Meeting date: Thursday, February 25, 2021
Meeting of the Parliament (Hybrid) 25 February 2021 [Draft]
Agenda: First Minister’s Question Time, Portfolio Question Time, Budget (Scotland) (No 5) Bill: Stage 1, Scottish Income Tax Rate Resolution 2021-22, Scottish Fiscal Commission Appointment, Parliamentary Bureau Motion, Decision Time
- First Minister’s Question Time
- Portfolio Question Time
- Budget (Scotland) (No 5) Bill: Stage 1
- Scottish Income Tax Rate Resolution 2021-22
- Scottish Fiscal Commission Appointment
- Parliamentary Bureau Motion
- Decision Time
Budget (Scotland) (No 5) Bill: Stage 1
The next item of businesses is a debate on motion S5M-24224, in the name of Kate Forbes, on the Budget (Scotland) (No 5) Bill at stage 1.14:58
I start by thanking the Finance and Constitution Committee for its report, to which I will respond ahead of stage 3.
Today, we are reminded of the difference that one year can make. At this point in our consideration of last year’s budget bill, we had yet to pivot to respond to the emerging threat of the virus; that was to come in the following days. Since then, it has been clear that only by working together as a Parliament can we provide the support that our people, businesses and communities need and deserve.
That is what I have worked hard to do with this budget. I am committed to building the consensus across the chamber that we need to deliver this budget for Scotland. Why? Simply because this budget is key to supporting our economy and public services, to funding the vaccination programme and to laying the foundations for recovery. To do all that, the budget needs to pass, and that is why I appeal to parties across the Parliament to work together to secure its passage.
The constantly evolving impacts of Covid, combined with the financial uncertainty presented by the delayed United Kingdom budget, have meant that this has been a challenging budget to produce, and I recognise that it has also been difficult for Parliament to scrutinise it. I have been as open and transparent as possible in updating Parliament on our funding position. That includes the £1.1 billion of additional spending proposals that I announced last week for next year’s budget.
The delayed UK budget in March is key to confirming what the actual funding position will be for Scotland next year. It is likely that that will mean that we need to make further changes to the bill following the UK budget to ensure that the allocations reflect the available resources and to secure parliamentary support.
Over the past few weeks, I have met every party in Parliament several times, and I thank all members for their consideration of the budget and their willingness to engage in discussions. The additional £1.1 billion of spending proposals that I outlined last week reflected the cross-Parliament priorities that were identified in those discussions. It included the Liberal Democrats’ request for an increase in spending for mental health and education; it responded to the Greens’ suggestion to focus on energy efficiency measures and further steps to tackle poverty and inequalities; and it reflected the cross-party ask to extend non-domestic rates relief, increase the funds for affordable homes and enhance local government’s budget. That is because my overarching objective is to support the people of Scotland through these most challenging of months.
That brings me to the two reasoned amendments to the Budget (Scotland) (No 5) Bill today. I should state at the outset that the Government does not vote for reasoned amendments to the budget bill until negotiations with other parties have been completed. I ask Labour and the Tories to continue to negotiate in good faith before stage 2 and after the UK Government’s budget in order to make progress on their proposals.
I thank Jackie Baillie for the various discussions that we have had over the past few weeks in relation to her amendment. I remain fully committed to exploring her proposals in advance of stage 2 and after the UK Government’s budget, which will provide greater clarity on the funding that is available to us.
I am sympathetic to considering the further steps that we can take to support carers and so will carefully examine that proposal in detail over the next fortnight. Two main issues still need to be considered to ensure that the proposal is deliverable, which is why I regret that I cannot support the amendment as it stands.
One of those issues is that the Government has already committed to collective bargaining—a principle to which I know the Labour Party also holds—and I would not want anything to cut across that. Secondly, the proposal needs to be affordable. Ultimately, the Government and I need to ensure that proposals on pay, which are recurring and so cannot be covered by one-off Covid consequentials, can be funded, particularly when there will be knock-on impacts on other workforces. My public commitment today, however, is to explore carers’ pay with officials and Jackie Baillie on behalf of the Labour Party over the coming weeks to see whether we can come to a compromise.
On Murdo Fraser’s amendment, I have repeatedly thanked local government for their efforts over the past year, which is why I provided a further £275 million to local government in this past week’s statement. Anything further is subject to the UK Government’s budget, as all funding has been committed, including the pre-emptive assumption of an additional £500 million of Covid consequentials and a pledge to support businesses.
I know that the Liberal Democrats and the Greens have further asks. I hope that all parties will consider enabling the bill to pass at stage 1 so that those proposals can be considered in good faith.
While engagement across party lines continues, the budget is already delivering the certainty that businesses need. A key ask from businesses, and from members of the Parliament, was to extend this year’s rates relief for retail, hospitality and leisure for the whole of next year. I was pleased to propose that extended relief in my statement last week and to provide that certainty to businesses in these critically impacted sectors. On top of that, we now provide for the lowest poundage available anywhere in the UK, saving ratepayers more than £120 million when compared with previously published plans.
This pandemic is first and foremost a health crisis. We have a commitment to ensure that all health consequentials are passed on in full. We have not only delivered that commitment for next year but exceeded it. As I announced last week, we are proposing to provide £120 million of additional funding to help tackle the pandemic’s significant mental health impacts, exceeding the Liberal Democrats’ ask for an additional £100 million for mental health. At the same time, we are providing further support for the recovery of the national health service with an additional £60 million to continue that vital work. Overall, the budget provides a record level of spending on our health front line.
Members across the chamber have asked that we provide a fair settlement for local government. Next year’s local government settlement will be £11.6 billion. In addition, local government will receive £259 million of non-recurring additional Covid funding. The settlement not only gives local authorities the resources and flexibility to respond to the new challenges that the pandemic has created but, through our policy of guaranteeing non-domestic rates revenues, provides continued fiscal certainty that does not exist in England.
Does the cabinet secretary accept the case that has been put forward by the Convention of Scottish Local Authorities that the core funding for local government from the Scottish Government is increasing by just 0.9 per cent in the coming year?
Murdo Fraser has picked up that there is a difference between Covid consequential funding and our own core settlement funding. Out of our core settlement funding, which is designed to cover recurring costs for services that local government is key to delivering, such as education, our non-Covid recurring settlement has not increased that much, but we have tried to protect the local government settlement. Over and above that, we have passed on to local government the additional Covid consequentials for the Scottish Government, including the £259 million for next year that I mentioned, which was topped up by £275 million to help with Covid pressures. Therefore, there is a distinction to be made between recurring and non-recurring funding.
We are also the only devolved Government to have committed to extend the Covid-19 reliefs into 2021-22, replacing £719 million of non-domestic rates income.
I recognise the contribution of our public sector workers, and the ambition on all sides of the chamber, including mine, to go further on public sector pay. The UK Government pay freeze has a direct and material impact on our funding position. A balance needs to be struck between fairly rewarding public sector workers, ensuring job security and maintaining employment levels across all sectors in the wider Scottish economy. Nevertheless, our progressive approach to pay maximises awards for the lowest paid, which recognises that the impacts of the pandemic have not been felt equally across our society, while ensuring that pay rises are affordable now and in the future.
All that clearly shows that this budget will deliver on the key priorities of creating jobs and supporting our sustainable recovery while responding to the health crisis and tackling inequality. I have responded to the asks from across the chamber, and I hope that we can all come together to pass the budget and deliver this important funding for the people of Scotland.
That the Parliament agrees to the general principles of the Budget (Scotland) (No.5) Bill.15:07
The Cabinet Secretary for Finance is indeed a fortunate person, because the budget that she is setting out today is the largest in the history of devolution. It is the highest ever budget that a Scottish Administration has had to deal with, and more money than any of her predecessors in office had. That is all thanks to the broad shoulders and the deep pockets of the British Government, which is supporting individuals, businesses and public services in Scotland at this difficult time.
In this budget, revenue has increased, according to the Scottish Parliament information centre—
Will the member take an intervention?
Murdo Fraser talks about broad shoulders, but can he tell us how much of that money the UK Government has had to borrow?
Let us just be thankful—[Interruption.] Let us just be thankful that we are part of Great Britain, which is the fifth largest economy in the world, with the strength and security of a financial system that allows us to borrow money easily and cheaply on the international markets. How foolish it would be to give up the opportunity to borrow that money in such a secure financial system, as members on the Scottish National Party benches would have us do. [Interruption.] If members will all calm down for a second, I can carry on with the rest of my speech.
According to SPICe, in this budget, revenue is increasing by some 11 per cent from last year to next. Those figures take no account of the additional Covid support that we have seen in the current financial year—some £9.7 billion in Barnett consequentials, guaranteed funding for the NHS and individuals, and support for businesses throughout Scotland.
