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Budget (Scotland) (No.1) Bill [Session 5]

Overview

The Budget Bill is the final stage in the Scottish Government’s annual budget process. The Bill allows parliament to set public spending in Scotland for the financial year 2017-18.

The overall figure budgeted for is £34.5 billion. 

This figure includes spending on: 

  • Health and Sport – £13.3 billion
  • Communities and Local Government – £11 billion
  • Public Pensions – £4.5 billion
  • Education and Skills – £3.4 billion
  • Transport and Agriculture – £2.8 billion
  • Justice – £2.5 billion

This is the first Budget Bill for Session 5 of the Scottish Parliament.

You can find out more in the Scottish Parliament research briefing Draft Budget 2017-18 that explains the Bill.

Why the Bill was created

The Scottish Parliament has a statutory duty to produce a Budget each year. Statutory duty is the law that a company, a government organisation, or the members of a particular profession must obey.

You can find out more in the Scottish Government's Budget 2017-18 that explains the Bill.

Becomes an Act

The Budget (Scotland) (No1) Bill [Session 5] passed by a vote of 68 for, 57 against and 0 abstentions. The Bill became an Act on 31 March 2017.

Introduced

The Scottish Government sends the Bill and related documents to the Parliament.

Budget (Scotland) (No1) Bill [Session 5] as introduced

Related information from the Scottish Government on the Bill

Information on the powers the Bill gives the Scottish Government and others (Delegated Powers Memorandum)

Scottish Parliament research on the Bill 

Stage 1 - General principles

Committees examine the Bill. Then MSPs vote on whether it should continue to Stage 2.

Have your say

The deadline for sharing your views on this Bill has passed. Read the views that were given.

Committees involved in this Bill

Who examined the Bill

Each Bill is examined by a 'lead committee'. This is the committee that has the subject of the Bill in its remit.

It looks at everything to do with the Bill.

Other committees may look at certain parts of the Bill if it covers subjects they deal with.

What is secondary legislation?

Secondary legislation is sometimes called 'subordinate' or 'delegated' legislation. It can be used to:

  • bring a section or sections of a law that’s already been passed, into force
  • give details of how a law will be applied
  • make changes to the law without a new Act having to be passed

An Act is a Bill that’s been approved by Parliament and given Royal Assent (formally approved).

Delegated Powers and Law Reform committee

This committee looks at the powers of this Bill to allow the Scottish Government or others to create 'secondary legislation' or regulations.

Read the Stage 1 report by the Delegated Powers and Law Reform committee published on  January 2017.

Finance and Constitution Committee Stage 1 report 

Debate on the Bill

A debate for MSPs to discuss what the Bill aims to do and how it'll do it.

Stage 1 debate on the Bill transcript

The Presiding Officer (Ken Macintosh)

The next item of business is a debate on motion S5M-03768, in the name of Derek Mackay, on stage 1 of the Budget (Scotland) Bill.

14:31  



The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

I am delighted to lead this debate on the principles of the Budget (Scotland) Bill for 2017-18. It is undoubtedly a bill of huge importance to Scotland and a test of the maturity of this Parliament. I seek Parliament’s approval for spending plans that will have a positive impact on our economy, our public services, our communities and our environment—plans that will be supported, for the first time, by income tax proposals made under the powers devolved to us by the Scotland Act 2016.

I welcome the Finance and Constitution Committee’s report on the draft budget. The Government will respond fully to the report before stage 3, but I can offer some initial reflections in this debate. I welcome the committee’s recognition that the 2017-18 budget is fundamentally different and more complex, and I look forward to the work of the budget process review group. The review group will consider the impact of the chancellor’s announcement to alter the timing of the United Kingdom budget and I share the committee’s view that the United Kingdom Government should provide clarity on its autumn budget plans as soon as possible. I have raised this matter with the chancellor, with the full support of the finance ministers of the other devolved Administrations. The group will also reflect on the committee’s comments on transparency with regard to the operation of the fiscal framework and the associated forecasts.

I turn to the principles of the bill and to my engagement with the other political parties. The Government’s budget plans are focused on stabilising and growing our economy, empowering our communities, protecting our environment, promoting equality and improving our public services. Our plans have been framed by wider economic and political factors that have been emerging, such as the impact of the Brexit vote, and by our programme for government.

We remain totally committed to the programme for government—

Jackie Baillie (Dumbarton) (Lab)

The minister says that he wants to grow the economy. Why then has he cut the budget of his main economic development agency by 48 per cent?

Derek Mackay

I will come to Scottish Enterprise.

We are operating with a chancellor who continues to apply restrictions and constraints to our public finances. We have acted positively, investing in our country, and we will use our taxation powers in a fair and balanced way that focuses on taxing in a way that is proportionate to the ability to pay. We propose to protect low and middle-income taxpayers, at a time of rising inflation, by freezing the basic rate of income tax.

However, I recognise that this is a Parliament of minorities, where compromise and finding consensus is a necessity. We know that there is now more of a link between Scotland’s economic performance and the revenues that we have available to spend on our public services. That is why stability and stimulating economic growth is so important to this Government and it is why we will deliver measures such as the £500 million Scottish growth scheme, more investment in higher and further education, new investment in innovation and investment hubs, and of course £4 billion of investment in infrastructure across transport, public services, affordable housing and digital infrastructure.

We propose to reduce the business rates poundage and expand the small business bonus scheme, which will lift 100,000 properties out of rates altogether, and to expand rural and renewables reliefs. This budget will help us to tackle climate change, including through the national priority status that we will attach to energy efficiency.

At a time of significant challenge in our economy, this is a budget that will support jobs and lay the foundations for future growth—economic growth that must be inclusive and sustainable.

We have made it clear that education is this Government’s number 1 priority. We propose to invest £1.6 billion in higher and further education, continuing the provision of free education and maintaining 116,000 full-time college places. We are maintaining investment in skills and training and increasing the number of modern apprenticeships, as well as creating our new skills fund.

We are maintaining the £50 million attainment Scotland fund and investing an additional £120 million to go directly to our schools to tackle the attainment gap in Scotland. We also plan to provide £60 million for the first phase of work to expand early learning and childcare to 1,140 hours by the end of this parliamentary session. Overall, this is a package of measures that places equality of opportunity at the heart of this Government’s approach to Scotland’s economy.

I have said before that I believe that this budget provides a strong settlement proposal for local government, including the additional funding for educational attainment, increased capital resources and increased revenues from council tax. The budget provides real-terms protection for front-line policing and a real-terms increase in total funding to the national health service, with increases to front-line NHS budgets being invested in primary care, community care, social care and mental health.

However, I have been listening very carefully to the other parties in this Parliament across the political spectrum on both tax and spend and I have entered into negotiations in good faith in order to build the consensus that this country needs. I particularly welcome the constructive approach that has been taken by the Green Party. It has asked me to consider changes to our income tax proposals and to provide additional funding for local government. My latest assessment of the financial position this year and our projections for 2017-18 has enabled me to identify an additional £100 million of resource funding and £30 million of capital funding that could be provided through central Government resources.

That will be funded through the use of the budget exchange mechanism, updated projections of the Scottish Government contribution that is required to bring the non-domestic rates pool into balance, and a reduction in the anticipated cost of borrowing repayments next year. In my discussions with the Green Party, I have made it clear that at a time of economic uncertainty, rising inflation and rising prices, this Government does not think that it would be right to increase tax rates.

No party in this Parliament has a majority, but the considerable mandate that we were given in the election means that I believe it would not be right to make a fundamental change to the proposals we put to the people of Scotland. However, having considered the proposals put to me, I can confirm that this Government will lodge a Scottish rate resolution that sets the same tax rates as originally proposed but which applies a cash freeze on the higher rate threshold.

Murdo Fraser (Mid Scotland and Fife) (Con)

Yesterday, Scottish Chambers of Commerce warned that to create a tax differential income tax was “highly dangerous” for the Scottish economy. Why is the cabinet secretary listening to the Green Party before the voice of Scottish business?

Derek Mackay

Our proposals are fair and balanced. Some in the business community were concerned about the prospect of higher tax rates, but this Government is not proposing that. Our proposals protect basic rate taxpayers and ensure that 99 per cent of taxpayers who are on the same income this financial year will not pay any more income tax in the next financial year. However, the proposals will generate an additional £29 million of revenues in 2017-18.

The proposals that I am putting before Parliament balance the need to raise additional revenues, while asking the highest earners—the top 10 per cent of earners—to forgo a significant tax cut at a time of UK Government austerity. For the people who are covered by that higher rate, the income forgone amounts to £7.70 a week, which is less than the cost of a single prescription in England.

However, in return for that contribution, Scottish taxpayers will continue to benefit from significant investment in our public services, including above-inflation investment in the NHS, free prescriptions, free personal care, free higher education, no business rates for 100,000 small businesses, new resources to tackle the inequality of the attainment gap, investment to support our efforts on the environment, and the doubling of free childcare. In other words, they will get the best deal for taxpayers in the whole of the UK.

The Presiding Officer

Patrick Harvie. [Interruption.]

Patrick Harvie (Glasgow) (Green)

I have not said a word yet.

The cabinet secretary knows that the Greens believe that he can go further on taxation and that people who are on generous incomes such as ours can afford to pay more tax. Can the cabinet secretary confirm that the £29 million that he talked about generating by abandoning his inflation-based increase in the higher rate threshold will be added to the £130 million that he already spoke about, and will it result in an additional £160 million going into local government services up and down the country?

Derek Mackay

Let me be clear with Patrick Harvie and the Parliament that, with the support of the Scottish Green Party for all stages of the budget bill and for the local government finance order—together with agreement to allow the Scottish rate resolution to come into force—I propose to allocate those additional resources of £160 million to local government. The resources are to be allocated through the normal formula distribution and spent at the discretion of individual local authorities.

Willie Rennie (North East Fife) (LD)

Will the finance secretary take an intervention?

Derek Mackay

Once again, this Government has listened and acted.

In line with this Government’s commitments and priorities, I wish to make two further additions to the budget. My proposals already protected the police resource budget in real terms and provided additional reform funding of £36 million to continue the process of transforming the police service and to meet the VAT costs that are imposed by UK Government ministers. The Scottish Police Authority and Police Scotland will shortly set out a long-term strategy for a flexible, modern and sustainable police service that is capable of meeting the changing nature of crime and society.

Today, I can announce further funding of £25 million within the police reform and change budget to support that new phase of transformation, funded through a combination of capital and resource headroom that I judge to be available in 2017-18. That is more support for the police in Scotland.

A range of measures to support our economy were outlined in the draft budget and I have engaged further with Scottish Enterprise.

Willie Rennie

Will the finance secretary take an intervention now?

Derek Mackay

I have 30 seconds left to speak. I have spoken to Willie Rennie quite enough—it did not amount to very much.

I propose to provide an additional £35 million to Scottish Enterprise to support our economy at this time.

Presiding Officer, this budget is putting the programme for government into effect, but I also believe that it responds to requests from all sides of this chamber in a reasonable and constructive way by protecting health budgets; delivering a living wage for social care workers; delivering free tuition; expanding early years provision; making efforts on energy efficiency; increasing house building; and supporting local services.

In my draft budget, I explained that supporting it would deliver £700 million of additional spending on public services. Today, I can say that, as a consequence of my proposal, that figure now increases to over £900 million in additional spending for Scotland’s public services.

By any measure, this budget delivers for Scotland. For our economy, our communities and the wellbeing of our nation, I commend the principles of this bill and seek Parliament’s agreement to them.

I move,

That the Parliament agrees to the general principles of the Budget (Scotland) Bill.

14:45  



Kezia Dugdale (Lothian) (Lab)

Today, this Parliament has an important decision to make—indeed, one of the most important that it has ever made. We can deliver on the promises that the majority of us in the chamber made to the people of Scotland at last year’s election, when all but one party represented in the chamber said that we would stop the cuts to valued public services and invest in our economy instead, or we can walk by on the other side as teachers struggle with fewer resources with which to educate our children; as more and more carers’ visits to our elderly family members are reduced to 15 minutes; and as welfare advisers who support those who are most in need face even more cutbacks.

I listened to the First Minister very carefully at lunch time, and she said to Ruth Davidson:

“given the pressure on public services as a result of Tory austerity, it would be wrong to cut taxes for the top 10 per cent”.

I agree. Equally, however, it would be wrong to take that Tory austerity and pass it on to the poorest Scots in the face of public service cuts—Labour is just not prepared to do that. I got into politics to stand up for the very people who will be hit the hardest by the Scottish National Party’s cuts.

I also heard the First Minister refer to Labour’s position on the budget as being somehow playground politics. I say to her that I met Derek Mackay several times throughout the budget process and spoke to him on the phone, too, and the conversations were cordial and constructive. I know that he knows that, and I know that he would agree with that. I therefore reject completely the suggestion that the Labour Party has been playing games. We have been very clear from the outset—[Interruption.] We have been very clear from the outset: we said that the price of our vote was no cuts to public services. The more that they try to bait me to say that Labour was never serious about engaging with this budget, the more inclined I might be to say exactly what we were talking about in those meetings.

The truth is that the finance secretary spent the first half of the meetings saying that there were no cuts and the rest saying, “How much do you need to get rid of the cuts? We won’t do it after all.” It was completely duplicitous. The finance secretary said to me—[Interruption.] The finance secretary said to me that he had no mandate in his manifesto to increase taxes, and I said to him that he had no mandate, either, for these cuts to public services.

With the concession that he has given the Green Party to move away from his manifesto commitment on the top rate of income tax, the cabinet secretary has abandoned the principle of sticking to his manifesto, and it leaves him open to accusations about why he did not use the 50p top rate of tax. If he has moved away from his manifesto once, he can do it again in the name of protecting vital public services.

It has been Labour that, throughout this process, has been honest enough to say that if we want high-quality, universal public services, we have to talk about how we pay for them—and, crucially, who pays for them. That is why we have lodged an amendment saying that the tax powers of this Parliament should be used in order to stop the SNP’s millions of pounds’ worth of cuts to local schools and care for the elderly—services that are the very fabric of our communities across the country and which the Labour Party will always fight for.

However, Labour’s amendment is not just about stopping the cuts; it is about growing the economy. For Scotland’s economy to thrive, we need strong public services. That means good, well-funded schools giving young people the skills that they need to compete for the jobs of the future; and it means investing in the infrastructure projects that are essential to businesses across the country. In this globalised world, if we are to fight for our futures, we need to be able to attract investment into Scotland. We are competing with the world’s major economies for investment and jobs. Nations such as China and India are investing to grow their economies and Scotland must and should do the same.

However, the SNP’s budget does the opposite, and the employers looking for a high-skilled, well-educated workforce will go elsewhere if we do not invest in the greatest natural resource that this country has: its people. We know that the SNP’s constant threat of another independence referendum is not good for our economy either and is certainly not good for our future prosperity. If Scotland were ever to leave the UK, we know that that would be devastating for the public services that we all value. That is why Labour will not and cannot back any SNP plan to impose another referendum on the people of Scotland.

John Mason (Glasgow Shettleston) (SNP)

Will the member give way?

Kezia Dugdale

Not just now, thank you.

There is a different path available to us because of the new powers that the Scottish Parliament has—powers that so many of us fought for—and it is our responsibility to put them to good use, because this Parliament does not have to be a conveyor belt for Tory austerity. That is why we have come to the chamber with an alternative to the SNP’s millions of pounds’ worth of cuts; in fact, we are the only party to have lodged an amendment to the budget motion. I make no apologies for saying that Labour will not vote for an SNP budget that imposes millions of pounds’ worth of cuts on local services such as schools and care for the elderly—we just will not do it—because to do so would be a betrayal of the voters who sent us here in the first place.

Stuart McMillan (Greenock and Inverclyde) (SNP)

Will the member take an intervention?

Kezia Dugdale

No, thank you.

I know about the impact of the SNP’s cuts from my work in Edinburgh. I make a particular appeal to Patrick Harvie here. He has campaigned against austerity his entire political life and has spent the month since the Government published its draft budget warning about the impact of the SNP’s cuts on communities across Scotland—I agree with him about that. All I ask is that he maintain his opposition to the cuts to local services such as schools and care of the elderly.

Patrick Harvie

Will Kezia Dugdale give way?

Kezia Dugdale

I will give way in a moment.

Here is what the Greens manifesto actually called for: a 60p top rate of tax and a 43p rate of income tax. Those were the lofty, progressive ambitions of the Greens, but today they have settled to be the fig leaf that the nationalists so desperately want and need.

Patrick Harvie

Kezia Dugdale knows fine well that if every party in what is a Parliament of minorities was just to say, “Our manifesto or nothing,” we would be failing the people of Scotland. However, does she not recognise that what we have achieved, unlike what Labour has achieved, is an additional £12 million-plus for the City of Edinburgh Council—her city council—for public services that she is concerned about this very tax year?

Kezia Dugdale

No, I do not accept that. I say to Patrick Harvie very clearly that the tax changes announced—[Interruption.]

The Presiding Officer

Order, please.

Kezia Dugdale

The tax changes announced today constitute £29 million-worth of new money, which is one tenth of the money that we need to stop the cuts and one thirtieth of the amount of money that Mr Harvie’s party’s manifesto said was needed to stop the cuts. To accept anything less than bold use of this Parliament’s tax powers amounts to an astonishing and deeply disappointing revelation from the Greens. However, we should not kid ourselves: it is not the Greens’ responsibility to Parliament that is shining through, but the responsibility that they have put on themselves to do nothing that might jeopardise the prospect of another divisive independence referendum. The truth about the Greens is this: nationalism first; austerity second; and—somewhere down the list—their environmental credentials. If the Greens vote for this budget tonight—a budget that passes Tory austerity on to Scots—in the face of a better way, it will be remembered as the day when the Greens abandoned any claim to be a party of the progressive left.

We all remember Nicola Sturgeon as the anti-austerity crusader in the 2015 general election; now, she has become the minister for cuts. The nationalists who claim to be stronger for Scotland now want to weaken our public services and rip the heart out of our communities.

Today, all parties have the chance to back up their previous commitments with action and to say to the people of Scotland that the policies that we put forward were not just to get us through an election but were promises to be delivered. It is make-your-mind-up time. Labour stands for stopping the cuts and investing in public services. There is a better way, and I ask members to join Labour in that fight.

I move amendment S5M-03768.1, to insert at end:

“, and, in so doing, believes that Scottish income tax rates should be set as follows for 2017-18 to invest in public services: basic rate at 21p above £11,500, higher rate at 41p above £42,385 and additional rate at 50p above £150,000.”

14:55  



Bruce Crawford (Stirling) (SNP)

The Finance and Constitution Committee recognises that this is an historic budget for Scotland. The new income tax powers, combined with the previously devolved taxes, mean that approximately 40 per cent of the money that the Scottish Government spends will now come from taxation that is raised in Scotland. The Scottish Government’s borrowing powers have increased to a limit of £3 billion for capital spending and £1.75 billion for resource borrowing and cash management.

I will summarise briefly the committee’s view on the Scottish Government’s taxation and borrowing proposals. The committee recognises that there is a wide range of views on income tax, including on rates and bands, in the chamber and beyond. The members of the committee were likewise unable to come to a consensus on those matters.

On land and buildings transaction tax, the committee considers that it is too early to draw any definitive conclusions on the impact of the rates and bands from the available outturn data. On Scottish landfill tax, we noted that, as in previous years, the Government proposes to increase the rates in line with inflation. The approach is similar to that of the UK Government and is intended to address the possibility of waste tourism. On capital borrowing, the committee notes that the Government intends to utilise the maximum amount of £450 million in 2017-18.

The committee notes that the total drawdown of £915 million in capital borrowing powers for 2015-16 to 2017-18 was a result of projects being brought on balance sheet as a consequence of the European system of accounts 2010 ruling. The committee notes the impact of that drawdown on other capital projects, and asks the Scottish Government to provide a full and comprehensive analysis of the use of its borrowing powers.

As the committee makes clear, those new powers provide both opportunities and risks; that is because the outlook for the public finances is now much more dependent on the performance of the Scottish economy. There is now a direct incentive for the Scottish Government to grow the economy in order to increase the amount of tax that is raised in Scotland. However, the way in which the fiscal framework works means that it is the performance of the Scottish economy relative to the performance of the UK economy that matters. Scotland will benefit only if there is higher growth in per capita tax revenues in Scotland than per capita performance of receipts from the equivalent taxes in the rest of the UK. If Scottish tax revenues per capita grow at the same rate as those in the rest of the UK, the Scottish budget will be no better or worse off than it would have been prior to the devolution of the relevant taxes.

Given the linkage between productivity levels and future tax revenues, one of the major challenges for the Scottish Government is to ensure that productivity growth performs at least as well as in the rest of the UK. The chairman of the Office for Budget Responsibility explained to us that the defining puzzle of the present economic recovery has been that productivity has grown much less quickly than has historically been the case. He suggests that, although that is not unique to the UK, it is probably more pronounced here. The committee has therefore asked the Scottish Government what analysis it has undertaken of its options for addressing the productivity puzzle in Scotland and what opportunities the new financial powers provide to improve productivity growth.

Implementing the new financial powers and the framework would have been challenging enough during a period of economic stability. The committee recognises that the added uncertainty arising from the Brexit vote significantly increases that challenge. A key question for the committee is whether the impact of Brexit in Scotland will differ from that in the rest of the UK. We did not hear any evidence at this stage to suggest a differential impact. However, the likelihood is that rising inflation will have an impact on the Scottish Government due to the declining real-terms value of budgets and the increased costs of commitments to maintain spending in real terms. The committee has asked to what extent the Scottish Government has taken steps within the draft budget to address the potential disproportionate impact of inflationary pressures arising from Brexit on households on lower incomes and on public services.

A further significant challenge for the committee and colleagues across the Parliament is to develop our understanding of how the fiscal framework works. The Fraser of Allander institute describes it as “exceptionally complex and opaque” and “without precedent internationally”. It potentially introduces a much higher level of uncertainty and volatility to the budget process. Our report highlights three areas: how the annual adjustments to the block grant for each of the devolved taxes are calculated; forecasting tax revenues for each of the devolved taxes; and reconciling the differences between forecasts and outturn figures.

In essence, the annual budget is now dependent on the Barnett-determined block grant minus the adjustment for each devolved tax and plus the tax revenues from each devolved tax—it is quite simple really, isn’t it? The block grant adjustments and tax revenues are initially based on forecasts, which are reconciled with outturn figures once the data is available. Given the complexity of that arrangement, the committee emphasises that it is essential that there be complete transparency in how the fiscal framework operates. It is hoped that our report on the draft budget will provide some clarity on the process.

The committee also recognises that the operation of the fiscal framework is a responsibility that is shared between the Scottish Government and the UK Government. Therefore, the committee is disappointed that the Chief Secretary to the Treasury declined to give evidence as part of this year’s budget process. It is vital that we have the opportunity to hear from a minister from Her Majesty’s Treasury on the operation of the fiscal framework. We will continue to pursue the matter with HM Treasury.

The committee recognises that the new powers and the fiscal framework fundamentally change the budget process. Consequently, the committee and the cabinet secretary have established a budget process review group. The committee has asked the group to consider a number of issues that arose during this year’s process, including: budget timing, multiyear budgeting, medium-term financial strategy, and transparency and accountability.

A number of subject committees raised timing issues. The impact of the proposal to move the UK budget to the autumn will also need to be addressed, as the cabinet secretary described. The committee has also asked the review group to explore the options for a more strategic approach to financial planning.

The committee believes that consideration needs to be given to improving the transparency of the draft budget document, as the Fraser of Allander institute highlighted. For example, the committee agrees with the Local Government and Communities Committee that greater transparency is required in relation to the local government allocations in the draft budget. Due to the different presentation and sets of numbers relating to the local government settlement, some members were concerned about the level of financial resource available to local government in the settlement.

I am pleased to present to Parliament a unanimous report by the Finance and Constitution Committee for consideration. It was achieved by committee members coming to a consensus through a collective approach despite the obvious differences that existed. Therefore, I thank all members of the committee for making my job easier and the committee clerks for the professional and helpful way that they approached their task.

I commend the Finance and Constitution Committee’s report on the Scottish Government’s draft budget for 2017-18 to the Parliament for consideration.

15:04  



Murdo Fraser (Mid Scotland and Fife) (Con)

I start my remarks with an apology. In last week’s budget debate, I referred to the leader of the Green Party as Patsy Harvie. I can only apologise to Mr Harvie for that gross calumny with regard to his character. We know today that it is not the Greens who are the patsies in the chamber but the entire SNP front bench, for they have swallowed hook, line and sinker the Green Party’s hard-left, high-tax agenda. They have let Patrick Harvie pull all the strings, and it will be hard-working Scottish families that suffer as a consequence.

The Cabinet Secretary for Finance and the Constitution had a choice as he went into this debate. He could come with us, drop his plans to make Scotland the highest-taxed part of the United Kingdom and work with us to deliver an ambitious budget focused on growing the economy—

Willie Rennie

Will Murdo Fraser give way?

Murdo Fraser

Not just now.

Or he could turn sharp left and embrace the anti-growth, anti-business agenda of the Green Party. What a pity and what a tragedy for Scotland that he chose to throw in his lot with the lentil-munching, sandal-wearing watermelons on that side of the chamber. [Interruption.]

Mr Mackay was well warned by the business community as to the consequences of going further on tax than he originally intended. [Interruption.]

The Deputy Presiding Officer (Christine Grahame)

I am afraid that I cannot hear what Mr Fraser is saying, but I ask him to calm it down just a wee bit.

Murdo Fraser

Thank you, Presiding Officer. They do not like it when they hear the truth about their budget—

The Deputy Presiding Officer

No, Mr Fraser—I do not like it. That is the difference.

Murdo Fraser

Maybe they will like this more, Presiding Officer. Yesterday, Scottish Chambers of Commerce described a move to increase the tax differential between Scotland and the rest of the UK as “highly dangerous”. Today, Mr Mackay and his Government have shown contempt for the views of the Scottish business community and have demonstrated that they have zero interest in trying to help to grow our underperforming economy. They might as well put up a sign at the border saying “Scotland is closed for business”.

Willie Rennie

May I put into context what Murdo Fraser is talking about? As a result of the decision today, a person who earns £100,000 will pay £86 more than they would have paid under the SNP manifesto, but they will pay £2,080 less than they would have paid under the Green manifesto. I do not think that the Government has given way a hell of a lot.

Murdo Fraser

There we have it from the Liberal Democrats. The Greens are not hard left enough for Willie Rennie. He wants to go even further.

Derek Mackay had so many advantages with this budget. He is a lucky man, first because he has had more money to play with than ever before. By his own admission, his budget for the coming year is up on the current year, in real terms, by some £501 million. He has half a billion pounds more to spend than he had in the current year. In these budget debates, we hear a lot from members on the SNP benches about Tory cuts and Westminster austerity, but their own document tells us that, in both cash terms and real terms, their total budget for the coming year is up against the previous high point of 2010-11. When it comes to total managed expenditure, there is not a cut to be seen in the document.

However, it is not just because he has at his disposal money that his predecessors could only dream of that Mr Mackay is a lucky man. He is also lucky because he has a greater range of powers over taxation than any previous finance minister had. He has a great opportunity to use those powers and resources to build an ambitious budget—a budget for growth, a budget to expand the tax base and a budget that is worthy of the extensive powers at his disposal.

Sadly, in place of that ambition, we have a weak, hesitant, dismal set of measures that, together, amount to a budget that tells us nothing about the type of Scotland that we want to see. It is a budget that will see local services cut while council taxes are being hiked; a budget that cuts funding to the enterprise networks, even after the extra money that has been put in today; a budget that reinforces reductions in college places when we should be doing the opposite; and a budget that will make Scotland the highest-taxed part of the United Kingdom, scaring away investment and sending out a message that the risk taker, the wealth creator, the entrepreneur and the successful are not welcome here.

Patrick Harvie

Will the member take an intervention?

Murdo Fraser

Not just now.

