair and balanced, and our budget proposes record investment in the NHS, including a £304 million uplift, as well as £120 million for the pupil equity scheme to tackle the attainment gap and more than £140 million to invest in energy efficiency. The budget will target £47 million to mitigate the effect of the bedroom tax, provide about £470 million of capital funding for housing, invest in health and social care to deliver the living wage for social care staff and expand the small business bonus scheme to lift 100,000 properties out of rates altogether. It will also provide for transport and digital infrastructure expansion; support for higher and further education; the delivery of our commitment on police funding; and the beginning of the expansion of free early learning and childcare.

I know that many of those commitments are shared by other parties. While producing a budget and delivering on our programme for government, we have listened to other parties, and I will continue to listen to good ideas.

That sounds like a list of Donald Trump’s alternative facts. The reality is that the cabinet secretary is going to make £327 million of cuts. When the cabinet secretary looks at his life, his salary and the community that he represents, does he really think that he pays enough tax, when he is making the cuts that he is faced with making?

The problem for the Labour Party is that it is not proposing tax rises just for people such as me; it proposes to increase the basic rate for everyone who pays tax in this country. That is passing on austerity to the households of Scotland.

The £327 million figure is not a like-for-like comparison, as it ignores a number of funding streams to local government. That is a fact on the local government settlement.

The Opposition parties might be able to unite to provide a critique, but it seems impossible that they will be able to unite to agree credible alternatives. From left to right, there might well be a better together comeback for the budget, but there is no way that the Opposition can unite on a credible alternative. It will be down to the Government to find the necessary consensus to deliver a budget for Scotland. Through that budget, local government and local services will have increased spending power of some £240 million. It is no wonder that none of the local authorities has rejected the offer that I put to them.

The Labour Party proposes to vote with the Tories against the Scottish budget. In that budget, we propose to allocate hundreds of millions of pounds more to our public services—to the NHS, education and our local services. It is Labour that proposes to pass on austerity to the households of Scotland with its basic rate tax rise. It cares not for the impact on the households of Scotland and sees no connection between its proposed rise in the basic rate of tax and the general health of the Scottish economy.

I accept my responsibility to find agreement in the Parliament, and I hope that those in the Opposition have a sense of responsibility, too.

Will the cabinet secretary give way?

I would like to make more progress.

I have held constructive discussions with Opposition parties about alternative budget proposals. I hold those talks in good faith and I plan for them to continue. As members are aware, the budget that I introduced in December was a draft budget. It marks the beginning of a process and not the end. The budget bill will be subject to the established three-stage parliamentary scrutiny process, which allows for two debates on the budget in the chamber as well as a scrutiny session with the Finance and Constitution Committee.

Will the cabinet secretary give way?

The cabinet secretary is in his last minute, Ms Lamont.

At any point, the Government can propose amendments. As Bruce Crawford pointed out, we have not even heard from the Finance and Constitution Committee on the Parliament’s views.

I will continue to undertake the talks in good faith, but members must recognise the significance of not supporting a Scottish Government draft budget. That is not just about disagreeing on the margins; it puts all our public services at threat. It threatens crucial public spending that pays for our teachers, doctors, nurses, local government employees and emergency service workers.

I therefore call on all members to adopt a productive approach to the budget, to engage in meaningful discussions and to offer credible alternatives that reflect the mandate in the Parliament and the common ground that I am sure that we can find. We have a parliamentary process and we should respect it. Rather than play games, we should work together for the people of Scotland.

I move amendment S5M-03576.4, to leave out from “does” to end and insert:

“notes that the Budget Bill will be introduced to the Parliament on 26 January 2017 and that it will then be subject to a three-stage Parliamentary scrutiny process; accepts that government amendments to the budget reflecting the outcome of discussions with other parties can be made at any time during that scrutiny process, and agrees that constructive discussions on the 2017-18 budget are continuing between the Scottish Government and other political parties with the objective of securing Parliamentary support for it.”

I call Murdo Fraser to speak to and move amendment S5M-03576.1. You have up to seven minutes of shouting, Mr Fraser.

15:38  

I welcome this Labour Party debate on the Scottish Government’s budget, and I agree with the sentiments of the Labour motion, although I might have different reasons from the Labour Party for taking that view.

On the finance secretary’s final point, I look forward to meeting him tomorrow to continue our budget discussions. The meeting might be short, but we approach it in good faith.

To put the budget in context, despite all the moaning that we have heard from SNP members about Tory cuts and Westminster austerity, the finance secretary has accepted that the Scottish Government has about £501 million more to spend in real terms in next year’s budget compared with this year’s. That is a cool £0.5 billion of extra spending power, and it is against the background, as set out in the Scottish Government’s budget documentation and helpfully confirmed last week by the Fraser of Allander institute, that the Scottish Government’s total budget—its total managed expenditure—is up in real terms against the high point of 2010-11. Throughout the period of a Conservative Government at Westminster, overall resource has increased in real terms.

If we take discretionary spend—the Scottish Government’s preferred measure—the Fraser of Allander institute has confirmed that, over the 10 years since the SNP came to power, there has been no real-terms cut in discretionary spend. Debates would be helped if SNP members accepted those basic points.

Our primary concern about the draft budget relates to tax. The budget would deliver a situation in which Scotland became the most highly taxed part of the United Kingdom. There would be a differential for income tax, which would be on top of higher rates of land and buildings transaction tax for many house purchasers and the continuation of the large business supplement on non-domestic rates being double the applicable tax elsewhere in the United Kingdom.

The SNP does not want to listen to us raising those concerns, but it should at least listen to the voices of the business community. In response to the draft budget, Liz Cameron of the Scottish Chambers of Commerce said:

“Creating a differential between tax bandings north and south of the border will set a dangerous precedent.”

The Institute of Directors in Scotland said that the income tax plans would “send the wrong messages” and have a negative impact on the Scottish economy. It also said:

“a taxation disparity between Scotland and the rest of the UK is not good news for business when competing for talent. It can send the wrong messages to those we want to attract to Scotland to fill the top jobs, and create others.”

Does the member accept that businesses are attracted by a well-educated and healthy workforce and that such a workforce might come into being through slightly higher taxation?

I remember Mr Mason, in election after election, standing on a manifesto that argued for cutting corporation tax in Scotland to 3 per cent below the rate for the rest of the UK. It seems that he and his party have completely changed their tune.

As a chartered accountant, Mr Mason will recognise the following comments from Johnston Carmichael, which warned that higher taxes in Scotland might mean that businesses move elsewhere—it said that the

“cost will be significant and may give rise to business relocating”.

Closer to home, the SNP should listen to some voices that are currently, or were previously, connected with that party. Andrew Wilson, the former SNP economy spokesman in the Parliament and the chair of the SNP’s growth commission, has argued that the SNP needs to learn from the introduction of LBTT, which he said had lost revenue after the tax charge for the purchase of larger homes was hiked.

Will the member take an intervention?

I would like to make some progress, if I can.

At the weekend, The Sunday Times Scotland reported that SNP donor Bill Samuel—a former chairman of Motherwell Football Club—said that

“he had lost faith in the SNP for doggedly pursuing income tax and stamp duty reforms that target high-earners.”

In what was described as

“a withering attack on the party he has backed for a decade, Samuel said the SNP had given ‘fresh meaning’ to mediocrity and that ... the ‘great hopes of a nation will now fatally flounder in the mud of moaning and complaint’.”

He added that LBTT reforms

“said in resounding tones that ‘Scotland is now closed for business’.”

That is on the back of another former SNP donor and enthusiastic supporter of Yes Scotland, Peter de Vink, the independent councillor in Midlothian—[Interruption.] SNP members were not laughing when he gave them all that money in support of the Yes Scotland campaign. Last weekend, in language about the finance secretary that was so unparliamentary and uncomplimentary that even I could not use it in the chamber, Peter de Vink announced that his support for the SNP was at an end.

The SNP might have a point if it was raising more money to spend on vital public services and could demonstrate that that was the case. However, the reality is that hundreds of thousands of householders around Scotland will see their council tax bills hiked in April—some by £500 or more—at the same time as their local services are slashed.

In my area, the SNP-run Perth and Kinross Council is considering a range of cuts to front-line services, including scrapping 24 maths and English teaching posts, reducing the opening hours of community campuses, scrapping the community warden scheme, increasing the cost of school meals from £2.10 to £2.70 a day and cutting 94 care home places. There will be many, many other examples from around the country of similar cuts being proposed by local authorities at the same time as taxes go up.

The Tory position is to reduce taxes further, so where does the member propose to make cuts to pay for those tax cuts?

I am delighted that the finance secretary has asked me that question, because the Government should be growing the economy and the tax revenue. That was precisely the point that Liz Cameron from the Scottish Chambers of Commerce made. She said:

“growing our economy rather than increasing taxes will provide the most sustainable route towards boosting tax revenues and thus public sector spending.”

Our calculations show that, if Scotland were to match the UK average for higher-rate and additional-rate taxpayers rather than lagging behind, an additional £600 million a year would be generated for vital services without a single tax rate being raised. However, we will not get there as long as we send out the message that Scotland is the most highly taxed part of the United Kingdom.

With Labour and the Conservatives set to oppose the Scottish Government budget, it only remains to be seen which of the two remaining suitors at the court of Queen Nicola are likely to win her favour. Will it be Patsy Harvie, the man who is always there to do the SNP’s bidding, or Willing Willie, who may risk sacrificing the electoral prospects of Liberal Democrat councillors up and down the land to gain a few moments of glory as the saviour of the SNP budget? We will know soon enough. For our part, we are clear: this is not a budget that we can currently support.

I move amendment S5M-03576.1, to insert at end:

“, and considers that families and businesses in Scotland should not be taxed more than those elsewhere in the UK.”

15:45  

I will do my level best to resist returning the rather pathetic name-calling that we just heard.