Back in January, I set out a number of our budget asks to the finance secretary, and I am pleased that many of them have already been delivered, thanks again to the additional funds from the British Government.
We asked for no further increases in income tax. That has been delivered, because there is more money coming from the British Government.
We asked for more money to employ teachers, who are much needed in our schools at this time. That is being delivered—thanks to more money from the British Government.
We asked for all Barnett consequentials arising from the extra NHS spending down south to be passed on to the health service. More money is being delivered—thanks to the British Government.
We asked for the 100 per cent rates relief for businesses in the retail, hospitality and leisure sector—which has been hard hit by Covid restrictions, as we know—to be extended for a further 12 months. That has been delivered—thanks to the British Government.
I agree with the member that all those things are wonderful. Of course, the Scottish public will not enjoy any of that unless the budget passes. Will the Tories ensure that it does?
The Scottish people will not enjoy any of it if we break our link with the British Government, which is providing all that money to back up the public services of Scotland.
We have asked for the existing business support schemes to be continued, and the Cabinet Secretary for Finance has indicated her willingness to do that. Although the existing schemes are welcome, I have raised with her before, as have many other members from different parties, the need to make sure that the schemes are as comprehensive as possible.
Too many of my constituents still say that they are not eligible for existing support schemes. Often, their businesses are not legally obliged to close—they are still permitted to trade—but they have seen a huge percentage of their trade disappear. We see that in aspects of retail, in bed and breakfasts and in parts of the tourism and events sector, and I heard about it just yesterday from people who operate in the wedding sector. Although the sector-specific funds that have been set up are very welcome, many businesses do not meet the criteria for them.
The discretionary funds that are available to local authorities are also welcome but, in many cases, the funds available simply do not go far enough to meet the need. For example, I know that, in some councils, the total that can be paid out to an individual business is £2,000. In many cases, that goes nowhere near meeting the need that must be met if we are to help businesses survive over the remaining months of lockdown restrictions.
The British Government is stepping up, extending the furlough scheme and providing direct support for businesses in Scotland. I hope that the Scottish Government will do the same with the funds at its disposal.
Although we welcome much in the budget, there are issues that remain to be addressed. Our reasoned amendment today sets out two areas of concern for us.
The first concern relates to the local government settlement. Yesterday, the Parliament discussed and voted on a fiscal framework for local councils that would provide a fair funding settlement. Conservative members proposed that councils’ budgets should increase at least in line with the total increases in the Scottish budget.
I have referred to the fact that the revenue budget that is available to the Cabinet Secretary for Finance had gone up, according to SPICe, by some 11 per cent. I accept that some of that is non-recurring funding. However, according to COSLA, core revenue funding for councils is not up by 11 per cent, or even by half of that; it is up by less than a tenth—by 0.9 per cent. That 0.9 per cent will only just cover one half of the likely increase in staff costs, if councils follow the Scottish Government’s pay policy.
According to COSLA, the revenue shortfall just to stand still in the coming year amounts to some £362 million. That money would not allow councils to do anything extra over and above what they are currently doing; it is simply what they need to meet existing commitments. The budget that is before us therefore falls short of what is required.
The Government needs to stop treating local councils as the whipping boy of the budget process. It needs to start treating councils fairly, and it should start with this budget.
The other concern that I highlight relates to the provision of free breakfasts and lunches for all primary school pupils, which the Parliament voted for last year and which needs to be delivered as soon as possible. We know that there are clear benefits in health and educational outcomes from providing such meals to young children. If the Government is serious about helping to tackle poverty and the attainment gap, it can do it now, rather than kick it into the long grass.
While there is much in the budget that we welcome, it is there only because of the deep pockets and broad shoulders of the British Government. As it stands, it is not a budget that we can support, because it falls short of what the Scottish people and Scottish society require.
I have pleasure in moving amendment S5M-24224.1, to insert at end:
“, but, in so doing, regrets that the Scottish Government’s draft Budget fails to meet the level of funding required by local authorities, as set out by COSLA, and further regrets that the Scottish Government has made no commitment in this draft Budget to fund free breakfasts and lunches for all primary school pupils.”15:14
When the Parliament passed the budget on 5 March 2020, we could not have foreseen the year that lay ahead. Eight days later, the first patient in Scotland died of coronavirus; today, the death toll stands at 7,084. Every one of those deaths is a tragedy and every person was a mother, father, son or daughter who is mourned by the people whom they have left behind.
I want to note those deaths at the start of the debate, because the proposals that are before us must be among our first steps in recovering from this national tragedy. Nothing can bring back the thousands of people whom coronavirus has taken from us, but the actions that we take today, if we choose well, can prevent more harm. They can prevent harm not only from the direct effects of the virus, but from mass unemployment that could drive hundreds of thousands of people into poverty. They can prevent harm from the suffering that could result from the NHS struggling to get back on its feet and to provide vital care to people who suffer from life-threatening diseases such as cancer, or who are waiting in pain for too long for operations, and they can prevent harm from the lagging effects of increased inequality that could damage the life chances of our young people for years and years to come.
We have the chance to choose a different direction of travel and to make it a budget for recovery—one that invests in our economy, gives us the best chance of protecting jobs and businesses, remobilises our NHS and rewards our front-line workers. There is much in the budget that we welcome, including the deep pockets of the UK Government, but it does not go far enough.
The coronavirus crisis might have exposed the deep inequalities in our society, but it did not create them. The truth is that when the pandemic hit, Scotland’s economy was still struggling to recover fully from the last recession. We cannot afford for the Government to make the same mistakes as it made after the last economic crisis.
We need from the Government a bolder and more ambitious budget that does not just take Scotland back to where we were before coronavirus, but builds the foundations for a better and more prosperous future. That is why we are genuinely disappointed that the Scottish National Investment Bank, which the First Minister called
“one of the most significant developments in the lifetime of this Parliament”
only three months ago, has had its budget cut. It is why we have called for more support for councils and for the Government to fill the £518 million Covid funding gap that local government is experiencing. It is why we want more funding for mental health. While England and Wales are spending 11 per cent of their health budget on mental health, Scotland is spending only 8 per cent, and the SNP Government cut services by £26 million in real terms between 2010 and 2019.
Is Jackie Baillie arguing that a higher percentage should be given to mental health and that a lower percentage—therefore, a cut—should be given to other health services?
There is no need for a cut. If John Mason listens to his finance secretary, he will hear that there is now a lot more money than ever going into health. It is the highest budget ever, so there is an opportunity to invest some of that new money in mental health. That is an objective that we should all share.
I turn to the people who are being most let down by the budget and who are the subject of Labour’s amendment—social care workers. Those workers have looked after some of our most vulnerable people during the pandemic and we clapped for them every week during the first lockdown. They deserve more than our praise, however. They deserve a raise.
As it stands, the budget has no provision for a pay increase beyond the living wage for social care workers. Social care workers are mostly women and are low paid, and many of them have to work more than one job to make ends meet. During the pandemic, they put themselves at risk and dealt with death on a daily basis. The truth is that they were badly let down by the Government in terms of provision of personal protective equipment, lack of guidance and routine discharge of patients with Covid from hospitals to care homes, which was a decision that created a wave of deaths that many of them had to face every day they went to work. It is unacceptable that we should be asking people to do those jobs for poverty pay.
That is why we have lodged a reasoned amendment that backs the GMB’s call for £15 an hour for social care workers. That is not just about fair pay for a day’s work; it is, fundamentally, about decency and dignity. We cannot and should not expect people to do some of the most demanding jobs in our society for poverty pay. The coronavirus crisis has opened the public’s eyes to the work that social care workers do. It is not just the workers, their unions and Labour members who are demanding action; the public also wants to see those workers being rewarded.
I thank Kate Forbes, the Cabinet Secretary for Finance, for her positive engagement on that issue. Labour’s reasoned amendment reflects those discussions and provides for a staged approach of an immediate rise to £12 per hour, followed by a review in order to reach £15 per hour. I am happy to agree to continuing discussions with the cabinet secretary in order that we can get to that point.
Let me be very clear, however. Although there is much in the budget that we would like to see being improved, if the Government accepts our amendment and, therefore, rewards social care workers and gives them the respect that they deserve, the Government can rely on Labour’s support for the budget at stage 3.
I move amendment S5M-24224.2, to insert at end:
“, and, in so doing, notes the calls for an immediate rise in 2021-22 to £12 per hour for all social care workers followed by a review to establish steps to increase this to £15 an hour to fully recognise the value of their work.”