This should have been a budget to grow the economy. Our growth rates today are one third of the UK average. Our unemployment rates are higher, our employment rates are lower and our business confidence is well below the UK average. Those are the key issues that the budget should address, but instead it will simply make matters worse.

If we grow the economy, our tax revenues will grow with it. Our research has shown that, if Scottish growth had matched UK average figures since 2007—the year that the SNP came to power—our gross domestic product would have been £3.1 billion higher over the past ten years, which equates to nearly £1,300 for every Scottish household. If we simply raised to the UK average the proportion of higher and additional-rate taxpayers—the very people on whom Mr Mackay wants to impose an extra tax burden—the Scottish finances would stand to benefit to the tune of £600 million a year in extra revenue, and what a difference that would make to the finance secretary’s spending power.

Once upon a time, the SNP used to believe that it could help grow the economy by cutting taxes. I think that the finance secretary is far too young to remember, first time round, the film genre that was the brat pack movies of the 1980s but, if he has time, I suggest that he takes a look at the 1986 John Hughes classic “Ferris Bueller’s Day Off”, in which a young Matthew Broderick sits in a class of bored teenagers listening to Ben Stein’s economics teacher trying to explain to them the principles of the Laffer curve. Has anyone seen that? Anyone?

Ivan McKee (Glasgow Provan) (SNP)

Will the member take an intervention?

Murdo Fraser

Oh—Mr McKee has seen it. He can instruct the finance secretary about it.

Ivan McKee

Mr Fraser frequently mentions the Laffer curve in this place, so I just want to ask him about that. For a single peak Laffer curve with a point of inflection where the rate of change of revenues with respect to rates—dR/dt—equals zero, can he enlighten us whether he believes that we are currently in the range where dR/dt is greater than zero or less than zero and why, or does his understanding of Laffer curves extend only to soundbites and does he have no idea what he is actually talking about? [Interruption.]

The Deputy Presiding Officer

Well, Mr Fraser—

Murdo Fraser

Unfortunately, I could not hear Mr McKee’s question, such was the hilarity generated. [Interruption.]

The Deputy Presiding Officer

Mr Fraser—

Murdo Fraser

But listen—

The Deputy Presiding Officer

Mr Fraser, sit down.

I want to hear the debate, and that goes for those on the front benches, too—not that I am looking at anybody in particular, Mr Swinney.

Murdo Fraser

Thank you, Presiding Officer.

If Mr McKee wants a lesson on the Laffer curve, all he needs to do is ask the former First Minister Alex Salmond, who was never done talking about the benefits of cutting taxes. Month after month, year after year in this very chamber, the former First Minister lectured us on the benefits of cutting corporation tax in order to grow the economy. For more than a decade, that was the central tenet of SNP economic theory. The question is: where was Derek Mackay when all the rest of us were being bored rigid by his former boss on those topics? Why was he not listening? The finance secretary might not want to remember but, in election after election, he and his colleagues stood on a tax-cutting platform. Alex Salmond at least understood how economics works. Who would have thought that we on these benches would be saying, “Bring back Alex”?

The budget represents a huge missed opportunity. It fails to address the problem of our underperforming economy; it cuts support to local government, which will mean that services are being cut at a time when the council tax is going up; and it sends out a message that Scotland will be the highest-taxed part of the United Kingdom. We will vote against the budget. It is a dismal and unambitious budget that damages Scotland. There is now only one party that champions the Scottish economy and is on the side of Scottish business, taxpayers and hard-working families, and that is the Conservative Party. If we stand alone in this chamber on their side, we do so with no regrets.

15:13  



Patrick Harvie (Glasgow) (Green)

In between the name calling and the laughable curve, the one thing that we have learned is that the Conservatives want to slash taxes for the wealthy and are deeply against cuts to public services. They used to accuse us of believing in a magic money tree, but it is clear that they are in that position today.

In a period of minority government, it is the responsibility of all parties to exercise influence for the good and to make a meaningful difference. That is a healthy kind of Parliament. I even think that it is good for ministers to know that the votes are not in the bag when they turn up to work. They need to work for those votes and convince people by compromising.

Government needs to compromise, and today the Greens have achieved the biggest budget compromise in the history of devolution in Scotland—[Interruption.]

The Deputy Presiding Officer

I want to hear Mr Harvie, please.

Patrick Harvie

I am grateful, Presiding Officer, because I know that our Labour colleagues in particular are keen to hear what we have to say.

We began the discussion by recognising that there was a big gap between Green and SNP propositions. On tax, we had the most radical proposition in the election last year, which was to cut tax for low earners. Everybody who was on a low or average income would see their tax go down, and we would move to progressive taxation as well. We proposed investing in public services and giving local councils the financial flexibility that we believe they need. We had a long list of other measures, from social security changes to low-carbon infrastructure.

Even before the draft budget was published, Greens had been making progress. The Government had committed to rolling out the healthier, wealthier children initiative, which saves money for households that are hard pressed; to creating a young carers allowance; and to protecting people in Scotland from the UK Government’s sanctions regime. That is the difference that the Green approach was making, even before the draft budget was published.

Neil Findlay (Lothian) (Lab)

Will the member take an intervention?

Patrick Harvie

I will in a moment.

As for the package that the Scottish Government has proposed for local government, there is clearly a wide range of interpretations. The Government rolls in a lot of extra budgets that we do not think should be counted as part of the core local government settlement. Others compare the budget at the beginning of the financial year with the outturn of the previous year. We do not think that either approach is appropriate.

The Scottish Parliament information centre—our independent researchers—compared the budget this year with the budget at the beginning of last year and came up with a cut of £166 million. We have set out practical ways in which the Government could reverse that cut and invest in public services.

It is also clear, from what I have been told by the cabinet secretary, that the proposition today does not take away from normal in-year financial allocations.

As I said earlier today, the cuts that are under consideration around the country at local council level are things that none of us should be willing to impose on our councils. Greens regard the cuts as unacceptable, and the basis of the compromise is not £29 million, as Kezia Dugdale said, but the addition of £160 million to the un-ring-fenced local government allocation—the biggest single budget concession since devolution.

Kezia Dugdale rose—

Patrick Harvie

That will make meaningful differences in communities up and down the country. Maybe Kezia Dugdale would like to tell us how she thinks that the £12 million in Edinburgh ought to be spent to reverse dangerous cuts.

Kezia Dugdale

When Patrick Harvie has struck the deal that he has, it is important that he is very clear with the chamber about exactly how much of the money that he has secured will come from progressive taxation. Is it, or is it not, £29 million?

Patrick Harvie

I am very clear that the Scottish Government has given far less ground than I think it should, and far less ground than I think it could, on progressive taxation. However, the reality is that an additional £160 million is going into the un-ring-fenced local government allocation.

There is a strong and unanswerable case for more progressive taxation. The SNP cites its manifesto from 2016—a manifesto, by the way, that included no pledge on what the higher rate of income tax ought to be.

Neil Findlay

Will the member give way?

Patrick Harvie

I have allowed an intervention already.

The SNP gave a pledge on the basic rate, but it gave no pledge on the higher rate. Even a modest 1 per cent increase on the higher rate would generate £80 million. A small drop in the threshold for the higher rate would generate an additional £80 million.

The fact that the Scottish Government found that money in other ways is not what I would have wished. This is not a budget that I would have written. However, nobody who cares about protecting public services in Scotland can look at the £160 million of extra investment and say, “No, thanks. I would rather just keep ranting and make no difference in people’s lives”.

I ask Labour colleagues, with respect to their position, how much more we could have achieved if a constructive approach had been taken by all Opposition parties. We could have pressed the Scottish Government to go even further. As it happens, the Greens are the only political party that has managed to persuade the Government to make any changes at all.

As for Labour’s amendment, Kez Dugdale wants to pretend that it is a budget amendment, but she knows well that the budget cannot be amended except by the Government. Even if we thought that low-income households should be paying more tax, as she wants, a basic-rate increase would affect everybody above the personal allowance level and she knows that well.

Even if we thought that low-income households should be footing the bill, there would clearly be no majority for Labour’s reasoned amendment. It is a pretext for Labour to say to what remains of its fan base how much it hates the SNP. What has that approach achieved? Has Labour’s posturing saved a single council service? Has it prevented a single cut?

Even worse, Labour is reduced to an act of desperation, with Labour activists today spending a grumpy afternoon online trolling the Greens and pretending that we voted for an aviation tax cut when that tax is not even devolved yet. I can be clear that, when the air passenger duty cut comes to a vote, the Government knows that the Greens will make the most consistent case against its policy and will continue to do so.

Greens have made more of a difference in the real world in this one budget debate than Labour has made in 10 years of opposition. It is a position that we should be proud of and—

The Deputy Presiding Officer

Mr Harvie, you are well over your last minute. Please conclude.

Patrick Harvie

I know that Green activists around the country will be putting in place the budget changes as soon as possible.

15:21  



Willie Rennie (North East Fife) (LD)

We have all listened to Patrick Harvie a lot over the years. We listened to him at the last election, when he promised us a greener and bolder Parliament. After today, it is not green and bold; it is grey and timorous. We should no longer listen to lectures from Patrick Harvie about austerity and compassion after today’s concession.

I was going to begin with a compliment to the finance secretary. I know that he does not like it; he might feel uncomfortable. Everybody praises John Swinney for what he managed to achieve over his many years as finance secretary, but I thought that he had an easy time. In his first parliamentary session, he had the Conservatives, desperate to support him at every budget in order to do down the Labour Party. That was relatively simple.

Jackson Carlaw (Eastwood) (Con)

It was successful, too.

Willie Rennie

It was quite successful, absolutely.

Then the SNP had a majority, so John Swinney did not have many hurdles to overcome. Now, in this session, the task is tougher. Derek Mackay has done pretty well. I have found him to be a very reasonable finance secretary. He works in partnership. We have had numerous meetings and telephone calls over many weeks and the discussions have been constructive. As a finance secretary, he has outshone John Swinney.

The problem is that the SNP, too, has lectured us about austerity. I remember the First Minister going to Westminster to lecture everybody about how Scotland was a more compassionate, open, generous country. If only we could follow Scotland’s model. Today, the SNP has turned down an opportunity to invest £500 million in education and £200 million in mental health. Something that everybody in the chamber tells me that they support whole-heartedly has today been turned down.

The SNP has also turned down the opportunity to invest significantly in our colleges and schools and to clear up this Government’s mess in the police service, which Alex Neil admitted was a significant problem of over £200 million. All that has been turned down today in the pursuit of an agenda that is contrary to what the SNP promised that it would deliver.

We put forward a costed and reasonable compromise package in the budget but the Scottish Government could not even accept that. It could not accept a package that was going to be bold and that recognised that all parties in the Parliament are in the minority. The SNP could not accept that compromise and it has missed a big opportunity. Its promises are hollow. We will cast a harsher eye over those promises in future years. When the SNP promises to make a big change to Scottish society, or that it will revolutionise Scottish education, we will cast a harsher eye on that.

The situation has got worse in recent months. What has the Government’s response to the Brexit vote been? It has carried on exactly as it said it would before the Brexit vote. There have been no changes whatsoever and no further investment in our economy by investing in the skills of the people. There has been no further investment in mental health and no further investment in the critical bits that will turn our economy around. None of that has changed. Despite all the lectures about Brexit and how harsh it will be, the Scottish Government has not lifted a finger to do anything about it at all. Any idea that the SNP is a party of the economy has been blown apart today.

Most of my incredulity is, however, for the Conservatives’ claims. The Conservatives stand up here and lecture everybody else about the tax rates. Today’s deal between the Government and the Green Party will deliver £86 more for somebody who earns £100,000 and the Conservatives think that that is outrageous.

Patrick Harvie

Will the member give way?

Willie Rennie

Not just now. Then they say in the same breath that they condemn any cuts to public services. If we believe in public services, we have to will the means. We have to make the difference to the tax rates. The reality is that the Conservatives will say one thing in one place and something else somewhere else. That is why they have no credibility on the economy whatsoever.

John Scott (Ayr) (Con)

Will the member take an intervention?

Willie Rennie

Not just now. Today is a big missed opportunity to have a budget that will make this country more liberal and economically strong. It was an opportunity to meet the challenges of Brexit, to invest in our people, and to get the Scottish education system back up to being the best in the world. All those opportunities have been thrown away by this timorous and grey deal.

15:27  



Kate Forbes (Skye, Lochaber and Badenoch) (SNP)

I start by saying that I am the parliamentary liaison officer for the Cabinet Secretary for Finance and the Constitution.

Back in May, Ruth Davidson declared that being a strong Opposition does not mean

“shouting louder or emoting harder, or a more frenzied gnashing of teeth”—[Official Report, 25 May 2016; c 13.]

That was almost prophetic, because that is precisely what the Opposition has become in this debate.

To continue a theme of other members, this is a Parliament of minorities—although the SNP still has more MSPs than the Conservatives, the Liberal Democrats and the Labour Party put together, we are all minorities. We are parties that were elected by the people of Scotland on different manifestos, with differing policies, plans and priorities, but with one job to do, which is to govern at all times for the people of this country.

The single most important function of Parliament and Government is to pass a budget. How we do that is a measure of maturity, but maturity has been distinctly lacking from the debate so far. Our delivering the budget means that there is a responsibility on every party genuinely to suggest credible ideas, and an opportunity for every party to actually achieve something.

Labour has, for all its noise, not got a single thing to show on the budget. It was all just noise and politics—a bit like its amendment. Labour has a £2 billion wish list of budget demands and would make people who earn more than £11,500 pay for them. That is not fair: that would shift the burden of Tory austerity on to working-class people.

John Scott

Can Kate Forbes tell us—as she asks for suggestions—the form of words that health board recruiters should use to attract and recruit consultants and health workers from elsewhere in the United Kingdom, given that moving from England, Wales or Northern Ireland will cost them money under the Scottish Government’s tax proposals?

Kate Forbes

My response to that is twofold. First, one of the unhelpful mistruths that have been spread is that people’s taxes will rise under the proposals. In fact, 99 per cent of Scottish taxpayers will not pay a penny more. Secondly, anyone who moves to this country gets free childcare, free prescriptions, free education for their young people and free personal care for the elderly. If that is not an attractive proposition, I do not know what is. The Tories have spun a relentlessly narrow narrative about higher taxes, which I argue does more to scare off investors than the SNP Government does. The Tories are incredibly miserable about Scotland’s future. They talk about tax because they have nothing else to talk about—except for the Brexit shambles.

We know how the Tories would balance the books: they would cut tax for the richest to cut services for the most vulnerable. However, the books do not balance: under the Tories’ plans, a person on the additional rate would save approximately £6 a week, but would spend more than £8 on a single prescription. That does not add up.

Back in May 2016, the First Minister said:

“We will work hard to build consensus and partnership.”—[Official Report, 25 May 2016; c 5.]

She would not do that, however, at the cost of “inertia” in Parliament. Despite the apathy and lack of engagement among both the Labour Party and the Tories, we still come here today with a budget for the people of Scotland. The budget acknowledges that there is pressure on our public services, so it will not cut taxes for the top 10 per cent of earners at the cost of care for our elderly, education for our children and services for our society. The budget recognises that real people still face real tough financial times, so we will not raise income tax.

Daniel Johnson (Edinburgh Southern) (Lab)

Would Kate Forbes please explain to me why it is so unthinkable to use income tax while her party is more than happy to force councils to put up council tax, and why that is perfectly justifiable?

Kate Forbes

My response to that is simple. The newsflash is that real people out in the real world, who are not interested in our political rhetoric, are struggling to make ends meet. Labour’s plans would mean that all people who earn more than £11,500 would start paying income tax. That would shift tax so that working-class people would pay more. We have not increased taxes.

I close with a reminder of what other parties may find themselves voting against—

Johann Lamont (Glasgow) (Lab)

Will the member take an intervention?

The Deputy Presiding Officer

The member is in the last minute of her speech.

Kate Forbes

I have only 30 seconds left.

I will close with a reminder of what other parties may find themselves voting against tonight. In saying no to the budget, they will be saying no to more than £100 million in digital infrastructure and delivery of superfast broadband. They will be saying no to more than £470 million of direct capital investment to deliver 50,000 affordable homes, and they will be saying no to £47 million to mitigate the effects of the bedroom tax. They will be saying no to continued dualling of the A9 and improvements to the A82, and they will be saying no to spending £1 billion on mental health. If they can tell the people of Scotland that they have said no to those things, they are braver than I am.

15:34  



Liz Smith (Mid Scotland and Fife) (Con)

I will set the points that I wish to make in the debate in the context of the three conclusions that were drawn on page 11 of the Education and Skills Committee’s draft budget report, which relate to higher education. The conclusions not only reflect the concerns that were raised by Audit Scotland in its 2016 report into higher education, the evidence that was submitted to the Parliament’s Public Audit and Post-legislative Scrutiny Committee and recent statements by Universities Scotland; they also raise serious questions about the criteria by which the Scottish Government is making its judgment call on higher education policy.

In the first of those conclusions, on page 11 of its report, the committee says that it is

“unclear how a cash funding reduction of 1.3% in higher education resource matches with a commitment to protect core research and teaching grants.”

That concern was dismissed by the Cabinet Secretary for Education and Skills, who said that the Scottish Government is protecting teaching and research in cash terms because the capital budget is increasing by £20 million. Furthermore, he claimed that recent changes had allowed universities to increase their revenues, which, in turn, had helped them to increase their reserves and their profitability. However, it is not right at all for the cabinet secretary to argue that he is protecting budgets on the basis that it is possible for universities to make up the financial shortfalls by raising more money of their own via private means. The irony is, of course, that the Scottish Government’s changes have been made because Scottish universities can now charge students from the rest of the UK higher fees.

That lays bare the fact that the percentage share of the sector’s total income that is provided by the Government via the Scottish Further and Higher Education Funding Council is constantly falling. It fell from 41 per cent of the sector’s total income in the 2005-06 academic year to 34 per cent in the 2014-15 academic year. That is what has led Alastair Sim and, indeed, Audit Scotland to make the point that, for publicly funded activity, universities are being funded below cost, at around the 90 per cent mark.

When the Scottish Government claims that it is protecting the core teaching grant and the research grant, and that it is securing funds for widening access and providing free higher education, it is doing so without explaining the true context for the sector. That is the main point of the committee’s second conclusion on page 11, where it says that although

“it is a legitimate expectation of private bodies to augment core provision of services with its own income generation,”

the Scottish Government has not produced a satisfactory rationale to explain its budget choices. That is simply not good enough.

The Deputy First Minister and Cabinet Secretary for Education and Skills (John Swinney)

The long and the short of the point that Ms Smith is making is that she believes that the universities should be given more money by the Government. The Conservatives have argued for a reduction in tax that would come into effect on 1 April. I know that they argue that that would be a device to grow the economy. However, on 1 April, we must give a budget to the universities. How would we fund Liz Smith’s proposed increased contribution to the universities if we were to reduce the money that was available by cutting tax on 1 April?

Liz Smith

The Government would do so by virtue of the simple reason that it has £0.5 billion extra. It knows exactly what our policy reaction to that would be.

John Swinney rose—

The Deputy Presiding Officer

Please sit down just now, Mr Swinney.

Liz Smith

If the cabinet secretary allows me to make my point, I will let him in again. Why is it that Universities Scotland, the Auditor General for Scotland and several other experts in the field all maintain that the sector is not sustainably funded?

John Swinney

This morning, I spent two and half hours explaining to the Public Audit and Post-legislative Scrutiny Committee why I believe that the university sector is sustainably funded, so I have dealt with that question.

I come back to Liz Smith’s response to my intervention. She said that we have £500 million, but it has been allocated to other areas of expenditure. She wants to spend more money on the universities but she also wants to cut taxes. Where would the money come from to fund the universities?

Liz Smith

Mr Swinney knows that, over a long period of time, we have supported additional money coming in from—[Interruption.] Let me finish. Mr Swinney knows very well that we have a policy that would bring in additional money without increasing tax and without cutting college budgets—which has been a policy of the SNP. We aspire to having a graduate contribution.

Members: Aha!

Liz Smith

Mr Swinney knows that. [Interruption.] We are very happy indeed—

The Deputy Presiding Officer

I ask members not to debate across the chamber and to make their points through interventions.

I will give you extra time, Ms Smith.

Liz Smith

I think that I heard Mr Swinney say from a sedentary position that a graduate contribution would put people off. I do not think that it would. He knows well that, down south, when it comes to bursary support, the fees issue has not put people off going into higher education. At this morning’s meeting of the Public Audit and Post-legislative Scrutiny Committee, Mr Swinney found it extremely difficult to rebut the charge from the university sector on sustainable funding.

The Cabinet Secretary for Health and Sport (Shona Robison)

Will Ms Smith give way on that point?

Liz Smith

No, I will not, if Ms Robison does not mind. I want to make some progress.

Mr Swinney has to answer this key point—the sector feels badly underfunded just now because of the policy developments that the Scottish Government has set out for it. Unless the Scottish Government recognises that fact, our competitive ability and our ability to retain academic excellence will take a bad hit. Mr Swinney’s Government has to answer the point, but at the moment it has no answer at all. I leave it at that.

15:40  



Ash Denham (Edinburgh Eastern) (SNP)

Over the past few weeks, in considering the draft budget Parliament has been challenged to think about the kind of country that we want Scotland to be. As we have heard today, budget decision making rarely breeds harmony, but I suggest that the majority of us in Parliament should find some common ground in a document that charters a fair Scotland within the challenging context of Westminster austerity.

The budget will invest £60 million to expand free early learning and childcare while exempting 100,000 small businesses from business rates. It will deliver record investment in the NHS, while limiting the large business supplement to fewer than 10 per cent of properties. The budget will provide £120 million for schools while ensuring that 99 per cent of adults pay no more income tax. Those elements illustrate what the SNP Government has set out to do—which is to invest in our vital social services and in growing our economy.

Protecting and expanding our social infrastructure is so important because it demonstrates our priority of addressing the real problems that are faced by real people. That is why we are investing to increase free childcare to 30 hours a week by 2020. That leap forward in hours will benefit children, working parents and parents who need to access education or training in order to return to work. It might also benefit entrepreneurial parents who are setting up a business. Such investment is critical in the UK, where childcare costs are among the most expensive in Europe.

The Government is also maintaining education as a top priority. The £120 million that is going to schools is £20 million more than was previously announced by the Government. Schools will have discretion and creativity of approach in using those funds beneficially in the classroom.

The budget also delivers on what every party in the Scottish Parliament has called for: protection of and investment in our NHS. The SNP has put forth the boldest NHS investments yet: an increase of £304 million, elevating the total health revenue budget to £12.7 billion.

Jackie Baillie

How does Ash Denham square the boast about the biggest amount of health spending in all time with the fact that NHS Greater Glasgow and Clyde is saying that it will have to cut £333 million from its budget? I would be grateful to know.

Ash Denham

As Jackie Baillie is well aware, the budget will increase spending for local services, and announcements have been made today about additional funding. Perhaps Labour should consider engaging more constructively in the process. At this point, its voters must be wondering why there has been no constructive comment from the Labour Party. What is the relevance of Scottish Labour?

I think of my constituents in Edinburgh Eastern and how much the NHS investments will serve them. Edinburgh will benefit from a new elective care centre, a national trauma centre, a sick children’s hospital and a department of clinical neurosciences, as well as redevelopment of the Royal Edinburgh hospital. In fact, NHS Lothian will see £1.3 billion of investment.

That is precisely the kind of care that Scots deserve and expect under the SNP Government. That is why, with 47 per cent of the vote, they sent the SNP to Holyrood with a mandate to pass those policies. That is a directive that we cannot ignore. I am proud to defend the budget, knowing that not only my constituents in Edinburgh Eastern will get the best in health and social services—so will all of Scotland.

As such, now is not the time to give a tax cut to our highest earners, as the Tories would have us do.

Douglas Ross (Highlands and Islands) (Con)

Ash Denham said that she is proud to support the budget. Is she more proud to support the budget that is propped up by the Green Party than the budget that Derek Mackay proposed in December? [Interruption.] I am just wondering. Which one is it?

Ash Denham

A minority Government clearly has to make compromises. I had assumed that even the Conservatives would understand that. We will take no lessons from the Tories on the economy, given that they are about to drag us off the Brexit cliff edge.

The Tories’ tax policy would shred Scotland’s social fabric and impede investment to grow our economy. The Tories might not see the societal damage that their policies would inflict, but voters in Scotland are well aware of it, and they expect a budget that includes the manifesto commitments for which they voted—commitments to help people to prosper in their lives, not to fall behind.

That is why members of this Parliament would do well to think of the working parent who can never manage to get ahead because they do not have access to free childcare, of the bright young student who cannot afford to go to university, and of the pensioner who needs personal care to allow them a dignified retirement in their own home.

We have a democratic and moral mandate. There is an expectation that the parties whose members are elected to this Parliament will respect Parliament and its processes. There is a presumption that we will engage constructively and responsibly. That approach has been lacking. However, the SNP will not let our democratic and moral commitments falter.

I see that I am running out of time, so I will skip ahead to the end of my speech. In reflecting on the kind of country we want to be, those are the tenets for which we should strive. I think that many members, across different parties, can agree on that, which is why I ask them to join me today in voting for the budget.

15:46  



Colin Smyth (South Scotland) (Lab)

I refer members to my entry in the register of members’ interests. I am a local councillor.

At the end of last week’s Labour debate on the budget, the Cabinet Secretary for Finance and the Constitution made a telling comment when he said:

“we are in a Parliament, not a council chamber. Maybe the debate should have been conducted in that way.”—[Official Report, 25 January 2017; c 78.]

It seems that the more than 1,200 men and women across Scotland who serve their communities as local councillors, more than 360 of whom are SNP councillors, are not capable of the level of debate of which Mr Mackay is capable.

Those men and women, of all political persuasions and none, are currently wrestling with tough and painful decisions about which services in the community should be cut and which of their neighbours’ jobs should be axed.

The Minister for Local Government and Housing (Kevin Stewart)

Does Mr Smyth welcome the fact that, between them, Mr Harvie and the Cabinet Secretary for Finance and the Constitution have come up with an extra £5.114 million for Dumfries and Galloway today? Surely that is to be welcomed. Surely Mr Smyth will tell his constituents that that is the case.

Colin Smyth

I will be quite happy to come to the maths on Dumfries and Galloway in a second. I have done the maths and I can tell Mr Stewart exactly what that figure means in the context of the cuts in Dumfries and Galloway.

Men and women across Scotland will still have to wrestle with cuts as a result of the budget. The cabinet secretary was dismissive of debates in council chambers. I have been a council finance spokesperson and I have seen a fair few budget debates, some in the context of a minority administration, and some in the context of coalition with colleagues in the SNP. However, in all that time, I have never seen the smoke and mirrors and dodgy double counting that I witnessed when the cabinet secretary delivered his statement on the draft budget in this Parliament in December.

In that statement, he said:

“we will invest an additional £300 million in NHS resource budgets”.

That included £107 million for social care, which is part of the health budget. The problem is that the cabinet secretary went on to claim that the £107 million was also part of the local government budget, when he said:

“additional investment in social care means that, in the coming year, there will be no overall reduction in the funding that is provided by the Scottish Government to support local government services.”—[Official Report, 15 December 2016; c 49.]

Not only did the cabinet secretary double count the funding to try to claim that health spending is higher and cuts to councils are lower, but he failed to acknowledge that the £107 million is ring fenced for the living wage and a small number of specific new requirements. There was not a penny more in his draft budget to meet growing demand for existing social care services.

I support the living wage. I have campaigned for it for most of my political life and I am proud to have been instrumental in ensuring that my council became the first living wage-accredited council in Scotland. I also proposed that my council should pay the living wage to care workers in organisations that the council commissioned, but my proposal was voted down by the then Tory-SNP coalition. I welcome the partial U-turn by the SNP, but Labour will continue to campaign to ensure that all care workers, including those who carry out sleepover shifts, who are currently excluded by this Government, receive the living wage.