I welcome the fact that we are debating the budget today. Although it seems from Bruce Crawford’s comments that some might reasonably see the debate as cutting across the Finance and Constitution Committee’s process, we have—to be fair—had a relatively short and constrained budget scrutiny process. If this debate effectively ends up being stage zero, I hope that it will not, at the very least, do any harm.

As for the Labour Party’s motion, if that is the version that we end up voting on at the end of the day, I will vote in favour of it. The motion’s basic proposition is that the draft budget requires change in order to achieve what not only the Labour Party, but several of us across the chamber, have set out: that investment in public services is needed to protect those services that even Murdo Fraser has cited as being under threat from cuts in the coming months. I support that position.

I have been a little disappointed by the apparent ruling out of any constructive ideas that have come forward in recent weeks and months. In a period of minority government, all Opposition parties have a responsibility not just to Parliament and to the country, but to our own voters to try to maximise the impact of opposition against the minority Government. We should all be trying to do that in the most constructive way possible.

Would Patrick Harvie agree that, in the interests of being constructive and recognising the process, the cabinet secretary ought not to threaten local government with taking more money off it if it does not settle now? Surely that should be part of the process of respect in the budget.

I would agree with that, and I will come on to local government in a moment.

The Green response to the draft budget covers a wide range of concerns. It is unreasonable to be surprised that a small political party that gained six seats in the election this year on a manifesto of bold action to invest in the priorities for Scotland might be critical of what the largest party—the party in government—is doing.

We called for an anti-poverty budget, which means being open to radical ideas such as topping up child benefit and being bolder on the living wage plus to go beyond the living wage for vitally important and historically undervalued work such as care work. We need to make a long-overdue step change on energy efficiency; if the current proposal covers both residential and non-residential properties, as it appears to, it is not a significant increase and is possibly only a real-terms freeze. We need investment in GP funding, and a commitment to 70 per cent of capital spend going towards low-carbon infrastructure in areas such as active travel; we are very far from reaching that level at present.

During the election campaign, we set out clear ways of achieving that investment and taking a bold approach to the income tax powers that are now finally within this Parliament’s remit. We are not just obsessed with the additional rate, which is the very top rate. An increase in that rate—not just to 50p in the pound but beyond—is justified, but the proportion of the population who pay tax at that level is relatively small, so we need to be bolder still.

We are not just obsessed with the basic rate either. I find it frustrating that so little attention is paid to the higher rate—the rate at which we MSPs, as high earners, pay a proportion of our income.

It is clear that there is a wide range of ways—concerning either the rate or the thresholds—in which the Scottish Government could raise the revenue that is necessary to protect investment in our public services, and in a way that is fair and does not increase the income tax to be paid by low and average-income earners.

Historically, there has been an extraordinary concentration of wealth among fewer and fewer people in our society. That is true in many western countries, not just in this country. If we want to begin to reverse that trend and that tendency, we must begin to take action. We have presented the Scottish Government with options, not just on income tax rates but on thresholds, too, to give it the opportunity to show that that is possible.

The impact on services, in particular on local government services, will be profound. I acknowledge that there is a range of different interpretations of what is in the Scottish budget. I do not take everything back 10 years but, even back in the old days of the Labour-Lib Dem coalition—ever since devolution began—there has been a debate between the Government and the Opposition about how transparent the budget is. There is always a range of different interpretations of what the figures mean. It seems beyond doubt, and probably beyond debate, that there will be severe impacts on services, which our colleagues in local government will have to implement. They are already having to set or draft their budgets on the basis of the cuts that they expect to come to their un-ring-fenced resource allocations. We must find ways of reversing that, and I think that we can.

That comes at a time when the context is one not just of centralised control but of rate capping of the council tax without legislation to justify it, with the contradiction that the Scottish Government is willing to place an expectation on councils to use the most unfair tax that is available to us—the council tax—while refusing to use a more progressive tax power.

I will briefly touch on the other parties’ positions. I find the logic of the Conservative amendment very odd indeed. It suggests that there is a principled reason why people or businesses in Scotland should not be taxed any higher than those in any other part of the UK. If that is a principled position, there is an equally powerful equivalent principle that people in other parts of the UK should not be taxed higher than those in Scotland, either. The Conservatives are effectively arguing against the devolution of taxation powers on principle, and I have to reject that.

The Liberal Democrat proposition includes a range of spending ideas that most of us would welcome. I do not think that any of us would die in a ditch saying that they are terrible ideas for what we might spend money on. Like Labour members, however, I find it astonishing and puzzling that the proposition for funding those measures should be focused on the basic rate, so that the revenue would come from low and middle-income earners. We do not have to do that.

There remain big differences between the Green position and the SNP position, but we are open to discussion. We will take the issues seriously and constructively, but I reinforce the point to the SNP that many of its own supporters expect and want it to do the right thing and move us in the direction of progressive taxation to fund the public services that we all rely on.

I move amendment S5M-03576.2, to insert at end:

“, and believes that changes to income tax policy must be made, both in order to raise revenue to protect public services, and to reduce income inequality in Scotland.”

15:53  

I gently return the favour to Murdo Fraser—or, as Mike Rumbles suggested, Machete Murdo. He promises to cut taxes for higher earners while cutting public services for everyone else. That is true to form, as the Conservatives are not squaring the circle and explaining how they will raise the extra money that they propose to cut from taxes.

Today’s debate is a helpful precursor to the stage 1 debate next week. From today’s speeches so far, it is pretty clear that there is no majority for the budget among members. My party understands that a budget will need to be agreed between the parties if it is to be passed. We have been working hard to do exactly that. We have been putting forward the credible alternative that the finance secretary has been suggesting we should propose. We have been measured, we have been reasonable, and we have been open with our budget requests.

We understand that we cannot dictate the whole of the budget; all that we are asking for is the ability to influence a fraction of it. In view of the consistently poor economic and education data that have been published in recent weeks, since the draft budget was announced, I think that we are right to put the economy first through the measures that we have been proposing. With the challenge of Brexit and the threat to our economy, I think that the case is even stronger now.

Our £400 million of measures would cost just over 1 per cent of the total Scottish Government budget, so our requests are not unreasonable. We are not demanding that the entirety of our manifesto be delivered in this first budget, either. We have set out the priorities that we believe are urgent and that the whole Parliament should unite around. As Patrick Harvie has just said, it is difficult to disagree with the proposals. We believe that the argument should be that they are for the good of our long-term economy.

I have met the finance secretary formally on three occasions and I am planning to meet him again this week. We have had numerous informal conversations as well. Because I am keen to be open, I will tell members what we have discussed. Our education system is under strain and needs investment so that our colleges and schools can train our workforce to face the challenges of Brexit and an ever more competitive global market. We want extra money to go into schools. The pupil premium that we pioneered in England has helped to close the attainment gap there, but current Scottish plans do not match that—although I believe that they should. We also want to invest in colleges to restore the part-time courses that helped women and older people to retrain. Audit Scotland highlighted the damage that has been done to those groups. We have estimated that £160 million is required to get Scottish education back up to the best in the world after it has slipped in recent years.

Will Willie Rennie give way?

I will make a bit more progress.

Everyone in this Parliament tells me that mental health services are a priority for everyone. Well, this budget is a chance to show that. We have set out a package of measures, from tier 1 and 2 counselling through to emergency support from the police and accident and emergency units. We need to take the total mental health budget up to £1.2 billion to pay for that.

We all know that Police Scotland has been put through the mill. The centralisation programme has not worked, despite all the assurances of the previous First Minister and the previous justice secretary that it would deliver savings. Police Scotland needs an extra £20 million over and above the SNP’s plans.

We also want a better deal for ferry and air transport links to the northern isles, and I have highlighted to the Scottish Government where its policies have left a gap in funding for alcohol and drug partnerships.

I restate the question that I put in my speech. I do not think that any of us would look unkindly at that list of goodies, but, at the moment, that is all that it is. How does Willie Rennie propose to fund it—by cutting other services or by raising taxation? What is his tax proposition that would protect low and middle-income earners?

I set out in considerable detail during the election campaign our promise of a modest increase in income tax for a big return. Patrick Harvie knows that. Because we managed to raise the tax thresholds at Westminster, those who are on low and middle incomes are more protected, which allows us to increase income tax by a modest 1p. We must get the balance right between increases in taxation and investment in public services. We believe that we have got that balance right, and we believe that making that modest increase is the right way to go.

Derek Mackay has a problem with part of his rhetoric. He started off by setting out that there has been a 9 per cent reduction in the Scottish Government’s budget in the past few years, and, until 2019-20, a £3.5 billion reduction is coming, yet he claims that councils, colleges, schools, the NHS, social services and almost every part of the public sector will not get a better deal than he is offering, which is a big, generous response. He cannot have it both ways. I believe that we need to invest in public services through a modest increase in taxation.

Every member of this Parliament has a responsibility. There is no majority, as things currently stand. We have set out what our priorities should be. If anyone in the Parliament thinks that it is just a matter of time before the Liberal Democrats agree on a budget with the SNP, they are mistaken. Everyone has a responsibility to try to reach agreement. If they do not live up to that responsibility and an election follows, those who have not lifted their shovels and made an attempt will bear the responsibility for the failure to reach an agreement.

The people of this country do not want an election. Members need to wake up and realise that we are heading down that path. My warning to everyone in the chamber today is that they have a responsibility to work with the finance secretary to reach an agreement. So far, we have worked with him; it is now up to others on the Parliament to do exactly the same.

I move amendment S5M-03576.3, to insert at end:

“, and believes that the budget requires changes to support the long-term Scottish economy through additional investment in school education and colleges, new mental health services and transport links to the northern isles, and additional investment in Police Scotland to mitigate the failure of the centralisation programme.”

We move to the open speeches. The debate is oversubscribed for the time that we have left, so unless members’ speeches are well under five minutes, later speeches will have to be cut quite dramatically.