Bruce Crawford will speak on behalf of the Finance and Constitution Committee.15:21
When I agreed to take on the role of convener of the Finance and Constitution Committee—unbelievably, almost five years ago—I could never have imagined how much of a rollercoaster I was letting myself in for. Although the mysteries of the fiscal framework and the impact of Brexit were challenging enough, they have, of course, been overshadowed by the tragic national emergency that we continue to face.
In what is probably my last speech as convener, I pay tribute to my colleagues on the committee throughout session 5, who have largely put political differences to one side in carrying out our essential scrutiny role. We have worked primarily on a consensual basis and always in a constructive and respectful manner. Indeed, we have unanimously agreed all our budget and pre-budget reports during this parliamentary session, which is an achievement for any committee that is dealing with the budget.
I sincerely thank our clerking team, which is led by James Johnston. Its members have supported, advised and—yes—sometimes cautioned me on my approach. They are remarkable, incredibly hard working professionals whom, over the course of the past five years, I have come to greatly admire. [Applause.]
Presiding Officer, it is inevitable that the focus of our report on the budget for 2021-22 has been on the economic and fiscal impact of the pandemic. We recognise that the progress of the vaccination programme provides room for optimism, but the UK and Scottish economic and fiscal outlooks remain highly uncertain. The impact of the UK’s trading relationship with the EU also remains unclear.
Given that continuing uncertainty, and with borrowing costs extraordinarily low, the committee’s view is that economic recovery from the crisis, rather than fiscal consolidation, should be the priority in the next financial year.
The committee notes that there does not yet appear to be evidence of an overall differential impact on the Scottish economy relative to the UK economy from the pandemic or from the future trading relationship with the EU. Given the way that the fiscal framework operates, that means that the Scottish budget is relatively well protected from the continuing UK-wide economic shock. However, the medium-term financial strategy highlights
“a considerable risk that the Scottish Income Tax base might prove less resilient to COVID-19”
and to Brexit,
“simply due to differences in the sectoral composition of the two economies”,
once we begin to emerge from the pandemic. The MTFS also suggests that
“differences are likely to emerge”
when business support measures such as the furlough scheme are withdrawn. The committee has invited the cabinet secretary to explain what actions have been—or can be—taken by the Scottish Government to address that considerable risk.
We have also recommended that our successor committee continue to monitor closely the impact of Scotland’s relative tax performance on the budget as the economy emerges from the pandemic and as Government support is withdrawn.
A key question for the committee was the extent to which the pandemic has had a differential impact on sections of the population and sectors of the economy. Although some sections of the population have been well protected in terms of employment and income, others have suffered economically.
The pandemic has led to more job losses, higher rates of furlough and less ability to work from home among younger, lower-income and less-educated people. The committee therefore recognises that it is highly likely that the crisis has exacerbated existing structural inequalities, with particularly severe consequences for people on low incomes.
It is the committee’s view that a fair economic recovery from Covid will require proactive measures to reduce inequalities in wealth and income, with a need for a particular focus on supporting lower-income, less-educated and younger workers into the labour market. The recovery should also help them to progress up through the labour market while driving up standards of pay and workplace rights.
The committee also suggests that, as we emerge from national lockdown, the Scottish Government should consider targeting business support at protecting the jobs and businesses that are subject to restrictions and to temporarily lower demand. That support should also be targeted at incubating emerging businesses and sectors.
The committee recognises that the fiscal and economic challenges arising from Covid-19 are enormous. However, a crisis can create new thinking. As we begin to shift our focus from crisis management to recovery, it is essential that the differential impact of the pandemic, especially on low-income families, is addressed. That also creates an opportunity to re-examine the persistent structural inequalities in our society. There can be little doubt that such inequalities have been exacerbated by the current crisis.
There should be an examination of how the structure of devolved taxes could be reformed to support a fair and equal economic recovery, and the committee recommends a fundamental consideration of what the Scottish tax system is designed to achieve. In particular, any review should consider the role of tax policy in achieving a just, sustainable and strong economy as we emerge from the grip of Covid. That should include examination of the breadth and nature of the tax base, of the impact of economic growth on the size of the tax base and of the relationship between local, Scottish and UK-wide taxes.
We recommend a national conversation, led jointly by the Government and the Parliament, which should include a wide range of voices from across Scotland. I have every confidence that the Parliament can rise to the enormous challenge it will face in session 6 in addressing the tragic and brutal impact of Covid.
I will finish on a more optimistic note. I have tremendously enjoyed my role as convener, and I wish our successor committee the very best of luck in dealing with the significant challenges that it and the new Parliament will undoubtedly face.15:28
If that is Bruce Crawford’s final speech, he will be a huge loss to the Parliament. He has made an immense contribution to political life in Scotland. [Applause.] I have always admired his persistent, polite and respectful approach to politics, despite the strain that he has faced on some occasions. I wish him well in the future.
The Liberal Democrats will vote for the budget at stage one. We will support it because of the gains that we secured from the finance secretary and which she announced in her statement to the Parliament last week: £120 million for mental health to make spending up to £1.2 billion, which was a goal that we set to address the mental health crisis; additional funds for education to help pupils bounce back from the loss of schooling in the pandemic; and more support for business that are on their knees in lockdown.
Those are the priorities that we set out to Kate Forbes in our discussions. She followed through in her statement last week and we are grateful for that; that is sufficient to secure our support at stage one. The finance secretary knows however, because I have told her, that we are on the hunt for more from the next stages of the budget. We suspect that more funds will come from the Chancellor in his budget in March, and we know the finance secretary is wise and will have kept funds back for future negotiations. We know that more money will be available.
We will be looking for support for local government, which stepped up during the pandemic when it mattered most but which continues to be at the rough end of the Government’s priorities. Local government has faced a cut to its capital budget just when investment is required. It has been compensated for the council tax freeze, but the support is not enough and is not built into the budgets for future years.
We will be looking to address the unfairness of the funding for the north-east of Scotland. We want more support for businesses and people who have been left behind, especially those in the tourism sector.
I invite Willie Rennie to say whether he would support a pay rise for social care workers.
Jackie Baillie has obviously read my speech. I will address that in a second.
On education, we want more bounce-back funds for pupils to help them to recover from the pandemic. The Scottish Government still does not have adequate plans in place to give young people in our schools the boost that they will need in the coming year.
Of course, additional support for mental health is still required, because we have a mental health crisis in this country.
There is a lot to do to put the recovery first, and we will argue for that, but I say to the finance secretary that our plans will be affordable. I will set out details in a letter to her in the coming days to ensure that, together, we fully understand what we are seeking to get.
We will abstain on both amendments, because we want to take the issues that are being raised by the Conservatives and the Labour Party into the discussions. I am particularly supportive of the aims of the campaign to pay social care workers £15 per hour. We have had discussions with the GMB about that, so I am keen to explore further with the Government what can be done in that area.
The Liberal Democrat party has always hunted for agreement, rather than chased after division. Over the past year, we have worked constructively with a host of ministers. [Interruption.] I can hear them crying out right now. They are desperate for more co-operation. However, we sometimes disagree—sometimes vigorously—because it is our role to scrutinise and challenge to ensure that things get better.
Of course, in the middle of a global pandemic that has resulted in thousands of people dying, even more people being in hospital, thousands of people being out of work and our way of life being shut down, it will take the combined efforts of everyone to overcome the challenges. We want the budget to succeed in getting money to schools, to businesses and to people who need mental health support. There are no guarantees that we will support the budget at stage 3 but, with good will and a bit of give and take on both sides, it might just be possible. At a time of crisis, we must do our best to make things work.15:32
I assumed that we would hear from Bruce Crawford in the stage 3 debate on the budget but, if that was his last contribution as the convener of the Finance and Constitution Committee, I thank him for his work in that role. I think that those thanks will be echoed by members of all parties, including everyone who has served on the committee.
The Green approach to budgets has always focused on putting forward positive, workable proposals that seek to make improvements. Our work is the reason why there have not been the cuts to local government that the SNP has proposed since 2016. It is why Scotland has a fairer tax system, which the Greens alone proposed at the last election. It is why there has been progress on issues from marine protected areas to local rail, and from teachers’ pay to energy efficiency. It is also why free bus travel for under-19s will be introduced this year.
While others often seem to think that defeating the budget and throwing public services into crisis should be their objective, we know that winning improvement is the real objective. Although voting down a budget can be a necessary step, it should be a last resort.
This year, we have set out clear challenges for the Government, one of which is supporting household incomes—especially targeting those who are most in need. For goodness sake’—if the Government can afford a council tax freeze, which will give the biggest savings to the wealthy, it must be able to take more progressive steps, too. Such steps might be taken via social security, by cutting other costs such as energy bills and public transport or, indeed, by ensuring fair public sector pay. It is not for any political party to undermine the role of unions by determining what they should accept, but it is clear that the Government will need to go further to meet reasonable demands.