However, because the £107 million in social care funding is taken up by the living wage, tens of millions of pounds of cuts will still need to be made to existing social care services as a result of the draft budget. Those cuts are sanctioned by the cabinet secretary. In his letter to council leaders on 15 December 2016, he wrote that local councils can cut

“their allocations to Integration Authorities in 2017-18 by up to their share of £80m below the level of budget agreed with their Integration Authority for 2016-17”.

That is £80 million of cuts to existing social care services for our most vulnerable, at a time when demand is growing.

Never before have we seen such contempt shown towards local government and services; never before have we seen such a systematic breakdown in the relationship between local and central Government as the one we are witnessing under this Scottish Government. Local government is seen not as a partner of the Scottish Government but as an enemy. When it comes to properly funding local services, there is no meaningful negotiation—just imposition. If local government dares to call for a fair settlement, the threat of sanctions is waved in its face.

The consequence is that, right across Scotland, communities are now facing up to the prospect of losing local services and jobs. After £1.4 billion of cuts to local government in the past five years, the debate in council chambers, for which Mr Mackay has such contempt, is no longer about which services to trim; it is about which services communities will have to scrap altogether.

It seems that the Government will get its cuts budget through, thanks to the Green Party. Keeping the Yes coalition together, it seems, is more important than keeping council jobs and services.

Patrick Harvie

I appreciate the member giving way, and I agree with a great deal of what he said about the relationship between central and local government and the need for more investment as well as more local control. However, the Green approach has brought his local council £5 million more that it would not have had otherwise. How much difference has the Labour approach made?

Colin Smyth

I say to Mr Harvie that I have done the maths on my local council in Dumfries and Galloway. It means that, instead of having to plug a £20 million funding gap, because of the cuts it will have a £16 million revenue funding gap. Perhaps Mr Harvie will tell me, along with the SNP, exactly where that £16 million-worth of cuts will come from.

I also say this to the Greens and to Mr Harvie: as I have shown, the deal that they have done will still mean millions of pounds of cuts to council services, and members on this side of the chamber will not rest until every single voter in every single ward with a Green candidate at the council elections in May knows exactly who has voted with the SNP to cut their local jobs and services. It says a lot about the Green Party that, in his speech, Patrick Harvie spent more time attacking Labour for opposing the cuts than he did opposing the SNP for proposing the cuts.

We on this side of the chamber know that all those cuts can be avoided—all of them, not just some of them. This Parliament has the power to make different choices, to be genuinely progressive and to say that if we want decent public services, we need to fund them properly. That is what Labour’s amendment does.

Members have a choice. They can vote through a draft budget that still includes £169 million-worth of cuts to council services and jobs, or they can send a clear message to this Government to come back with a new or amended budget that says, “No ifs, no buts, no more cuts”.

15:53  



Ivan McKee (Glasgow Provan) (SNP)

I am delighted to be taking part in this debate on Scotland’s budget at this historic time.

This Parliament is being tasked with putting together not only a spending budget but one to raise revenue. That is part of the process of moving more and more responsibility to the Scottish people and the Scottish Parliament—a process that, we believe, will only continue and accelerate over time.

Today, we will take decisions that are central to the future prosperity of the people of Scotland and of our economy. We have a heavy responsibility to get that right—to balance the need to stimulate growth with the need to provide quality public services both in the short term and in the long term.

In the elections last year, the people of Scotland made their views clear. They want this SNP Government to continue in office. They trust us to govern responsibly and competently in the interests of the country. However, no party secured a majority, and the voters expect all parties to work together, constructively, to deliver a consensus budget in the interests of the country.

The people will watch this process, and they will judge us on how we conduct ourselves. They expect maturity and an appreciation of the responsibilities that we now hold. They will reward those who step up to the plate, who understand those responsibilities, and who work with others in this Parliament to move forward.

Anas Sarwar

Ivan McKee is right that the first responsibility of any local member is to their constituents. Will he, as a representative of the city of Glasgow, condemn the £324 million of cuts since 2007 and—despite the Greens’ deal today—the £130 million of cuts that will come to the city in the next two years? Who is he going to stand up for, Glasgow or the SNP?

Ivan McKee

An extra £17 million has been given by Derek Mackay, the finance secretary, to Glasgow City Council today—extra money that is going to every school in the Glasgow Provan constituency as a result of the Government’s £120 million to close the attainment gap.

The people of Scotland will reward those who understand that responsibility and work with us, in this Parliament, to move forward, and they will punish those who do not and who use the platform that they have in this place and beyond to disengage from the process and shout from the sidelines. They will look on as the Tory party trashes its reputation for fiscal responsibility. Not a day goes by without a Tory member demanding more spending in one portfolio or another; yet, at the same time, we see the alternative truth narrative that the Tories peddle on Scottish tax.

The reality is that, for 100,000 small businesses, the small business bonus means lower taxes than in England; for council tax payers the length and breadth of Scotland, the council tax freeze means lower taxes than in England; and for lower earners, our manifesto commitment to a higher starting threshold will mean lower taxes than in England. In addition, the whole package of superior public services that are provided in Scotland includes no tuition fees and free prescriptions.

The Tory narrative on Scottish tax is tired and untrue, and it is counterproductive to the task that we should all be engaged in, which is encouraging businesses to invest in Scotland’s economy. It demonstrates their skin-deep commitment to devolution and their belief that Scotland should mirror the policies of the Tory Westminster Government, and the people of Scotland will recognise it for what it is. The Tories’ focus on the top 10 per cent of earners, to the exclusion of the 90 per cent, will limit their support in this country, as it always does, against a backdrop of the economic vandalism of Brexit, which will further trash their reputation for economic competence.

Neil Findlay

Mr McKee talks about the trashing of reputations. I have sat in this chamber for six years, listening to Patrick Harvie’s moralising, sanctimonious speeches. Have Mr Harvie and the fist-clenching Ross Greer not just done the impossible and made Nick Clegg look like someone who is principled?

Ivan McKee

What the Greens have done, by engaging constructively in this process, is release another £160 million for local government, which should be welcomed.

If the Tories have trashed their reputation for fiscal competence, Labour has enhanced its reputation for irrelevance. Labour today presents a package of tax increases with the vast majority of the money that they would raise coming from a 1 per cent increase in the basic rate of income tax—a 21 per cent tax starting with those earning £11,500. How on earth does Labour expect to be taken seriously when it proposes to punish the very lowest earners in our society with a tax increase to pay for Tory austerity? Such economic and political ineptitude demonstrates why Labour is not only unfit to govern but unfit to oppose, and it shows why the people of Scotland will continue to reject Labour at the ballot box. Labour’s failure to engage in the process demonstrates that its interest is not in delivering an agenda but only in opposing for opposition’s sake.

The budget provides an extra £300 million of investment in the Scottish national health service, which is above the rate of inflation, as part of our SNP manifesto commitment to increase NHS spending by £500 million more than the rate of inflation over the course of this parliamentary session—a full £0.5 billion more than the Labour Party committed to the NHS in its election manifesto last year. The budget also delivers a £120 million attainment fund, which is essential to closing the attainment gap in our schools; it delivers an extra £4 billion of investment in infrastructure to support growth in the Scottish economy; and it delivers an extra £160 million to local government through the changes that have been announced by the finance secretary today. The budget delivers for the people of Scotland, and I look forward to voting for it.

The process of reaching a compromise in the interests of the people of Scotland has been the most instructive part of these activities over the past few days. A clear line has been drawn between those who understand their roles and responsibilities in this Parliament and those who do not, who use the Parliament as a platform for politicking and, as a consequence, achieve nothing.

15:59  



Dean Lockhart (Mid Scotland and Fife) (Con)

The people of Scotland deserve a budget for jobs, a budget to increase their take-home pay and a budget to grow the economy. Instead, the SNP is delivering a budget that increases the tax burden for hard-working people in Scotland compared with the rest of the UK, slashes investment in the economy and makes Scotland the highest taxed part of the UK. That is precisely why we will vote against the budget today.

This budget fails to recognise the new fiscal and economic framework that now applies. As the Fraser of Allander institute has explained, how Scotland’s economy performs relative to the rest of the UK is now crucial for future budgets in Scotland; that point was made very well by Bruce Crawford earlier. Given the new fiscal framework, what we really need is a budget that will stimulate economic growth. We simply cannot continue with an economic scenario in which Scotland grows by only 0.7 per cent when the rest of the UK is expanding at above 2 per cent.

We need a budget that will create new jobs and boost wage growth in Scotland. Last year, workers in Scotland had the lowest rise in annual pay of any region in the UK. We need a budget that will help to create the 120,000 new businesses identified by Scottish Enterprise as being required to reach productivity, export and employment targets. Unfortunately, this budget does none of that; instead, it contains a number of measures that will negatively impact economic growth in Scotland.

Take, for example, the enterprise budget. Despite Mr Mackay’s last-minute U-turn today, the budget for Scottish Enterprise has been cut yet again. That means that for each year that the SNP has been in power, the budget for Scottish Enterprise has been cut, and it is now 40 per cent below the budget levels of 2009. It is difficult to understand the rationale behind that cutting of the enterprise budget at a time when the economy is close to recession. According to Scottish Enterprise, its investments have contributed to the creation of 55,000 new jobs over the past four years, and for every pound that it invests in the economy, it generates about £9 in return.

John Swinney

Will the member take an intervention?

Dean Lockhart

I will in a second.

In other words, the multiplier effect of reducing the Scottish Enterprise budget will lead to the loss of hundreds of millions of pounds to the Scottish economy. We need to recognise that cutting the enterprise budget will reduce levels of new business and job creation, result in lower productivity and innovation levels, and ultimately lead to lower Government revenues.

John Swinney

I ask Mr Lockhart the same question that I asked Liz Smith. The Conservatives want to cut taxes on 1 April, but Mr Lockhart is making the argument for an increase in the enterprise budget. Where is that money to come from?

Dean Lockhart

You have to start some time. I would identify—[Interruption] I am coming to that. I would identify the close to £500 million that the SNP’s maladministration has lost over the years. If you were more efficient in government, you would have more money to spend. [Interruption] We have identified cost overruns close to £1 billion.

This budget presents a unique opportunity to send out a clear message that Scotland is open for business. Unfortunately, the SNP is sending out another message—that individuals and businesses will be taxed higher in Scotland than elsewhere in the UK. Take, for example, the SNP’s large business supplement, which is basically a penalty on business expansion. At a time when we need to encourage small businesses to scale up and employ more people, that SNP expansion tax will penalise businesses that want to expand. Even after taking into account the increased threshold for that tax, more than 20,000 businesses in Scotland will be taxed higher than their counterparts in the rest of the UK. It should come, therefore, as no surprise that the Scottish economy continues to badly underperform that of the rest of the UK.

It is not only expanding businesses that will be penalised by the budget. At a time when the Scottish economy desperately needs more job creators, technology leaders, entrepreneurs, risk takers and highly skilled workers, all of whom would expand the tax base and contribute to higher Government revenues, those individuals now face higher tax in Scotland than in other parts of the UK. There is nothing progressive about increasing tax for hard-working people.

Gail Ross (Caithness, Sutherland and Ross) (SNP)

Will the member take an intervention?

Dean Lockhart

I need to make progress.

Ultimately, increasing tax will result in lower spending for vital public services—there is nothing progressive about that. As Scottish Chambers of Commerce has said,

“The sooner our politicians realise that supporting economic growth”

not hiking taxes will increase revenues, the sooner Scotland will prosper.

Derek Mackay

Dean Lockhart refers to Scottish Chambers of Commerce. Liz Cameron of Scottish Chambers of Commerce said:

“We very much welcome the Scottish Government’s decision to match the basic business rates poundage to that south of the border, resulting in an overall decrease in rates revenues.”

Does he also agree with that comment?

Dean Lockhart

Scottish Chambers of Commerce and many other business organisations have expressed real concern about the revaluations of business rates coming up. For every quote that Mr Mackay has from business, I can give him 10 that are negative on the budget.

The finance secretary is indeed lucky. This budget benefits from £0.5 billion extra funding from the UK Government at a time when the SNP is running a £15 billion budget deficit—the largest Government deficit in western Europe.

Derek Mackay

What?

Dean Lockhart

They are your “Government Expenditure and Revenue Scotland” numbers.

It is somewhat ironic, although not surprising, that the SNP budget is being supported by the pro-independence Green Party. I say that it is ironic because, if the SNP and the Greens get their wish for an independent Scotland, Parliament will not be debating how to spend £0.5 billion extra: it will be debating how to strip out £15 billion from vital public services across Scotland. Ash Denham talked about damaging our social fabric, but the decimation of public services in Scotland is precisely what will happen if the SNP continues to pursue its single-minded obsession with independence.

The Deputy Presiding Officer (Linda Fabiani)

I remind all members to speak through the chair, please, and not to each other.

16:08  



Maree Todd (Highlands and Islands) (SNP)

This is indeed a historic budget that is published against a backdrop of economic and political uncertainty. More than ever, the people of Scotland need a budget and this Parliament needs to deliver it. A Conservative minister, Michael Fallon, came to Scotland today to tell us, in essence, to leave Brexit to the Tories, forget about independence and get on with the day job. I think that it is high time that he told his Conservative colleagues in this chamber that getting on with the day job involves negotiating and passing a budget on behalf of the people of Scotland.

The Tory party’s internal war over Europe is wreaking havoc on the UK economy and on our social fabric, with the pound falling, inflation rising and the horrific prospect of our EU citizens being used as a bargaining chip in negotiations. At this moment, the people of Scotland do not want brinkmanship and posturing: they want us to get on with running the country—doing the day job, it might be said.

The harm caused by the Tories’ infamous and failed deficit reduction programme, followed by Brexit, has wrecked their reputation as a sound pair of hands on the economy. In this chamber, hearing the Tories demand both tax cuts and increased spend is just the latest manifestation of their fiscal incompetence. The Conservatives in Scotland may well try to distance themselves from their colleagues down south, but the people of Scotland are not daft. We can hear the demands for tax cuts for the richest 10 per cent and we know where the money is coming from: no more free prescriptions, no more free education and less money for public services.

We heard this week that the UK Government’s policy on tax and benefits will succeed only in delivering the biggest increase in inequality since the time when Margaret Thatcher was in Downing Street. Having last night seen the one remaining Tory MP in Scotland vote against the expressed view of the people of Scotland, we do indeed seem to be right back in the 1980s this week. We did not need Murdo Fraser to mention brat pack movies to remind us of that, because it feels like it.

It seems that the Labour Party, too, is stuck in the 1980s, confirming its irrelevance by not even coming to the table to negotiate. Although its plan to increase everyone’s taxes, even for the poorest in society, was something that we could not agree with, I am sure that we could have worked together on areas in which we have common interests.

The Lib Dems are keen to appear entirely reasonable in public, but behind closed doors they are entirely uncompromising and say that they will never support the budget put forward by the party of independence, regardless of what it might offer to the people of Scotland.

I firmly believe that this budget is filled with things worth supporting. It protects public services, safeguards household incomes, supports economic growth and empowers local communities and people across the country. There is much in the budget of which to be proud and much that members of all parties can get behind. As I said last week, it is a budget that delivers record investment for health—substantially more than any other party in the chamber offered in its manifesto.

Jamie Greene (West Scotland) (Con)

Does Maree Todd accept that, in the last quarter of 2016, growth in the UK was at 2.2 per cent while growth in Scotland was at 0.7 per cent, and that unemployment in Scotland was up whereas it was at an all-time 10-year low in the rest of the UK? Which bit of the budget fills members with any confidence that growth in Scotland will improve under the deal that Maree Todd’s party has just done?

Maree Todd

Given that we are still part of the United Kingdom, that is a damning indictment of the UK Government’s management of the finances of Scotland.

As someone who worked in mental health for 20 years, I am well aware that mental health has often been the poor relation of general medical services. I am therefore delighted to see a budget that will deliver record investment that is set to exceed more than £5 billion in the current session of Parliament.

I draw everyone’s attention to the commitment in the budget to protect the environment. Climate change is one of the defining issues of our age, and it is significant that the Scottish Government’s budget sets out its commitment to deliver our climate change ambitions of reducing greenhouse emissions; investing in energy efficiency; supporting the renewable energy sector; and creating a vibrant climate for innovation. The budget will tackle fuel poverty, provide high-quality jobs and ensure that Scotland continues to lead the world in developing new technologies and addressing climate change. I cannot believe that the other parties in the chamber do not support that.

Johann Lamont

Will the member take an intervention?

Maree Todd

I am in my last minute.

The budget has made closing the poverty-related attainment gap our number 1 priority, and the new £120 million pupil equity fund shows our commitment to doing just that. It will give teachers and school leaders the ability to decide on the best way of using the extra funding to close the poverty-related attainment gap and improve standards in their schools. My old school, Ullapool primary, is set to receive more than £14,400 in funding from the scheme.

There is much for members on all sides of the chamber to support in the budget. It is time for us all to do our day jobs, find consensus and deliver the budget for which the people of Scotland voted.

16:12  



Daniel Johnson (Edinburgh Southern) (Lab)

The SNP was returned to government on a promise that it would make education its top priority, and I agree with that. Nicola Sturgeon said that closing the attainment gap would be her overarching mission as First Minister, and we on the Labour side of the chamber, who have long championed the issue, agree with that too. However, rhetoric must be matched with resource. In the words of former Vice President Joe Biden,

“Don’t tell me what you value. Show me your budget and I’ll tell you what you value.”

When we look at the budget, we see that the values are only too clear. Words and promises are not backed by investment, and intent and objectives have no new money behind them. On education, the Government refuses to consider using the new powers that this place now has. If anyone wants a sign that the draft budget was one of cuts, they should ask themselves why the Government is now conceding a compromise with the Greens to mitigate the cuts that just a few days ago it claimed did not exist.

It may not be obvious where education appears in the budget, because the reality is that education is delivered primarily by local councils. Spending on schools comprises approximately half of everything that local government spends. There were £327 million-worth of cuts in the draft budget that Derek Mackay put before us. The Government cannot make cuts on that scale without undermining the ability of our schools to deliver education.

Today, we have compromise. Whether the mitigation equates to 10 per cent, a quarter or a half, there are still cuts, and when those cuts fall on local government, it is our schools that will suffer.

It may be unsurprising that the SNP is unwilling to use tax powers, but it is deeply disappointing that the Greens, who have said time and again that they stand for the principle of progressive taxation, have compromised and rolled over in the way that they have. The compromise that the Greens make today will not be accepted by parents or teachers, and anyone who believes in the future of children should not accept it. It is telling that Patrick Harvie, in his speech, spent so much time attacking Labour, rather than dealing with the cuts that the Government has proposed.

Alison Johnstone (Lothian) (Green)

Will the member give way?

John Mason (Glasgow Shettleston) (SNP)

Will the member give way?

Daniel Johnson

I will take an intervention from Alison Johnstone.

Alison Johnstone

Daniel Johnson will be aware that, as a result of the commitment that the Greens secured for local government today, we will be able to save libraries in Edinburgh from a £2.54 million cut, restore £1 million to welfare advice, head off a cut of £400,000 to Edinburgh Leisure and stop £300,000 being cut from the budget for support teachers. That is in his constituency.

Daniel Johnson

Alison Johnstone knows fine well that, in the draft budget, £38 million of cuts were being handed down to the City of Edinburgh Council. That is the reality of the cuts, which are being only partly mitigated, that her party is supporting.

We have only to look at the numbers to see what is happening in education in this budget, and what has happened to it in the nine previous budgets that the Government has passed. We have £1.4 billion of cuts in revenue. Teacher numbers are down by 4,000. Support staff numbers are down by 1,000. Spend per primary pupil has fallen by £561—that is 10 per cent—since 2010. Those cuts are equivalent to more than £400,000 for every school day since 2010.

Members might not like our numbers or want to accept the damning survey results that the Education and Skills Committee has been receiving from teachers, but they should listen to the Organisation for Economic Co-operation and Development. Its survey results from headteachers make the story clear: 45 per cent of headteachers say that their schools are hindered by lack of teaching staff, 32 per cent say that the schools are hindered by lack of assisting staff and 31 per cent that they are hindered by a lack of educational materials.

However, it is not just about the numbers. Anyone who has spent any time with staff from our schools will hear the same stories. Indeed, the Unison survey was interesting. I will repeat some of the stories from it. On textbooks, someone said:

“Maths resources are woeful, every book has either no front cover, no back cover and pages missing, not because of damage to the resource but because the school has not been able to purchase new books.”

Derek Mackay

Will Daniel Johnson give way?

Daniel Johnson

I will in a moment. The same is true for our science subjects. Another contribution to the survey said:

“we have less money every year to provide the basic material for teaching—chemicals, apparatus, glassware and text books”.

One primary school headteacher in my constituency put it to me that she did not want more control over her budget—she has enough control already—she just wants enough budget so that she has janitorial cover so that she is not the one unblocking the loos at lunchtime.

I will give way to Mr Mackay.

The Deputy Presiding Officer

Time is tight. You must be quick, Mr Mackay.

Derek Mackay

It is a timely point and intervention. In light of what he says about resource issues, will Mr Johnson explain why he will vote against £120 million of additional resource for attainment to go direct to schools in Scotland?

Daniel Johnson

My answer to that is simple: he should look to our reasoned amendment. We say that we should stick up for local services, use the powers of the Parliament and stop the cuts. It is really very simple.

Neil Findlay

Does John Swinney find the cuts funny?

Daniel Johnson

The importance of education must be matched in the budget.

Neil Findlay

Education is John Swinney’s department.

The Deputy Presiding Officer

Mr Findlay, will you stop shouting from the back benches?

Daniel Johnson

It is simply not good enough for the SNP to talk up education while making cuts year after year and hiding behind the smokescreen of local government as it does so. The Labour Party believes in progressive taxation. We value public services, which is why we make the argument that we should use the Parliament’s powers to put a penny on income tax. That way, we would not have to see the damage that will be done to local services by the budget that the SNP has proposed.

That is the difference between the Labour Party and the SNP. We believe in progressive taxation, progressive policies and the powers of the Parliament. I am sorry that the SNP does not.

The Deputy Presiding Officer

Time is tight. Speeches must be no more than six minutes including interventions.

16:18  



Kenneth Gibson (Cunninghame North) (SNP)

The Labour Party didnae believe in progressive taxation when Tony Blair and Gordon Brown were Prime Ministers: for all but one month in 13 years, the higher rate of tax was lower than it currently is under the Conservatives.

All that we have heard today from the three Opposition parties is sour grapes. Kezia Dugdale was marginalised. The Tories’ Murdo Fraser was unhinged and Dean Lockhart was incoherent. Willie Rennie was outmanoeuvred. Patrick Harvie is the man of the moment, along with Derek Mackay. It is a tribute to both of those individuals, who have worked hard to deliver a budget for Scotland.

Kezia Dugdale talked about engagement and how Labour genuinely engaged with the cabinet secretary. I remember when Andy Kerr genuinely engaged with a former cabinet secretary. He came to the SNP Government with a shopping list and said, “Labour would like this, this and this.” The cabinet secretary agreed to every single one of Labour’s demands, but Labour could not get its own group to agree to its demands. The reality is that, whatever the SNP proposes, Labour will oppose it. As my colleague Mike Russell said in this Parliament a decade ago, if the SNP invented the light bulb, Labour would denounce it as a dangerous anti-candle device.

What we actually have today is over £900 million for public services, but the increases were met with grim faces on the Labour benches. We should remember that, in the autumn last year, Labour members were talking about £500 million or £700 million of cuts to local government services, which of course have not actually arisen in any shape or form. [Interruption.] They are greetin fae the sidelines.

If they want to talk about cuts, I remind them that I was a councillor in Glasgow City Council when Tony Blair cut £168 million—more than 10 per cent—from the city’s budget in two years, and I was an MSP when Gordon Brown, as Prime Minister, cut £500 million from this Parliament’s budget. Also, it is only two years since Labour MPs walked through the lobby with the Tories and voted for £30 billion of cuts, which is why Labour has one MP in Scotland and not 41.

Jackie Baillie

Will the member take an intervention?

Kenneth Gibson

As I like to do, I am happy to give way to Jackie Baillie.

Jackie Baillie

I am very grateful to the member for taking an intervention. Perhaps he will recall that, during the period from 2007 to 2011, every single budget that the SNP put through was supported by the Tories.

Kenneth Gibson

The reality is that a budget had to go through. We negotiated with the Tories. Sometimes we had to change our budget by 0.5 or even 1 per cent, but the core SNP budget went through. I am really delighted that the Tories supported those budgets. It allowed us to show that we were a competent Government and to kick Labour into touch in the 2011 election. Thanks to the Tories helping us with those budgets, we could get an overall majority and have a referendum.

Let us talk about taxation, which the Tories have been droning on about. In Scotland, the average band D council tax is £1,152. In England, it is £1,530. I say to John Scott that I do not see a huge number of people coming to Scotland from England to escape an increase in council tax. It does not say much for his view of doctors if he thinks that a £300 or £400 increase in their taxation might deter them from coming to our beautiful country, the appeal of which he clearly underestimates, just as he underestimates the chaos in the English health service.

I turn to North Ayrshire Council and the alleged devastating cuts. In 2016-17, its budget was £279.443 million in revenue and capital. In the coming year, it will be £303.89 million in capital and revenue, which represents an increase of £24.447 million, or 8.8 per cent. As I represent North Ayrshire, I am pleased to say that that represents the highest percentage increase in Scotland. That includes £2.925 million in health and social care integration funds and £4.392 million of additional money to help to close the attainment gap—something that I thought Daniel Johnson might welcome, but it appears that he is not going to do so. Labour tries to ignore those additional resources with its fantasy figures.

Let us talk about some other areas where the SNP Government is delivering. No one has talked about the £3 billion for affordable housing or the delivery of 50,000 new affordable homes. On the small business bonus scheme, Andy Willox said:

“By giving full ... relief to 100,000 Scottish firms, the government has lifted the prospects of smaller businesses”

that otherwise face

“a tough 2017.”

The Scottish Government continues to invest in rural and island housing, and we are significantly increasing—because many MSPs from across the party divide have asked for it—the funds that are available for mental health spending, from £39.45 million to £52.2 million, which represents an increase of 32 per cent.

We are also delivering on skills, with Andy Willox saying:

“We called for a new flexible fund to help firms develop their skills—especially the ones they need to tap the power of the digital economy. So what was announced ... fits the bill perfectly.”

On productivity, David Lonsdale, director of the Scottish Retail Consortium, said:

“It is also welcome to hear that the Scottish Government has listened to our calls to invest in improving productivity. The investments in digital and transport infrastructure will assist this.”

Hugh Aitken, director of the Confederation of British Industry Scotland, said:

“The commitments in this budget, on housing, and digital and transport connectivity, will lay the foundations to allow firms to get on with growing our economy and creating jobs for the long term.”

The Deputy Presiding Officer

Mr Gibson, will you close now, please?

Kenneth Gibson

I say to colleagues that this is an excellent budget and I urge every member to support it.

16:25  



Adam Tomkins (Glasgow) (Con)

Scotland needs a budget for growth, but it is getting a budget that will make us the highest-taxed part of the United Kingdom, and that will not stimulate growth; it will stymie it. In Scotland, we have only 17,000 additional-rate income tax payers. What should we do about that? We should double that number and double it again. But what are we doing about it? We are going out of our way to make them the highest-taxed citizens anywhere in the United Kingdom. The top 1 per cent of earners in the UK pay 28 per cent of the income tax that is received by Governments in the UK.

We are told that those with the broadest shoulders should carry the heaviest burden, and I fully agree, but they already do. More than a quarter of all income tax is paid by the top 1 per cent of earners. In a rational and fair Scotland, we would not seek to penalise those taxpayers; we would seek to double, triple or quadruple their number. Even if we raised their number to the UK average, that would yield an additional £600 million in tax receipts, all of which would come to the Scottish Government.

John Mason

Will the member give way?

Adam Tomkins

Not at the moment.

The tragedy of the budget is that, despite all Derek Mackay’s earnest appearances to the contrary, he in fact understands that point, or at least his officials do, some of the time. Just yesterday, the Finance and Constitution Committee took extensive evidence at stage 1 of the Air Departure Tax (Scotland) Bill. It is Scottish Government policy to cut air passenger duty—or air departure tax—by 50 per cent over the lifetime of this Parliament. Why? Because it knows that cutting taxation stimulates growth.