16:00  

This is a Labour Party debate, but I first want to say something about the Tories and taxation as detailed in their amendment. The Tories claim to be the party of low taxation, but that is deeply misleading. If it was up to the Tories, there would be a tax on education and Scottish students would be paying millions of pounds more in tuition fees, as they do in England; there would be a tax on ill health and sick people in Scotland would be paying for their prescriptions, including some with long-term conditions; and there would be a tax on poverty and, in many cases, disability, with vulnerable Scots paying the hated bedroom tax.

All those Tory taxes are levied on people in England but, in Scotland, we have chosen not to impose them. They are the cruellest taxes of all. They hit the just about managings—the JAMs—who Theresa May and her Tory team in this chamber pretend to care about. It is the JAMs who suffer most from the sickness tax; in England, people who earn more than £16,000 a year pay £8.44 for each prescription item.

Also, because the SNP has found £50 million to mitigate it through discretionary housing payments, vulnerable families in Scotland do not pay the Tory bedroom tax.

Unfortunately, there are some Tory taxes that we cannot avoid because we do not have the power to adjust them, such as value added tax. Under the Tories, VAT has hit a record 20 per cent. It is one of the most regressive taxes of all. It means that, for every £5 spent, the individual pays £1, regardless of income. The Office for National Statistics has calculated that the poorest fifth of UK households lose nearly 10 per cent of their disposable income in VAT compared with 5 per cent for the richest households. Consequently, I contend that the Tories are not the party of low tax for most people; rather, they are the party of low tax for the very rich.

Turning to the Labour motion, I note that the cabinet secretary has made it clear that the Scottish Government is open to amendments to the draft budget. There is much to commend in the budget given that, as Derek Mackay said, Scotland’s discretionary budget will decline significantly in real terms between 2010 and 2020. The budget protects low-income households from tax hikes, while supporting jobs and delivering increased investment in education. There will be £120 million paid direct to schools and record investment in the health service.

The member has rightly attacked the Conservative Party. Will she list all the progressive measures taken by the Scottish Government that take money from the wealthiest and give it to those who are at the bottom end of the scale?

I have just listed many of the SNP Government’s progressive policies, including the steps to mitigate the bedroom tax, having no tuition fees, and abolishing prescription charges, which the Labour Party opposed.

I was about to talk about the resources for health in the draft budget. The proposal is to pass on £304 million of resource consequentials, taking spending on health to a record £12.7 billion. That is what people voted for last May. They rejected Neil Findlay’s party and voted for the SNP manifesto that committed to provide record above-inflation increases in health funding.

Perhaps it is a desperate ploy in advance of this year’s council elections, but there has been a great deal of dishonesty, with Labour consistently ignoring the overall increase in funding for local services, the attainment fund for schools and health and social care integration funding, which has risen by another £107 million this year in addition to the £250 million that was given last year. That is for local services, even if they do not fall under the local government budget lines. Not all local services are delivered by councils; some are delivered by integration joint boards, whose formation was supported by Labour, and some are delivered directly by schools, which know what is best for the children that they teach. [Interruption.] Excuse my cough, Presiding Officer.

You have half a minute left.

I want to finish by returning to the Tories who, as others have said, have no credibility. Today and every day, they stand up to demand lower taxes for the better-off while at the same time making numerous spending demands. Murdo Fraser said that he expected his meeting with the cabinet secretary to be very short indeed; I am not surprised by that, because he has nothing constructive to say.

16:05  

I am pleased to speak in today’s debate.

The impact of the Scottish Government’s draft budget on local authority budgets across the country has understandably already been a significant theme of today’s debate. As Joan McAlpine has just mentioned, through her coughing, the council elections are an important part of this debate and, as we approach them, it is especially important for my constituents in Edinburgh to remember what the SNP Government tried to do with their hard-earned money through the proposed central educational attainment fund. Until just a few short weeks ago, SNP ministers were determined to take millions of pounds of council tax raised here in Edinburgh away from the city and spend it in other parts of Scotland.

Does the member welcome the news in the budget that £120 million of the Government’s money will be going towards closing the attainment gap?

We have still to find out the figures and where that money is going to go in councils. We will not be clear about this until we find out how the money will be spread.

That deeply flawed policy was going to cost City of Edinburgh Council almost £9.5 million in the next financial year, with £38 million being taken away from the city over the next five years. I am sorry to say that Edinburgh SNP councillors, MPs and MSPs were mute on the issue of city residents facing having millions of pounds of their money hived off to other councils. The policy was not only centralising and anti-localist but totally at odds with the Scottish Government's supposed support for community empowerment.

Will the member give way?

Will the member give way?

No. As the members will know, I am very short of time.

Of course, it was only thanks to the Scottish Conservative campaign against the proposals not only in Edinburgh but in other council areas that would have been hit and which would have had money diverted away from their school spending that the policy was rethought last year.

Will the member give way?

No. I do not have time—I have only two minutes. As the minister knows, the debate is oversubscribed.

Despite the finance secretary’s U-turn on the way in which the money for the fund is to be raised and allocated, Edinburgh council tax payers still face losing out more than any other area as a result of council tax banding multiplier changes. The move means that council tax will rise for the more than 37 per cent of city households who live in band E to H homes, compared with a national average of just 26 per cent of households. Many of those council tax payers, especially those in bands E and F, are not particularly wealthy, but they find themselves in those bands because of the city’s comparatively high property values. They will be hit hard, even before the Labour and SNP coalition that runs the council considers putting council tax up by an additional 3 per cent.

An issue that I want to raise and which I hope will be considered in future budgets is the capital city supplement that Edinburgh receives in recognition of its capital city status and the extra burden that that status places on the council and its services. I pay tribute to the determined and successful work that was undertaken by my friend the late Margo MacDonald, supported by city MSPs of all parties, to secure the supplement back in 2007. In future budgets we need to consider whether the supplement is sufficient, given our capital city’s international status and draw, the increasing number of official functions that it has to support, the extra policing responsibilities and the need to ensure that our infrastructure can compete with other capital cities.

It is a sad economic reality that, after 10 years of this SNP Scottish Government, the only part of the Scottish economy that is growing is Edinburgh and the south-east region. It is therefore vital that the investment that is needed to sustain that and the region is made. Priority should be given to transport projects to support jobs and growth in the region, and the additional housing that there will be across Edinburgh and the Lothians should be taken into account.

Traffic on the Edinburgh city bypass has already reached capacity levels. We need forward thinking and planning to meet future needs across the region—for example, by making the A720 a smart motorway that allows the hard shoulders to be used for running traffic at peak times to address the ever-growing congestion. I welcome the debate on that and hope that MSPs across the city will back me on it.

I agree with my colleague Murdo Fraser on the dangers to the Scottish economy if the SNP Government’s high-tax instincts result in tax rates being increased further. Ministers need to listen to businesses and job creators across the city as well as hard-pressed Edinburgh council tax payers. If we are to attract more companies to invest and the high-skilled workers and entrepreneurs who are key to the future economic success and growth of Scotland, we cannot be less competitive on tax and less attractive than the other nations of the United Kingdom.

I support the amendment in the name of my colleague Murdo Fraser.

I remind members that we are very tight for time and that their colleagues might well be disadvantaged unless they cut down their speaking times.

16:11  

I recognise the thought in and the content of Mr Rowley’s remarks, but it is a shame that Labour did not decide to put what he said in its motion and have the confidence to put that to a vote. In its paucity and vacuity, Labour’s motion is commensurate with its puerile approach to politics. Given the opportunity to put forward and put to a vote an alternative prospectus, Labour has instead chosen to sacrifice what is left of its credibility with a craven motion that is more about its pursuit of its fanatical obsession with denigrating the Scottish Government.

After Labour’s decade of denial—at a cost of 40 MPs, 25 points in the polls and 26 seats in this chamber—it has now successfully distilled its loathing of the SNP into a laconic motion. However, I applaud it on its new-found efficiency of messaging. I regret only that Labour members’ colleagues in local government seem to be anything but efficient in their handling of public services and public finances.

Last year, Labour-controlled Renfrewshire Council downgraded recycling centres across the authority, including in Johnstone and Linwood in my Renfrewshire South constituency. Despite huge local opposition, Labour pressed ahead only to reverse the decision three months later at a cost of over £280,000. [Interruption.] They do not like it.

If that fiasco in Renfrewshire was an isolated incident, it would be bad enough but, sadly, it is part of a bigger picture. Some £100,000 was wasted on the aborted revamp of George Square, up to £100 million was wasted in North Lanarkshire as a result of Labour’s mishandling of equal pay, and let us not forget Labour's multibillion-pound toxic private finance initiative legacy. That kind of reckless approach and needless waste of taxpayers’ money typifies Labour’s approach to public spending.

In its proposals for raising revenue, Labour’s incompetence is matched only by its incoherence.

Will the member take an intervention?

Out of respect for colleagues who want an opportunity to speak, I will not take interventions.

After years of calling for the council tax freeze to be lifted, Labour in South Lanarkshire has indicated that it will continue the freeze because, in its words,

“residents are struggling with their budgets”,

while Labour members in the chamber demand that income tax is increased for the lowest paid in society. While Labour members call for an increase in the additional rate, even if it leads to less money for public services, their shadow chancellor has said that Labour will support Tory plans for an inflation-busting tax cut for those on the upper rate. John McDonnell admits that that is a tax giveaway for the wealthiest in society.

That is a shambolic approach to public policy. It is no wonder that people do not take the Labour Party seriously on public services and finances. It is clear from its record of incompetence in local government that it could not run a ménage, never mind a Government.

The Tories’ amendment is but their latest attempt to undermine the principle of differentiation that underpins the devolution settlement. After their unconstrained ecstasy at yesterday’s confirmation of the legal irrelevance of the Sewel convention, which they legislated for, they now demand that we do not use the tax powers that they argued should be devolved. Coupled with their intransigence on a differentiated solution for Scotland on Brexit, it is clear that what the Tories mean by strong opposition is what it has always meant for them: strong opposition to devolution and to the will of the Scottish people.