We have also set out proposals to take forward a truly green recovery. All political parties talk a good game on that, but they then keep backing oil and gas, aviation, road building and all the failed priorities of the past. Those need to be replaced with investment in a sustainable future.
We have put those priorities to the Government. We do not yet have agreement, therefore we cannot yet support the budget bill and will abstain to allow it to proceed to stage 2. Such a situation was probably inevitable given that, yet again, the UK Government has delayed its own budget until after the Scottish budget has been published. It seems committed to wrecking its own fiscal framework.
I turn to the amendments. The Tory amendment refers to the “draft Budget”, which of course does not even exist. It also casts judgment on the settlement for local government before we know what the final position on that will be. As for the Labour amendment, I strongly support the call for fair pay for social care workers. However, Labour members know that no possible amendment to the budget could achieve that. The Scottish Government is not the employer of social care workers and cannot directly change their pay rate. As the campaign by Unite the union makes clear, if we are to achieve that we need national and sectoral bargaining that covers all care workers, which the Greens proposed in our green new deal for workers paper last year.
Scottish Greens will therefore abstain on the motion and on both amendments. We will continue to work toward budget amendments to achieve improvement for Scotland’s people, both in the immediate crisis in household incomes and in the long-term drive for a green recovery.
We move to the open debate.15:36
I am conscious that, as the first back bencher to make a contribution to the debate, this comment might be premature. However, this has been the most encouraging stage 1 budget debate in which I have participated in my five years in the Parliament. We have heard substantive contributions from across the parties, and a clear desire and willingness to engage to achieve a budget that reflects all our shared priorities. That demonstrates that, contrary to what some might suggest, the Parliament is a robust institution and that when people come together and work together in good faith, results can be achieved.
Nowhere is that more in evidence than in the work of the Finance and Constitution Committee. Although I do not think that we have yet heard the last of my friend and colleague Bruce Crawford, I pay tribute to him and to the committee’s clerks for all their hard work.
When speaking in budget debates I am always conscious that we use a lot of big numbers that do not necessarily relate to the lived experience of our constituents. I would like to touch on that in my contribution, in which I want to get to the heart of what the budget actually means for people in Renfrewshire South.
In my constituency, five high schools, 18 primary schools and one special school will benefit from more than £1.8 million in pupil equity funding. Such funding is to be spent at the discretion of headteachers, with the aim of closing the attainment gap. In 2016, the SNP Scottish Government provided nearly £30 million in funding for a new Barrhead high school. The £1 billion learning estate investment programme will also benefit pupils in Renfrewshire South in coming years, with a new primary campus for Neilston primary and St Thomas’s primary, and in due course a new Thorn primary in Johnstone.
Families with young children will also benefit from the increase in early learning and childcare provision from 600 to 1,140 hours, which will save them more than £4,500 per child per year. Free school meals will save around £380 per child per year. Across the areas of Renfrewshire Council and East Renfrewshire Council, around 19,000 children and 12,000 families are expected to benefit from the Scottish child payment, thanks to £68 million of investment from the Scottish Government in the budget. The budget will also deliver £70 million for the young persons guarantee, which will continue to provide work, education or training for every 16 to 24-year-old in my constituency and across Scotland.
All that is being delivered in addition to on-going support and commitments, such as the provision of the baby box that is given to every family regardless of their circumstances so as to give children the best possible start in life. Since 2017, more than 40,000 such boxes have been given out in the NHS Greater Glasgow and Clyde health board area.
Health funding in Renfrewshire South will be improved through a budget increase across NHS Greater Glasgow and Clyde of more than £33 million, which will help to ensure that our front-line health and care services continue to receive the support that they require at what I am sure we will all understand is a very challenging time. Our councils have been on the front line, delivering support throughout the pandemic. Last year, more than £31 million of Covid-related funds have been given out to the local authorities that cover the Renfrewshire South constituency.
The budget increases the combined budgets of Renfrewshire Council and East Renfrewshire Council by 2.6 per cent, and that is in addition to the £90 million that is being delivered across the country to support a council tax freeze and help to protect household incomes.
I know from speaking to local business owners across Renfrewshire South the pressure that they have been under. The extension of 100 per cent non-domestic rates relief for properties in the retail, hospitality, leisure and aviation sectors for all of the next financial year will come as a huge relief. High streets across my constituency are hubs for small businesses and I know that the commitment of that support will be welcome news.
The budget will help to protect our communities as we continue to fight the pandemic. With the urgent measures that it puts in place, the budget will also provide financial stability for those who need it, easing pressure on household incomes, helping those who need it and, therefore, reducing financial burdens.
The budget gives hope that, as we focus on rebuilding, we can ensure that opportunities are available for all communities, including in my Renfrewshire South constituency and across Scotland, as we emerge from the pandemic. For those reasons, I will support the budget at stage 1.15:40
I remind members of my entry in the register of members’ interests, which notes that I am a partner in a farming business.
I recognise that the budget comes at a time when all Governments are facing unprecedented challenges. The period ahead of us will likely be the most unusual and least predictable in the history of this Parliament. However, we should also be conscious that this is a time of even more extreme uncertainty for Scotland’s businesses and people, particularly those who are concerned about the security of their jobs and incomes.
Unfortunately, this week’s statement from the First Minister did not offer a clear direction out of the tough restrictions that many businesses have been operating under. In my region, I have heard from many businesses across tourism, hospitality and a range of other sectors that have been left disappointed by the lack of a route map out of the restrictions. Those businesses have too often had lengthy waits to access support funding, and even if it has arrived, it has only just kept them afloat. Beyond that, many have made considerable losses.
Public bodies, too, have been forced to work in entirely different ways. Many schools and other centres of learning have been empty for months. Hospitals have had a complete refocusing of the care and treatment that they provide. The police have had additional demands placed on them and local councils have been handed the administration of a number of business support schemes, as well as being on the front line in social care and other services. That has put huge additional pressure on them, and in some cases, at least, it has impacted on their ability to deliver what is expected of them.
We should have a budget that is ambitious for recovery. That we should build back better approaches being a cliché, but that must be part of our consideration at every stage. As part of their scrutiny of the climate change plan update, the Rural Economy and Connectivity Committee and other committees have been considering the fact that we must aim for a green recovery that ensures that we do not go backwards in relation to climate targets, given our hard-won progress against them. A key part of that is how the Government manages its rural economy. Unfortunately, however, the backdrop is that little guidance or clarity is forthcoming from SNP ministers about the future of rural support or how it will be delivered. Our rural sector acknowledges the need for change, but it is also looking for certainty.
Despite the Government’s rhetoric, the draft budget sees programmes such as the agri-environment climate scheme being given a headline cut of 20 per cent at a time when we are told that environmental measures are more essential than ever. Another key measure is the agricultural transformation programme, which supports sustainability and innovation in farming. That saw a huge underspend last year, which was then reallocated to other areas.
All of that adds up to a Scottish Government that is happy to talk about change being essential in the rural sector, yet seems to be undermining vital capital investment schemes to achieve that, all the while piling on additional regulation. In the coming year, the LEADER programme, which is so valued by our sector, will see its spending cut almost in half.
I am curious that the member has listed a number of schemes that came from the EU. Replacement funds have not been forthcoming from the UK Government, which is why there have been substantial cuts in those areas. Will he take that up with his UK Government colleagues?
The Cabinet Secretary for Rural Economy and Tourism made that point, and I made the point back to him that that is a question of choice, given the additional funding that the Scottish Government has received from the UK Government over the past year.
The convergence money, which was hard won by the industry and the Scottish Conservatives, has been dipped into to top up the budget for the less favoured area support scheme. That involved taking money from one part of the sector and giving it away to another, in a move that NFU Scotland described as the Scottish Government “short-changing” the farming sector.
In all of this, what the sector really needs is a sense of direction and evidence that there is a strategy for the medium term, that ministers know where they are going and that the desired priorities of today will be linked to the delivered priorities of tomorrow. This budget is a missed opportunity for that.
Despite the challenges, this is—as Murdo Fraser rightly reminded us—the largest budget that any Scottish Government has ever had at its disposal. Hundreds of millions of pounds in support have found their way to this Parliament to allocate, and we have seen further unprecedented sums through programmes such as the job retention scheme directly supporting hundreds of thousands of jobs. This is a budget that would have been impossible without the security of being part of the United Kingdom.