To quote the Scottish Government’s policy memorandum, air departure tax is to be cut to boost

“Scotland’s air connectivity and economic competitiveness, encouraging the establishment of new routes which will enhance business connectivity and tourism.”

It states that that

“not only creates new routes but creates new jobs”.

All that by cutting tax—cutting tax, but not cutting the revenues accruing to the Scottish exchequer, because the new jobs will come with new wages, and wages are taxed. Yesterday, the Finance and Constitution Committee heard that cutting APD could generate fresh economic activity in Scotland worth £200 million per year. Cut tax; grow the economy—I point out to Mr Mackay that that is the Laffer curve. He should not need Murdo Fraser to remind him of it.

Why is it that the SNP gets that when it comes to air departure tax but has introduced a budget that fails to reflect those core economic truths anywhere? It is not as if we can somehow afford not to grow the Scottish economy. GDP growth in Scotland is lower than in the UK as a whole; our employment rate is lower than the UK’s; our employment growth rate is lower than the UK’s; our inactivity rate is higher than the UK’s; our claimant count is higher than the UK’s; our skills gap is higher than in the UK as a whole; we have fewer apprenticeships per head than in the UK generally; and the proportion of our workforce lacking digital skills is greater than in the UK as a whole. I say to Maree Todd and others on the SNP benches that none of that can be blamed on Brexit—none of it at all. All of it is the responsibility of the Government that has been running the Scottish economy for a decade—this SNP Government.

Scotland’s productivity is likewise poor. We are in the third quartile of Organisation for Economic Co-operation and Development countries—not the third decile, as the Cabinet Secretary for Economy, Jobs and Fair Work said earlier—when the Scottish Government aims to be in the top quartile. The chief executive of Scottish Enterprise recently told the Parliament’s Economy, Jobs and Fair Work Committee that, to achieve that would require a 200 per cent hike in innovation levels, at a time when Scottish Enterprise’s budget is being slashed.

How on earth Derek Mackay taking his axe to the enterprise agencies is going to deliver economic growth for Scotland is something that neither the Economy, Jobs and Fair Work Committee nor the Finance and Constitution Committee has been able to understand. Perhaps the cabinet secretary will explain it to Parliament this afternoon.

Yet this is the budget for which comparisons between Scotland and the rest of the UK have mattered as never before. As Bruce Crawford said earlier this afternoon and as the Finance and Constitution Committee pointed out in its report, Scotland’s economic performance relative to that of the UK as a whole is now a key factor in determining Scotland’s budget. Do well relative to the rest of the UK, and Scotland will reap the rewards. Do poorly, as we are doing now, and Scotland will suffer. “Stronger for Scotland”, they say. If only that were true.

The one virtue of the SNP’s budgetary policies for the Scottish economy is that they are, at least, comparatively clear. That is to say, they are clearly bad for the economy—bad for business, bad for taxpayers, bad for skills and bad for public services.

That much may be clear, but there is, alas, a great deal about this budget that is anything but transparent. Indeed, parts of it seem to have been presented in a manner that is positively designed to mislead. Figures do not compare like with like and comparisons of spend over time do not correspond. There is an urgent need for greater transparency in the Government’s budget documents, as the Finance and Constitution Committee unanimously agreed.

This is not the budget that Scotland needs, it is not a budget that deserves our support and it is not a budget that we can support. I will join my colleagues tonight in voting against it.

16:31  



John Mason (Glasgow Shettleston) (SNP)

I am delighted that there now seems to be a majority in Parliament for approving this budget at stage 1. I think that we all have to accept that there is a lot of good in the budget, and I particularly welcome the continuing commitment to build 50,000 affordable homes, the £1 billion investment in mental health, the increase in spending on primary healthcare to 11 per cent and, of course, the £120 million to tackle the attainment gap.

I understand that £21 million of that £120 million is coming to Glasgow. That reflects the challenges and needs in the city, perhaps especially in my Shettleston constituency, where the cabinet secretary was yesterday. I believe that it is absolutely right that the emphasis should be on where the need is greatest.

Johann Lamont

Will the member give way?

John Mason

Let me go a wee bit further.

It is all very well that some councils have argued recently that they are receiving less funding per head than other councils. Surely the stronger argument is that funding follows need. In that regard, I thank the Government for recognising the position of Glasgow.

Johann Lamont

Does John Mason, as a fellow Glasgow MSP, accept that the removal by this Government of £324 million to Glasgow since 2007 will have had a massive impact on the life chances of our young people? Our suggestion for this budget is not just to accept what is already in it but to give greater resources to the Scottish Government to direct towards needs and towards tackling equality.

John Mason

First, we have to live within our means. If Johann Lamont is arguing for more for local government and for cuts to the health service, I would oppose that, I am afraid. I would also oppose her suggestion of taxing people on £11,000 more—that is ridiculous. I will come on to that later.

It goes without saying that we would all like to do more, if we had more money. I think that the Government has been realistic in balancing up what we can raise with what we need to spend.

In one briefing, I saw the phrase “cash limited” being used as if that were a bad thing. The reality is that we are all cash limited, whether as individuals, as organisations or as Governments. We might be able to increase our income, but there is still a cash limit on what we can spend on any one sector. It is all very well listing what we would like to spend on the NHS or whatever, but there has to be a realism about what we can afford.

I look at the positions of the individual parties, starting with the Conservatives. At least the other three parties—Labour, the Lib Dems and the Greens—have been honest enough to say that they want to spend more on services and they need more tax to fund it. By contrast, the Conservatives ask for more spending in several areas—just this afternoon, they have been asking for more money for colleges, local government, universities and Scottish Enterprise—but they also either want tax cuts or want us to at least match tax rates in the UK. How can that be? They now have two chartered accountants on the team, so I would have expected much better than that from the Conservatives. They seem not to have understood so far that, if you want more spending in one sector, you have to either cut in another sector or raise taxes, and if you want to cut taxes, you have to cut some of the expenditure.

Liz Smith

Is a third option not to grow the economy so that there is more money?

John Mason

It has already been well pointed out by John Swinney that there is a time element to that, as we are looking at the budget for next year and I do not think that there is a lot that you can do in that time. Nor is growing the economy entirely clear cut; we have all tried it and have been toiling since about 1707.

I argue that tax is a good thing. If we believe in a healthy society with good public services and improved health and cohesiveness, sensible levels of taxation are an important part of the mix. I accept that taxes can be too high, as when Labour raised them to 98p in my lifetime. That discourages people who are living here and does not encourage businesses either.

If we want to attract businesses, and people for that matter, we need a good education system, a strong health system and good roads, railways, and other infrastructure. This is where the Conservatives and, I fear, Scottish Chambers of Commerce get it wrong. It is not as simple as saying that low tax rates make us more attractive. In its briefing, Scottish Chambers of Commerce admits that our income tax differentials

“may seem modest in year 1”.

That is fair comment, but it warns against

“even more punitive Scottish tax rises”.

There have not been any punitive Scottish tax rises, so that is not very credible.

I agree that Labour’s proposal of going 5p higher than the UK represents too big a jump in one go. We do not know what the reaction to that might be. If it led to behaviour change and people leaving Scotland, that would not be healthy. Scottish Chambers of Commerce, however, says that we are making modest changes this year and I agree with it.

At least we have some clarity this week about Labour’s amendment. Alex Rowley told us in the debate last Wednesday that no one earning under £21,000 would pay more. However, today the Labour Party’s position is different and everyone earning over £11,500 would pay more. A marginal rate of 20 per cent tax and 12 per cent national insurance contribution is far too much for people on £11,000 or £12,000.

The budget process should be that Westminster sets its budget first, we set our budget and then local government does so after that. Westminster needs to get its act together over how it does the budget. The process can certainly be improved.

Overall, it reflects well on this Parliament that deals can be done. No one gets exactly what they want. Perhaps the public likes that and prefers a bit of give and take.

16:37  



Jackie Baillie (Dumbarton) (Lab)

From the start, Labour has made clear our opposition to the cuts to public services. Kezia Dugdale has met and written to the finance minister on several occasions and, as other members have said, we had a debate in Parliament last week. There is no doubt about our position. The truth is that the SNP does not want to do a deal with Labour. Remember that for four years SNP was joined at the hip with the Tories to get its budget through.

The SNP’s idea of consensus is simply that we need to agree with it. Our clear approach from the start has been to use the new powers of the Parliament to stop the cuts in full, not in part, to invest in public services and to grow the economy. That stands in stark contrast with the SNP, which is content to operate simply as a conveyor belt for Tory austerity. We have the power to do things differently, but it comes down to political choice.

In the face of austerity, a post-war Labour Government invested: it created the NHS. In the face of austerity, the SNP Government cuts. It is a Government that boasts about the money that it is giving to health, but that deception was laid bare yesterday with the report from NHS Greater Glasgow and Clyde that talks of cuts of £333 million on top of the cut of £69 million this year, which is causing sweeping centralisation of services.

Despite today’s sleight of hand from the finance secretary, local services including schools and care of the elderly still face millions of pounds of cuts. That is even before we consider the SNP’s fundamentally dishonest approach of double counting, with the Scottish Parliament information centre and the highly respected Fraser of Allander institute showing that the same funds for social care were in both the health and council budget lines. Rather than cutting, Labour would invest in our public services and our people. There is no greater investment that a country can make for the economy than to invest in its people.

Scotland’s economy has many strengths, but that cannot mask the major problems that we face. Across virtually every economic measure, we are underperforming when compared with the rest of the UK. Unemployment is up, economic inactivity is up, growth is stagnating and business confidence is plummeting. In the face of all that, the SNP is in denial and is pretending that everything is okay.

Most worrying of all for our debate today is the fact that employment is down. I said in the chamber last week that the fall in employment has serious consequences for our country. Fewer people paying tax and a lower tax yield means less money for our public services. It is therefore self-evident that growing the economy is a key priority.

The cabinet secretary tells us that Scottish Enterprise should be overjoyed because he cut it by a staggering 48 per cent but now it is to get back £35 million. He failed to tell us that, despite his apparent largesse, there is still a cut of £50 million in real terms to the Scottish Enterprise budget. So much for growing the economy. As for the £35 million, it is financial transaction money. I invite members to explore what that means. It is allocated by the Treasury, is only used for loans or equity and needs to be repaid. Money is given with one hand and then, through sleight of hand, is taken away with the other.

Derek Mackay

Will the member take an intervention?

Jackie Baillie

No; I have heard enough from the cabinet secretary already.

Let me put it in the simplest of terms so that the SNP understands. I was taught that if I took £100 away and returned £40, I would still be £60 short. The Government should not expect congratulations for making huge cuts and then putting a little back, when it is not real money.

I turn to the Greens, who have settled for a small change in the threshold, which will deliver £29 million. That is really the only new money on the table. The other £130 million is smoke and mirrors, shifting budget lines, accounting trickery, and relying on underspends that might be needed for other things and cannot therefore be guaranteed. We are pulling apart the deal that the Greens arrived at; they have settled for very little indeed. What we have seen today are lofty progressive principles being abandoned for low politics and the illusion of influence. The Greens are fooling no one but themselves. They are certainly not fooling the SNP, which has played the Greens like a fiddle.

I pay tribute to the cabinet secretary’s guile. Kenneth Gibson gave the game away. There was a marriage of convenience with the Tories, whom the SNP then abandoned. The Greens await a similar fate. Let us not pretend that this is anything other than a grubby back-room deal among parties with more interest in forcing another independence referendum on the people of Scotland than in protecting local services such as schools and care of the elderly. Shame on them.

16:43  



Douglas Ross (Highlands and Islands) (Con)

Today’s stage 1 proceedings have reinforced what the Scottish Conservatives have been saying for weeks: the budget is not fit for purpose. My colleagues have comprehensively addressed why that is the case, but it bears repeating.

The SNP, aided by the Greens, have chosen to hike taxes on families and firms, making Scotland the most expensive part of the UK in which to live, work and do business. The SNP is asking Scots to pay more while it continues to deliver the same shambles on education, the NHS, and our justice system. While Derek Mackay is raiding the pockets of hard-working Scots, he has conveniently failed to mention that he has £0.5 billion pounds more to spend this year.

The SNP likes to claim that it is competent at running the country, but the budget has shown that to be fantasy. I see the First Minister sitting on the front bench; I wonder whether she will do a report card on her cabinet secretaries after the debate. I would not like to see the grades that would be given to Messrs Mackay, Brown and Matheson.

In Mr Mackay, we have a finance secretary who had to ask my colleague Murdo Fraser to explain the Laffer curve. From his reaction to Mr McKee’s essay, I am pretty sure that there is no way that he wrote what Mr McKee read out.

Dean Lockhart was quite right to outline that, despite the last-minute changes, there is still a cut to the enterprise networks. We might think that Mr Brown would have spoken up against that at Cabinet, but perhaps that is expecting too much. Earlier this week we found out through a freedom of information request that Mr Brown had “little awareness” of the role of Highlands and Islands Enterprise—two months after he had set up a review on HIE. That is hardly competent government.

Ivan McKee

Will the member take an intervention?

Douglas Ross

Hold on.

On justice, Mr Matheson, who has been dubbed by some “the invisible minister”, would probably have preferred not to have been seen when he appeared before the Justice Committee. We were considering the Crown Office and Procurator Fiscal Service budget, and we had already heard from the Crown Office that it would have to lose jobs as a result of the real-terms cuts from the SNP Government, but the justice secretary said, in response to my question about his Government’s cuts and job losses:

“I am not expecting any at present.”—[Official Report, Justice Committee, 10 January 2017; c 8.]

A week later, the Crown Agent told the same Justice Committee that 30 jobs would be lost because of the SNP’s cuts to the budget.

I would dearly love to tell SNP ministers to go back to school and learn their briefs, but given the shambolic nature of education under the nationalists, I am not sure that they would learn very much.

We have heard some great quotations in the debate, which I have enjoyed greatly. Ash Denham confirmed to me that she prefers the budget as amended by the Greens to the one that Derek Mackay proposed in December. Maree Todd told us that this, our Scottish Parliament, with its powers over finance, the economy, enterprise, education, policing and the NHS, does not have the powers to improve things. I tell that SNP member that we have the powers; we just do not have the right Government to use them.

Kenneth Gibson stood up and called Patrick Harvie the man of the hour—words that spread fear through many of us, myself included. So, what about the man of the hour? How tough a negotiator is Patrick Harvie? What was his negotiation for the vital six Green votes to get the budget passed tonight? How much ground did he get the SNP to concede? The answer is “far less” ground than they should have conceded. Those are not my words; they are Mr Harvie’s own words. He said in response to Kezia Dugdale that he had got “far less” from the Scottish Government than he should have. It is hardly the amazing deal that the Green MSPs say they got.

Patrick Harvie

Will the member take an intervention?

Douglas Ross

I will give way to the man of the hour.

Patrick Harvie

I am grateful to Douglas Ross for giving way, because it allows me to ask him the same question that I would have asked Jackie Baillie. Both of them have said that we should have got more. Can the member tell me of any occasion when any budget has been debated in Parliament when either the Conservatives or the Labour Party have achieved anything like the scale of the impact that the Greens have managed today?

Douglas Ross

We achieved business rates cuts, 1,000 extra police officers on the beat and a town centre regeneration fund. If members want to learn how to negotiate, they should listen to the Conservatives, rather than saying that they did not get enough from the SNP and then complaining when members criticise them for it.

I will also mention business rates. I have been contacted by countless businesses in Moray that have been affected by the proposed rises that the SNP Government is overseeing.

Kenneth Gibson

No, you haven’t. [Laughter.]

Douglas Ross

It is not a laughing matter. Hotels in Forres and entertainment venues in Elgin have told me that the increases will harm their businesses. We know from today’s First Minister’s question time that even SNP members cannot swallow the increases that those businesses would have to apply to their fees to meet the hike in business rates. Those businesses are right to expect more from the SNP and from their Scottish Government.

I will say more about the deal that has been done to secure tonight’s budget. We now know the price of dealing with the Greens. The nationalist alliance between the two parties represented in the chamber that want to separate Scotland from the rest of the UK also wants Scottish taxpayers to pay more. The SNP—I am sorry. I mean the SNP and the Greens have lurched far further to the left than any—[Interruption.]—of us feared they would. I stopped for a moment when the First Minister spoke from a sedentary position. Does she wish to intervene? No. Okay. The First Minister does not wish to intervene. That is very telling about her Government’s budget.

As Murdo Fraser has said, Scottish businesses will suffer because of the budget. Hard-working families will suffer because of the budget. The SNP would love to paint our opposition to the tax hikes as protecting the rich, but it is about protecting many public servants, including teachers, nurses and policemen and policewomen. Those are the people who will suffer under the SNP plans.

The Scottish Conservatives have outlined an alternative approach that would increase the tax base and provide an environment that is ripe for growth at a time when the performance of Scotland’s economy has never been more pivotal in providing cash for public services.

Because we have ambition for Scotland, we cannot support the Government’s budget while it proposes to make Scotland the highest-taxed part of the UK. For those reasons, the Scottish Conservatives will vote against the budget at decision time.

16:50  



Derek Mackay

I was thoroughly disappointed by Douglas Ross’s comments and the content of his speech. He showed that the Tory party, as well as not being fit for government, is not fit for opposition. We had remarkably disappointing contributions from a number of Conservative members. [Interruption.] I was turning my attention to the Tories, but that seems to have upset the Labour Party. Better together is back together for the budget, which may be a sign of things to come. They are not just back together for the budget; from what I have seen this afternoon, they are bitter together. What a woeful contribution to what was meant to be a mature debate on the public services of our country.

This has been quite a lively debate in which members have taken a number of different positions, as is to be expected. Throughout the process, I have tried to find the common ground—the consensus—that exists in the Parliament to deliver a budget for Scotland that we can all agree to.

The comment by Douglas Ross that most disappointed me was his appalling attack on the education service of Scotland in referring to what he described as the “shambles” in Scottish education. That is symptomatic of how the Conservatives have reverted to type in constantly—regardless of the subject—talking Scotland down. If people are scared away from investing or living in Scotland, it will be because of the messages that they hear from the Scottish Tory party, whose day job seems to be standing up for Westminster and the hard-right Tory Government.

I now regret not taking an intervention from Willie Rennie, especially if he was to start by saying, “I think Derek Mackay has done a good job.” I say to the Liberal Democrats that there is much in the budget that they can support.

As for the Labour Party, we know that its amendment is totally meaningless. It is not proposing to end austerity; with its proposition on the basic rate of income tax, it would simply pass austerity on to households across Scotland. It has not considered the risks that that would pose to the Scottish economy and it has taken no cognisance of the advice that its proposal on the additional rate might lose money for Scotland’s public services. What the Government proposes now is not the investment of an extra £700 million in our public services but the investment of an extra £900 million in our public services, yet the Labour Party will not support that.

Anas Sarwar

Will the minister take an intervention?

Derek Mackay

In a moment.

On the subject of support, I have a number of quotes that demonstrate support for our budget from sector after sector. Colleges Scotland says:

“The increased investment in Scotland’s colleges is very welcome indeed, particularly in these tough financial times.”

We have discussed the Scottish Chambers of Commerce’s welcoming of our business rates position as it relates to the small business bonus and the poundage, as well as its welcoming of our infrastructure spend. The Educational Institute of Scotland has welcomed the additional funds to tackle the attainment gap and inequality, while the Federation of Small Businesses has spoken about how we are giving hope to small businesses in difficult times. I could go on reciting quotes in support of our budget, but it is only right that we hear from Anas Sarwar.

Anas Sarwar

The SNP used to support the 50p tax band. At the Finance and Constitution Committee, the cabinet secretary said that if that band were introduced in other parts of the UK, he would consider introducing it in Scotland. Why is he only a unionist when it comes to Tory tax policy?

Derek Mackay

The problem is that the Labour Party believes its own rhetoric. I did not say what Anas Sarwar suggested. I tried to explain the block grant adjustment to the Labour Party members on the committee, but it is clear that I failed to do so. I explained the difference in what happens to the outturn for our resources under the new fiscal framework. I will happily arrange a full briefing for members of the Labour Party who want to understand how that works.

Our proposition was that the additional rate should remain under review. We would want to be certain that such a rate would actually generate resources for public services, rather than jeopardising them, which is what the Labour Party suggests.

The Labour Party has criticised my position on local services. It is true to say that the potential spending power for local services is not £240 million. After the budget, with the co-operation and engagement of the Greens, the totality of spending power for local services will increase to more than £400 million.

Different members have mentioned different council areas. Colin Smyth mentioned his council area, which will see an increase of £12 million for local services. Kezia Dugdale mentioned Edinburgh, which will see an increase of more than £30 million—3.92 per cent. Ivan McKee mentioned Glasgow, as did other members—its increase is £45 million. Kenny Gibson mentioned North Ayrshire, which will see an increase of £26 million.

We are investing in our public services and infrastructure, whether that is housing, digital, water, roads, rail—that would be opposed by the Labour Party, too—or new community facilities. There is fantastic investment that will increase the number of houses that we are building. We are delivering stability for our economy and stimulating growth with further investment in innovation and internationalisation.

The Conservatives kept referring to the extra resources that we have to spend. As I have said repeatedly—this is backed up by the Fraser of Allander institute—the figures that they are using do not refer to full discretionary spend. I might need to do another briefing to educate many of the Conservatives on the actual discretionary spend that the Parliament has at its disposal.

Murdo Fraser

Will the minister take an intervention?

Derek Mackay

I will not take an intervention because I have only two minutes left.

I want to make an important point about what the Conservatives propose. They were elected to be a strong Opposition, but I would like to see them tell those they represent that they are opposing a generous package on business rates and the relief that the SNP Government will provide. The Conservatives will be opposing investment in education, our trade strategy and a range of other infrastructure projects. Scotland remains an attractive place to live, work and invest in. It is the Tories who have been talking Scotland down, and we will not pass on the Tory tax cuts.

If there is divergence in our tax proposition, it is because the SNP believes in the social contract, which includes free education, rather than tuition fees; free prescriptions; free personal care for the elderly; the abolition of bridge tolls; the council tax freeze during those difficult times; no compulsory redundancies for the Scottish Government and health service workforce; and massive investment in the NHS. The Tory party is actually in favour of tax rises, but only for people who are poor, who are seeking education or who happen to live south of the border, where council tax has rocketed under the UK Tory Government.

We believe in a budget that delivers stability, stimulates our economy, invests in education, tackles inequality, focuses on attainment, supports every part of the country, invests in our infrastructure and listens and responds to the voices in Parliament. It is a good budget. I am proud of the budget and I look forward to taking it to the country. I believe that the Parliament can unite, even at this late stage, to recognise that the extra spending of £900 million is good for Scotland in building a better and fairer society, of which we can all be proud.

Vote at Stage 1

Vote at Stage 1 transcript

The Presiding Officer

There are two questions to be put as a result of today’s business. The first question is, that amendment S5M-03768.1, in the name of Kezia Dugdale, on the Budget (Scotland) Bill, be agreed to. Are we agreed?

Members: No.

The Presiding Officer

There will be a division.

For

Stewart, David (Highlands and Islands) (Lab)
Smyth, Colin (South Scotland) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Sarwar, Anas (Glasgow) (Lab)
Rowley, Alex (Mid Scotland and Fife) (Lab)
McNeill, Pauline (Glasgow) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Macdonald, Lewis (North East Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lamont, Johann (Glasgow) (Lab)
Kelly, James (Glasgow) (Lab)
Johnson, Daniel (Edinburgh Southern) (Lab)
Griffin, Mark (Central Scotland) (Lab)
Gray, Iain (East Lothian) (Lab)
Grant, Rhoda (Highlands and Islands) (Lab)
Findlay, Neil (Lothian) (Lab)
Fee, Mary (West Scotland) (Lab)
Dugdale, Kezia (Lothian) (Lab)
Bibby, Neil (West Scotland) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Baker, Claire (Mid Scotland and Fife) (Lab)
Baillie, Jackie (Dumbarton) (Lab)

Against

Yousaf, Humza (Glasgow Pollok) (SNP)
Wightman, Andy (Lothian) (Green)
Whittle, Brian (South Scotland) (Con)
White, Sandra (Glasgow Kelvin) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Wells, Annie (Glasgow) (Con)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Tomkins, Adam (Glasgow) (Con)
Todd, Maree (Highlands and Islands) (SNP)
Thomson, Ross (North East Scotland) (Con)
Swinney, John (Perthshire North) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Smith, Liz (Mid Scotland and Fife) (Con)
Simpson, Graham (Central Scotland) (Con)
Scott, Tavish (Shetland Islands) (LD)
Scott, John (Ayr) (Con)
Russell, Michael (Argyll and Bute) (SNP)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Rumbles, Mike (North East Scotland) (LD)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Ross, Douglas (Highlands and Islands) (Con)
Robison, Shona (Dundee City East) (SNP)
Rennie, Willie (North East Fife) (LD)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Mundell, Oliver (Dumfriesshire) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mitchell, Margaret (Central Scotland) (Con)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McArthur, Liam (Orkney Islands) (LD)
McAlpine, Joan (South Scotland) (SNP)
Matheson, Michael (Falkirk West) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lochhead, Richard (Moray) (SNP)
Lindhurst, Gordon (Lothian) (Con)
Lamont, John (Ettrick, Roxburgh and Berwickshire) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Kerr, Liam (North East Scotland) (Con)
Johnstone, Alison (Lothian) (Green)
Hyslop, Fiona (Linlithgow) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Harvie, Patrick (Glasgow) (Green)
Harris, Alison (Central Scotland) (Con)
Harper, Emma (South Scotland) (SNP)
Hamilton, Rachael (South Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Greene, Jamie (West Scotland) (Con)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Golden, Maurice (West Scotland) (Con)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Finnie, John (Highlands and Islands) (Green)
Fabiani, Linda (East Kilbride) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Evans, Mairi (Angus North and Mearns) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dey, Graeme (Angus South) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Davidson, Ruth (Edinburgh Central) (Con)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Crawford, Bruce (Stirling) (SNP)
Corry, Maurice (West Scotland) (Con)
Constance, Angela (Almond Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Chapman, Peter (North East Scotland) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Carlaw, Jackson (Eastwood) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Cameron, Donald (Highlands and Islands) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Briggs, Miles (Lothian) (Con)
Bowman, Bill (North East Scotland) (Con)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Balfour, Jeremy (Lothian) (Con)
Arthur, Tom (Renfrewshire South) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Adam, George (Paisley) (SNP)

The Presiding Officer

The result of the division is: For 23, Against 103, Abstentions 0.

Amendment disagreed to.

The Presiding Officer

The final question is, that motion S5M-03768, in the name of Derek Mackay, on the Budget (Scotland) Bill, be agreed to. Are we agreed?

Members: No.

The Presiding Officer

There will be a division.