Regarding the specifics of the Tories’ amendment, not content with using parliamentary time to ask self-serving questions while several of their members swan off to work in second and third jobs, the Tories now want to give high earners such as themselves a tax cut. That could be regarded as showing a comedic level of chutzpah, were it not for the fact that tens of thousands of people have suffered as a consequence of the Tory party’s draconian and inhumane welfare reforms. To demand a tax cut for the wealthiest in society while implementing policies that are driving our most vulnerable into debt and reliance on food banks shows that the Tories—the party of the rape clause—are as heartless, callous and cynical as ever.

To add insult to injury, the Tory claim to be offering lower taxes is utterly disingenuous; the Tories’ position is that, rather than involve HM Revenue and Customs, they would have pharmacists implement their prescription sickness tax and students pay their £9,000 a year education tax.

The Tories and Labour have used this debate—and will continue to do so in their motions—to engage in the politics of the playground, but I want to close—

I am afraid that you are closing right now.

—by acknowledging the amendments that were lodged by the Greens and Liberal Democrats, who have recognised that this is a Parliament of minorities and are seeking to put forward their views.

You know that time is tight. No matter how vigorous you feel on your feet, everybody gets the same whack.

16:16  

It is correct to have this debate this afternoon, because it allows the parliamentary parties to set out their positions on the budget and it allows Mr Mackay to hear an alternative prospectus. Until now in the budget process, he has been very resistant to alternative ideas. The decision on the budget is one of the biggest decisions that Parliament makes in any year, and the debate will give Mr Mackay the chance to hear from representatives of constituencies and regions throughout Scotland what is really happening, as opposed to listening only to his civil servants.

Will the member give way?

I will not, at this time.

Since Mr Mackay announced the budget in December it has been unravelling, in terms of the spin of that day set against the reality. I will concentrate on three tests for the budget: outcomes, local councils and tax. Looking at some of the outcomes on the Scottish Government’s Scotland performs website, it is clear that the budget falls down on some of the budget lines. The Scottish Government tells us that its budget is set out to promote economic growth, but we have seen a 40 per cent cut in enterprise budgets since 2009. What does that do for economic growth?

Will the member give way?

I will not, at this time.

The Government tells us that it is in favour of fairness and widening access in education, but we have a 25 per cent cut in the educational maintenance allowance budget. We heard John Mason speak earlier about the importance of education, but what will that cut do for gaining access?

It is important that there is no scaremongering when we are discussing the budget. The educational maintenance allowance does not exist south of the border, but continues to exist in Scotland at demand-led level. I make that point because the UK Government has scrapped it. It will continue to be delivered in Scotland, so I do not think that it is fair or accurate for people who receive the allowance to be told that they will no longer receive it.

I am sorry, but interventions will also have to be crisp as well.

In all those words from Derek Mackay, I did not hear anything that said that there will not be a cut of 25 per cent to the educational maintenance allowance budget. Students up and down the country will have their educational access restricted because of that decision.

On health and sport, the Government quite rightly trumpets Scotland’s sporting successes, but it has cut the budget for sport. What will that do for extending working-class communities’ access to sport? Despite all the hype, the budget is not delivering on the outcomes that the Government is looking for.

One of the most retrograde parts of the budget is how councils are being hammered: £327 million of cuts are being passed on to local government. We even hear some SNP councils criticising aspects of the settlement—for example, Dundee City Council in its response. The difference is that councils and council leaders up and down the country are close to their communities and they see the impact of the cuts—unlike Mr Mackay, who clearly needs to get out more.

The other issue is that the SNP is very timid on tax.

Will the member take an intervention?

No. I do not have time.

Why are people on MSP salaries and above not being asked to make a contribution in order to try to mitigate the effects of the cuts? It is a fact of life that if Mr Mackay discovered a backbone and decided to use progressive taxation we would not see the job losses that are going to happen in local government, play schemes being cut or libraries being proposed for closure.

The budget is not about adding up the numbers on a spreadsheet; it is about the impact on people and communities. The fact of the matter is that, at present, the budget is not fit for purpose. It lets people and communities down. I say to Mr Mackay that it is time to think again.

16:21  

Before I begin, I point out that I am the parliamentary liaison officer to the Cabinet Secretary for Finance and the Constitution.

I am not sure that there is anything left to say after my colleague Tom Arthur’s spirited speech. However, when I read Labour’s motion on Monday night, it took me straight back to primary school, which might be more recent for me than for other MSPs—Ross Greer excepted. Labour’s motion is like a petulant child standing there, arms crossed, face in a scowl, just saying “No!” There is no analysis, no judgment and no substance—just a big, fat “No!”

Scotland needs a budget and there needs to be scrutiny, discussions with other parties and amendments, as the Government’s amendment mentions. To be fair to the Lib Dems and the Greens, at least their amendments have some substance.

Let us be clear. That big, fat “No!” in Labour’s motion would be awful news for the Highlands. It would mean saying no to more than £100 million in digital infrastructure and the delivery of superfast broadband to 100 per cent of homes and businesses. It would mean saying no to more than £470 million of direct capital investment to deliver 50,000 affordable homes. It would mean saying no to £47 million to mitigate the effects of the bedroom tax, and it would mean saying no to continued dualling of the A9 and improvements to the A82. That is what is in our draft budget.

However, the Tories’ amendment is even more predictable than Labour’s motion. The Tories spend so much time talking about extra tax with such misery that they scare away investment using empty rhetoric alone. Under the tax proposals in the draft budget, 99 per cent of taxpayers in Scotland will not pay a penny more. Only people who earn more than £122,900 will pay more—to the tune of £14 a year.

The marginal difference between Scotland and England was caused by the Westminster Tories taking the regressive decision to cut the thresholds, thereby giving higher-rate payers a tax break. That difference means that someone in the higher-rate band in Scotland will pay up to £314 more in 2017-18 than they would in the rest of the UK.

What the Tories blatantly and intentionally ignore is that taxpayers in Scotland, in any band, get more for their money and a much better deal than do people anywhere else in the UK. I, too, lament the difference in policy between Scotland and England, but not for the sake of the rich. It is for the sake of the 10 per cent poorest households, which the Resolution Foundation estimates will lose £400 a year by 2020-21 under Tory policies, while the richest 10 per cent are gaining £200 a year. I call on Labour and the Tories to park the premature stunts—

I wonder whether the member can tell me which households suffer most from cuts to local government, cuts to social care, cuts to the NHS and cuts to all our public services. Is it people at the top of the tree or people at the bottom?

I will happily answer that. I agree that, if there were cuts, it would be the poorest people who would pay. However, in the budget an additional £120 million is allocated to closing the attainment gap, there is an additional £111 million for councils as a result of changes to the council tax bands, there is an additional £250 million for social care, and there is an additional £107 million to deliver the living wage for social care workers. That is a budget that delivers for the poorest people in society. On that point, I will close.

16:25  

I declare an interest as a councillor in South Lanarkshire Council. I am someone who will, once again, have to grapple with a reduced settlement from the SNP, and decide what to cut.

First of all, I thank Labour for bringing the debate to Parliament. Like our debate last week on the dismantling of Highlands and Islands Enterprise, this is an example of Opposition parties focusing on what matters.

Will the member take an intervention?

No.

Not for us the blame game of the SNP; the grievance and the grudge. The moaning minnies of the SNP would have us believe that nothing is their fault—that it is always someone else’s fault. Well, after 10 years of being in Government, they cannot get away with it any more and people are seeing through it.

The funding—I am sorry. The underfunding of Scotland’s public services by the SNP is a scandal and it is a choice that the SNP has made against a backdrop of increasing money from the UK Government. Health is in crisis, because the SNP has made it so.

Will the member give way?

No. Local government is on its knees, because the SNP has put it there. SNP austerity is with us. It is very real and it hurts; and SNP members—Tom Arthur, for example—who shout and bawl should be ashamed. Derek Mackay has made a conscious choice to chop council budgets.

Will the member give way?

No—I am not giving way. There is not much time.

Derek Mackay has made a conscious choice to chop council budgets by £327 million next year—but only if Parliament lets him. We will not be voting for Derek Mackay’s slash-and-burn budget: we will be voting with hard-pressed taxpayers and for public services.

Today, all parties have the chance to show us where they stand. The Conservatives have been clear that making Scotland the highest-taxed part of the UK is not something that we can support. Labour has said, for different reasons, that it will not back Mr Mackay. What of the Greens and the Lib Dems? Will Willie Rennie jump into bed with Derek Mackay? We are not sure, but Mike Rumbles said yesterday that he was pretty sure that the budget will not pass next week. Will the Greens twist Mr Mackay’s arm up his back? How could either party, while professing to back localism, do a deal with a party that is on a mission to destroy local government? How will they be able to look voters in the eyes in May?

The money that is being given to our local authorities by this SNP Government is declining—

Where is that money coming from?

There is no use in shouting. Derek Mackay’s smoke-and-mirrors draft budget—[Interruption.]

Will the member take an intervention?

Go on, then.

I thank Graham Simpson for the gracious way he has taken my intervention. There are so many spending proposals in the Tory plans, so will he please tell us—for the sake of everybody, and in particular for the people of Scotland—where the money will come from, given that the Tories actually intend to cut taxes?

Perhaps Mr Mackay should look to the extra half a billion pounds, in real terms, that he is getting in his budget. He could start there.

I am afraid that the money that is being given to councils is declining, and Mr Mackay’s smoke-and-mirrors draft budget tries in vain to hide that. Expert after expert who has blown away the fog of figures has concluded the same. The Scottish Government has more money at its disposal than ever before. Since the SNP came to power in 2007, there has been no real-terms cut in its spending power—none.

The Fraser of Allander institute confirmed that last week, as Murdo Mackay said—I mean Murdo Fraser. [Laughter.] Jobs are at risk if Derek Mackay gets his way. Let us look at the reality. My council expects to have to make cuts of about £20 million next year, which means the loss of 282 full-time-equivalent jobs—the livelihoods of more than 300 people are at risk.

Those things matter. The SNP intends to make Scotland the highest-taxed part of the UK, while local services are slashed. That is not something that we will support. Will others?