It should be a budget that shows ambition and sets a path for the time ahead and the challenges that we face, but instead it is a budget that falls short and finds this SNP Government wanting when businesses and working people in rural Scotland need help most.15:45
At the outset of my brief remarks, I commend the finance secretary, Kate Forbes, for her very consensual approach to the setting of this year’s budget. Such a consensual approach is entirely fitting in these unprecedented times and properly reflects the very difficult year that the people of Scotland have endured, and the difficult months that lie ahead as our economy takes steps on the road to recovery and sustainable renewal. I am very pleased to note that discussions on a pay increase for social care workers are on-going, for those people are indeed angels—every one of them.
The budget set forth includes a significant number of very important initiatives, including support for public sector workers and business. In the short time available, I will highlight a few initiatives that will make a real difference to the lives of my Cowdenbeath constituents.
I very much welcome the additional £125 million to help young people, those who have been made redundant and the long-term unemployed. That includes £70 million to support the young persons guarantee, which is a key Scottish Government intervention to help young people find work, training or educational opportunity. Given the impact of the coronavirus pandemic on the younger generation, it is absolutely vital that all of us do everything that we can to help young people through to the other side of the pandemic and ensure that they are not left behind.
On those who have lost their jobs, an additional £35 million is being made available for skills and retraining, including for the national transition training fund, which specifically supports people who are unemployed or at risk of redundancy further to the pandemic. A further £20 million is to be made available to support the longer-term unemployed.
Another area of spending that will be of particular importance to my Cowdenbeath constituents is the commitment to spend £182 million to close the attainment gap. Each child in my Cowdenbeath constituency deserves the same life chances and opportunities as every other child in Scotland, and it is to the credit of the SNP Scottish Government that it is determined to make that a reality.
Housing is of course an important issue in my Cowdenbeath constituency, as it is across Scotland. The SNP Scottish Government’s planned investment of more than £3.5 billion over the next five years is very welcome news indeed.
The £90 million that the SNP Scottish Government is making available to support a further council tax freeze is very welcome and good news for households in Fife, where we hear that Fife Council has frozen council tax for the financial year 2021-22, in the light of that additional funding that is being made available to it.
It would be remiss of me not to place the Scottish Government budget in the context in which it sits, which is regrettably that it cannot take account of all of Scotland’s resources and it cannot reflect in all aspects the priorities of the people of Scotland. Rather, we can only plead with the UK Tory Government in London—a Government that we in Scotland did not vote for—to, for example, extend the furlough scheme, make the universal credit uplift permanent or request that a return to Westminster austerity politics is rejected.
Power over our resources continues to lie with Westminster, which retains the key economic levers that every other normal independent country takes for granted. What rational person hands over their money to a neighbour and gives them absolute power, without a veto, over how it is spent? Scotland has been in that condition for too long, and independence is coming.15:50
The convener of the Finance and Constitution Committee is right: Covid has exposed more than ever the class divisions in our society. The poorest and those in insecure work and unsuitable housing are twice as likely as others to die from Covid. The poorest are three times more likely to commit suicide and are more likely to die from addiction or cancer or to suffer from obesity. They are more likely to be the key workers who have kept the country from collapsing—the shop and food production workers, bus drivers, social care staff and factory workers. They cannot work from home. A person cannot drive a bus from their living room. A person does not have the option of showering an 80-year-old disabled person from the kitchen table while the banana loaf browns in the Aga.
They are the people we all clapped on our doorsteps. Some people took videos and selfies to show just how compassionate they were. Stuff your videos and your selfies. The way for the Government to show that it cares is by committing real, hard cash to improve those people’s lives.
Neil Findlay raises some really important points. One of my concerns relates to when we move back into the levels system. Some parts of the country found it really difficult to get out of levels 3 and 4. Does Neil Findlay agree that there needs to be specific resource targeted at those areas if we find that, once we move back into the levels system, they struggle to get down the levels?
I am glad that Mr Arthur has finally come round to that view. I have been arguing all my time in the Parliament that resources have to go to the communities in most need. It is just a shame that the Government has not been listening.
The way for the Government to show that it cares is by committing real, hard cash. It is not by imposing a 1 per cent pay increase, as the Government has done in the NHS, but by paying a minimum of £15 an hour in the health and social care sector.
Last week, we saw pictures of 200 people queuing up in the snow for charitable food. That shocked many people, but it should not have shocked people. That is not new, and it does not happen just in Glasgow. Every night, I pass a food van parked at the rear entrance to Waverley station that feeds queues of hungry people. Across every region, community projects are doing similar heroic work.
That is a scandal that is off the scale. A few weeks ago, I wrote to all the party leaders to call for cross-party talks to see whether we could come together to end hunger in Scotland. I received replies from Jackie Baillie and Andy Wightman, but not a word from anyone else. Are we not all ashamed to live in a country that cannot provide its citizens with food, which is the most basic human need? I am certainly ashamed of that.
What about housing? We had a housing crisis long before Covid. This week, we heard that Scotland has three times the level of deaths among homeless people compared with England. What is the Government’s cunning plan to deal with that? It is to cut the affordable housing budget by £100 million. More than half of those homeless people who have died were drug users. The Government announced an extra £50 million out of the social housing budget, which would have helped to house the very same people. It is all just a game to the Cabinet Secretary for Finance but, in the real world, on the street, people are dying.
We see the Government, which was going to scrap the unfair council tax, going back to a freeze that will deliver a massive 1 penny a month for the lowest-income households, but £30 a month for the highest earning.
Those are deliberate political decisions that dismiss the poor and the low paid because they are less inclined to vote, and reward the middle class, which does vote.
I have no doubt that the cabinet secretary will trot out her well-rehearsed lines about where the money will come from if we want to do other things. The Government pours money down the drain as if there is no tomorrow.
Let me tell her where the money will come from. It will come from the same place as the £100 million to pay off the maliciously prosecuted Rangers liquidators; the £100 million extra to pay for ferries; and the £650 million to pay for delayed discharge over five years. It can come from there, or from the £16 million that was paid for remedial work to the sick kids hospital; the £1.4 million a month in charges for the same hospital, which has not yet treated a patient; the £50 million of remedial work at the Queen Elizabeth hospital; the £1 million of taxpayers’ money that was spent on the Alex Salmond case; the salary and expenses of the cabinet secretary’s predecessor, who never turns up for his work; or the £54,000 to coach civil servants to answer questions at an inquiry. That is where the money will come from. I would rather it was spent on putting something in the mouths of hungry people and putting a roof over their heads than have the cabinet secretary and the Government pour more money down the drain.
The money is there. What is not there is the political will.15:55
I welcome the commitments that have been set out in the budget. It has a specific commitment to enterprise, which will be of immense benefit to my constituents across Dumfries and Galloway and the South Scotland region.
Tom Arthur spoke of how the big numbers impact his constituents, and that is important. The budget commits to increasing the funding that is available to Scotland’s enterprise agencies, including the newly established South of Scotland Enterprise, which became operational in April 2020 and hit the ground running at the start of the Covid pandemic lockdown. The budget commits an additional £3.4 million in resource funding and an additional £5 million in capital funding for SOSE, which is a combined additional investment of £8.4 million on top of the statutory funding that the agency is to receive each year.
Working with Dumfries and Galloway Council, SOSE has provided direct financial and practical support to over 500 businesses across Dumfries and Galloway during the pandemic, with essential support packages that range from £1,000 to £100,000. The leadership—Professor Russel Griggs and chief executive officer Jane Morrison-Ross—and their teams of staff have been absolutely fantastic and very helpful in my contact with them on behalf of constituents and businesses, for which I thank them.
Since its commencement, SOSE has been crucial in ensuring that local projects and community groups and initiatives are supported to survive and grow. SOSE has provided direct funding to community groups assisting with Covid resilience, as well as to initiatives that are actively working to make Dumfries and Galloway an attractive place for people and businesses—and we really need that. One such project is the United Nations Educational, Scientific and Cultural Organization-designated Galloway and Southern Ayrshire Biosphere reserve, which recently received £1.9 million and is also working to educate and to mitigate the impact of the climate emergency. The additional funding that is awarded to SOSE in the budget will allow continued support across Dumfries and Galloway, and it will undoubtedly continue to shine a light on our region.
The budget also contains over £100 million in funding to support infrastructure and active transport. That funding includes work to implement the recommendations in the “South West Scotland Transport Study”, which means much-needed improvements to the A75, A76 and A77, including improved east-west rail links and bus infrastructure. Many constituents have contacted me about that. I would encourage the Scottish Government to continue to ensure that those commitments are implemented and expedited as much as possible.
Almost 97,000 affordable homes have been delivered since the Government came to office, nearly 67,000 of which were for social rent, including more than 14,000 council homes. That has meant an additional 1,621 social homes and 614 affordable homes across Dumfries and Galloway in this session of Parliament alone. Since 2007, 4,484 new homes have been built in Dumfries and Galloway—[Interruption.]