For

Yousaf, Humza (Glasgow Pollok) (SNP)
Wightman, Andy (Lothian) (Green)
White, Sandra (Glasgow Kelvin) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Swinney, John (Perthshire North) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Russell, Michael (Argyll and Bute) (SNP)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Robison, Shona (Dundee City East) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McAlpine, Joan (South Scotland) (SNP)
Matheson, Michael (Falkirk West) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
Lochhead, Richard (Moray) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Johnstone, Alison (Lothian) (Green)
Hyslop, Fiona (Linlithgow) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Harvie, Patrick (Glasgow) (Green)
Harper, Emma (South Scotland) (SNP)
Greer, Ross (West Scotland) (Green)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Finnie, John (Highlands and Islands) (Green)
Fabiani, Linda (East Kilbride) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Evans, Mairi (Angus North and Mearns) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dey, Graeme (Angus South) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Crawford, Bruce (Stirling) (SNP)
Constance, Angela (Almond Valley) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Adam, George (Paisley) (SNP)

Against

Whittle, Brian (South Scotland) (Con)
Wells, Annie (Glasgow) (Con)
Tomkins, Adam (Glasgow) (Con)
Thomson, Ross (North East Scotland) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smith, Elaine (Central Scotland) (Lab)
Simpson, Graham (Central Scotland) (Con)
Scott, Tavish (Shetland Islands) (LD)
Scott, John (Ayr) (Con)
Sarwar, Anas (Glasgow) (Lab)
Rumbles, Mike (North East Scotland) (LD)
Rowley, Alex (Mid Scotland and Fife) (Lab)
Ross, Douglas (Highlands and Islands) (Con)
Rennie, Willie (North East Fife) (LD)
Mundell, Oliver (Dumfriesshire) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mitchell, Margaret (Central Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
McArthur, Liam (Orkney Islands) (LD)
Marra, Jenny (North East Scotland) (Lab)
Macdonald, Lewis (North East Scotland) (Lab)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lindhurst, Gordon (Lothian) (Con)
Leonard, Richard (Central Scotland) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lamont, John (Ettrick, Roxburgh and Berwickshire) (Con)
Lamont, Johann (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kelly, James (Glasgow) (Lab)
Johnson, Daniel (Edinburgh Southern) (Lab)
Harris, Alison (Central Scotland) (Con)
Hamilton, Rachael (South Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Greene, Jamie (West Scotland) (Con)
Gray, Iain (East Lothian) (Lab)
Grant, Rhoda (Highlands and Islands) (Lab)
Golden, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Findlay, Neil (Lothian) (Lab)
Fee, Mary (West Scotland) (Lab)
Dugdale, Kezia (Lothian) (Lab)
Davidson, Ruth (Edinburgh Central) (Con)
Corry, Maurice (West Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Chapman, Peter (North East Scotland) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Carlaw, Jackson (Eastwood) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Briggs, Miles (Lothian) (Con)
Bowman, Bill (North East Scotland) (Con)
Bibby, Neil (West Scotland) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Balfour, Jeremy (Lothian) (Con)
Baker, Claire (Mid Scotland and Fife) (Lab)
Baillie, Jackie (Dumbarton) (Lab)

The Presiding Officer

The result of the division is: For 67, Against 59, Abstentions 0.

Motion agreed to,

That the Parliament agrees to the general principles of the Budget (Scotland) Bill.

The Presiding Officer

That concludes decision time.

Meeting closed at 17:03.  



MSPs agreed that this Bill could continue

Stage 2 - Changes to detail 

MSPs can propose changes to the Bill. The changes are considered and then voted on by the committee.

Changes to the Bill

MSPs can propose changes to a Bill  these are called 'amendments'. The changes are considered then voted on by the lead committee.

The lists of proposed changes are known as a 'marshalled list'. There's a separate list for each week that the committee is looking at proposed changes.

The 'groupings' document groups amendments together based on their subject matter. It shows the order in which the amendments will be debated by the committee and in the Chamber. This is to avoid repetition in the debates.

How is it decided whether the changes go into the Bill?

When MSPs want to make a change to a Bill, they propose an 'amendment'. This sets out the changes they want to make to a specific part of the Bill.

The group of MSPs that is examining the Bill (lead committee) votes on whether it thinks each amendment should be accepted or not.

Depending on the number of amendments, this can be done during one or more meetings.

First meeting on amendments

Documents with the amendments considered at this meeting held on 6 February 2017:

First meeting on amendments transcript

The Convener (Bruce Crawford)

Good morning and welcome to the Finance and Constitution Committee’s sixth meeting in 2017. As usual, I ask members to switch off their mobile phones or at least to put them in a mode that will not interfere with proceedings.

Our first agenda item is to take evidence on the Budget (Scotland) Bill at stage 2. The session is intended to allow the committee the opportunity to put questions to the cabinet secretary and his officials.

I welcome to the meeting Derek Mackay, the Cabinet Secretary for Finance and the Constitution. He is joined by Graham Owenson, head of local government finance; Jonathan Sewell, head of the income tax and fiscal adjustments unit; and Gordon Wales, director of financial management. I welcome all our witnesses and I invite the cabinet secretary to make an opening statement.

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

I take the opportunity to recognise the committee’s work during this year’s budget process, which is reflected in the quality and scope of your report on the 2017-18 draft budget. As I informed Parliament last week, I will respond in full in advance of the stage 3 debate.

There are a number of amendments to consider following the spending changes that I announced at stage 1. As committee members are aware, there are a number of differences in the presentation of budget information between the draft budget and the budget bill. To assist the committee, I will explain the main differences with reference to table 1.2, which is on page 3 of the supporting document.

Column H in table 1.2 sets out the draft budget’s spending plans, as required to be restated for budget bill purposes. Columns B to G in the table provide details of the adjustments that have been made, including the statutory adjustments that are necessary to meet the requirements of parliamentary process.

I take the opportunity to highlight one substantive change to the spending plans that are outlined in the draft budget. To ensure that budgets align with the latest available information, there is an increase of £1.115 billion in the annually managed expenditure budget provision for the teachers and national health service pension schemes. That reflects HM Treasury updates to discount rates that are applied for post-employment benefits, which were announced in December 2016. That is a non-cash adjustment that relates to estimates of future liabilities.

The other adjustments that have been set out include the exclusion of £164.8 million of non-departmental public body non-cash costs, which do not require parliamentary approval and which mainly relate to depreciation and impairments in our NDPB community; the exclusion of judicial salaries and Scottish Water loan repayments to the national loans fund and the Public Works Loan Board, which also do not require parliamentary approval; and the inclusion of police loan charges, which are to be approved as part of the bill. Those are technical accounting adjustments of £111.7 million, which reflect differences in the way in which HM Treasury budgets for those items and how we are required to account for them under the international financial reporting standards-based accounting rules that apply under the Government financial reporting manual.

There are also adjustments to portfolio budgets to reflect the requirement for separate parliamentary approval for the budgets of a number of direct-funded and external bodies. They include National Records of Scotland, the Forestry Commission, Food Standards Scotland, the Scottish Courts and Tribunals Service, the Office of the Scottish Charity Regulator, the Scottish Housing Regulator, Revenue Scotland and the teachers and NHS pension schemes.

The restatement of specific grants was included in the overall 2016-17 local authority settlement, and they remain under the control of the appropriate cabinet secretaries with policy responsibility. Full details of all the grants that are treated in that way are included in the summary table on page 44.

I again make it clear that those adjustments are essentially technical and do not change in any way the budget that has so far been scrutinised by this and other committees and approved in principle by Parliament. I remind members that, for the purposes of the bill, only spending that scores as capital in the Scottish Government or direct-funded bodies’ annual accounts is shown as capital. That means that capital grants are shown as operating expenditure in the bill’s supporting document. The full capital picture is shown in table 1.3 on page 4.

The amendments to the bill will give effect to the changes in the spending plans that I announced last week in the stage 1 debate and will be formally moved in due course. The amendments will allocate an additional £160 million to local government, £25 million to police reform and £35 million to Scottish Enterprise. Details of the allocations of the £160 million at local authority level have been provided separately. It will be up to councils to decide how best to deploy the additional funding.

The commitments will be funded through the use of the budget exchange mechanism, updated projections of the required Scottish Government contribution to bring the non-domestic rate pool into balance and a reduction in the anticipated cost of borrowing repayments next year.

I hope that committee members have found that information helpful.

The Convener

The Government has claimed that an additional funding package of £220 million will be made available in 2017-18. I have a simple question: where is that money coming from?

Derek Mackay

It might be helpful if I give you more of the detail on that, after which I will be happy to take further questions. I can give you figures, but the caveat is that they will be quite fluid until we get to the end of this financial year and into the next one. I suppose that that will become clearer as I describe how we arrive at the figures.

In moving from the draft budget to where we are now, we have had further time to look at forecasts, demand-led budgets, actual expenditure and the potential carryover from one year into another year, which is the budget exchange mechanism that all members are familiar with. We have also looked at our forecasting of and how we adjust non-domestic rates, as well as the change in borrowing that I touched on. Furthermore, we have changed our tax position, which will generate a sum of money.

I will give you figures for each element but with the caveat that, as we reach the end of the financial year, the profile of some of the figures in the £220 million may change. From budget exchange—that is the carry-forward from one year into the next, which can apply to demand-led budgets or underspends as we understand them—there is £47.5 million in resource departmental expenditure limits, £42.5 million in capital and £35 million in financial transactions.

From non-profit-distributing programme borrowing, the figure is £6 million. Officials can assist with the technical detail on all the figures, if that is required. From the non-domestic rates pool, we have £60 million. In addition to all that, the cash freeze on the higher-rate threshold should generate about £29 million.

From resource DEL, the total is £142.5 million; from capital DEL, the total is £42.5 million; and from financial transactions, the total is £35 million. That takes us to the figure of £220 million.

I make it clear that those figures are fluid and may change. The £220 million will not change, but the profile will be subject to what is required and appropriate at the time. Some of that will feature in budget reports later in the financial year. I can go into further detail if required to do so, but that is where the resource comes from.

To put it another way, there is always some element of budget exchange from one year to the next, when an underspend is carried into the next year because we cannot overspend—we can only underspend or get it bang on. To achieve a spend that is absolutely bang on target is next to impossible for any organisation of this scale.

To put the matter into context, the level of carryover from one year to the next—budget exchange—is quite normal. In the past, finance ministers might have been able to allocate that to specific purposes over the course of the year—last year, we allocated funds to the fiscal stimulus of £100 million. At the start of the coming financial year, I propose to allocate the budget exchange figures to the purpose that I have described, to respond to requests in Parliament and the clear budget negotiation process that was undertaken.

The Convener

You are right that members will want to get to some of the detail that is underneath that information. I would like to go into more detail on the non-domestic rates pool, which you tell us will produce £60 million for expenditure in other areas. I hope that you agree that there would be an almighty outcry from the business community if it thought that that money came from business rates. Can you assure me that none of the money from the NDR pool will come from business rates and that there will be no impact on Scottish businesses as a result?

Derek Mackay

There is no impact on businesses or business rates as a consequence of the budget decisions that we have taken. The non-domestic rates pool is incredibly complex, but essentially, although it involves multiyear budgeting because of how it is calculated, distributed and forecast—because of all the moving parts that are in it—it is true to say that every local authority area keeps every penny of non-domestic rates. In the pool, there are the contributions and the distributable amount; we assess the forecasts for that and then profile the amount for distribution. That is what we have done.

We have looked at the profiling, the considerations of the pool and the nature of the operating account and have ensured that the decision on the £160 million will not impact on what I have proposed for business rates—the poundage is still being reduced, the small business bonus is still being enhanced, we are still taking thousands of businesses out of the large business supplement and every council area will still keep every penny that it raises. We have changed the forecasting for all that—again, I can go into further detail—but the basic point in your question is correct in that there is no impact on businesses paying rates as a consequence of my decision on how to deploy the resources.

The Convener

Liam Kerr has a question on that area.

Liam Kerr (North East Scotland) (Con)

My question follows on nicely. If I am hearing you right, there is an extra £60 million that you did not realise that you had, which relates to business rates. As you know, up in the north-east—I know that you have been up there—there are intolerable hikes in local business rates, which mean that there will be big cuts in businesses’ resources, and some are threatening to shut their doors. That begs the question of why you would not use the extra business rates money to ameliorate the significant problems that businesses in the north-east and elsewhere face.

Derek Mackay

Mr Kerr asks a good question. I am well aware of the issues in the north-east and particularly in Aberdeen city and Aberdeenshire—that is why I went there at short notice, following a timely request to go. The meeting was described in the media as fiery, although it was actually very positive and constructive for all the attendees.

We can go over the facts on business rates, but there are further actions that can be taken. The committee is a useful place to understand and discuss that.

Some people do not think that business rates money stays in the local area—I have heard that charge in Aberdeen and Aberdeenshire—but that is not true. I was able to explain that half of all properties in Scotland will pay no business rates whatever.

09:45  



There is an issue in hospitality that is worthy of further exploration, but half of all hotels pay no business rates whatever. In the north-east and across the country, there will be many beneficiaries from expanding the small business bonus. Raising the threshold for the large business supplement to £51,000 is lifting thousands of businesses out of paying that supplement. The poundage rate and the large business supplement together are lower than the 50p rate, and I have matched the poundage rate south of the border. All that is a good, nationally determined package of reliefs, and there is the expansion of rural reliefs as well.

The Ken Barclay review of all the individual issues around business rates will report in late summer. I want to look at how the methodologies for some sectors’ rates were arrived at. Maybe it has been the case for decades that the formula is the formula, but I am interested to hear the panel’s thinking on that.

I had a constructive conversation in the north-east. I said that I was more than happy to work with the local authorities on further support and that it might be more appropriate to have local schemes that reflect local circumstances, which is an issue that I will come back to.

I do not believe that a national transitional relief scheme is appropriate, given the nature of the revaluation. Mr Kerr will understand that the revaluation is independent of the Government and is delivered by assessors who are accountable to the courts and local authorities. Two thirds of businesses will pay business rates that are the same as or less than they paid previously. Those whose rates bills are going up will want to understand that and express their views to the Government, while those who will have no bills or smaller bills will perhaps not be as vocal.

Having looked at the data that I have, I believe that, if we were to have a national transitional relief scheme, as exists south of the border automatically because of legislation, the so-called biggest winners would be the national utility companies, at the expense of many smaller businesses. Many smaller businesses would pay more and their rates would be held artificially high to compensate the large utility companies. That would not be the right balance.

I have been engaging with a number of councils on local support. The Community Empowerment (Scotland) Act 2015 provides enabling legislation for a local authority to create any local rates relief scheme that it wishes. For example, Perth and Kinross Council has done that for retail businesses. Any local authority might want sectoral or geographic support for tourism, or, as in the north-east, the oil and gas sector. The legislation enables councils to provide that in a way that is state-aid compliant. Given that local authorities will have an extra £160 million of resource that they were not expecting, they will have the headroom and flexibility to deliver a local scheme if they think that that is appropriate. That is local community empowerment.

I think that we have taken the right decisions on a range of actions around business rates. However, I will continue to engage with the business sector because, although I am mindful that some businesses might have explored with the assessors their rateable values, others might not be fully aware yet of what that means for them. I would not want them to miss out on the opportunity of the appeals process.

All of that is incredibly complex, which brings me back to the non-domestic rates pool that goes to local authorities. The Government determines what can be distributed from that pool. Because there is a multiyear element, the figures for what is raised against what is spent or distributed are not bang on for an individual year. However, there is a balance over a number of years. I have taken decisions about what will keep the pool in balance over a number of years, while looking at further forecasts on appeals and income, which will change as businesses work their way through the system. Utility companies will probably be at the higher end of increases, so they are likely to appeal, which will probably affect the final position.

Convener, I think that I have given a fair degree of detail, but I am happy to bring in Graham Owenson if you require more detail.

Liam Kerr

Can I just re-ask the question?

Derek Mackay

Do you want me to do that again? [Laughter.]

Liam Kerr

I hear everything that you say, cabinet secretary, but the question that I asked was whether you considered applying the £60 million extra to ameliorate the eye-watering increases that an awful lot of businesses, particularly in the hospitality sector in the north-east, are facing.

Derek Mackay

Mr Kerr, I tried to give you a detailed explanation of how the rates system works—how the contributions, the national reliefs and the local reliefs work. The value of our reliefs is now in the region of £600 million, so the balance is fair. Some elements are automatic and some are not. Giving the £160 million to local authorities and allowing them the discretion to use it is the right balance, as is the balance between the national supports and what can be done locally.

Some of this might be quite specific. If you want me just to make bland political points, I can, but I hope that I have been able to demonstrate a detailed knowledge of sectors and geography. Many people will pay less on their rates bill. People in many parts of the country will have smaller bills as a consequence of the measure. Some people have asked us to postpone implementation of the revaluation or transitional relief but I have tried to describe how each of those determinations would be unhelpful for the people who would pay less as a consequence of the national decisions and their local valuations.

To be blunt, I think that the allocation of resources is the right balance. I am not closed minded on what to do next to support businesses on business rates but I am examining all the evidence in detail. A further allocation of £60 million to national business rates relief is not necessarily the right thing to do when I consider the issue sector by sector.

Liam Kerr

That is not what I am asking for.

Derek Mackay

I thought that it was.

Liam Kerr

No, and I am not making a bland political point. I am simply saying that a business that faces a 250 per cent rise in its business rates, as many of the businesses to which I am referring do, looks at it and says that the Government is taking a significant extra amount of money in business rates. There appears to be a pot for which you did not plan on which you appear to have made a spending decision. You could have decided to help the businesses that face a 250 per cent rise, but you have chosen not to. Did you consider making that choice or not?

Derek Mackay

I have tried to explain the details and the complexity of how the non-domestic rates pool works. I am happy for officials to assist. I think that you have misunderstood how those resources can be released and how the forecasts are used. It is about the multiyear nature of budgeting within non-domestic rates and ensuring that the pool is in balance. To answer your question and the convener’s question, it is absolutely not the case that I am asking businesses to pay more as a consequence of the spending decisions that I have made or the allocation on non-domestic rates.

The Convener

We will move to questions from Ivan McKee, because we need to explore issues to do with budget exchange.

Ivan McKee (Glasgow Provan) (SNP)

I will ask about the budget exchange mechanism, cabinet secretary. You detailed, I think, three numbers that, if I have got this right, add up to about £125 million. Is that right? It was £47.5 million for resource DEL, £42.5 million for capital DEL and £35 million for financial transactions.

Derek Mackay

Those three figures are correct.

Ivan McKee

Aye, so it is about £125 million. If I have got that right, that is the buffer or slack that you need to be able to manage the process through the year and ensure that you do not run out of cash for items on which there is demand-led or other spend that needs to be made. It sounds like a big number, but it is only about 0.3 per cent of a £30 billion budget. Is my understanding of that correct?

As I understand it, you do not lose any of that money by not spending it, because the agreement with the Treasury is that it moves into the next year, which allows you to release it. Therefore, you would have a problem if you had not allowed for that money, because you do not know what it will be at the start of the year but, as you go through the year, it becomes more apparent. Is that how it works?

Derek Mackay

Yes, that is a fair summary.

Ivan McKee

Good.

Derek Mackay

Of course, I could just repeat all that but, if you want concise answers, convener, I am happy to say that that is a fair summary.

Ivan McKee

That is fine. I just wanted to get that clear. It is all I need to know.

The Convener

Murdo Fraser wants more clarity on budget exchange.

Murdo Fraser (Mid Scotland and Fife) (Con)

Yes, and on the broader issue of the split in the numbers that you set out at the start, finance secretary.

When you presented your draft budget to Parliament six or seven weeks ago, you said—I might be paraphrasing—that it was a fair and balanced budget and that you had accounted for every penny. You challenged the Opposition parties to find what other parts of the budget to cut in order to balance it if they wanted to propose increases in spending in any area. It now turns out that that is not really the case. It turns out that you had the best part of £200 million down the back of the sofa, which you were not telling us about. How could it have been fair to the Parliament and its committees, which were trying to carry out detailed and proper parliamentary scrutiny of your draft budget, when you had all that money squirreled away that you were not telling us about?

Derek Mackay

I was trying to make you work for your money, Mr Fraser. I wanted to see whether you could find any more resources that I was not able to allocate and—

Murdo Fraser

But we are not in government, finance secretary—you are.

Derek Mackay

Yes, and that is unlikely to change for a while. I know that you love to debate, Mr Fraser—maybe we will return to that at stage 3.

The Convener

This is supposed to be questions and answers. Let us not have a debate across the floor.

Derek Mackay

Mr Fraser asks a fair question that relates to the updated forecasts for non-domestic rates and decisions that we are taking around the NDR pool. Through a tax policy change, we are moving the higher-rate threshold from an inflationary increase to a cash freeze, which will generate approximately an additional £29 million, and officials have advised on changing an element of borrowing that will release £6 million.

Budget exchange is a political decision, and it is fair to say that the Opposition will now be very wise to the operation of budget exchange in future years. I have taken a deliberate decision. Normally, budget exchange would carry on into the next year and, over the course of the year, it would be allocated as the Government and Parliament saw fit. However, I am determining at the start of the financial year that this is an appropriate policy decision to make.

That is partly a consequence of the negotiations with all parties, which will remain confidential with me although some Opposition spokespeople have chosen to put their requests in the public domain. I had to work hard to identify resources to make the consensus in Parliament that I wanted to deliver, which meant making policy decisions, taking an early decision on how we would allocate budget exchange and ensuring that officials turned over every stone to find extra resources to allocate in the budget. I can give further information on the non-domestic rates pool element, but that is still fluid because we are addressing issues within that.

I did not have resources waiting to be allocated but was able to make decisions over the past few weeks, since the publication of the draft budget. It is also fair to say that my room for manoeuvre in future years is now somewhat limited.

Murdo Fraser

I think that we all understand that last point, finance secretary. You say that you had to work hard to find those additional resources. The obvious question is why you did not work so hard back in December, before you published your draft budget. Had you done so, the Parliament and the committee would have had a much fuller picture of the resources that you had at your hand. It now seems that the budget that you published was a partial picture, because money was found subsequently. When exactly did it become apparent to you that you had the extra money that you did not know about before?

Derek Mackay

It is not an accurate characterisation to say that there was extra money for allocation. Political decisions were made on the basis of the profiling of non-domestic rates and our understanding of the assessments that are going on at the moment. Assessors are still looking at evidence, engaging with sectors and considering any appeals that have been made. Our forecasts for non-domestic rates will therefore continue to change until that process ends and the outcomes of any appeals are known. It is a moving situation, and there are many moving parts to that multibillion-pound budget.

Some of it was also down to policy choices such as the decisions to move our position on tax and to find further ways to allocate the underspend and budget exchange. Mr Fraser will be well aware that many budget lines are demand led and that what will be spent will become clear only as we get to the end of the financial year, which will determine what will be available for allocation. That situation changes from day to day and from week to week. As we get to the end of the financial year, we will have more information on what is a substantial amount of money—especially the £160 million for local government—but is still, in the end, a very small part of the total resource that the Government has at its disposal.

10:00  



Murdo Fraser

You mentioned your income tax changes. If I recall correctly, your original position of not matching the United Kingdom Government’s proposal to increase the higher-rate threshold was going to give you an additional £79 million. The further changes that you announced last week will bring you £29 million on top of that, which makes £108 million, according to my calculations. Could you confirm that that £108 million is actually less than the money that you have now been able to find, so there was no need to create an income tax differential between Scotland and the rest of the UK to meet all the spending requirements in your original draft budget?

Derek Mackay

That is an extra £107 million or £108 million that helps to balance the overall budget, so it contributes to the overall spending plans of the Government.

Murdo Fraser

However, you did not need to do that to meet your original spending plans.

Derek Mackay

We require that tax contribution to deliver the spending plans that I outlined to Parliament and for the policy reasons that we set out to Parliament.

The Convener

We have got on to transparency issues earlier than expected, so I will slightly change the process that we were going to go through. James Kelly, you are also interested in transparency issues, so we might as well get them out of the way now.

James Kelly (Glasgow) (Lab)

What does it say for the transparency of the budget, cabinet secretary, when you have in effect been sitting on a slush fund since the publication of the draft budget seven weeks ago? You held that back for your negotiations, so you were not completely open with Parliament at the time of the draft budget.

Derek Mackay

That is not an accurate, fair or reasonable characterisation of the budget process, which was a process that Mr Kelly’s party also engaged in. It is very constructive of the Government to listen to the parties in Parliament and to do everything that it can to find consensus to make decisions and to get the budget through. It is not unreasonable to make decisions to enable us to do that, and I totally refute any suggestion that I was sitting on any sort of fund that was ready to go. Political decisions were what ensured that I could arrive at the proposition of allocating £160 million extra in non-ring-fenced resources to local government. I would have thought that Mr Kelly would welcome that, but he seems quite bitter about it.

James Kelly

I am not bitter about anything, Mr Mackay. You said that the process is reasonable yet, if we take the budget exchange mechanism as an example, you knew that there was £125 million that had been built up in previous years, but you did not share that information with Parliament when you set out the draft budget in December and you held the money back for the negotiations. Is that not the case?

Derek Mackay

No, it is not the case, Mr Kelly. You are displaying an astonishing lack of awareness of the budget exchange mechanism and the budget processes of the Parliament. Speaking as a relatively new finance secretary, I am very surprised at that for a man of your years in the Scottish Parliament.

Budget exchange is not carried from year to year; it is from one year into the next. I recall the times when the Labour Executive handed money back to the UK Government, as it did not know how to spend it and, if it had not been for the Deputy First Minister ensuring that Scotland got the money back, the money would have been lost to Scotland. The difference between this Government and some previous Executives is that we ensure that the money is spent prudently and wisely and, when there has been budget exchange, it has been a fraction of the overall budget of the Scottish Government and it has been carried into the next year and spent.

Mr Kelly asked me why I did not explain that at the draft budget stage, but there are underspends in individual budget lines all the way to the end of the financial year—Gordon Wales monitors that on behalf of the Government—and there are accountancy adjustments beyond the end of the financial year. We have hundreds of budget lines, so the figure changes from day to day and the end position is known only at the point at which we close the accounts. We have been able to allocate that as part of the budget process in the fashion that I have described.

I hope that Mr Kelly is reassured that I have been prudent and constructive in my approach, and transparent about how I have funded the extra commitments as a consequence of the deliberations at stage 1 of the budget bill, which his party privately engaged in.

James Kelly

You mentioned local government funding and, as it stands, there are still £170 million of cuts to local council funding. Over the past week, you have heard councils’ stark warnings about the cuts that they face—£50 million in Glasgow, for example. In making the taxation change, is it not the case that you have simply tinkered at the edges and that local government workers and council services will have to pay the price because you have not been bold enough on taxation?

Derek Mackay

I disagree with that characterisation. Local services will benefit to the tune of not £240 million, which was the figure that I explained when the draft budget was published, but more than £400 million. That will be the spending potential for local services, as I described.

Even if no council in Scotland raises council tax and we take the £70 million out of the equation, there is still an increase of £330 million at local level. Councils are beginning to set their council taxes; let us see what they do. How much they raise council tax by—up to 3 per cent—is absolutely at their discretion. I appreciate the Labour Party’s support on increasing the multiplier for higher-value houses to enable us to make council tax a bit fairer and raise more revenue, which will support local services in every part of the country.

I said before that the local government settlement was strong and fair. It is now even stronger and fairer—I see that Mr Harvie is smiling at that. I think that local government welcomed the £160 million in non-ring-fenced resources, £130 million in resource revenue and £30 million in capital funding, which it can use as it sees fit.

I make one suggestion, which takes us back to Mr Kerr’s point about business rates. I do not want the business rates issue to come as a surprise; councils should give consideration to a local rates relief scheme, in addition to what has happened nationally, given that they have more financial headroom and the enabling powers in that regard. I am happy for Government officials to share information with local authorities about rateable values, sectors and localities.

Like me, many members have been members of local authorities, and Mr Kelly will be well aware of the difference between the options that officials present during budget setting and what actually happens—those are two different things. Many of the stories about what will happen to local services might not come to pass, especially as local authorities have more resources than they were planning for in what was already a fair settlement for local government.

I have repeatedly rebutted the misleading figure from the Labour Party. When I look at the increases, local authority by local authority, I think that authorities are in a good, strong position to ensure that they can deliver quality services and take a balanced approach on taxation.

The Convener

There are a couple more questions on this area.

Patrick Harvie (Glasgow) (Green)

I was smiling when the cabinet secretary said that the budget has gone from being “strong and fair” to being “stronger and fairer”. I think that my characterisation would be that it has moved from being a severe cut to local government to being something that is just about good enough.

The transparency question comes back year after year and session after session. It has been part of the tension between the Parliament and Government, whether we have had a minority, majority or coalition Administration. It can be reflected in difficulties in comparing one budget with another because of changes to headings or to the presentation of figures. The new example is the perceived lack of transparency around the budget exchange and the flexibility that that gives to the Government.

A budget review is going on to try to improve how we manage the process. Does the cabinet secretary have views on how we ensure additional transparency and a more calm and measured approach to the budget, particularly in the context of there being a minority Government? There is an additional case to be made for transparency in that context, if we want to avoid last-minute dramas and brinkmanship in the future.