16:30  

They say that persistence is a virtue. I will be persistent; I will also be brief.

There can be few more important things than debating the budget. Such a debate is an opportunity to reflect on our priorities as a country and lay the foundations of a growing economy and an inclusive society. We do so with more power than we have ever had. We have new powers, which come with new responsibilities. Gone are the days when we simply spent what someone else gave us; now we are responsible for raising a significant proportion of our revenue. One would hope that that would bring a new maturity to our politics, but I am not convinced that that has happened, based on the performance of some members this afternoon.

Let us start with the understanding that if the tax base contracts there are consequences. Fewer people paying tax and a lower tax yield mean less money for our public services. It is therefore self-evident that growing the economy is a key priority. The more people in work, the more taxes get paid.

A quick glance at the Scottish Government’s record on the economy should make us all very nervous about the future. Across virtually every measure, we are being outperformed by the UK. In Scotland, unemployment is increasing, employment is decreasing, economic inactivity is rising, work is precarious and growth has all but stagnated. Whatever selective statistics the Government quotes, the truth is that we are in trouble. If members need any more confirmation of that, they should look at business confidence. It is plummeting.

I would have much more respect for the Scottish Government if it was not in such denial. Recognition that there is a problem is the first step towards taking the pragmatic action that is required to turn the tide and grow the economy, which is surely an ambition that unites members of all parties and should feature in the budget.

I well remember Nicola Sturgeon going to London in advance of the general election and lecturing all the parties on being anti-austerity. It seems that she and the SNP are suffering from collective amnesia. The incredible thing is that she was prepared to do that when she had fewer powers over finance than she has now. I really do not understand why, with all that power, the SNP Government is content simply to be a conveyor belt for Tory cuts.

Will the member take an intervention?

I do not have time.

Devolution was about giving us the opportunity to make different choices, yet the party of independence is not using the powers that it has to protect Scotland’s interests. What is the point of arguing for more powers if the Government does not even use the powers that it has?

Instead, what we get from the SNP is austerity on steroids, with £327 million of cuts to local services, on top of cuts of more than £300 million last year. That is a direct attack on education, on opportunity and on the future.

Economists tell us that, in growing the economy, one of the greatest investments that can be made is in human capital—investment in the knowledge and skills of our young people. Businesses continue to report skills shortages, yet we cut the very budgets that are designed to make a difference.

That takes me to the enterprise agencies. At a time when the importance of growing the economy is clear in the face of Brexit, what does the SNP do? It cuts the budget of the very agencies that are responsible for supporting business growth.

Will the member give way?

Sit down.

Scottish Enterprise has had a staggering real-terms cut of 48 per cent, and Highlands and Islands Enterprise has had a cut of 18 per cent since 2009-10. Does the SNP honestly think that a 48 per cent cut to its main economic development agency will have no impact?

It is so completely wrong-headed, it is frankly breathtaking. Economics 101—if we want a bigger tax base, we need to grow the economy; we need more people in work. What does the SNP not get about that? In contrast, Labour’s proposal is to use the powers of this Parliament to invest in our young people and to invest in growing the economy.

The SNP promised to protect Scotland’s interests from austerity. It is increasingly clear that the hallmark of the SNP is to promise one thing but to do exactly the opposite. That is not just disappointing; the SNP stands charged with gross negligence of the Scottish economy and the evidence is there for all to see in its budget.

16:35  

As has been explained and as was intended when the Parliament was set up again in 1999, no one party has an overall majority. Therefore, no one party can get entirely its own way and every party has to compromise a bit. I think that that is a healthy state of affairs.

There are many options for improving the budget. That has happened every year, even when the SNP has had an overall majority. I am sure that the cabinet secretary has a little bit of money kept aside that he can use for the priorities of other parties—[Interruption.]

A slush fund?

It is probably worth reminding ourselves—

Patrick Harvie rose—

Is somebody intervening?

Yes—I am doing my best to.

Sorry—I did not see you. I was distracted by the comments.

Does the member not acknowledge that if he regards negotiation on this matter as a question of keeping aside a little pot of money, that absolutely fails to open up the possibility that we improve tax policy in Scotland and achieve a fairer, more redistributive economy through the opportunity that faces Derek Mackay at the moment?

Yes, I basically agree with that. The member may have intervened a little bit too soon, as I will develop my argument. There are two options—to stay within the present revenue or to raise more revenue. However, let us remember some of the things that are in the SNP budget: there is a record £12.7 billion for the health budget; £120 million is being targeted at closing the education attainment gap; there are still no fees for university students; we are heading towards 30,000 new modern apprentices each year; we are on target for 50,000 affordable homes by 2021; and we will complete the Forth replacement crossing, the M8/M73/M74 motorway improvement project and the rail electrification between Glasgow and Edinburgh—the list could go on.

On the taxation side, let us not forget that many small businesses are not paying business rates at all; our land and buildings transactions tax is more principles based and more progressive than stamp duty was; many small businesses are not paying business rates at all; and our income tax is diverging from the UK in a fairer direction.

Clearly there is a challenge around whether we can raise more tax and therefore free up more revenue for other forms of expenditure. The Conservatives keep repeating their mantra that they do not want Scotland to be taxed more than the UK—they seem scared to be different from their neighbours. However, if we want the best health service in the UK, the best education in the UK, and the best social rented housing in the UK, what is so wrong with paying more tax than the rest of the UK?

A well-educated, well-housed and healthy workforce will be more important factors in attracting businesses to Scotland than whether the income tax rate is a few pence different. My feeling is that there could be room to raise tax a bit. However, there are certain parameters that we should take heed of. At the Finance Committee in the previous session, of which I was a member, we heard evidence that a 1p or 2p difference between Scotland and England would probably not lead to many people moving residence but a 5p difference—which I think that Labour was proposing at the top end—would be much more of a risk and tax take could be seriously damaged.

We should oppose tax rises for those on the lowest incomes. They already face a marginal rate of 20 per cent tax and 12 per cent national insurance, meaning 32 per cent in total for those on an income of £11,000. That was certainly the previous Labour plan—I am not entirely clear whether it is still the Labour plan to increase tax for people on £11,000.

When it comes to expenditure, it is easy to have a wish list but we still have to have a balanced budget, so more expenditure in one area means either increased taxation or less expenditure on something else.

Will the member take an intervention?

I am sorry—I have taken an intervention already.

The member is in his last minute.

Let us look at the Opposition motion and amendments. Labour’s motion does not really say anything at all, apart from saying that the draft budget is unacceptable—I assume that that is to get the Tories on board, but it might have been more honest if it had set out what the party believes. The most honest amendment is that of the Greens who go straight in with a commitment to raise tax. The Conservatives’ amendment appears to be honest, saying that they want to cut tax, but the hypocrisy comes when Conservative speakers tell us that they want to raise expenditure, as Brian Whittle did in relation to sport and Graham Simpson did in relation to local government. Sadly, the Liberal Democrats are the most predictable, with a wish list of five areas. I think that they have costed their proposals at £400 million, but they have given no explanation of where that money is to come from.

There is room to improve the budget process, but I do not have time to go there today.

I certainly can support the budget in its current form, but let us see whether we can all improve it together.

16:40  

I declare an interest as a councillor in the City of Edinburgh Council.

I welcome this debate, which has been secured by the Labour Party. It is helpful for us to be able to air our views at this early stage.

I have been a councillor in Edinburgh for more than 10 years. Over that time, I have seen the national Government cut local authority money year after year, which means that front-line services have been cut. That has happened again this year, with the local authority in Edinburgh due to get less money. Not only are we getting less money, but we are asking the people of Edinburgh to pay more of their money. Under the SNP Government’s proposals, council tax charges will increase by 7.5 per cent at band E and by 22.5 per cent at band H. That means that somebody who lives in a band H house will pay over £500 more a year. People in those houses are often elderly people and others who simply cannot afford to pay that money.

It gets worse. If, as the Labour-SNP administration in Edinburgh proposes, council tax rises by 3 per cent, there will be a 26.2 per cent increase at band H, which will bring the annual increase to more than £600. It does not stop there, because the people of Edinburgh will have a 1.6 per cent increase in household water and sewerage charges.

Will the member give way?

Not at the moment, sorry.

It does not stop even there, because the Labour-SNP administration in Edinburgh is demanding that a tourist tax be placed on every tourist bed in Edinburgh. Not only are we going to tax the people of Edinburgh more, but visitors who come to our city will have to pay more tax, too. That is simply unacceptable. VisitScotland says that such a tourist tax would damage and hinder one of Scotland’s best-performing industries. I ask the minister to confirm, in his concluding speech, that he will say no to any form of levy or tax on tourist beds.

People could surely be forgiven for thinking that they will get better services in the city as a result of those rises. However, we see that that is not the case. Services in Edinburgh will be cut as a result of decisions that are being made by the SNP Government. Local people will face worse services in education, social security and other areas. We simply have to say that that has to come to an end. Why? Because families, elderly people, the infirm and the disabled will be affected if the budget is passed in its current form.

I argue that this budget is unacceptable as it stands today. The Conservative Party will vote against it. I hope that members of every party in this chamber will have the courage to vote down this budget and say to the SNP Government that it should protect local services and stop taxing the most vulnerable in our society.

16:43  

I am disappointed by the Labour Party’s lodging of a motion that rejects the draft budget in its entirety. Just last May, the electorate delivered a resounding verdict on the manifestos of each of the parties that are represented in this chamber, and I am sure that no one here needs reminding that the SNP won a historic third term at that election, winning more seats than Labour and the Tories combined.

Before detailing exactly what the Labour Party is refusing to support, I want to address the Conservatives’ amendment and their oft-repeated claim that we are the highest-taxed part of the UK. Like many of their claims, it does not stand up to scrutiny. After a nine-year freeze on council tax, we pay on average substantially less of that tax than do folks south of the border. As others have mentioned, if we look at indirect taxation such as the prescription levy, we see that we pay nothing, while folks south of the border pay £8.40 per item.