I do not have the time to give way.
The member is in her last minute—these are solely four-minute speeches.
The building of those new homes has directly benefited families across my region.
Between 9 November and 31 December 2020, 1,470 people in Dumfries and Galloway applied for the Scottish child payment, which will be worth £10 per child for low-income families by the end of 2022.
I have been working with people in north-west Dumfries and with the Lochside community centre and grub club, who provide meals to local families with support from Scottish Government budget money. I have just written to the cabinet secretary asking whether the Government can help the club match money that it already has to purchase a van to deliver meals.
To conclude, I welcome the budget and I support the motion on the bill at stage 1.
I am sorry. There is no time in hand, so I have to be quite strict. I do not know why it always lands in my lap, but there we go.16:00
It is the strength of our union that has allowed us to weather the storm of this crisis and deliver unprecedented funding during the pandemic, and that is reflected in the Scottish budget boost. We are seeing an increase in funding of 11 per cent on last year as a result, bringing the resource budget to just shy of £38 billion and allowing the SNP to agree to a number of the Scottish Conservatives’ budget priorities. We are grateful for Kate Forbes’s engagement in the process. The overall spending outlook for Scotland for 2020-21 is better than it has been for some time, which is due in large part to the £9.7 million in Barnett consequentials from the UK Government. That is more funding for the NHS and for supporting most businesses across Scotland.
We analyse the budget today, at stage 1, believing that this was Kate Forbes’s chance to provide our fantastic local authorities with much-needed help at a time of national crisis, but I believe that the budget is short-sighted. For the past 14 years, the SNP has raided council budgets—[Interruption.]—I am sorry about that ringing, Presiding Officer.
You are having a bit of a musical accompaniment. I hope that somebody has found out whose it is.
It is actually a timer.
For the past 14 years, the SNP has raided council budgets, which has run down the ability of local authorities to react to the ravages of inclement weather by repairing potholes the size of craters on our roads or progressing essential flood-risk defences. Ms Forbes may remember that, in 2018, the Scottish Conservatives called for a £100 million pothole action fund. However, years later, there is still no extra support for local authorities to deal with crumbling roads. Further, the Scottish Government must recognise that we are experiencing extreme weather patterns and that an extra £150 million for flood-risk management is perhaps not enough, considering the damage that has been done to the homes of my constituents in Newcastleton in the past 24 hours, for example.
In her summing-up, I urge the finance secretary to say whether the SNP will support a fair funding settlement for local authorities. The Scottish Conservatives want funding for councils whereby they receive a set amount of the Scottish Government’s budget each year, mirroring the block grant from the UK Government. A fair funding settlement would also address concerns over the sustainability of essential youth programmes and projects that are delivered by local authorities. I appreciate that this has not all happened on the finance secretary’s watch, but, for the past 14 years, the SNP has raided council budgets to pay for its own failed bailouts and botched projects.
The amount of money that the SNP has given to local authorities has fallen by £276 million in real terms since 2013-14, which has run down local services such as youth groups and initiatives. According to Unison’s recent report, youth services are at breaking point and youth service spending in Scotland has been cut by over £11 million in the past three years alone. A report on a YouthLink Scotland member survey from June 2019 also showed a funding crisis in the sector. We know that all of that is having a disproportionate impact on young people from deprived backgrounds. Compounded by the pandemic, things are, sadly, only going to deteriorate further unless councils are given the funding that they deserve to restore services.
We will not support the budget at stage 1 tonight, because, without a doubt, this SNP budget offers little hope for local authorities that they can provide the essential services that are required to support the most vulnerable people in our communities as we rebuild our way out of the pandemic.16:03
As has been said already, the timing of the budget this year is very far from ideal. I accept that it has been incredibly difficult, over the past 12 months, for the Westminster and Holyrood Governments to plan far ahead, so I understand why the UK Government is having its budget at this point. However, quite frankly, that is still not acceptable. How can any of the devolved Governments properly set a budget when we do not know what the UK budget contains? In particular, it is essential that we know personal allowances and other aspects of income tax, as income tax is not a fully devolved tax and we can vary only certain parts of it. Clearly, the normal approach should be that the UK sets its budget first, we follow, and then local government builds on that afterwards.
On the question of a Scotland-specific economic shock, we face the slightly odd situation that the requirements for such a shock have been triggered but it does not seem that there has actually been such a shock. That seems to be because of timing differences between the Office for Budget Responsibility and Scottish Fiscal Commission forecasts. It means that we have more flexibility for the next three years, which is welcome, although that will need to be addressed in the budget for 2024-25. However, that clearly was not the scenario that was expected when the fiscal framework was put in place. Both Governments were trying to cater for a situation in which the Scottish economy took a hit that did not impact on the UK as a whole—or, at least, not to the same extent.
That shows that it is impossible to foresee all that might occur when any fiscal framework is put in place or when it is reviewed, as our fiscal framework is expected to be fairly soon. When the Organisation for Economic Co-operation and Development reviewed the Scottish Fiscal Commission, it commented that we already have one of the most complex fiscal frameworks in the world. We also heard from the Citizens Assembly of Scotland that a recurring theme was that the public do not understand our tax system. I therefore appeal to both Governments to make any renewed fiscal framework as fair as possible, certainly, and to consider whether they can make it simpler and more understandable. One aim of the settlement is that the public are able to hold the Government accountable for a particular decision, but, frankly, I do not consider that that is happening at the moment.
One of the most important sections of the Finance and Constitution Committee’s report is between pages 26 and 27: it is headed “A Fair and Equal Economic Recovery”, with the subheading “Differential Social and Economic Impact”. It seems clear that Covid-19 has made existing structural inequalities worse. The incomes of some people—in particular, the better off—have been largely unaffected by the economic downturn, whereas people on low or precarious incomes have been hit harder. That needs to be tackled through how we spend the resources that we have in the coming year—as I believe has been done in the current year—and through what we do with taxation in future years. If I get to speak in the debate that follows this one, I will touch more on that.
I want to refer to the debate that we had yesterday on local government. It is all well and fine to want a more fixed settlement for councils, but, if they are to receive more money, some other sector will receive less, and that is likely to be the NHS. I accept that the NHS has been treated relatively generously in recent years. In effect, the Conservatives are saying that the NHS has received too much funding in recent years and that local authorities have not received enough. That is a perfectly valid argument, although I am not sure that the Conservatives have actually said that at the time of previous budgets. They cannot ask only for more spending for councils; in order to be believed, they need to say that that means less for the NHS.
If members got as far as pages 39 and 40 of the Finance and Constitution Committee’s report, they would come to the section on the Scottish Parliamentary Corporate Body. Among other things, that section refers to MSP staff cost provision, which is planned to rise from £18 million by £5.8 million.
You must conclude.
As the report says, that is justified because of rising workloads, but I have to say that I have slightly mixed feelings about it.
I support the budget.16:08
I am grateful to the cabinet secretary for meeting me last week to discuss some of the budget issues. I hope that, by stage 3, she might be able to say a bit more about some of the issues that I raised with her, which I will reference in my speech today.
Willie Rennie alluded to the north-east of Scotland, and it will come as no surprise to members that I intend to focus the bulk of my remarks on the city of Aberdeen and the issues that have been faced here. On the face of it, the statistics for Aberdeen are bleak. The business rates increase in 2017, which was much rehearsed in the chamber, saw business rates in Aberdeen rise at a level that was 15 per cent above the national average. During the pandemic, 30 per cent of all notified redundancies in Scotland have been in Aberdeen city. Although 5,497 properties in Aberdeen sit under the £18,001 threshold for the small business bonus, only 2,190 receive the bonus. In percentage terms, 23 per cent of businesses in Aberdeen city received the small business bonus, against an average of 50 per cent across Scotland.
I raised with the cabinet secretary a number of things that could be considered in relation to the budget. The first concerns the welcome transitional relief that was introduced in 2017, following the revaluation. The multipliers on that transitional relief mean that the support that has been provided year on year has reduced, as was always the intention. However, because of the economic storm that has hit Aberdeen as a result of the coronavirus and the failure of the oil price to bounce back, there has been a double whammy for businesses in the area. Therefore, resetting the multipliers on the transitional relief so that it returns to 2017 levels could provide significant support for over 1,000 businesses in the north-east of Scotland.
Another thing that the cabinet secretary could do is consider the low uptake of the small business bonus in Aberdeen and understand what is driving that. Some businesses will undoubtedly fall outside the threshold as a result of the multiple properties issue, but I cannot believe that that applies to as many businesses as seem not to be receiving the funds. Work could be done with local agencies to increase the uptake of that vital support.