Derek Mackay

No one could be keener than I am to find a calmer and more constructive and helpful way forward for the budget negotiation process that we have in the Scottish Parliament. On Mr Harvie’s comment that, in his view, the local government budget is “just about good enough”, I come from the west of Scotland, as he does, and I think that that is about as good a comment as I will get in political life from a member of an Opposition party.

I will reflect on the comment about transparency and how we do the business of the negotiations. Of course, that is a matter for Parliament as well. At this stage, I do not know of a way to do it other than to listen to Parliament and engage publicly and privately. On whether there is an issue about transparency, I have to work in the confidential realm, given what parties bring to me and what I can then explore and share. If parties put their requests into the public domain, I can respond fairly while still respecting private discussions. Ultimately, whatever is decided goes into the public domain by way of tax and spend, and that is clear and transparent in what I am doing through the stage 2 amendments.

I think that we could all reflect on the matter in view of the fact that there is the budget review group. It will have to consider many issues, including timetabling, transparency, process, the new powers and our engagement with the Chancellor of the Exchequer’s timetable this year, when we will have two budgets and not one, as we flip to having an autumn budget rather than an autumn statement. Considering all that, I am minded to consider how we could do budget negotiations differently. Political parties need space to have negotiations with Government, but if there is another way to do it, I will be interested in exploring it. I am not closed-minded.

More widely, there has been criticism of the transparency of the budget documents. That partly reflects just how complex the multibillion-pound budget is, and the many moving parts that it contains. However, we have tried to engage as best we can with people who are interested—stakeholders and opinion formers—in the budget process and in the detail that we have put out there.

The recommendation on that in the committee’s report is worthy of further reflection. Other committees have commented, too: for example, the Local Government and Communities Committee would like a bit more clarity, with information on local government finance all in the same place. Some of that relates to decisions that are taken in other portfolios or later in the year, so it is not just to do with where information features, but the point is valid, and I think that all members would agree that it is worth considering.

Patrick Harvie

Clarity on the local government settlement in particular has been the subject of some contested interpretations of the figures, if I can put it that way. Some people have compared the local government budget with outturn spending, which might be unfair to the Government, but the Government has also chosen to roll in additional spending, which might be unfair from the councils’ perspective.

Have you seen the new Scottish Parliament information centre figures? They show that, even discounting the health and social care money—whether that should be seen as local government budget or health budget is contested—and any increase from the 3 per cent flexibility that councils have on the council tax, which is their decision and not Parliament’s or the Government’s, we are moving from a 1.9 per cent real-terms cut to local government to a 0.7 per cent real-terms increase. Do you accept that those figures are a reasonable estimate that is somewhere between the overly generous and the overly critical interpretations that have been made for party-political purposes?

Derek Mackay

I never doubt the work of SPICe, of course, but I have not seen that paper or those figures. I think that I have clearly expressed my position on the overall settlement to local government. Mr Harvie alluded to whether the integration joint boards, as the partnership bodies, are local government or health bodies. They are actually both: that is the point of integration, which is about bringing local services together.

I cannot give a judgment on the SPICe briefing because I have not seen it yet. I have always expressed my view on the £240 million for local services moving to £401 million, but even if we take off the figure for integration and the extra resource from council tax, the figures sound credible, in terms of the question and how you asked it. I remind the committee that many other funding streams that do not feature in the figures also go to support local authority priorities—for example, city deal funding and other funding streams contribute to local services.

Patrick Harvie

Briefly, and finally, I would like to ask about the amendment process. The fact that was a revelation to me, as a new member of the Finance and Constitution Committee, is that this is the first time that there have been stage 2 amendments to the budget.

10:15  



Why has the stage 2 amendment process not been used by the Government in the past? Why is it being used this year, rather than other means of making budget changes? Do you anticipate this being a feature of budgets in the future, now that we are in a more complex budgetary system, especially with Parliament’s new powers?

Derek Mackay

It is fair to say that the Government can make budget revisions through the course of the year. They can come in either the spring budget revision or the autumn budget revision. Obviously, budget lines can change during the course of the year, but the determining part, the transparency part and the authority that is given can come in those events through Parliament.

In view of the political deal that has been done to find consensus on the budget, I judged that the right thing to do, to be frank, is to show up-front and clearly how negotiations have led to changes in the budget position, and to bring the changes to Parliament. I could have made the changes later in the year, through other perfectly legitimate budgeting devices, but I think that there is a good and strong position in terms of transparency and intent by putting them in stage 2 amendments, because I know, before the budget process is concluded, what we are trying to achieve and how we wish to achieve it, so Parliament can take a view on it now. That is happening largely as a consequence of our engagement with the Greens.

Patrick Harvie

Thank you. I think that that sets a helpful precedent.

Neil Bibby (West Scotland) (Lab)

As the cabinet secretary knows, the Scottish Government normally reports underspends in June, but you have decided to pre-announce £125 million of underspend and to allocate that before the close of the financial year. You said that the projected underspends change from week to week and from day to day. Will you tell us what the current projected underspend is for 2016-17?

Derek Mackay

Gordon Wales, who leads our financial management team, will cover that. It might be impossible to give an exact figure, but Mr Wales can give you a flavour.

Gordon Wales (Scottish Government)

The figures that the cabinet secretary has described are the numbers that we expect to have as underspend to carry forward to next year, so they represent the current expected outturn.

Neil Bibby

What was the underspend that was carried forward last year?

Gordon Wales

There was £75 million in resource, £40 million in capital and £40 million in financial transactions.

Neil Bibby

So, you are projecting less underspend this year.

Gordon Wales

That is the current state of play, but we still have a good number of weeks to go before the end of the financial year. There is a large number of demand-led budgets, so the situation could change.

Neil Bibby

On what budgets or projects in 2016 is there the greatest underspend at the moment? I am talking about where that £125 million comes from. What department budgets are the most underspent at the moment, and to what extent?

Derek Mackay

We could give you a flavour of that.

Gordon Wales

I can give some examples. It is important to remember that we are talking about the budget exchange number here, which the cabinet secretary quoted as being £47.5 million for resource; it is not the full £125 million. It is also important to remember that we are dealing with many hundreds of individual budget lines that cumulatively form an overall outturn forecast. We are not talking about a small number of budgets that all provide the budget exchange; it is a very large number.

Examples that I could cite range from reasonably large amounts of money to small ones. Within the sums that have been set aside to pay Her Majesty’s Revenue and Customs, to support income tax provisions for the collection of income tax this year, the assessment of costs for this year is around £4.5 million less than the budget that was set at the start of the year. It goes right down to organisations including Scottish Natural Heritage, which is reporting an underspend of something like £100,000 in its overall resource grant.

Neil Bibby

What is currently the biggest departmental underspend?

Gordon Wales

There is a variety of underspends across lots of areas.

Neil Bibby

I am asking which is the biggest area of underspend that is currently projected.

Derek Mackay

I think that Mr Bibby is almost trying to find a big project that has not been delivered as a consequence of these decisions.

Neil Bibby

No. I am just asking what you are underspending on. You are carrying forward £125 million. What is the biggest departmental underspend? It is a simple question.

Gordon Wales

When you refer to departments—

Neil Bibby

You have allocated spending to departments and you are projecting an underspend of £125 million. Where is the largest underspend? The underspend is obviously coming from some departments, so which departments are they? We will find out when you tell us in June, so why not tell us today where the projected underspend is from? You surely know the answer to that.

Derek Mackay

What we have tried to say, convener, is that there are hundreds of budget lines. If you want a portfolio breakdown—

Neil Bibby

Yes.

Derek Mackay

—I am happy to write to the committee within 48 hours with the portfolio breakdown of underspends. However, you will see that there are hundreds of budget lines, and funds within each of them add up to that total figure. I am happy to share that with the committee so that you will see where the underspends come from. The figures come out in due course in Parliament. We will happily give you them.

It would also be helpful if we give examples of what those kinds of underspends look like. I am happy to share that information.

Neil Bibby

That would be very helpful and welcome. Thank you.

You are talking about political choices and decisions. Was the extra money for Scottish Enterprise and the police budget a condition of the Greens’ support for the budget?

Derek Mackay

No, it was not.

Willie Coffey (Kilmarnock and Irvine Valley) (SNP)

My question is related to Neil Bibby’s previous question. Cabinet secretary—you have been accused of sticking money down the sofa and hiding money here, there and everywhere. Is the reality not that any Opposition member could ask these questions at any time and get a flavour of the ebb and flow of how the departmental budgets actually work? Should they not, in a sense, be doing their homework in the course of the year and asking those questions, rather than accusing you of hiding the information from them?

Derek Mackay

I would like to be fair to Opposition members. It is perfectly legitimate to ask at any time where the Government underspends are. However, I would caveat any answer to such questions by saying that the figures are likely to change. That is the nature of in-year budgeting and in-year adjustments. Of course, figures will change as some expenditure goes up and some expenditure is not fully met.

The same goes for income now. We are not just a spending Parliament; we are a tax-raising Parliament, so I am frequently asked questions about our tax position and our devolved tax powers.

It is fair for members to ask, but it is also fair to expect members to reflect on how the figures change from week to week and from month to month. As I said, the scale of our financial operation is massive and we undertake a huge number of transactions. That number will continue to multiply, given that further powers on social security payments and tax are coming our way.

I think that some of the colourful language is unhelpful, given that it is a perfectly ordinary budgeting and policy-making process.

Willie Coffey

Would it be helpful to members if you could provide some kind of monthly gathering together of the movements in these budgets, similar to what you have just said that you will do for the committee?

Derek Mackay

I am sorry to say that some members of the Opposition have a strong track record of misrepresenting the budget exchange and the underspend issues, so I am not sure whether that information would be of assistance. However, I have portfolio questions to answer this afternoon, and members are entitled to ask questions on underspend at general questions or portfolio questions—I should not say First Minister’s question time, because she would not thank me for that. Members can also ask about underspends via written questions. There are many parliamentary opportunities to ask the Government publicly for its current position on budgeting and finance. I am more than happy to engage in that process, but I do not think that it would be a helpful exercise to produce further reports on the Government’s day-to-day budget position.

The Convener

Maree Todd will be the last person to ask questions before we get to the formal bit of stage 2.

Maree Todd (Highlands and Islands) (SNP)

I have a fairly simple question about the £6 million that was found from a reduction of borrowing costs. I would like confirmation that the reduction in Scottish Government costs is not a reduction in capital investment.

Derek Mackay

That is correct. Mr Wales will give you the detail of how that transaction changes, but it does not in any way diminish our capital investment plan.

Gordon Wales

The reduction is tied to reclassification of a number of non-profit distributing projects in which the Government is using its borrowing capacity to offset the effects of those coming on to the Government’s balance sheet. The Government’s capital borrowing powers have been exercised to cover those projects, but it does not actually need to borrow money as a consequence. We had planned prudently that we might have to borrow, and obviously there are interest costs associated with borrowing from the national loans fund for that purpose. We no longer need to do that, so there is a saving on those interest costs for next year, which, as the cabinet secretary has explained, is £6 million.

The Convener

We now turn to the formal stage 2 proceedings. At this stage, I remind the cabinet secretary’s officials that they are not permitted to speak on the record during this item. Everyone should have with them a copy of the bill as introduced, the marshalled list of amendments that sets out the amendments in the order in which they will be debated, and which was published on Monday, and the groupings of amendments.

Section 1 agreed to.

Schedule 1—The Scottish Administration

The Convener

Amendment 1, in the name of the cabinet secretary, is grouped with amendments 2 to 6. The cabinet secretary will speak to and move amendment 1 and speak to all the amendments in the group.

Derek Mackay

Amendments 1 to 5 relate to authorisation to use resources that are provided for in schedule 1, and will adjust individual portfolio allocations within the budget to reflect the spending announcements that were made at stage 1 of the Budget (Scotland) Bill 2017.

Amendment 1 will remove £6 million of borrowing costs from the finance and constitution portfolio. Amendment 2 will allocate an additional £25 million for police reform to the justice portfolio. Amendment 3 will allocate an additional £160 million for local government to the community, social security and equalities portfolio. Amendment 4 will allocate an additional £35 million for Scottish Enterprise to the economy, jobs and fair work portfolio. Amendment 5 will increase the total allocation for the Scottish Administration by a net uplift of £214 million. Amendment 6 will increase the overall cash authorisation by the Scottish Administration under section 4(2) of the bill by £214 million, in line with the additional spending that was announced at stage 1. That net increase is the £220 million of additional spending, less the £6 million of funding that was previously set aside for borrowing costs that has been reallocated from the finance and constitution portfolio as a contribution to funding those commitments.

I move amendment 1.

Amendment 1 agreed to.

Amendments 2 to 5 moved—[Derek Mackay]—and agreed to.

Schedule 1, as amended, agreed to.

Section 2 agreed to.

Schedule 2 agreed to.

Section 3 agreed to.

Schedule 3 agreed to.

Section 4—Overall cash authorisations

Amendment 6 moved—[Derek Mackay]—and agreed to.

Section 4, as amended, agreed to.

Sections 5 to 11 agreed to.

Long title agreed to.

The Convener

That ends stage 2 consideration of the bill. Members will note that the bill will now be reprinted as amended.

I thank the cabinet secretary and his team and suspend the meeting to allow for a change of witnesses.

10:30 Meeting suspended.  



10:36 On resuming—  



Budget (Scotland) (No1) Bill [Session 5] with Stage 2 amendments

Stage 3 - Final amendments and vote

MSPs can propose further amendments to the Bill and then vote on each of these. Finally, they vote on whether the Bill should become law

Final debate on the Bill

Once they've debated the amendments, the MSPs discuss the final version of the Bill.

Final debate transcript

The Presiding Officer (Ken Macintosh)

The first item of business this afternoon is a debate on motion S5M-04168, in the name of Derek Mackay, on the Budget (Scotland) Bill.

14:31  



The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

I am delighted to lead this debate on the budget bill for 2017-18.

First, I confirm that I responded formally to the Finance and Constitution Committee report on the budget on Tuesday. I commend the Finance and Constitution Committee and all the subject committees for their constructive approach. Our process, in future, will continue to adapt to our new powers, and I look forward to seeing the output of the budget review group, and to working together with all members of Parliament to ensure that our future processes are fit for our new powers and responsibilities.

The Budget (Scotland) Bill is of huge importance to Scotland. The decisions that we make today underpin the work of our vital public services, our commitment to sustainable economic growth and the support that we provide to communities and individuals across the country. The bill before us seeks Parliament’s approval for an additional £900 million of expenditure that is focused on the positive vision for Scotland that was established in our programme for government. That vision is focused on stabilising and growing our economy, empowering our communities, protecting the environment and promoting equality and improving our public services.

The budget that we will vote on today includes areas of compromise where, as a minority Government, we have worked hard to secure support for the bill in order to deliver on our commitments and protect Scotland’s hard-won social contract. I thank once again those who engaged constructively in those discussions. As a result of that, I believe that the bill offers a balanced approach that is right for our economy, for jobs and for our public services, as well as providing stability and continuity for the public and taxpayers at a time of economic uncertainty.

As we debated on Tuesday, the Scotland Act 2016 powers mean that there is a much more direct link between Scotland’s economic performance and the revenues that are available to fund public spending. The decisions that we make must have economic growth at their heart. In the draft budget, I confirmed our £500 million Scottish growth scheme, funding for city deals and interventions such as funding for the new innovation and investment hubs in Dublin, London, Brussels and Berlin. Our support was also confirmed for the Aberdeen, Glasgow and Highland deals, which will total more than £760 million in the years to come, and we are continuing discussions on the Lothian growth deal, the Tay cities deal and the Ayrshire growth deal.

We are using all the economic levers that are at our disposal and I am pleased to confirm further progress today. I have this week confirmed the Scottish Government’s formal approval of Fife Council’s tax incremental financing scheme, which will enhance the Fife energy park and is projected to unlock more than £11 million for the Scottish economy and create more than 220 construction jobs. As well as taking forward the Fife scheme, I look forward to receiving applications next week for the two fresh TIF opportunities that are announced in the budget.

Overall, in 2017-18, we will see investment of around £4 billion in key infrastructure projects up and down the country, including projects across our roads and transport programmes, such as the improvements to the M8, M73 and M74; the Queensferry crossing, which will complete this year; the A9; the Aberdeen western peripheral route; and, of course, the Edinburgh to Glasgow rail improvement programme.

We will invest to deliver ambitious targets on affordable housing and in the key area of digital infrastructure, including our commitment to reach 100 per cent broadband coverage.

There are actions to address the climate change challenge, including actions to improve energy efficiency, reduce bills, create jobs and reduce emissions.

To assist the work of our enterprise agencies, our draft budget provided an increase in resources for Highlands and Islands Enterprise, and at stage 1 of the budget process, I confirmed that there would be an additional £35 million for Scottish Enterprise to support loans and equity investments.

A fair and competitive business rates regime is, of course, crucial to our economy. The draft budget took a range of early measures ahead of the revaluation, including cutting the tax rate and extending the small business bonus to deliver our commitment to ensure that more than 100,000 businesses pay no rates at all.

Mike Rumbles (North East Scotland) (LD)

Will the minister consider reopening the closing date for submissions to the Barclay review of business rates so that, as a result of what has happened recently and the Government’s recent initiatives, businesses can have more input to that review before there is a report to the Government?

Derek Mackay

I am staggered. I have never heard Mike Rumbles make such a contribution—a constructive suggestion—in the chamber before. In that spirit, it is absolutely right that I engage with Ken Barclay and others to consider further how we will look at the issues that require to be addressed as a consequence of what has happened. I am certainly open-minded about doing that. I do not think that I have ever seen Mike Rumbles smile at me in the chamber before, either.

The additional measures that I have taken, which the business community has warmly welcomed, will help a further 9,500 business premises, and our £660 million of investment in rates relief will ensure that seven out of 10 premises in Scotland will pay no, the same, or less rates from 1 April.

The Tories and Labour have failed to support any local rates relief schemes so far. They should deliver on their rhetoric and back the Government schemes so that we can provide relief across the country.

Ross Thomson (North East Scotland) (Con)

I refer to my register of interests. I am an Aberdeen City Council councillor.

If the Scottish National Party had been paying attention, it would know that Aberdeen City Council has set aside £3 million for business rates relief. Given that that council had less than 24 hours’ notice to digest Derek Mackay’s statement, it is looking for more detail on the implications of that for the city, and it wants a local scheme that will help businesses and other sectors that his proposal does not help. Will Derek Mackay be true to his word in saying that the situation in the north-east is exceptional and that he wants a local solution, and will he match the funds that the council has already put aside for local relief?

Derek Mackay

What hypocrisy from Ross Thomson and the Conservatives. In Aberdeenshire Council, which is led by the SNP, the Conservatives opposed the local rates relief package. In Aberdeen, I cut across party politics to try to engage constructively and proactively with Aberdeen City Council and the local chamber of commerce and to listen, engage and deliver. That is exactly what the Government has done.

Is it not interesting that, when I acted with all the early measures and then in response to businesses responding to the independent revaluation, the Tories described those as 11th hour actions? The best that they can produce with the same information is consideration of a report at some point in the future. I will continue to engage with the local authority, but they need to ditch the rhetoric and start to come up with solutions to support businesses in the way that the Government has done.

There are immediate interventions to support our economy and lay the foundations for future growth. That is why we should invest in our people as well as in infrastructure.

As members are well aware, education is the Government’s number 1 priority. That is why there is such a comprehensive package of investment. The bill will deliver £1.6 billion of investment in higher and further education, and will maintain at least 116,000 college places. It will maintain the £50 million attainment Scotland fund, which is targeted, and it will, of course, deliver an extra £120 million directly to our schools to address attainment, particularly in our most disadvantaged areas. That is welcomed by schools across the land.

We are embarking on the expansion of childcare to the tune of £60 million of investment in the first phase of work to expand the provision of early learning and childcare to 1,140 hours by the end of this session of Parliament.

This package of measures places equality of opportunity right at the heart of this Government’s approach to Scotland’s economy.

I have proposed a strong settlement for local government in the draft budget. It includes an additional £120 million for educational attainment, £107 million additional investment in health and social care integration, increased capital resources, increased access to city deals funding and increased revenues from the council tax changes that were approved by Parliament.

By working constructively with the Greens to reach agreement, we have allocated an additional £160 million to be spent by local government at its discretion. The council tax freeze provided much-needed relief for household budgets through difficult times. Council tax is, on average, still lower in Scotland than it is south of the border. Local authorities are able to generate extra revenues through increasing the council tax, but it is interesting that some clearly consider that they have sufficient funding to deliver their services without a further council tax increase. Those are matters for individual local authorities but, I say again, that support for local services has increased thanks to this Government’s actions.

Using existing resources wisely is necessary, as is further public service reform. As just one example of that, and recognising the role that councils play in the delivery of housing and social care, I am directing additional funding over the next two years to Scotland Excel to develop, with Scotland’s care providers and registered social landlords, enhanced procurement capability that will support plans in those vital areas.

We are backing our police and fire services, investing in reform with an additional £25 million for Police Scotland to support its future plans.

To ensure that our national health service is fit for the future, the Government is committed to the twin approach of investment and reform. The “Health and Social Care Delivery Plan”, published shortly after the draft budget, highlights a range of steps to reform and further improve our health services.

Balancing that action with investment will see NHS revenue spending increase to £12.7 billion in 2017-18—an increase of £120 million above inflation and the first step towards delivering our commitment to increase the NHS revenue budget by almost £2 billion by the end of this session of Parliament. There will be more spending in mental health, primary care and general practitioner services. Today, we have confirmed investment of £7.5 million to support the development of GP clusters, which will help GP practices to collaborate on quality improvement, to share resources and to develop community health services that are more tailored to their local population.

I opened by highlighting that voting for this budget will deliver more than £900 million of additional investment in our public services, our people and our communities. The budget delivers on the Administration’s programme for government, but it also responds to requests from across this chamber. We are supporting businesses and our economy; investing in front-line health and police budgets; expanding expenditure on local authority services; delivering a living wage; investing in a new social security system; ensuring that no one should pay the bedroom tax; providing free tuition; expanding early years provision; tackling the attainment gap; improving energy efficiency; increasing house building; and supporting public services that are free at the point of use, including prescriptions, eye tests and personal care.

This budget delivers the best deal for taxpayers and public services in the whole of the United Kingdom—a fairer country and a stronger country. It is a budget that delivers for our people. I commend this budget to Parliament.

I move,

That the Parliament agrees that the Budget (Scotland) Bill be passed.

14:44  



Murdo Fraser (Mid Scotland and Fife) (Con)

In the stage 1 debate three weeks ago, I said that the finance secretary was a lucky man. He was lucky because he had more resources than any of his predecessors had—his budget will go up by £500 million in real terms as against the current year, and we know that the Scottish Government’s total budget is up even on the previous high of 2010-11. He was also lucky because he has—or had—an unprecedented range of choices over taxation compared with his predecessors.

We did not realise then just how lucky Mr Mackay was. It turns out that he is a far more fortunate man than we knew at that point for, in addition to the budget that he presented to Parliament, he had wads of spare cash just lying around.

When the finance secretary introduced his budget in Parliament on 15 December 2016, he told us that it was a fair and well-balanced settlement, that every penny that he had was properly accounted for and that, if the Opposition parties wanted to propose extra spending in any area, they would have to tell him what cuts they would impose as a consequence.

It turns out that the finance secretary had much more money than he was letting on. Just three weeks ago, he produced, as if from nowhere, an additional £185 million to secure his budget deal with the Greens—but that was not all. Just 19 days after that, on Tuesday this week, he produced another £44 million to introduce a very welcome rates relief for a number of businesses that are affected by the current rates revaluation. That is nearly £230 million extra in just a few weeks.

How I wish I had Mr Mackay’s sofa, which must be the best-stuffed sofa in Scotland. Every time he has a problem, he puts his hand down the back of the sofa and pulls out wads of cash. Who knows what other riches would lie between the seams of the sofa if he took the time to look?

Stewart Stevenson (Banffshire and Buchan Coast) (SNP)

Will the Tories be voting against the budget tonight and denying businesses across Scotland access to the £44.5 million to which Murdo Fraser just referred? Does he intend to stuff businesses tonight?

Murdo Fraser

If Mr Stevenson asked the business community in Scotland for its view on the budget, it would give a clear response that would not be the one that he is looking for.

The great wealth that Mr Mackay has identified raises all sorts of important issues. First, Patrick Harvie must be ruing the day that he and his party sold themselves so short in their budget deal with the Scottish National Party, for there was another £44 million to be had, of which he was blissfully unaware.

Secondly, the finance secretary has undoubtedly created problems for himself in the future. Whenever, in coming years, he comes to Parliament to present his budget and tells us earnestly that it is the total sum that he has available to spend, no one will believe a word that he says. We will all be asking where the extra money is that he has squirreled away to wait to do a deal with the lowest bidder.

There are serious questions to be raised in connection with the Parliament’s budget scrutiny process. As the Fraser of Allander institute pointed out a few weeks ago, it turns out that all the budget scrutiny by the Parliament and its committees was based on a draft budget figure that was £190 million lower than the one that the Parliament will in due course be asked to vote on. As the institute said, in the future, members may press the Government at the outset of the scrutiny process for greater information on the scope to use underspends or changes to non-domestic rates profiling.

The institute pointed out that, in the past, underspends have been used to boost Government spending in subsequent years. That is what happened earlier in this financial year, when underspending in the previous year was utilised with the aim of stimulating the economy in the aftermath of the Brexit vote. This time, the underspend money has been made a central part of next year’s budget, and even Mr Mackay cannot spend the same money twice.

As the institute said, the case for multiyear budgeting is all the more important, which means that the work that is going on in the budget review group that has been established is vital. That group needs to look closely at budget transparency, which is highlighted in the Finance and Constitution Committee’s report on the budget—that echoes the concerns of the Local Government and Communities Committee about the lack of transparency in the local government settlement.

The Scottish Government’s response to the Finance and Constitution Committee’s report, which was published earlier in the week, says:

“the increased complexity of the budget process introduces a steep learning curve for all involved”.

I hope that that indicates that the finance secretary accepts that he must do better in the future at informing Parliament.

The budget process is not just about balances; it is also about choices. It remains our view that the finance secretary has made the wrong choices in connection with the budget. We should have had a budget for economic growth.

As we well know, the Scottish economy underperforms that of the rest of the United Kingdom. Our growth rate is barely one third of the UK average, our employment rate is lower, our unemployment rate is higher and our business confidence level is much lower. We should have had a budget to boost economic growth and, as a result, to boost our tax revenues.

That was precisely the point that the Fraser of Allander institute made last week. It said:

“With the Scottish Government’s budget now increasingly tied to how well Scotland’s economy performs relative to the UK, closing this gap must be a key priority for the government.”

Nothing in the budget tells us how the Government will do that; instead, the finance secretary has presented us with a budget that will do nothing to promote Scotland as an attractive place to do business. He will introduce an income tax differential that will for the first time make Scotland the most highly taxed part of the UK. He continues with the large business supplement at double the rate that applies elsewhere in the UK, and his land and buildings transaction tax rates have led to him downgrading his forecasts for the tax take by some £750 million over the coming three years, which represents a potential catastrophic loss to the Scottish public finances.

Action has been taken on the rates revaluation, which we welcome as far as it goes. However, that action affects only a small minority of the businesses that are seeing large increases in their rates. When the finance secretary talked about local relief schemes, perhaps he was not aware—perhaps Mr Swinney did not tell him—that, when the Conservative opposition group on Perth and Kinross Council proposed a local rates relief scheme yesterday, it was voted down by SNP councillors in that administration.

Derek Mackay

I hate to inform members that Murdo Fraser is wrong. I have spoken to the SNP leader of Perth and Kinross Council, who said that the council is building an augmented and improved scheme to do even more for businesses in Perth and Kinross. That was what the Conservatives opposed.

Murdo Fraser

What a change there has been since yesterday afternoon. I have no doubt that Mr Swinney has been on the phone to the council to tell it to sort out its act in short order, because the SNP knew that it was about to be caught out in this chamber.