I agree that there are universal benefits available in Scotland that are not available in the rest of the United Kingdom. Does that not logically lead us to think that we should have a progressive taxation system to fund such welcome initiatives? Otherwise, what happens is that budgets for vulnerable people are cut in order to sustain budgets for the things you mention. Progressive taxation and universalism usually go together.

We support universalism. For Scottish taxpayers, this budget upholds the much-valued commitment to free education, free personal care and free healthcare at the point of need.

Let us look at some of the specifics that the Labour Party is refusing to support. The Labour Party does not support increased investment in mental health. As someone who worked in mental health for 20 years and who is well aware that mental health care is often the poor relation of general medical services, I, for one, am very pleased to see that mental health is a focus of this budget. Investment in mental health will exceed £1 billion for the first time [Interruption.]—

I ask that members let me hear the speaker. I cannot hear her.

It is set to exceed £5 billion over the course of this parliamentary session. The investment of an additional £150 million in mental health provision over the next five years will help to reduce inequalities in the access and support experienced by those with mental illness.

Will the member take an intervention?

No—I am sorry, but I do not have time. I have taken one already.

I agree with the sentiment that was expressed by Alex Rowley and that I, too, have heard expressed: continually comparing ourselves with the English NHS is aiming somewhat low. However, when criticism of this Government’s management of the NHS is made in this Parliament, we must ask the electorate to look at how the NHS is managed in the countries where other parties are in charge.

The Labour Party, apparently, does not support community health. An additional £500 million is being invested in primary care each year until the end of this parliamentary session. That commitment will mean that by 2021-22, for the first time, more than half of NHS front-line spending will be in our community health service. Primary and community care is where most health care interactions begin and end. That investment means that as many people as possible will receive care at home or in a homely setting. It undeniably meets the priorities of the Christie commission by taking a preventative approach.

The Labour Party apparently does not support economic growth. This budget delivers investment in new and existing infrastructure projects that focus on the key drivers of economic growth. As a representative of the Highlands and Islands, I know that families and businesses in my region will welcome the investment in mobile and digital infrastructure. I know that the dualling of the A9 has been universally welcomed in my region, and in the far north we were delighted to hear a mention of the Berriedale braes in the draft budget.

Of course we want more money and faster delivery, but we know well that successive Governments in both Parliaments have failed to invest in Highland infrastructure and, at last, with an SNP Government, we see some investment.

Finally, I want to draw attention to the budget’s commitment to protecting the environment.

It has to be very brief. You must finish at exactly five minutes.

I will finish, then, by reiterating what the Government amendment states. There is much to support in this draft budget. Let us get to work and find consensus.

16:49  

Based on that speech, when the SNP was voting against budgets when the Labour Party was in government, it was opposed to doubling spending on our national health service. I think that the member should get an education on how Parliament works. Perhaps Mr Mackay can provide that education to the member.

The SNP is a political party that campaigned against austerity in the referendum, that campaigned against austerity in the UK general election and that campaigned against austerity in the Scottish Parliament election. Now, when it comes to setting its budget, it is accelerating austerity for local government across the country.

We have had 10 years of cuts and of letting down local democracy. The SNP demands that powers come to the Parliament but, when it gets those powers, it does not want to use them. Derek Mackay said at the Finance and Constitution Committee that he would consider raising income tax if that happened in other parts of the UK. It seems that he is a unionist when it comes to tax policy, or perhaps I should say that he is a unionist when it comes to Tory tax policy. The reality is that, under John Swinney and now under Derek Mackay, we have had a decade of cuts to Glasgow and across Scotland.

Since the SNP came into Government, there has been a £324 million cut from Glasgow’s budget, which represents 17.5 per cent, and there will be £150 million of cuts in the next two years. It is a party that takes a Tory cut, trebles it and gives it to Glasgow and local government across the country. It is amazing that we had a Glasgow MSP speaking in the chamber and not once uttering opposition to cuts in the city that they are supposed to represent. Glasgow MSPs, from Mr Mason all the way to the First Minister herself, are passing on cuts to the city that they are supposed to represent. The SNP’s Glasgow members are supposed to come here and stand up for Glasgow but, instead, they stand up for the SNP. They are meant to be Glasgow’s voice in the Parliament, not the SNP’s voice in the city, and they should reflect on that when they vote on the budget.

Anas Sarwar spoke about the arithmetic and the process in the Parliament. Does he not understand that, if members vote against the budget, they will be voting against £700 million-worth of extra resources going to Scottish public services?

Why did Mr Mackay vote against Labour budgets in the Parliament in the past? He needs to understand that we have to prosecute a case against a budget that will pass on £327 million of cuts to local government. I know that, in the SNP’s eyes, democracy means that you do what you’re telt. I am sorry, but it is not the job of Opposition parties to come here and do what Nicola Sturgeon and the SNP say. The job of the Labour Party, and indeed of every political party in the Parliament, is to stand up for the communities that they represent and to try to deliver fairness for people across Scotland, including in Glasgow.

Ms Forbes said that we are saying “a big, fat no”. We are saying no to austerity, to cuts to local government, to cutting off opportunity, to persistent deprivation and to letting people rot in our communities. We are saying no to cuts the length and breadth of our country to social care, education and the NHS. I listened with interest to Maree Todd talk about extra investment in mental health. The reality is that, under this Government, there are cuts to mental health budgets in integration joint boards right across the country. I see Maree Todd shaking her head. She should instead speak to her colleagues in the Parliament.

In the Parliament, we hear a lot about powers, mandates, standing up for Scotland and looking out for those who are struggling the most in our communities. We have an opportunity to use the powers that we have been given by the people of Scotland to transform our communities and the lives of the people we represent. Let us not waste this opportunity with a political gimmick and by having a game and a fight about something else; let us instead use the powers of the Parliament to reverse cuts, invest in opportunity and people’s talent and make Scotland a shining beacon right across the United Kingdom.

Mr McKee, you are the last speaker in the open debate. I can give you only two minutes, so use them wisely.

16:54  

Where to start? I will do a minute each on Labour and the Tories. Frankly, the motion is a bit of an embarrassment, because Labour has not taken the time to write down what it wants to say; instead, the motion basically rejects the whole budget. Labour may as well have lodged a motion saying, “SNP bad.”

It is the absence from the motion of any proposals—constructive or otherwise—that demonstrates why Labour is unfit to govern or to oppose. That shows why the people of Scotland have continued to reject the Labour Party at the ballot box.

Will the member take an intervention?

Please sit down, Ms Lamont. Mr McKee only has two minutes.

It is important to remember that the budget is based on the SNP manifesto on which we were elected last year, when Scottish Labour did so terribly badly. By rejecting the budget, Labour is rejecting an extra £500 million for the health service, which is £500 million more—above inflation—than the health service would have received based on the commitments in Labour’s manifesto for last year’s election.

Labour is also rejecting the changes to the higher tax threshold, which will be different to what the UK Government is doing. We are not putting forward inflation-busting increases on the 40 per cent rate, which UK Labour’s John McDonnell supported down south. Labour needs to improve its line on that.

As far as the Tories are concerned, the whole premise of their motion is based on an inaccurate assertion that Scotland is the highest-taxed part of the UK. That is not the case when it comes to council tax, which is significantly lower in Scotland than down south, or when it comes to business rates for the 100,000 small businesses that do not have to pay the small business bonus. That is also not the case when it comes to our commitment to have a lower starting threshold for basic rate taxpayers in Scotland compared with taxpayers in the rest of the UK.

16:56  

We have had a serious attempt at building consensus this afternoon: Tom Arthur accused the Labour Party of not being able to run a ménage, James Kelly asked the finance secretary to grow a backbone, and Graham Simpson said that SNP members are moaning minnies. That is a serious attempt to build consensus across the Parliament and we should respect the serious effort that everybody has made.

We need to get real: this Parliament needs to reach an agreement on the budget and, given this afternoon’s debate, we will not reach that agreement. Where is the serious attempt to come to an agreement? There has been no such attempt, just insults flying back and forward.

John Mason made an attempt, before spoiling it by saying that there was a bit of pocket money that could be handed out to the minor parties to try to reach an agreement. We need far more than that to have a radical change in the budget. He listed what was, in his mind, a huge list of successes, but failed to mention some significant problems. Those problems include the 150,000 places that have been cut from colleges; the slipping of the international standing of our schools, according to the Organisation for Economic Co-operation and Development; the 500,000 teacher sick days that are due to mental health problems; the 8,500 NHS staff who are going off sick because of mental health issues; police morale being very low; problems with the control rooms; and the backfilling of civilian jobs by experienced police officers. There are serious problems in our public services and our party has made a serious attempt to come up with some answers.

Jackie Baillie’s speech was excellent. I whole-heartedly agree with her that our budget, especially in the current context, should be focused on getting the economy back on track, because the economy in Scotland is in trouble. She rightly pointed out that unemployment is up, employment is down and growth is really struggling. We have Brexit coming down the track and we have serious skills shortages. She also noted that economists say that the best investment that we can make is in our people. I happen to believe that the best investment that we can make is in our children at the very earliest age—with nursery education—but she is right that investing in skills and people should be at the heart of the budget in order to grow the economy. The Tories say that the only way to grow the economy is to slash and burn—to cut taxes. They say that that is the only answer, and I reject that approach.

Does Mr Rennie agree that one of the key things that could be done to grow our economy is for the Scottish Government to rule out a destructive second independence referendum?

Murdo Fraser reached for consensus—he did very well there, and I can agree with him. I thought that he was going to say something else on which I would disagree, but I agree with him absolutely on that.

Jackie Baillie was right in her focus. She was also right to say that Nicola Sturgeon paraded herself in London and argued that her party was the anti-austerity party but then failed to use the powers that have been devolved to her own Parliament.

Our offer is a reasonable one, and it is costed. We said that we would put income tax up by a modest 1p, which would raise £500 million, and in our letter to Derek Mackay, we came down from that figure. We are not expecting to get all our manifesto into the first budget, although we want it to be delivered over this session of Parliament, of course—

Will the member give way?