However, business rates are only one element. I believe that the Scottish Government needs to understand the wider issues around the costs of doing business, particularly for small businesses, and how those could be relieved. Indeed, the Federation of Small Businesses has raised with me the fact that small businesses are keen to make a digital transition to more online ways of working but, with the recent digital boost funding having been snapped up in a matter of hours, many of them do not understand where they can get the support to enable that transition.
At the start of my speech, I mentioned the issue of redundancies. In the previous financial crisis, many people who were made redundant chose that moment to start their own businesses, and we may well see another surge in new start-ups as we move into the recovery phase. I seek assurances from the cabinet secretary that the Scottish Government and its agencies stand ready to support them and ensure that they have every possibility of success in the future.16:12
I welcome the commitment to explore carers pay and look forward to the outcome of the talks that Kate Forbes is having with other parties on that matter. The issue will not be easy to deal with in the context of the UK’s public sector pay freeze, and it should be noted that the budget sets out a distinctive Scottish pay policy that, again, supports the lowest paid, charting a very different course from that taken in the ill-judged UK pay freeze. I think that we all want social care workers to be properly rewarded, and I look forward to progress on that. If there is good will on all sides, I am sure that we can achieve it.
As the cabinet secretary has said, it is clear that she does not have all the tools that she needs to build the budget that she might want to deliver in an ideal world. All the UK Government spending in response to Covid and the consequentials that are subsequently passed to Scotland come from borrowing. The block on Scotland borrowing on the financial markets, or even using unspent capital funding, to address immediate needs is simply not acceptable.
Much has been said today about the generosity of the UK Government but, of course, it is our money that we are talking about, whether we pay it in taxes or take a share of borrowing that must be paid back. The cabinet secretary has also laid out clearly that much of the additional funding that has been allocated by the UK Government is short term and is restricted to addressing the pandemic and its fallout.
The £1.1 billion spending that was announced on 15 February is, of course, welcome, and I particularly welcome the additional £120 million for mental health, which is necessary, given the trauma faced by many people and the social isolation imposed on them by the lockdown. I also very much welcome the extension of 100 per cent non-domestic rates relief for properties in the retail, hospitality, leisure and aviation sectors for all of 2021-22. As convener of the Culture, Tourism, Europe and External Affairs Committee, I am acutely aware of the challenges that are faced by businesses in those sectors.
Tourism plays a proportionally larger role in Scotland’s economy than it does in the economies of other UK nations and regions. It directly contributes 229,000 jobs, or 8.8 per cent of all Scottish employment. That reliance on the tourism sector makes Scotland particularly vulnerable to the consequences of the global pandemic.
A recent survey by the Scottish tourism emergency response group found that, out of 3,000 businesses that responded, a fifth of those that are still in operation have no cash reserves left. With the likely continuation of both international and domestic travel restrictions, the sector will face further pressures this year. I therefore welcome the additional £25 million of funding that was announced through VisitScotland business support schemes in February, which builds on the £104 million package of support for tourism and hospitality that was announced in December.
The UK Government needs to do more if we are to save our tourism infrastructure, and that is why I was pleased to hear that Kate Forbes had written to the Chancellor of the Exchequer, asking him to extend the furlough scheme beyond April, which all the tourism witnesses who came before the committee asked for.
I welcome this budget for recovery, and I urge everyone to support it. I welcome the Covid consequentials so far, although we all know that demand continues to outstrip resources, and the Scottish Government’s inability to borrow on the financial markets or to use unspent capital funding to address what we need to spend now is completely unacceptable.
We now come to the closing speeches, starting with Claudia Beamish for Labour.16:16
I welcome the cabinet secretary’s continuing offer to support other parties in seeking consensus on the budget.
I start with Scottish Labour’s call for radical action and up-front investment, on which the budget still needs to deliver if we are to kick-start a green jobs recovery and to set firm—[Inaudible.]—on the path of social justice—[Inaudible.]. Shovel-ready energy efficiency programmes would mean skilled jobs creation—[Inaudible.]—poverty and—[Inaudible.].
Early action on—
Ms Beamish, could you stop a minute? You are breaking up. Could you switch the visuals off? The sound might then improve: sometimes that trick works. Much though we like to see you, this is so that we can hear you.
Okay—thank you. I now just have the sound on. Is that better?
Indeed—it is wonderful.
That is a relief—good.
Early action on retrofitting will secure local jobs, prevent rising long-term costs and tangibly improve the lives of many people. Although the £45 million of additional funding that has been announced is welcome, it does not go far enough to prevent the increasing costs of decarbonisation that will face everyone over time and increasing fuel poverty.
There is also an issue around the overall level of public investment that is required. With their combined expertise, the Existing Homes Alliance Scotland, WWF Scotland, Friends of the Earth and other organisations are calling for a doubling of the energy efficiency budget to £244 million for the next financial year, front-loading increased investment in the immediate term.
This year, Scotland hosts the 26th UN climate change conference of the parties—COP26—and its build-up. As the sub-state host, Scotland must set an example for the rest of the world to follow with its approach to support for other countries on the front line of climate impacts. Despite that—[Inaudible.]—£3 million, and non-governmental organisations have called for that to rise to £10 million in what is a very significant year. Scottish Labour was a key voice in the Parliament for securing climate justice under the Climate Change (Scotland) Act 2009, and the Scottish Government should play a leading role in that process.
In Scotland, the pandemic has exposed many pre-existing injustices, not least in the social care system. Scotland’s current care system is not working, despite the hard work and commitment of those employed in the sector. Many communities across Scotland, including in my region, are rural. In the south of Scotland, people are struggling to access the care that they need.
A survey by the GMB union revealed that more than half of social care workers feel undervalued by the Scottish Government, and 98 per cent of social care workers feel that they are not paid properly for their job. Despite the poverty pay that is endemic throughout the sector, those workers—many of them women, as Jackie Baillie stressed—have been at the forefront of caring for and protecting our loved ones in the present Covid crisis.
The SNP needs to show that it is serious about investing in social care. Our motion calls for exactly that in noting
“the calls for an immediate rise to £12 per hour for all social care workers followed by a review to establish steps to increase this to £15 an hour to fully recognise the value of their work.”
Jackie Baillie highlighted the cabinet secretary’s offer to continue to discuss the issue. If the Scottish Government supports that call, Labour will support the budget at stage 3. Scottish Labour is clear that transformation in social care is essential and that we must put people before profits.
We need to continue to discuss our other calls for funding in the budget. On local government, this year’s budget still falls short of a fair funding settlement, with councils left to foot the bill for their response to the pandemic. We cannot have a strong, green, fair economic recovery without well-resourced local government. It is central to supporting and growing local economies through direct and indirect job creation, local investment and regeneration; I emphasise that it is also central to reducing inequality.
In my region, the SNP administration in South Lanarkshire Council consulted on the closure of seven community libraries and cuts to school janitors. Those proposals were taken off the table following pressure from the Labour group, but the SNP administration and the Tories still voted for an austerity budget, rejecting Scottish Labour’s alternative.
There is an alternative to austerity, such as the successful approach of the Scottish Labour administration in North Ayrshire Council, where regional and anchor organisations support local businesses to bid for public sector contracts, and where co-operatives, employee ownership and social enterprises are encouraged. Money stays in the local economy.
As Jackie Baillie stressed, the pandemic has exposed the inequalities in our society, which have been here for far too long. As we look to recover from the Covid crisis, Scotland needs robust investment and support where it really matters, and Scottish Labour is arguing for that today. Cuts are not the answer to the crisis.
Thank you Ms Beamish, and—
On a point of order—
I will just finish this point.
Thank you for your perseverance, Ms Beamish—we did hear you much better.
On a point of order, Presiding Officer. I realise that these are unusual times, but a member who makes a speech during a debate from their place in the chamber is normally expected to return to hear the closing speeches in that same debate. Can you confirm whether that is no longer the current convention?
That is the convention, but if members indicate to me—unfortunately, they cannot send notes to the chair now—that they require to leave the chamber briefly, I usually let that happen. If you have observed that happening, it was with my permission.
I call Maurice Golden to close for the Conservatives.16:22
Kate Forbes said in her opening speech that her
“overarching objective is to support the people of Scotland”.
We agree on that.
I pay tribute to Bruce Crawford for his stewardship of the Finance and Constitution Committee, as well as for his contributions in the chamber and for being such a statesperson, which is something that we should all strive to achieve.
I welcome the positive measures in the budget, many of which can be delivered only as a result of Scotland’s being part of Britain, as Murdo Fraser highlighted in a rip-roaring speech that referred to
“the broad shoulders and the deep pockets of the British Government”.