It is a shame that, given all the choices, the finance secretary chose to go in the other direction. He chose to sit down with the anti-business Greens and to produce a budget that will entrench our economic underperformance.

Gillian Martin (Aberdeenshire East) (SNP)

Will the member take an intervention?

Murdo Fraser

No, I am sorry—I have no time.

In the long run, it will be the Scottish public finances that suffer. If our economy does not grow, our tax revenue will not grow either, and there will be less money to spend on all the things that we regard as important.

What we would have done with the budget is kept tax rates competitive with the rest of the United Kingdom, and we would have done that in the knowledge that we would raise more revenue in the long run as a consequence, which is exactly what the business community in Scotland has been calling for. The finance secretary’s budget not only raises taxes but delivers a cut to local government across the country, and that is at a time when a great many Scottish households are seeing substantial council tax rises. They will be asked to pay more in taxes, but they will get poorer public services as a result. What a deal that is from the SNP Government.

That is the budget that Mr Mackay is presenting to Parliament. We cannot support that budget, because Scotland deserves better. I have pleasure in moving the amendment in my name.

I move amendment S5M-04168.2, to insert at end:

“, but, in so doing, regrets the damage that will be caused to the Scottish economy and public finances by making Scotland the highest taxed part of the UK.”

14:53  



Kezia Dugdale (Lothian) (Lab)

Stronger for Scotland: that is what we were told that the SNP would be. “Vote for us,” SNP members said, “and we will be stronger for Scotland.” Those of us on the Labour benches always questioned who in Scotland the SNP would be stronger for. Now we know, as this budget makes it abundantly clear—the SNP is stronger for the richest 1 per cent.

If someone in Scotland is already rich, the SNP will protect them from paying their fair share. However, the SNP is not stronger for someone in an ordinary family, whose children go to the local school, who relies on the local GP, who sometimes needs to attend the local hospital or whose elderly relatives need support from carers. As a consequence of this budget, the public services that they rely on will be downgraded, closed or under pressure like never before. In the same week that the SNP refuses to ask the richest few who earn more than £150,000 a year to pay a little bit more tax, the Government will team up with the Greens to impose £170 million-worth of further cuts to vital public services. That makes it £1.5 billion-worth of cuts since 2011—so much for being stronger for Scotland.

Let us take a look at that record. Are the plans to close the maternity unit at the Royal Alexandra hospital in Paisley stronger for Scotland? Is the fact that we have 4,000 fewer teachers under the SNP an example of being stronger for Scotland? Is the utter shambles of ScotRail an example of being stronger for Scotland? With this budget, public services in Scotland face a budget double whammy from the SNP. Under the SNP-Green deal, local services such as schools and care of the elderly face £170 million-worth of cuts. Those cuts will harm everybody, but they will hurt the poorest the most.

Another feature of this year’s budget process has been the concerns that employers across Scotland have raised about the impact of business rates increases. I know from my local area that it is small firms—those at the very heart of their communities—that are most worried.

The Minister for Parliamentary Business (Joe FitzPatrick)

What about the small business bonus?

Kezia Dugdale

The SNP’s shambolic U-turn on business rates, which I point out to Mr FitzPatrick is for a specific group of firms, is welcome. However, our public services are facing massive bills, too. We know that national health service chiefs warned the SNP last year that the health service could face a £30 million bill as a result of the revaluation. We also know that our universities could be hit with multimillion-pound increases. At a time when maternity units are facing closure and other NHS services are being scaled back, it would be criminal for the SNP to do nothing to help.

The cuts that are being imposed on valued public services do not have to happen. Throughout the budget process, Labour has been setting out an alternative plan, which says that we do not have to accept the austerity that is imposed by the Tories and that we have the powers in this Parliament to chart a different course. Labour’s plan would stop the cuts to the public services that we all value and would allow us to invest in them instead. It is only with investment that we can chart a better future for Scotland’s young people.

Derek Mackay

Kezia Dugdale has mentioned cuts a number of times and has tried to make the case local. Just to take one example, in the City of Edinburgh Council—which she might be interested in—the total increase for local services is more than £30 million, which is a 3.9 per cent increase.

Daniel Johnson (Edinburgh Southern) (Lab)

It is a £27 million cut.

Kezia Dugdale

I do not accept the cabinet secretary’s figure. He can hear from my colleague, who represents Edinburgh Southern, that the figure is in fact a £27 million cut, and there are £170 million-worth of cuts across the country. At stage 1, I gave the cabinet secretary specific examples of fantastic projects in Edinburgh that are facing serious cuts or closure because of decisions that he is making. He knows the troubles that local authorities are faced with across the country and he still insists on cutting services by £170 million. It does not have to be that way—there is a different choice.

Only with investment in education can we give our people the skills that they need to compete for the jobs of the future. It is not just about tackling poverty and inequality, important as that is—there is an economic imperative. In this rapidly changing world, where the kind of jobs that people do and how they do them continues to evolve beyond all recognition, we risk our people getting left behind. We know that the people who are almost always left behind are not those from wealthy backgrounds; it is the ordinary working-class families of Scotland who will lose out most from cuts to education.

However, all of Scotland will be worse off as a consequence, because locking so many people out of the jobs of the future will mean that our economy cannot grow at the rate that it needs to. If we are to compete with the likes of China, India and Brazil, everybody in our country must have the skills that are necessary for the jobs of the future. To make the investment that is needed, those with the broadest shoulders have to pay their fair share.

Just as I believe that together we are stronger as a nation by remaining in the UK, I believe that together we are stronger as a nation when the wealthiest few pay just a little bit more so that we can all benefit from improved public services. When members vote at decision time tonight, we will see who really is stronger for Scotland. A vote for a budget that imposes cuts to local services such as schools and care for the elderly is not evidence that members are stronger for Scotland.

We can either vote through this budget, imposing cuts of £170 million on local services, or we can make good on the promises that many members made to the people of Scotland. Labour said that we would seek to stop the cuts and invest in the future of our economy and our country. That is what we will do when we vote against the budget this evening.

15:00  



Patrick Harvie (Glasgow) (Green)

Much like the debate in this chamber earlier this week on the rate resolution and non-domestic rates, it is pretty much inevitable that this afternoon’s debate will be entirely polarised, with some members offering glowing praise for a budget that has no flaws at all and others offering utter condemnation, as though there is nothing at all of which to speak positively.

In reality, the record of the SNP in government is mixed and the arguments in relation to this budget are mixed. The Green approach, ever since we entered the Parliament in 1999, has been to challenge Governments, but to do so constructively, with a view to making a difference. That is what we did when the Labour-Lib Dem Administration was in office, and that is what we have done with the SNP Administration since then. It is what we have done whether or not the Government has had a majority, and it is what we will continue to do.

Someone who this year has been listening to budget debates for the first time might be forgiven for not knowing that all political parties in this Parliament, when they have been in opposition, have voted for Government budgets. All parties have done that and will continue to do so. In January 2009, the one time a Scottish budget fell, it was not because of Green unwillingness to be constructive but because of brinkmanship by the Administration. During the debate on that budget, the Labour finance spokesperson called the SNP’s approach “shameful” and said that the budget failed key economic tests and offered

“consensus ... on only the Scottish National Party’s terms.”—[Official Report, 28 January 2009; c 14408.]

However, one week later, Labour members voted for precisely the same budget, without a single amendment.

There is therefore a degree of—well, I do not want to be rude, Presiding Officer, but I do not think that we can take fully seriously some of the outrage that has been expressed in the debate so far. All political parties have been at their best during budget debates when they have tried to make a difference rather than merely express outrage.

Neil Findlay (Lothian) (Lab)

Mr Harvie’s party had the SNP over a barrel in the budget negotiations. Which high environmental or tax justice principles did the Green Party advance when it was selling out local government to another £160 million of cuts? [Interruption.]

Patrick Harvie

I am grateful to Mr Findlay for giving me an opportunity to talk about local government, because that is precisely where the Green approach to the budget has made a difference. [Interruption.] This year, we were most concerned and most angered by the cuts—[Interruption.] I appeal to the Presiding Officer.

The Deputy Presiding Officer (Christine Grahame)

I would like to hear what Mr Harvie has to say, please.

Patrick Harvie

We were most focused on the cuts to the non-ring-fenced core local government allocation. What we secured is not just an additional allocation and the first formal budget amendment that we have seen in years in this Parliament, but £160 million of additional allocation to local government.

Daniel Johnson rose—

Patrick Harvie

I have never said that this budget is perfect and I will not do so today, but this is the biggest budget concession that any Administration has given any Opposition party since devolution.

The Deputy Presiding Officer

Please sit down, Mr Johnson.

Patrick Harvie

The concession will make a difference in every local government area, including the one that Mr Johnson represents.

Daniel Johnson

Does the member recognise that that difference is still a £170 million cut to local government, whatever way he dresses it up?

Patrick Harvie

I note that Mr Johnson ended his intervention by saying “whatever way it’s dressed up.” It will always be possible to produce a different interpretation of the figures—[Interruption.] There are some creative thinkers on the Tory benches, too.

The Labour approach throughout has been to compare the draft budget with the outturn budget—the amount that has been spent during the current financial year—which is not a fair comparison. We have taken the Scottish Parliament information centre’s assessment of the figures—

Anas Sarwar (Glasgow) (Lab)

Will the member take an intervention?

Patrick Harvie

I have taken a couple of interventions already. [Interruption.] The SPICe analysis does not include—

The Deputy Presiding Officer

I ask Conservative members, in particular, to stop chattering away. I would like to hear the debate.

Patrick Harvie

The SPICe interpretation of the figures is the closest thing that we have to a politically neutral and impartial judgment on the matter, and its assessment was that the core cut to the un-ring-fenced local government allocation was £166 million. It did not include the double counting of health and social care money or other allocations that should not be counted within the overall pot. We argued that that cut should be reversed, and we have achieved a £160 million reduction in it.

The assessment that SPICe has produced since the stage 2 amendment was agreed to states that the budget line for local government

“is now ... essentially flat in real terms”.

We are talking about a 0.1 per cent reduction compared with the previous year’s draft budget. Once we include the reforms to local council tax—the reforms to the multiplier as opposed to the 3 per cent, which it is up to local councils to decide on—it becomes a 0.7 per cent increase. That is the difference that the Greens have made in this budget. We have secured additional funds that councils are free to allocate and that will make a difference in every local council area in Scotland.

I again remind members, with great respect, of the consequences of voting down the budget. On Tuesday, Daniel Johnson asked us to think about the consequences of how we vote. Voting down the budget at this stage would send every council in Scotland into panic and would mean that they would have to set emergency budgets, which would bring back on to the agenda the cuts that in recent weeks they have been able to cancel as a result of what we have achieved.

As far as the Conservative amendment is concerned, I could never accept the principle that after finally persuading all parties to agree that tax powers should be devolved, we should refuse to ever do anything progressive with them. That is the position that the Tories advance—we should only ever cut tax for the rich and only ever become an ever meaner, more selfish and more self-interested economy in which wealth is concentrated in the hands of ever fewer people. That is what the UK Government is doing, and that is what the Conservatives would have us do as well. We will never agree to that.

The Deputy Presiding Officer

Can you please begin to wind up, Mr Harvie?

Patrick Harvie

The Greens will vote in favour of the budget, and I make this appeal to all parties in all future budget debates: don’t just throw a tantrum, make a difference.

15:07  



Willie Rennie (North East Fife) (LD)

Budgets are an opportunity to judge people not by their words, but by their actions. Hard numbers—hard cash—reveal hard priorities. It is not an easy process, but it strips back all the talk and reveals the naked truth.

We all remember the First Minister saying in the debates in the 2015 general election that we should reject austerity and that Scotland would do it differently, but we can now see from the budget what she really meant.

In the Scottish election debates, Patrick Harvie looked down his nose at everyone and pledged to fight for a greener and bolder Scotland. The Greens voted for the budget at stage 1, but they abstained in this week’s debate on the Scottish rate resolution. I am looking for the full set: there is still a possibility that Patrick Harvie’s party could vote against the budget, so it could still fall. Patrick Harvie reminded us of what happened in 2009, when he changed his mind in the middle of the debate and the budget fell. I urge the finance secretary to make absolutely sure that he has the Greens in his pocket, because the situation might well change after all.

The challenge is enormous. Brexit is coming down the track, which will have a significant impact on our economy. As we all know, our once-proud education system is slipping down the international rankings. Furthermore, 643,000 working days are lost because of poor mental health, which is worth £54 million to our economy. The Sutton Trust has highlighted the real and dramatic impact of the inequality gap in our education system. That is why there is still an opportunity to reject the budget—the Greens could vote against the budget today, perhaps alongside others who are concerned about those issues. It is not too late for the Greens to reject the budget. We can do so much better.

Patrick Harvie

Will the member take an intervention?

Willie Rennie

I will not, just now.

If we look at the education system we see that in the past few years we have lost 150,000 college places. That has hit women and mature students in particular. We need to invest in part-time courses.

There is also the issue of the pupil premium. I am glad to see that the Scottish Government, after years of opposing the pupil premium, which was pioneered by the Liberal Democrats down south, has changed its mind and has implemented a pupil equity fund. That approach is having a big impact in England and has closed the attainment gap by five percentage points. However, the amount of money that has been put into the fund is simply not enough. If we cannot even match what they are doing in England, how on earth will we get our education system back up the international rankings?

We could have invested more in mental health. I want to increase the mental health budget to £1.2 billion. In last May’s elections, all the leaders stood on a platform and agreed that mental health was a top priority. Every single leader said that no one could possibly disagree with that approach. Where is it in the budget? We do not even have enough of a budget for what is required to invest in tier 1 and 2 counselling, emergency mental health services, mental health professionals to work alongside the police and mental health professionals in primary care. Where is the investment that would make that happen? It is not there. That is another missed opportunity. All those wise words on the election platform last year have come to absolutely nothing. That is what is disappointing about the budget.

All this is at a time when we have an opportunity to do something different. We have new tax powers—the powers that we have been wanting for years so that we could do something different from the rest of the United Kingdom, chart our own path, mark a different way and boost the economy, improve our education system and improve mental health services. What do we do with that power? We tinker at the edges with it. We have not got a transformational investment in education. We do not have a step change in mental health services.

This is a timid, tinkering budget. We could do so much more for Scotland. I am ambitious for our country—I want us to do so much more. I do not want to ramp up tax all over the place; rather, I want to dedicate it to a specific purpose, which is investing in people—their talents and mental health—so that they can get to work, contribute to our economy, create more wealth and bring in more taxes. It is not all about the Conservative race to the bottom on tax. That is not the way to get a better, more vibrant and more energetic Scotland. The best way to do that is to invest in the talents of our people, because our people are the best way forward.

I urge all those who want a better and more ambitious Scotland and who want to improve the economy and make a real big difference to our future, to reject the budget so that we can go back to the start and negotiate again for a proper budget that really meets the aspirations of our country.

15:14  



Bruce Crawford (Stirling) (SNP)

Deputy Presiding Officer, there have been many occasions since we first joined the Parliament together in 1999 when we have been able to say, “Today is an historic day”. I can safely say that today is yet another historic day. Today, we set a budget for Scotland’s health service, education services, emergency services and local councils that contains about £11 billion of commitments supported by money raised from income tax.

As the weeks and months turn into years, I am confident that we will witness many more historic days as the Parliament goes from strength to strength. Let us reflect on the moment. What will future commentators make of the political players who took part in the setting of Scotland’s budget for 2017-18? What will they make of the role of the finance secretary who has had the historic privilege—although I am not sure that he has always seen it that way—of setting the first budget to be supported by unprecedented levels of tax raised in Scotland? What will they make of a finance secretary who has had to deal with the very real challenge of a revenue and capital departmental expenditure limit budget that will be reduced in real terms between 2010-11 and 2019-20 by 9.2 per cent?

The finance secretary has had the added difficulty of dealing with the volatility of Brexit and all the implications for public expenditure that it brings. He has also had to deal with the immediate Brexit threat of rising inflation and, as a direct consequence, a reduction in his real-terms spending power. If that were not enough, in the longer term, up to 80,000 jobs in Scotland will be destroyed if we are forced to leave the single market.

Today, we are living in a world with a much greater level of shared powers between Holyrood and Westminster than has existed at any time in our history, particularly as a result of the fiscal framework. That is why it is imperative that UK Treasury ministers appear before the Finance and Constitution Committee to give evidence. By refusing to attend to give evidence, either they simply do not understand the nature of the devolved settlement that they were responsible for creating or they are treating this place with contempt. I really do not care which of those is the reality; what I want them to do is to show some respect for this Parliament, which belongs to the Scottish people.

It makes me wonder who would take on the job of finance secretary and then be landed with the additional complications of securing a budget agreement in a Parliament of minorities, yet secure an agreement the cabinet secretary has—an agreement that sees an additional £160 million allocated to local government.

Although Parliament may find agreement at decision time today, no credit will be given to those who have chosen to be entirely oppositionist in their approach, no matter the potential consequences for public services and public finances. The agreement that the Scottish Government has secured with the Green Party should make Labour Party members in particular squirm with regret, but I guess that they will not because they have become so wrapped up in their all-consuming opposition to the SNP and in their own destruction that they have consigned themselves to a place of utter irrelevance in Scottish political life. [Applause.] Others might take some joy from that but I think that it is very, very sad indeed, and I wonder how history will judge the Labour Party’s role on this significant day for Scotland.

What is clear is that history will judge the Conservative Party members as financial fantasists. Throughout the budget process, Tory member after Tory member has made spending proposals amounting to billions of pounds. However, when challenged on how they would pay for them, they gave us nothing more than financial drivel.

First, we are told by Dean Lockhart that a fantasy sum of £500 million from maladministration would be used to fund Tory commitments amounting to billions. I have news for Mr Lockhart—if £500 million was the cost of past maladministration, which in itself is a load of nonsense, it has already been spent and cannot be spent again.

Then we have the fantasy economics of Douglas Ross, who is sitting on the Tory front bench along with Dean Lockhart. Douglas Ross tells us that the alternative Tory approach is to expand the tax base by cutting taxes for the wealthiest. Even if the Tory argument of cutting taxes to increase spending had any shred of credibility, just how would such a plan produce any additional money from an expanding tax base in the short time before the start of the financial year? It is absolute nonsense. As for Murdo Fraser’s financial fantasies—well, probably the least said about those, the better.

Thank goodness we have a finance secretary who has kept his head while the Opposition have been losing theirs. That is why we should all vote for the Government’s budget at decision time. I ask this Parliament not to deny public services in Scotland an additional £900 million; not to deny the hospitality sector a cap on rates; and not to deny local government an extra £160 million. For goodness’ sake, do not vote against the Government at decision time just because it happens to be an SNP Government—vote for the budget.

15:20  



Maurice Golden (West Scotland) (Con)

The finance secretary—[Interruption.]

The Deputy Presiding Officer

I ask members to behave—I want to hear this as well.

Maurice Golden

The finance secretary has available to him a plethora of options to vary tax, improve productivity and grow the Scottish economy. He also has more cash—£0.5 billion more in real terms—as against the current year. Patrick Harvie and the rest of the sell-out six must have wondered why they did not ask for more from the finance secretary, given that he has managed to conjure up an extra £230 million since he first presented the budget only a few weeks ago.

If the SNP Government’s original tax proposals were not dangerous enough, they have been made a whole lot worse now that the Greens are dictating the SNP’s policy on taxation. The left-wing SNP-Green coalition has introduced a tax system that will see individuals on pay scales similar to that of the First Minister pay a marginal tax rate of 42 per cent on their last pound earned and the CEO of the Royal Bank of Scotland pay a marginal tax rate of 47 per cent on his last pound earned, while hard-working Scots who earn between £43,000 and £45,000 a year pay an astonishing 52 per cent marginal tax rate on the last pound that they earn. Perhaps even more astonishingly, the SNP Government has the audacity to claim that its taxation proposals are progressive.

Patrick Harvie

I am a little bit puzzled as to why the member, from the two examples that he gave, seems to be interested only in the top 10 per cent of earners. Why is it that the Greens are the only party that has even tried to make the case for cutting tax for people on ordinary incomes? People on the average full-time salary, which is £26,000 a year, would, under the Green proposals, be paying less tax. Why are the Conservatives interested only in those at the very top?

Maurice Golden

The Conservatives are interested in everyone in Scotland, and we do not show that by hurting the middle classes and middle-income earners. If the Government listens to our policies, the Scottish economy will grow, and we will improve productivity and have more money to spend on public services.

My economics professor always told me that gross domestic product was god. Although I disagree with that analogy, I would welcome the cabinet secretary for finance making more of an attempt to grow our economy. The finance secretary is fully aware that he has the power to vary tax rates by band and to introduce new bands, and thus it is entirely possible for him to avoid forcing hard-pressed Scottish families to pay more than the 42 per cent marginal rate of tax.

If we accept that the finance secretary is intent on making Scotland the highest-taxed part of the UK, we might consider that he could at least be more creative in his proposals in order to ensure that no hard-working Scot will be forced to pay that marginal tax rate. If he had done so, however, the First Minister would not be able to stand up and proclaim that there has been no increase in Scotland’s income tax rates. This SNP Government is more interested in spin than in standing up for the interests of Scottish families.

Derek Mackay

Does Maurice Golden think that PricewaterhouseCoopers was wrong when it said:

“although we don’t expect any short term impact on decision making for people who may already be planning to relocate to Scotland or for Scottish businesses looking to attract staff”?

Was PwC wrong when it contradicted the Conservatives’ position that there will be a mass exodus as a consequence of our tax proposition?

Maurice Golden

It is a disincentive to work for people who are earning between £43,000 and £45,000. The cabinet secretary for finance would have been better off using a more innovative approach if he wanted a more progressive tax system.

So here we have it: a marginal tax rate of 52 per cent and the SNP Government doing its best to impersonate the Labour Party of the 1970s. What will happen next year, and the year after that? The Greens will, most likely, continue to pursue their hard-left agenda and insist that the higher-rate threshold stay at £43,000. What will the SNP do? If it does not increase the higher-rate threshold over the next four years, there will be an £8,000 gap between the higher-rate income tax threshold in Scotland compared with that in the rest of the UK. That would result in Scottish taxpayers being burdened with a 52 per cent marginal rate of tax on £8,000 of their income on earnings of between £43,000 and £51,000 a year.

Either the SNP Government has not considered the significant threat that that poses to Scotland’s economy and to the prosperity of all its citizens, or it does not consider it to be a problem. I am not sure which is worse.

When the SNP Government erects an earnings tax wall at £43,000, does it expect that that will have a positive or negative impact on earnings? Let me tell the SNP what the impact will be. There will be fewer Scots earning over £43,000 a year, an ever-growing gap in earnings between those in Scotland and those in the rest of the UK, and less money being spent in our local economy—and all that is supposed to be designed to raise additional tax revenue. I urge the SNP Government—and the chamber—to put Scotland first, and I urge the chamber to support the amendment in the name of Murdo Fraser.

15:26  



Kate Forbes (Skye, Lochaber and Badenoch) (SNP)

I remind members that I am a parliamentary liaison officer to the Cabinet Secretary for Finance and the Constitution. That is a privilege, because this is the first budget to raise revenue, through limited tax-raising powers, for over 300 years.

That is what the people of Scotland wanted: they wanted the power to raise revenue in Scotland, in our way and for our services. That is so that we do not have to walk the Westminster way—as the Tories would have us do—by slashing taxes for the rich and slashing services harder. The Tories complain about divergence, but there is already divergence in that we deliver, for all residents of Scotland, whatever their background, and wherever they live, while the Tories deliver for only the top 10 per cent of earners. That is a far more dangerous divergence, and it is downright unfair.

Given that we have waited that long for tax-raising powers, I am pleased that this budget will deliver for the Highlands. It is a budget for the crofter in Staffin, the engineer in Drumnadrochit and the dinner lady in Dingwall. It is a budget for my constituents, because people in the Highlands want reliable connectivity. In this budget, there is more than £100 million investment in digital and mobile infrastructure to support our commitment to deliver broadband across 100 per cent of Highland businesses and homes.

Douglas Ross (Highlands and Islands) (Con)

Will the member give way?

Kate Forbes

With pleasure.

Douglas Ross

I am grateful to the member for giving way. However, does she not agree with Councillor Margaret Davidson, the independent leader of Highland Council, who said that this was not a good budget for it and told the Scottish Government to stop its efforts with smoke and mirrors because it is deluding people into thinking that the council has a better deal? It sounds as though Kate Forbes has fallen for it.

Kate Forbes

I agree with the part of Douglas Ross’s comments about smoke and mirrors. We are sure seeing a lot of smoke and mirrors coming from the Tory benches. I like to go on the basis of the hard, cold, boring facts and figures, which show that investment in public services in the Highlands is up by £20 million versus that of last year. I would rather depend on the cold, hard figures than on the smoke and mirrors that we have been seeing.

As I said, people in the Highlands want reliable connectivity. They also want more, and affordable, homes. In this budget, we are investing heavily in the provision of affordable housing, with over £470 million of direct capital investment to ensure that we are on track to deliver 50,000 affordable homes across Scotland, which will also support employment in construction and housing management. The budget specifically maintains funding for rural and islands housing funds, which should be welcomed by every self-respecting rural constituency member of the Scottish Parliament.

We also want improved roads and rail links. This budget promises to progress design and development work on improvements to the A82; to continue dualling the A9; to improve the stretch at the Berriedale Braes, in my colleague Gail Ross’s constituency; and to invest in improving Highland rail links.

We also want a well-resourced NHS Highland with more healthcare professionals, and this is a budget with £592 million for NHS Highland. If the Tories had their way, they would charge the sick for prescriptions. Instead, we are protecting NHS funding.

Edward Mountain (Highlands and Islands) (Con)

I am very happy to talk about the concerns of people in the Highlands regarding health provision, especially those on Raasay, who have lost their local nurse and have no provision at night, and those mums in Caithness who no longer have paediatricians. How is that improving the services and how will that help people in the local community to get better healthcare?

Kate Forbes

I thank—

The Deputy Presiding Officer

Ms Forbes, will you wait until you are called again, please? I know that you are anxious to respond. I call Kate Forbes.

Kate Forbes

Thank you, Presiding Officer.

Douglas Ross

On a point of order, Presiding Officer. I think that perhaps your clerk heard the word repeated twice by Gail Ross when she called Edward Mountain a liar. [Interruption.] Well, she said it twice.

The Deputy Presiding Officer

I ask you to sit down. We heard nothing here, so we can make no comment whatsoever.

Douglas Ross

Did you—

The Deputy Presiding Officer

I am sorry. Let us proceed. Please continue, Ms Forbes.

Kate Forbes

I agree with Edward Mountain on the point about Raasay, and it is something that I am actively engaged in with NHS Highland and the community. I like to think that if he asks the community—he might well have done so—it will say that I have been working closely with it to try to find a solution. As we both know, however, part of the issue in NHS Highland is the problem with recruiting professionals. A British Medical Association survey today shows that four in 10 European doctors in the UK are considering leaving in the wake of the UK’s vote to leave the EU. That is hardly helping with the real challenges that we face with recruitment.

In the Highlands, we also want well-resourced education for our children and accessible further and higher education both for our young people and to attract other young people to study in the Highlands. Not only is the budget still committed to free education across Scotland, but it provides additional money to directly reduce the impact of poverty on children’s educational attainment. Of the £120 million total, almost £4 million is going straight to Highland schools.

More than anything else, however, we want local power, and the budget promises to empower island communities further so that they can build a more prosperous and fairer future for our communities.

That is our budget. If we want confirmation that the Tories and the Labour Party care only about political posturing, we should watch how they vote tonight, because to vote against this budget is to vote against connectivity, housing, roads and rail, a well-resourced NHS and reducing the impact of poverty. Those things matter to my constituents and they matter to me.