I will not give way just now.

We are prepared to be reasonable, which is why we have limited our requests to Derek Mackay for the first budget. We have said that there should be an increase in college funding to bring it back to its peak of £93 million. We have said that the pupil premium needs at least to match what we are doing in England, where the policy has proven to be successful in closing the inequality gap, and that the police should get an extra £20 million. We have said that we must deal with inequality in relation to transport for the northern isles; the road equivalent tariff system does not apply there, so we need measures on ferries as well as on flights. We have said that there must be some attempt to deal with the problems in the alcohol and drug partnerships.

We believe that all those things are at the heart of getting our economy back on track. We need to invest in people—for example, by dealing with the mental health problems that it is clear exist among staff in our public services, given that so many of them are going off sick. Investing in our people is the best way to get our economy back on track.

I make a plea. I do not want to make cataclysmic predictions, but I think that we are heading towards another election—if the debate next week is the same as today’s debate, we will not reach an agreement. We have to make some compromises, and Labour and the Conservatives must come to the table with serious proposals. So far, I have not seen any such proposals.

We have made a big effort to come forward and talk to Derek Mackay, and I will meet him later today to follow up on our discussions. Those discussions might not be successful—the gap between what we want and what Derek Mackay wants is huge just now, and we will need to work to close it—but others need to step up and make a serious effort to try to get the budget agreed, or we will be heading towards an election.

17:02  

I agree with Willie Rennie that the debate has been mixed at best. Yes, Opposition parties in a period of minority government need to come forward with positive and constructive ideas, but the minority Government must demonstrate a willingness to compromise and give ground. We have not yet heard anything specific from the Government in that respect.

Mr Mackay said that it is a historic budget, and he is absolutely right. For the first time, we are setting income tax policy for Scotland in a budget in this Parliament. We must, therefore, take the historic action on progressive taxation that such an opportunity affords us—the action for which many of us, including many SNP members, activists and politicians, have historically argued.

During the Finance and Constitution Committee’s budget scrutiny, I asked the finance secretary about his commitment to progressivity as a core element of the Scottish Government’s tax policies. I asked him whether he believes that the current income tax rates and thresholds are progressive enough at present, but I did not get a clear answer to that question of principle. If the Scottish Government is presenting what is pretty much a status quo tax policy in relation to the rates and thresholds that apply this year, that implies that it believes that income tax is progressive enough at present and does not need to change. I do not think that that should be accepted.

The purpose of tax policy is an unstated aspect of the debate. Part of the purpose is, of course, to raise the revenue that we need to invest in public services. As was mentioned by members from pretty much every political party in the chamber, the impact on services will be significant. Even if the Conservatives believe that economic policies can be used to expand the tax base—I point out that closing down the loopholes that have allowed corporate profits to be taken out of the tax base is one way that we could do that—councils are setting their budgets now with the resources that we will provide them with in the coming weeks through the budget. We need to be realistic about the practical and immediate consequences of the choices that we make.

There is another purpose of tax policy: to provide fairness in the distribution of wealth in our society. We need proactively to reverse the unfair distribution and centralisation of wealth and its concentration in ever fewer hands over recent years and decades.

Let me restate some Green proposals for income tax from last year’s Scottish Parliament election campaign. There should be a significant increase in the additional rate, but with an increase in the higher rate as well. We should break the basic rate into two, so that we reduce income tax for everybody earning below the average full-time salary. By doing that, we can redistribute wealth in a fairer way.

That is not the only way to achieve that. I have heard others talk about introducing a 30p band, and I suspect that that argument will grow over the coming year, but we need to take action this year if we are to begin to reverse the trend of recent years. There is a long way to go to rectify the long history of unjust, unfair economic policy that is designed around the false notion that there are a small number of people in our society who should be described as “wealth creators”. In reality, all of us are involved in the creation of wealth, whether that is because we are wealthy investors or businesspeople, work for a wage, care for or educate the next generation or volunteer in our community. All of us are wealth creators, and we deserve to be remunerated fairly. That means reversing that concentration of wealth.

I am disappointed by the fixation on increasing the personal allowance. I hear that proposal from the Conservative Party and from the Liberal Democrats. I regret that, despite hearing SNP members share my objection to that in the past, it still seems to be SNP policy, too. Increasing the personal allowance gives no benefit to those on the lowest incomes, because they are already below the personal allowance level. Most of the benefit of increases to the personal allowance goes to households on higher-than-average incomes. That is not a progressive way to redistribute wealth in our society.

Derek Mackay said that the debate should not be a matter of playing games. I agree completely. We have seen in the past that brinkmanship is the wrong way to have such debates. I and my colleagues will approach the matter with seriousness, but that also applies to the Government. I have no interest in theatrics for the sake of it in tonight’s vote. I will abstain on the Government’s amendment—and I expect that it may be agreed to on that basis—but we will vote against the amended motion unless it includes the Green amendment.

The discussions that are mentioned in the Government’s amendment can be constructive. They have certainly been friendly and professional, and I appreciate the opportunity to have them, but it is too soon to judge whether they have been constructive, because they have led to no substantive outcome yet.

To be clear, as well as voting against the amended motion if it does not include the Green amendment, we will also find ourselves taking the same position on the budget itself if it does not include meaningful change on taxation to fund local services.

I am sorry to cut members’ time in such an important debate, but we have to move on.

17:08  

The motion that is before Parliament is succinct and clear, and our amendment is just as apt. In my closing remarks for the Conservatives, I do not intend to cover the same ground as Murdo Fraser except to restate that given that the Scottish Government budget is increasing thanks to decisions that have been taken at Westminster, it flies in the face of all logic and fairness for Derek Mackay to continue to insist that Scotland will become the most taxed part of the UK.

Before the Christmas break we heard the Scottish Government’s draft budget from Derek Mackay. It is clear that, at present, that budget has the support of the governing party alone—nobody else. That is for a very simple reason: it is because there are so many problems with it that the Government has chosen not to address.

I will concentrate on two areas that are of particular interest—health and sport. I will start with health. When Derek Mackay launched the draft budget, I asked him a simple question: I asked how much of the £72 million that was stated to be an improvement fund for primary care and general practice services would go directly in support of Scotland’s general practitioners. I hoped that it was a fair question. However, the cabinet secretary not only chose not answer the question but decided to ignore the concerns of Scotland’s general practitioners. He suggested that I was asking for an increase in funding when, in fact, I was asking only for the detail of one of his commitments. Other complaints that funding has been cut were—and still are being—characterised as calls for increases in spending.

This Government has form on failing to tackle the big issues in health; I will go through them. Let us start with the damning report from Audit Scotland last year. Back in November, when we debated that report, I told Parliament that the report was critical of the fact that the Government has made little progress in shifting funding from hospitals to primary care despite the fact that, for over 10 years, almost every Audit Scotland report has called for that funding shift. We know that that shift is happening, but it is moving far too slowly and Audit Scotland has been routinely critical of it.

Will the member take an intervention?

I do not have time.

It has taken almost 10 years for the Government to address that recommendation by Audit Scotland, and the fact that the Government envisages that half of front-line NHS spending will be incurred by primary services by 2021 means that it will have taken almost 15 years, from when Audit Scotland first raised the matter, to get to that point.

Derek Mackay’s budget also announced £13.2 billion of allocated spending to health and sport, and he took great pleasure in announcing the real-terms and cash-terms increase. The SNP regularly likes to tell us that it is protecting the health budget in Scotland and increasing it in real terms. However, it also likes to tell us regularly about—and regularly to take pot shots at—the health service in the rest of the UK. For instance, how often do we hear SNP members compare the performance of the NHS in Scotland with the performance of the NHS in England, often gloating that the NHS here performs better? For once, let us indulge them with a direct comparison. During the last session of Parliament, health spending in Scotland increased by 3.4 per cent in real terms and by 9.7 per cent in cash terms, whereas health spending in England increased by 9 per cent in real terms and by 15.6 per cent in cash terms. That is more than double the investment in SNP-run Scotland.

Will the member take an intervention?

I am sorry, but I do not have time.

If members of the Government party do not like to hear that, they should not take my word for it, but should listen to the Institute for Fiscal Studies, which has said that

“the Scottish government has chosen to protect the NHS in Scotland slightly less than it has been protected in England.”

The same can be said for general practice. Over the course of the last session, spending on general practice in Scotland increased by 1.4 per cent in real terms, whereas spending in England rose by 4.6 per cent in real terms. That is more than three times the spending commitment on general practice that was made by the SNP Government.

Let me turn to sport, which is an area that is often overlooked in the debate. The amount that is invested in the sports budget in the current draft budget has fallen from £45.6 million to £41.8 million—a fall of 8.3 per cent in real terms. Only last night, many members from across the chamber spoke in my members’ business debate about the need for action to tackle Scotland’s growing obesity crisis and the necessity of getting people more physically active. It is my fear that wielding the axe on the sports budget will hamper our efforts to get Scotland fit and healthy, rather than improve our current position.

In the Health and Sport Committee yesterday, I asked officials from sportscotland about the implications that the budget proposal would have for them. The chair of sportscotland said:

“It has quite serious implications at that level in terms what we are trying to do”.

He referred to the reduction in lottery funding as “a double whammy” and said that

“If the strategy moving forward is about getting Scotland to be a healthy nation and to become active, the last thing you should be doing is cutting the sports budget”.

The chief executive of sportscotland added:

“You can’t just take lumps out of the system and hope that it will continue to deliver in engagement and participation terms but also success with medals”.

That is the reality of the draft budget—a far cry from the dry figures and statistics in the budget document. Let us remember the effects of the draft budget on everyday Scottish life—the child who will not be able to participate in a local sports team being just one example.