My colleague Jamie Halcro Johnston echoed that and outlined how the Scottish Government is short-changing our agricultural sector.
With regard to the positives, increased funding for the NHS is always welcome, and is especially so during the pandemic. Front-line staff and the army of support workers behind the scenes have, in the past year, gone above and beyond to care for us, so it is only right that we give them additional resources. Willie Rennie highlighted that mental health support should be part of that, as well.
The budget’s tax measures are also welcome. Individuals can look forward to a freeze on income tax rates, thanks to the efforts of the Scottish Conservatives. We led the charge to prevent hard-pressed families’ tax bills from rising again, as they have because of past SNP budgets. Thankfully, the SNP listened this time.
The extension of 100 per cent rates relief for retail, hospitality and leisure businesses is also welcome. Again, the Scottish Conservatives pushed for that, because we understand how vital such support is in order to protect jobs. That point was well made by Rachael Hamilton, who was accompanied by some music.
As Maurice Golden knows, I have extended non-domestic rates relief in advance of the UK Government doing so. Does that suggest that the SNP is a bit quicker off the mark in supporting businesses than is its counterpart south of the border, which has still not extended the furlough scheme or non-domestic rates relief?
There is time for interventions.
I hoped that Kate Forbes was intervening to welcome the unprecedented funding from the British Government, which has allowed the Scottish Government to be so generous, in certain cases. The initial SNP plan was to terminate the support early; I know that it will not have been easy for ministers to make such a significant public U-turn. However, by following the Scottish Conservatives plan, more than 14,000 Scottish businesses are now better able to survive the crisis. That includes our newspaper industry, which employs 3,000 people. The Scottish Conservatives felt that the SNP plan to end rates relief early was simply too risky for those jobs. Again, we intervened and, again, we saw a welcome U-turn from the SNP.
Jackie Baillie spoke about a budget for recovery. I agree with her that the budget offers such an opportunity, but as yet fails to deliver it. Perhaps that is because many businesses, including supply chain businesses, are still struggling to access support. They do not all have premises, so they are refused hardship and temporary closure funding. They are left only with local authority discretionary funds, for which eligibility varies across Scotland. In Renfrewshire, the discretionary fund is open only to businesses that pay business rates, which puts those that do not have premises back to square 1.
In Inverness, an amusement supply chain company that employs 43 people has been unable to secure funding, and is struggling to survive. The trade body, the British Amusement Catering Trade Association, has called for a discrete support package to help. I urge ministers to reconsider their opposition to that.
A cleaning business that is based in Barrhead has seen its income levels drop by 85 per cent. There is no guarantee that its hospitality-business clients will reopen fully at the end of April, and despite being the sole source of hygiene services to them, the business is not able to claim the strategic business framework grant because it is not classed as part of the supply chain. The business is not legally required to shut down, but it is not legally allowed to clean in people’s homes and, as such, it falls through the cracks. The local discretionary grant is only a one-off £2,000, which does not even touch the sides. Job losses are imminent. Many more businesses—too many to mention—are in the same position.
On the route map to recovery, the Scottish Chambers of Commerce said that
“it does not go as far or as fast as the Prime Minister did towards clarifying when we can get back to business”.
Derek Provan, who is the chief executive of AGS Airports Ltd, said:
“the First Minister provided a clear message the aviation industry is not a priority for the Scottish Government. We received no plan or framework against which we can start plotting any form of recovery.”
The Scottish Wedding Industry Alliance, which I assume is now close to the cabinet secretary’s heart, reports that the sector is in free-fall and is losing £6.5 million a day. January alone accounted for £205 million in lost business. Couples have lost hope—they cannot put their lives on hold any longer, and they do not believe that they will be able any time this year to have the weddings that they have dreamed of.
The budget choices show the SNP’s true character. Jobs, housing, transport, councils, a green recovery and even victims of crime—none of them are as important to the SNP as holding another, potentially illegal, referendum. There is still time for the SNP to do the right thing and defund referendum preparations, give councils the resources that they need and protect as many jobs as possible.
Thank you very much, Mr Golden. You kept going, heroically, despite heckling from your neighbour. I call Kate Forbes to close for the Scottish Government.16:30
I am so glad that this has been a relatively traditional budget debate, in which the only party to mention independence has, of course, been the Scottish Conservative and Unionist Party.
The past 12 months have been extraordinary and, as we approach the end of the parliamentary session, it is essential that we demonstrate unity for the people in Scotland and deliver the Scottish budget that is required to continue Scotland’s recovery from the pandemic. As we have heard, there are different nuances on the priorities and different concerns, but I think that we are all relatively agreed, right now, on what the priorities are. That is why the budget that I have presented to the Parliament will fund our key priorities for people, businesses and communities throughout Scotland. It also provides us with the opportunity to demonstrate how we work together as a Parliament to support Scotland through the most difficult of times.
In the first few minutes of my speech, I pay tribute, as others have done, to Bruce Crawford. I do not think that this will be the last time that we hear from him; I am sure that he will be back for stage 3. However, it is helpful to reflect on the fact that the reports of the Finance and Constitution Committee and most others have been consensual in their commentary on the budget that the Scottish Government has presented and on the priorities. The committee’s report, to which I will respond, highlighted the challenges of the fiscal framework that John Mason picked up on—that it has not met the challenges of Covid-related funding and that there is a need for a review, which I hope that all parties can get behind in the coming months.
I think that the budget demonstrates that either we can rise to the occasion, find consensus and make compromises, or we can just resort to the politics. Tom Arthur talked about what can be achieved in good faith. Consensus delivers results. Willie Rennie and the Liberal Democrats have demonstrated that in securing funding in the budget for their ambition on mental health and for the delivery of certain policies on education recovery.
Given that we have been a minority Government for the past few years, there has been an opportunity every year for parties to secure concessions, find compromise, negotiate on their priorities and secure improvements to the budget. It is very easy to criticise and to rail against the Government; it is far harder to solve problems and provide solutions. The budget enables every party—and indeed every member—to provide those solutions every year. Patrick Harvie, as he said, has done that on behalf of the Scottish Green Party in the past few years. He has delivered substantial changes to the budget every year. This year, he identified the need to support household incomes in order to tackle inequalities, and he talked about public sector pay. We have already delivered on some of that, and I am open to continuing discussions on other things.
The Tories listed all the great things in the budget—that is great and I might clip that speech for Twitter tonight. There are in the budget a lot of great things on which the people of Scotland depend, and a lot of elements for which businesses and communities have asked. However, of course, those elements will be delivered only if the budget is passed, as I put to Murdo Fraser. Again, it is one thing to call for things but, when they are delivered, it is quite remarkable then to vote against them.
The Conservatives also talked, as they do generally, about the deep pockets of the union. In fact, it is the deep overdrafts of the union. One wonders how every other country around the world has funded its own Covid response without being part of this great United Kingdom, but, of course, they have done it in exactly the same way as the UK Government, which is through borrowing, at record low levels of interest. It is well documented that the Scottish Government cannot borrow and is therefore reliant on when and whether the UK Government comes to a decision on policies and generates Barnett consequentials.
If we were not part of Britain, with the ability to borrow very cheaply on the international markets because of the strength of British financial institutions and the fifth-largest economy in the world, in what currency would we be borrowing money?
We have been very clear that the currency of an independent Scotland would be the currency that we have right now, which is the pound. Other small countries around the world have been able to borrow at record low interests and in some cases at negative interest rates. Meanwhile, I have had to wait for the UK Government to come to a decision on a policy that then generates funding that we can then apply to our decisions, and now we see it deviating completely from the Barnett formula and choosing to spend directly in devolved areas. Getting rid of the Barnett formula is an issue that has also raised concern in Wales and Northern Ireland among parties of a very different political persuasion.
Other members have made important points. I want to close with comments that were made by Tom Arthur and Annabelle Ewing, because they talked about the fact that, although there are big numbers in the budget, it is about the impact on real people, schools, children and young people. Within the constraints of every budget, which is required to be balanced, we have had to prioritise and make choices, and we have chosen to prioritise against our three objectives—the economic recovery, responding to the health pandemic and tackling health inequalities. This is a budget that responds to the moment. It includes support for business. Maurice Golden talked about the need to support the wedding industry, and the Scottish Government is the only Government in the UK that is supporting that industry.
The budget also sets the framework and the foundation stones for recovery over the coming year, because we need hope. We need to be bold and ambitious, and I am open, as I have been throughout the past few weeks, to working with other parties to ensure that we can be as ambitious and bold as possible in responding not only to the requests from across the chamber but, ultimately, to the needs of the people of Scotland, who depend on the Parliament to work together and deliver a budget.
That concludes the debate on the Budget (Scotland) (No 5) Bill.