In the brief time that I have left, I will make some comments about other members’ speeches. It has been quite a confusing afternoon. I know that the budget process involves flirtations with other parties, but we have had John Mason sounding as though he would prefer to be in Labour and Jackie Baillie sounding as though she might prefer to be a Tory. To cap it all, there was reference to a new mythical political figure called Murdo Mackay. I cannot wait to meet him. However, Jackie Baillie made a serious point when she spoke about the importance of growing the economy. If we want a bigger tax base, we must grow the economy. Andrew Wilson gets that, but no one else in the SNP does.

You have to stop right there. Thank you very much.

17:14  

It falls to me to close the debate for the Scottish Government. I will respond to some members’ comments and I will focus on two issues that are central to the debate: the need for stability in our economy and wider society, and our partnership with local government.

I would like to say that today’s debate has provided a welcome opportunity to discuss the Government’s positive vision for Scotland and the benefits of our tax and spending proposals for 2017-18, but I do not know whether I welcome all the debate, given some of the rammies that have gone on—although there have been fairly constructive contributions, too.

I will concentrate on some of our positive vision, because our proposals include record funding for our NHS, additional investment in educational attainment and childcare, and real-terms protection for our police budget.

We are proposing a proportionate approach to income tax, building on the principles-based approach that we have taken to other devolved taxes and, of course, to a competitive business rates regime.

The budget contains key measures to support our economy and investment in infrastructure, including funding to progress our commitment to deliver 50,000 affordable homes, improve energy efficiency, enhance our digital infrastructure and take forward key transport projects across Scotland.

Our plans maintain our commitment to equality, to inclusion and to support for people on the lowest incomes, including through the Scottish living wage.

The draft budget provides a fair settlement for local government, on which a large proportion of the debate has focused. Local authorities are key partners for us. They deliver vital services and contribute massively to delivery of shared objectives in education, health, social care, economic development, housing and the environment.

As an Aberdeen city MSP, does the minister think that the funding settlement for Aberdeen—the lowest council settlement in the country—is fair?

I pay tribute to the late Brian Adam, who ensured that the SNP Government put in place a funding floor, which means that the city of Aberdeen and the north-east are much better resourced than they ever were.

Let us look at some of the topics that have come up in the debate. Miles Briggs talked about council tax, but he failed to say to the people of Edinburgh to whom he supposedly spoke that Edinburgh—like every other local authority—will keep every penny of the council tax and every penny of non-domestic rates that it raises. That is the situation.

We have set out in this year’s budget a deal for local government that is fair and offers considerable investment in key local services. There is an additional £120 million of funding for educational attainment; an increase of £107 million in funding to support the integration of adult health and social care, including meeting the costs of paying the living wage in that sector; and an increase in the local government capital grant of £150 million on the previous financial year. An additional £111m will be raised through the council tax rebanding, which, as I have said, will all be retained locally; and local authorities will be free to increase the council tax by up to 3 per cent next year, which will generate—if they so choose—up to a further £70 million. That is a fair and substantial investment package in local services across Scotland.

The Tories have had much to say about council tax today, but their manifesto proposals were little different from the ones that we put forward. Unlike south of the border, no local authority here is proposing to increase the tax by up to 15 per cent.

I turn to stability in our economy and public services. I note that Willie Rennie highlighted the challenges that we face as a result of Brexit, which poses risks to our economy and creates uncertainty for businesses, communities and households across Scotland, so we have to take that into account in everything that we do.

I have many more things that I could say, but I realise that I am short of time.

Will the minister give way?

How long do I have, Presiding Officer?

You have seven minutes in total.

I have a bit longer. In that case, I will give way to Mr Rennie.

Now that the minister has a bit more time, can he tell me, given his comment that Brexit is a threat, exactly what he is going to do about it? Will he change his budget to reflect the real challenges that we face, or is he just going to carry on as normal?

The Cabinet Secretary for Finance and the Constitution is already taking cognisance of some of the challenges. I am sure that if Mr Rennie thinks that more needs to be changed in the budget in that regard, the cabinet secretary will listen to his proposals. He has been in listening mode.

We have to take cognisance of the fact that supporting neither the budget bill, nor the tax position through the Scottish rate resolution, will leave Scotland with no approved budget. That will affect our vital public services, because it will mean that we will forgo £38 billion of public spending, including crucial investment in health, local government and education. That vital public spending pays for vital public services, so I urge all members of Parliament to engage in meaningful discussions with the cabinet secretary and to offer credible alternatives for consideration.

In his speech, Mr Balfour said that members should have the courage to reject this budget. I think that members should have the courage to converse, compromise, reach consensus and create a budget that is best for Scotland.

17:22  

I want to start with a moment of consensus and agree with colleagues across the chamber that what has happened this afternoon has perhaps not been the best advert for this place.

In many ways, Kate Forbes started it; she was the first to decry the debate as petty and puerile, and that became a theme in SNP speeches. I find that a little bit ironic, given that it was, of course, the finance secretary, Derek Mackay, who told us in his opening remarks that voting down this budget would mean wages going unpaid and the lights going out. That appeared to be the strongest argument that he could muster for voting for his budget. Every attempt to argue that substantial investment was going into Scotland’s services rung hollow from Derek Mackay, because for every pronouncement that he tried to make there is an independent expert telling us that he is about to make £327 million-worth of cuts to public services. What was also petty and puerile was Maree Todd’s comment that to vote against the budget was somehow to vote against any money for mental health, against any money for schools and against any attempt to grow the economy.

Then we had Tom Arthur’s speech, which was impassioned and contained many good things about the damage that the Tories are doing to our country. However, he also crusaded against the apparent paucity of Labour’s motion and demanded a more specific motion. However, his demand came only minutes after Bruce Crawford had told us off for daring to debate the budget at all and for somehow frustrating the whole scrutiny process.

I know that Tom Arthur is a good man and a socialist; I have heard him say very often how much against cuts he is. What a shame it was, then, to see him refuse to take any interventions. Had he done so, Labour members would have had the opportunity to remind him of the cuts that Derek Mackay made to his community when the SNP ran Renfrewshire Council.

Will the member give way?

I will let the member in once I have reminded him of those cuts. It was, of course, the SNP in Renfrewshire that cut 200 teachers, cut school buses for children and cancelled support for students struggling to get through school. Those are the cuts that the SNP made; I could also read out all the ones that we managed to stop. It is a terrible record by the SNP.

Perhaps the most puerile and pathetic thing that we heard in the debate was the suggestion from SNP members that somehow we could close our eyes and ignore the fact that there were any cuts at all. SNP members must see the impact of those cuts in their communities each and every single day. If they cannot see those cuts, they are simply not doing their jobs properly.

I remind Kezia Dugdale that we are in a Parliament, not a council chamber. Maybe the debate should have been conducted in that way.

Is it not alarming that the Labour leader does not recognise that voting against the budget means voting against £38 billion for public services and an extra £700 million towards public services?

It is very important that Scotland understands the type of finance secretary it has. I have just read out a list of cuts that he made when he was in charge of Renfrewshire Council. I will also mention some cuts that he tried to make but was prevented from making. He tried to cut a quarter of a million pounds from a home link service that supported vulnerable families, to rapidly increase care charges for elderly people and to cut classroom assistants, and he was defeated. That is the type of finance secretary we have, and that is the reality behind the debate that we have had.

On Sunday afternoon, I was fortunate to be able to see “T2 Trainspotting”. “Trainspotting” is, of course, the story of four Edinburgh men living in 1996 in a city beset with drugs and all the rest of it. “T2 Trainspotting” is a first-class film, with fantastic cinematography. Just how beautiful Edinburgh is shines through it. Two castles—Edinburgh and Craigmillar—are featured in it. Spud’s new house is in the grounds of Craigmillar castle. Craigmillar has been regenerated by the Labour Party. The community there is volatile and on the edge. That is where this matters. The £327 million of cuts are about to undermine all the progress that has been made in Craigmillar.

Let us talk about the Venchie project, which is more than a breakfast club. People do not just provide tea and toast there; they knock on the doors of chaotic families, get the kids out of their beds, put them on the bus and get them to the school gates. When the finance secretary cuts £327 million from council services, that is the type of service that he will shut down. It does not have to be that way.

Another project in that community is the Craigmillar books for babies project, which provides critical early literacy services for families with children between zero and three. That is another service that is on a knife edge—it runs from one charity grant to another—and that is the type of service that the finance secretary’s Government should support.

The neighbourhood alliance project, which is another project that seeks to protect and advance the community in Craigmillar, is about to go under. With it will go sporting facilities for vulnerable families, the community centre and the development trust. It does not have to be that way. The SNP needs to understand that.

When Derek Mackay was putting his budget together, he had two choices. He could complain about Tory cuts but do nothing about them, or he could complain about Tory cuts and use the Parliament’s powers to stop them. Unfortunately for the most vulnerable people in our society, he and the SNP went with the former.

Labour is here to say that it does not have to be that way. The Parliament has the power to raise enough revenue to stop the £327 million of cuts and instead choose to invest in our public services.

Our plans would mean the richest few paying their fair share through a 50p top rate of tax, which would be paid by those who earn more than £150,000 a year. The SNP used to support that, but the finance secretary said that he would now introduce that rate only if the Tory UK Government did the same and did it first. That is not quite being stronger for Scotland. By setting an income tax rate that is just one penny higher than the rate that Philip Hammond set, we can stop the cuts to local services, such as schools and care of the elderly.

We can choose instead to invest in education to give our young people a better chance of getting on in life, regardless of their background. We can choose instead to invest in social care so that more older people can be cared for at home, which will, in turn, tackle the growing NHS crisis. We can provide support to the most vulnerable, instead of pulling the rug out from under them, which is what I see in Craigmillar and across Edinburgh every day.

Tonight, the Parliament can unite to say that there is a different way. I know that members in other parties will not support everything that I have called for here today and will have their own particular concerns about the Government’s proposals. However, I hope that they will agree with me that the budget in its current form is unacceptable. We do not have to put the life chances of the next generation at risk by imposing £327 million of cuts on communities across the country. There is a better way and I hope that members grasp that opportunity tonight.