15:32  



Iain Gray (East Lothian) (Lab)

We have had 19 budgets since devolution, by my count, or 20 if we include two in 2009, yet this one could and should have been different because it had the potential to be both transformed and transformational. It had potential to be transformed because, for the first time ever, a Scottish Government has significant powers over tax—the powers for us to decide for ourselves the balance between what we ask our citizens to contribute and how much we will have to invest in our country’s future.

The budget had the potential to be transformational, first, because we could have used the substantial new welfare powers to reshape the benefits system, create targeted new benefits to support the vulnerable and thus transform their lives in the here and now, and also because we could have chosen to end our 10 long years on the low road of squeezing education budgets and returned at last to the high road of investing in our young people’s future, thereby transforming their prospects and our country’s future.

Alas, the only thing that the budget has transformed is itself, through a series of U-turns, humiliating climbdowns and shameless flip-flops. It started with the debacle of the council tax, when the finance secretary revealed that, after 10 years and three elections of promising to abolish the council tax, he had, well, changed his mind, and the only thing that he planned to do was to impose a swingeing increase across the board for higher bands.

Derek Mackay

Will Iain Gray explain, on behalf of the Labour Party, why, despite campaigning against the council tax freeze for nine years, Labour councils are now freezing the council tax?

Iain Gray

Councils are taking the best decisions that they can locally. My own local authority has increased the council tax to protect services from the £4.5 million cuts that the finance secretary has imposed.

The finance secretary’s council tax plan was radical in one way because he planned initially to remove the proceeds of the council tax increase from local communities to swell his own coffers. That is a redistribution of sorts, I suppose, in the same way as a smash and grab redistributes wealth. In the first of his U-turns, the finance secretary had to abandon that plan by the time that he brought forward his budget, which he did with great claims of extra money for schools, councils and the NHS, only for those claims to collapse under independent scrutiny that discovered sums of money allocated in multiple budget lines in an effort to hide cuts of £327 million to councils.

We then had the Green deal, which was, we were told, to stop those cuts that the finance secretary had told us did not exist. Of course, that deal also turned out just to be a smaller cut that was funded not by progressive taxation but by creative accounting in the non-domestic rate pool.

The finance secretary was not done. This week, his think-of-a-number budgeting led to the last great handbrake turn of this sorry budget process, when rates relief for a handful of the businesses that were facing increases of 200 and 300 per cent suddenly appeared.

After all the sound and fury, double counting and fantasy forecasting, we end up pretty much where we started. No serious attempt has been made to use the new tax powers; the UK Tory tax structure has simply been accepted pretty much intact. There has been no attempt at all to use the new welfare powers, with our most vulnerable citizens being unnecessarily left at the mercy of Tory welfare reform for at least another three years. As for education, the budget squeeze goes on. The £120 million to close the attainment gap could and should be a serious, welcome and needed effort to transform the lives of children from poorer backgrounds, if it did not have to be set against a £170 million cut to the councils that fund the schools. There was a commitment to expand childcare, but again it has to be set against the cuts to councils who will be asked to deliver it. Meanwhile, the nursery sector is being hammered by rates increases for which it has received no help whatsoever.

That is also true of universities, which have seen swingeing increases in their rates at the same time as a 7.5 per cent cut in their revenue funding. As for colleges, great fanfare was made of a tiny increase in their teaching budgets this year, but it covered up the fact that, in real terms, our college budgets have not yet caught up with what they were in 2006-07, when the SNP came to power—10 long years ago. There is also no support in the budget for college students who are struggling with a system that the National Union of Students Scotland describes as not fit for purpose.

Is that not the truth of this budget? There are new powers and new opportunities, but all that the Government can come up with is more of the same. I say this to Kate Forbes. Yes, I believe that the people wanted the Parliament to have powers, but I also believe that they wanted us to use those powers to stop the cuts. That is what she and her colleagues promised a year ago but they have delivered the same cuts to education budgets, the same Tory austerity cuts, the same squeezing of local services in particular, and the same tired excuses for a timid Government that does not have the vision or the guts to use the power of the Scottish Parliament to do the things to which it pays lip service—redistribute wealth, stop the cuts, and invest in our future.

15:39  



Ash Denham (Edinburgh Eastern) (SNP)

We have spent some time debating the budget, and the process has made clear many things—mainly that, although the Scottish Government has worked constructively to build a revenue and spending plan that is both fair and bold, the Tories have moved further to the right and have turned their backs on the people of Scotland in favour of damaging rhetoric that is neither forthright nor productive in constructing a budget.

In fact, last week, in a speech that was given in the backyard of her Westminster bosses, Ruth Davidson was daring enough to suggest that the First Minister faced a choice between a top priority of education or an independence referendum. She said that the First Minister

“cannot have it both ways.”

I would never want to know the realities of a Tory Government at Holyrood, but it seems that Ruth Davidson cannot grasp that governing so narrowly is not conducive to getting the best deal for the people of Scotland.

That is why this budget prioritises education by providing £1.6 billion to support higher and further education, while also making record investment of £12.7 billion in health resource spending, expanding free childcare and early learning to 30 hours a week and handing the headteachers of schools an additional £120 million to use however they see fit, which will benefit eight schools in my Edinburgh Eastern constituency to the tune of just over £1 million. The budget also lowers the business poundage rate, expands the small business bonus scheme to exempt 100,000 properties from rates and ensures that 99 per cent of Scots will not pay more in income tax.

On top of that, an additional tailored rates relief package for 9,500 businesses across Scotland was announced this week. One need look only as far as Portobello in my constituency to see how that action will benefit many restaurants, pubs, hotels and cafes that are the heart of our communities. I know that those businesses will be watching the Tories today as they vote against those crucial rate reliefs and against a package of support for small businesses. It is something that the Tories themselves called for, but today they are once again caught out with their empty rhetoric. Ruth Davidson would be better off lecturing her party about trying to have it both ways, given that the Scottish Tories have on the one hand called for cutting taxes while on the other demanding millions of pounds of investment in public service.

In reality, we know that a Tory-led Holyrood would result in tax cuts for the wealthiest at the expense of our vital services, which real Scots depend on. That is why voters sent the SNP to Holyrood as the largest party, with a mandate to pass a budget that is far reaching and which provides the kind of country that Scots demand—a country where students do not pay tuition fees for university, where the elderly do not pay for personal care and where parents do not pay astronomical childcare costs.

As a result of constructive work with the Greens, the budget now delivers £160 million to local government to be spent at the discretion of individual authorities. For Edinburgh, that equates to an extra £12 million to bolster important local services. The budget provides all that, along with a reduction in the business poundage rate, a large business supplement threshold that matches England’s and the best support for small to medium-sized enterprises in the UK.

That is what getting on with the day job looks like. It is all about prioritising the needs of the Scottish people, because that is what being in the Scottish Parliament demands of us. However, it seems as if the Scottish Tories would rather turn their eyes and ears away from Scotland and towards London, from where they get their marching orders. That might explain why they had no constructive engagement in the budget process at all. In fact, they had nothing to say about schools, nothing to say about hospitals and nothing to say about infrastructure: all they could talk about was tax cuts, tax cuts and more tax cuts.

However, this Government hears the Scottish people, and it refuses to lead in the incoherent way that the Tories would have led. The adage at Westminster might be austerity, but in Scotland it is prosperity—it is fairness and it is a better deal than anywhere else in the UK. That is what the budget represents, so I urge members to join me in voting for it.

15:45  



Dean Lockhart (Mid Scotland and Fife) (Con)

In the stage 1 budget debate, the finance secretary told Parliament that the budget will support jobs and lay the foundations for future growth. This budget is many things, but it is most definitely not a budget for economic growth and jobs. As Murdo Fraser said, the budget process is about choices, and in two critical areas the finance secretary has made decisions that will damage the economy and risk future Government revenues. First, despite having an extra £500 million to spend, the finance secretary has slashed the enterprise budget by more than £50 million—

Ash Denham

Will the member take an intervention?

Dean Lockhart

Perhaps I will take one later.

The finance secretary has done that at a time of, in his words, “significant challenge” in our economy. At least we can agree on that last point: this is, indeed, a time of significant challenge to our economy. That is precisely why slashing the enterprise budget, which supports new and expanding businesses across all sectors, is the wrong thing to do.

Derek Mackay

Will the member take an intervention?

Dean Lockhart

I will, later.

I say to be clear that Derek Mackay said earlier that he has given Scottish Enterprise an extra £35 million. However, he has not. Originally, the budget would have cut the enterprise budget by £85 million, and now the cut is £50 million. Only in the fantasy world of SNP economic policy would that be seen as extra funding.

Derek Mackay

We have just had another specific example of a spending request from the Conservatives. From where in the budget does Mr Lockhart propose that we take money to fund that other item of expenditure?

Dean Lockhart

I could be flippant and mention Mr Mackay’s sofa. However, I will make it clear to him that if growth in Scotland’s economy under the SNP matched the growth in the UK’s economy since 2007, GDP in Scotland would have been £3.1 billion higher over the past 10 years. That would have been an extra £1,200 per household in Scotland. That is where the extra money would come from. Grow the economy; do not increase tax.

In justifying the decision to cut the enterprise budget, the finance secretary has pointed to other measures that are being taken to boost the economy, including the growth scheme, which he says will provide up to £500 million of investment guarantees and loans. The only problem is that the budget fails to provide additional funding for that growth scheme. Where is the additional funding coming from to finance the £500 million growth scheme?

Derek Mackay rose—

Dean Lockhart

Show me the money, Mr Mackay.

Derek Mackay

Does Mr Lockhart understand what contingent liabilities are? It has been explained to him before. Would he like a further briefing on it to explain how the £500 million Scottish growth scheme is funded?

Dean Lockhart

Under international accounting standard 37, I know what contingent liabilities are. They are off balance sheet. However, the finance secretary and Keith Brown have repeatedly said that there will be fresh loans under the scheme—that means fresh funding, but that money is not available in the budget.

Earlier today, when I asked Keith Brown where the money is coming from, he was unable to answer the question. He indicated that it might come from the existing enterprise budget. However, as we have heard, that budget is being cut by more than £50 million. It is now becoming clear that the £500 million growth scheme is another example of the SNP repackaging existing money and presenting it as new. It is all headlines but no substance and no extra cash, as is the case with the mythical Scottish business development bank, which was first announced by the SNP in 2013, with the aim of expanding high-growth business in Scotland, but which, four years later, is still nowhere to be seen.

Ash Denham

Will the member take an intervention?

Dean Lockhart

I will not, right now.

With such abysmal economic policy making, it is no wonder that the economy in Scotland, under the SNP, is performing so badly.

The second area in which the finance secretary had a choice was whether to increase tax on jobs and take-home pay. We now know that he did not need to increase the tax burden on hard-working families, but the finance secretary decided to abandon the centre ground and to lurch to the left, joining the Greens, to increase tax on the hard-working people of Scotland. I urge the finance secretary to listen in the future to the advice of business leaders in the economy, not to the Greens. Scottish Chambers of Commerce has said that

“growing our economy rather than increasing tax will”

boost

“tax revenues and ... public ... spending.”

We agree with that.

Neil Findlay

Will Mr Lockhart take an intervention?

Dean Lockhart

I will not, right now.

Bruce Crawford and Ash Denham asked how we would finance the extra spending. I answered that when I responded to Mr Mackay. If, under the SNP Government, the Scottish economy had grown at the same rate as that of the UK, we would have an extra £3.1 billion. Economic growth, not increasing tax, is the answer. That is why we will not support the budget.

Ash Denham

Will the member take an intervention on that point?

Dean Lockhart

Yes. Go ahead.

The Deputy Presiding Officer

Saying “Go ahead” is not very polite, Mr Lockhart.

Ash Denham

The Conservatives are very fond of claiming that Scotland has received more money from the all-benevolent Westminster Government, but it is a fact that we have had a drastic 9 per cent real-terms reduction in the previous session and this session. Perhaps if Westminster had continued to support Scotland financially, the economy would have grown further.

Dean Lockhart

I refer to Scottish Parliament information centre research that shows that the real-terms numbers have increased between 2010 and the current budget. I have the numbers with me and would be happy to compare notes with Ash Denham later. [Interruption.]

The Deputy Presiding Officer

Excuse me a minute. There is no point in members debating across the chamber with each other. If Mr Ross or the cabinet secretary want to make a point, they should intervene.

Dean Lockhart

The budget debates have quite rightly focused on how we can increase funding for vital public services. However, no discussion about funding of public services can be complete without recognising the fundamental importance of the funding that is received through Barnett consequentials. For example, over £350 million of the £380 million increase in NHS spending in Scotland last year was funding from Barnett consequentials.

Earlier this week, Douglas McWilliams from the Centre for Economics and Business Research, who is one of the country’s top economic forecasters, provided a timely reminder of the importance of the Barnett formula and the impact that independence would have on public services in Scotland. He said that, in the event of independence,

“there would need to be cuts”

in public spending

“of about 15 per cent of GDP. That’s roughly on the scale of what has happened in Greece”.

Let me conclude. In dragging a high-tax budget through Parliament, the pro-independence coalition of the SNP and the Greens has argued that increasing tax is progressive. I make it clear that there is absolutely nothing progressive about the massive cuts to public spending and vital public services that would be a direct consequence of the obsession of the SNP and the Greens with independence.

I support Murdo Fraser’s amendment.

The Deputy Presiding Officer

I remind members that practice in the chamber is that, after a member has made their speech, they should wait through the next two speeches before they leave the chamber. Two members have not done that. Members should bear it in mind that that is a courtesy to other members. Those people will find out who they are later today.

15:52  



Gil Paterson (Clydebank and Milngavie) (SNP)

The budget delivers on the promises that the Government was elected on. It was created in Scotland for Scotland, not dictated to us by Westminster. Scotland’s finances are still being strangled by the UK Tory Government, but we will not bend to its plan of total austerity. We will not sell off Scotland’s public services and we will not bow to privatisation. We will ensure economic growth, social justice and the protection of our services.

Yesterday, we all found out from independent research that Scotland is not the highest-taxed part of the United Kingdom. That destroys complaints from the Tories that that is the case. SPICe found out that any tax rises are mitigated by lower council tax levels in Scotland. It is important to mention that all council tax will be spent locally.

Nationally, Labour’s mantra is, “Increase tax,” which we have heard throughout the process. However, last night, when there was the prospect of Labour increasing tax in West Dunbartonshire Council, it voted to freeze the council tax, after years of complaining bitterly locally about the freeze.

Jackie Baillie (Dumbarton) (Lab)

Is it not the case that the SNP councillors voted to increase the council tax by 3 per cent and ignored the impact that that would have on some of the poorest in our community?

Gil Paterson

That might well be the case, but the point is that, locally, Labour councillors and Jackie Baillie in particular have berated the freezing of the council tax, yet Labour has continued that freeze. That is what we are talking about.

We have the business bonus, but we also have the social bonus of free further education, free prescriptions and free bus passes, among other benefits that are exclusive to Scotland. I am sad that the Tories are demanding a tax reduction for the highest paid. Should we not maintain the principle that the more a person earns, the more they contribute? There are many higher earners who will gladly contribute their fair share, and I thank them for that.

The Scottish budget protects Scottish services. We have invested in education, and I welcome the new funds that are set to be given to schools. Most of the schools in my constituency will benefit from that funding. More important, more funding will go through the mechanism to underprivileged pupils. That will help to improve the life chances of many young people, and it will also help to reduce the attainment gap, as the Government has vowed to do.

The funding increase for universities and colleges is excellent news and, as I have said, free education will continue. If the Tories had their way, everyone would have to pay the huge fees that apply down south. Every person, no matter what their background is, should get the chance to have a great education if they so choose. The SNP is delivering on its promises.

Poverty scars Scotland. The problem is historical, but we are tackling it. Many of my constituents will benefit from the Scottish Government continuing to mitigate the impact of the hated bedroom tax. Many in my constituency will also benefit from the Scottish welfare fund, which will clear up the mess that the UK Government’s punitive welfare programme has left. The wheels are in motion for a new Scottish social security system. With the powers that we have, we will run welfare with dignity and respect.

Economic growth is the key to Scotland’s prosperity. With the few tools that we have, we are still driving economic growth. We have invested £4 billion in our infrastructure. Most of us will have seen the amazing developments that are taking place, such as the motorway projects on the M8 and the M74 and the stunning Queensferry crossing. Many more projects are progressing across the country. They are all drivers of economic growth and will improve the lives of millions.

The SNP Government is building our economy. My Clydebank constituency boasts one of the finest heart surgery hospitals in the world. The Golden Jubilee national hospital is to receive a multimillion-pound expansion and 700 new jobs, which are not being transferred—they are brand-new jobs in the local economy. I also note that health and social care partnerships help some of my most vulnerable constituents.

The budget is about economic growth, investment in our public services and social justice. It is about protecting our most vulnerable from the class war that is waged by the Tories, making Scotland’s economy prosper and investing in and protecting public services. I call on all MSPs to back the budget tonight.

15:58  



Tom Arthur (Renfrewshire South) (SNP)

I am delighted, particularly as a newly elected member, to have the opportunity to participate in this afternoon’s historic stage 3 budget debate. The budget is fair and proportionate and balances the imperatives of public spending with the exigencies of supporting economic growth at a time of Brexit-driven uncertainty.

The proposals that the budget outlines will increase the total resources for local services and increase health spending above inflation. In my Renfrewshire South constituency, that translates into almost £5 million in additional support for integration authorities and more than £1.5 million direct to schools through the pupil equity fund.

Although St David’s primary school in Johnstone benefits from attainment challenge funding, the pupil equity fund that the budget provides means that, to give just a few of many examples, St Mark’s primary school and Carlibar primary school in Barrhead will each receive more than £120,000, Johnstone high school will receive more than £110,000 and Woodlands primary school in Linwood will benefit from almost £150,000. That is real money that will make a real difference to the lives of children and young people in my constituency. Those who vote against the budget are voting against that money going to those schools.

Neil Findlay

Does that mean that, every time the SNP has voted against a budget here or in any council chamber, it was voting against every single thing in that budget? Let us get beyond such childish stuff.

Tom Arthur

The context to that remark is that I hear calls from the Labour Party for increased investment in education, but when we provide increased investment in education, what do Labour members do? They vote against it.

Neil Findlay

That does not answer the question.

Tom Arthur

It does answer the question.

A frustration that is shared by many of my constituents, particularly in Howwood and Lochwinnoch, has been the lack of access to superfast broadband. On doorstep after doorstep during the election campaign, the SNP Government’s commitment to provide superfast broadband access to 95 per cent of homes by the end of this year and to 100 per cent of premises in Scotland by 2021 was warmly received. I know that many of my constituents will join me in welcoming the support that the budget provides to deliver the final phase of the digital Scotland superfast broadband programme and to commence the first phase of the reaching 100 per cent programme. Whether it be in health, education or digital infrastructure, the budget will deliver for my constituents in Renfrewshire South and for the people of Scotland.

The same cannot be said of the Tory and Labour proposals. Labour’s tax proposition is unfair, ill advised and incoherent. It is unfair to ask people who earn less than £12,000 a year to foot the bill for Tory austerity. It is ill advised to advocate an increase in the additional rate without having regard to the potential behavioural impact and consequent reduction in tax revenue.

Anas Sarwar

That is the Tory argument.

Tom Arthur

I would rather deal in pragmatic reality than in Labour’s clown-car economics.

It is incoherent to press for tax increases on the lowest earners in society while simultaneously implementing council tax freezes across the country on the grounds that

“so many people are having to tighten their own budgets and, in the worst cases, are struggling to provide the basics for their families.”

Those are not my words but those of the outgoing Labour Renfrewshire Council leader, Mark Macmillan. Incoherence has characterised Labour’s whole approach to the budget process at every level, which has resulted in Labour’s politics being viewed by the overwhelming majority of people in Scotland as outdated, misplaced and irrelevant to their needs. That was confirmed yet again by the grotesque chaos of Labour’s walkout at Clackmannanshire Council this morning.

While Labour would hammer the least affluent in society with tax rises, the Tories want to cut tax for the most affluent, at the expense of our public services. The budget process has been revealing about the values and character of the Conservatives, as it has confirmed what we have always known—that, despite the talk over the past 10 years of rebranding, disbanding and a refreshed membership, they are still the same old Tories.

I will give one example. East Renfrewshire Council stands to benefit from an additional £3 million that was announced earlier in the budget process. When the council’s budget was set last week, what did the Conservatives decide to do? Did they suggest that that revenue should be spent on education or on additional investment in health? No. Their proposition was a 6 per cent council tax cut in one of the most affluent parts of Scotland. That tells us all that we need to know about the values of the Conservative Party. For all the talk of Scotland being the highest-taxed part of the UK, the people who would stand to benefit from the Conservatives’ proposition are the highest earners, not the people who are most vulnerable and most in need of support.

This budget delivers for all of Scotland, and I am proud to support it.

16:04  



Anas Sarwar (Glasgow) (Lab)

Almost daily, we hear SNP members say that it is “a historic day”, “a historic moment”, or that there is “historic progress” towards whatever it is that they dream of every single night, but in actual fact the budget is a historic waste of time and a historic wasted opportunity.

SNP Government ministers spend every waking moment saying, “We want more power, more power, more power.” However, when they get the power, they do not want to do anything with it. On welfare powers, they say, “We need to wait and see.” On tax powers, they say, “We don’t want to use the tax powers.” I listened very carefully to Tom Arthur’s argument about the 50p tax band. I have heard that argument before: it is a Tory argument to say that people will flee if we introduce a 50p tax band. In fact, Nicola Sturgeon supported a 50p tax band when she was playing the game of the 2015 general election, but now that the Government has the opportunity to use the power, it does not want to. The truth is that Derek Mackay, Nicola Sturgeon and SNP members are, rather than wanting to use the tax powers, Tory unionists when it comes to tax policy.

The budget was meant to be about protecting communities, but all it does is protect the yes alliance.

Joan McAlpine (South Scotland) (SNP)

Can the member explain why the previous Labour Government did not put up the tax rate for the highest earners until 2010?

Anas Sarwar

I am sorry that Joan McAlpine was not paying attention to what happened under the previous Labour Government, which introduced the 50p tax band.

This budget is all about protecting the yes alliance—not the poorest and most vulnerable communities. I listened to Patrick Harvie’s speech. He is a man whom I respect and who I think always speaks on principle. However, he is a Glasgow MSP who fails to recognise a £53 million cut to Glasgow’s budget, which his own councillors voted on last week.

Patrick Harvie

I am a Glasgow MSP who has won an additional £17 million for the budget. I agree with Anas Sarwar about wanting more—I wish that we had more and I wish that we were investing more. However, exactly what meaningful difference has Anas Sarwar’s party’s approach made in terms of pushing the SNP to do something that it does not want to do? None.

Anas Sarwar

I am so glad that Mr Harvie made that intervention, because the equivalent of the Green and SNP deal is someone coming to Patrick Harvie, Derek Mackay or Nicola Sturgeon and saying, “You’re going to get a £15,000 pay cut”, then coming back and saying, “Actually, you’re getting a £10,000 pay cut, but you should be happy because you’re getting £5,000 extra.” That is the equivalent of the argument that they are making in this debate. There is no extra money and there are still cuts to communities around the country.

Look at members on the SNP benches—there has not been a single utterance of opposition to budget cuts in their communities. They have no backbone, no ability to stand up to their own Government—their masters—no opinions of their own, no ideology and no thought except for independence.

The Minister for Community Safety and Legal Affairs (Annabelle Ewing)

Will the member take an intervention?

Anas Sarwar

I will not, just now.

Clare Adamson (Motherwell and Wishaw) (SNP)

Will the member give way?

Anas Sarwar

I will not, just now. I took pleasure in standing shoulder to shoulder with every single SNP MSP against the proposals to close jobcentres in Glasgow. Why are they not standing shoulder to shoulder with us now when the city’s budget is being cut? Why are they not standing shoulder to shoulder with us when there are cuts to the NHS across the country? The reality is that it is easy to be tough when they are talking about what is being done to us by the Conservatives in Westminster, but it is not easy to show backbone when their own Government makes bad decisions right here in Scotland.

I was at NHS Greater Glasgow and Clyde this week to protest against closures—[Interruption.] I am glad that Mr Mackay is laughing, because I am talking about the Royal Alexandra hospital, which is in the area that he represents. I was standing shoulder to shoulder with Neil Bibby at the health board in opposition to the closure of the kids ward at the RAH. Where was George Adam? Where was Derek Mackay? Where were those SNP MSPs? They were outside McDonald’s, campaigning against a closure there—or perhaps they were buying Nicola Sturgeon a Happy Meal. When it comes to standing up for their communities, they are nowhere to be seen.

I have seen the social care promise that was made in this budget. Apparently, we are getting £107 million more for social care, but the reality is that, at the same time, the Government is writing to councils to say that they can withdraw up to £80 million for integration joint boards. What is the consequence? Delayed discharge means that more than half a million bed days are being lost, although the Cabinet Secretary for Health and Sport promised to eradicate that by the start of 2016. Half a million bed days is the equivalent of every single bed at the Queen Elizabeth university hospital, and more, being occupied every single day by patients who are fit to leave but who are trapped in hospital—that is a shame on every single SNP member.

After 10 years of the SNP in Government, we have seen inequality rise. Health inequality has risen—the gap has not narrowed, but widened. The attainment gap and the wealth gap have widened, not narrowed. What is the SNP’s version of redistribution of wealth? It is to cut air passenger duty for frequent flyers while reviewing the bus pass for pensioners across the country. That is the real truth of the SNP Government.

I will vote against the budget because I believe in prosperity and fairness and because I stand up against poverty and reject austerity. What will SNP members do? I know what they will do—they will do what they are told.

16:11  



Joan McAlpine (South Scotland) (SNP)

If we have learned anything today, it is that the Tories are economically innumerate and their sums do not add up. Throughout the budget process, the Tories have made uncosted spending demands while simultaneously demanding tax cuts. They make two completely contradictory assertions at exactly the same time and apparently without any embarrassment or shame. George Orwell called it doublethink—I call it a double-cross. The Tories are not fooling anyone except themselves. We cannot cut tax and spend more at the same time, and no amount of silly extended metaphors about overstuffed sofas can divert us from that dodgy arithmetic.

Murdo Fraser

Where was Joan McAlpine in election after election when the SNP stood on a manifesto commitment to cut corporation tax by 3 per cent in order to grow the tax take and the economy? Was that completely wrong?

Joan McAlpine

We cannot expect immediate returns from a tax cut, which is exactly why the Tories’ sums do not add up—they are not coming up with the money immediately to meet all their spending demands.

I will go through some of the spending demands that we have heard. Dean Lockhart wants more for Scottish Enterprise and Edward Mountain demanded more to fill health service vacancies, despite the fact that there is £12.7 billion being allocated to the NHS this year.

It is not just that the Tories’ sums do not add up. The basic Tory assertion that Scots will pay more tax is simply not true. The fact is that 99 per cent of people in Scotland will pay no more tax on their current level of income than they did in 2016-17. Income tax is not going up in Scotland; however, the Tories are giving the richest 10 per cent in the rest of the UK a big tax cut. The Tories propose to raise the level at which people start paying the higher rate of income tax from £43,000 to £50,000 by 2020. That is a massive tax cut that the Conservatives forecast will cost the UK £1.6 billion. I am very glad that that cost will not fall on Scotland because of the fair and sensible policies that are being pursued here. Scotland will freeze income tax rates for this entire session of Parliament. Freezing income tax is not the same as raising it, but the Tories continue to assert that it is. Ordinary basic-rate taxpayers will pay the price of that through increased charges and fewer services.

The real high-tax party is, in fact, the Tory party. In England, Tory taxes are higher for poor people, who have to pay the Tories’ bedroom tax, which the Scottish Government has effectively wiped out in Scotland at a cost of £47 million.

Anas Sarwar

Can Joan McAlpine please clarify something? She said that the SNP will freeze income tax rates for the duration of this session of Parliament. Does that mean that the top rate of tax will not rise for the duration of this session of Parliament?

Joan McAlpine

As the member has already heard, that is being considered at the moment.

The new Scottish welfare fund, which the SNP introduced for the most vulnerable people in our society, will benefit 217,000 households that are affected by emergencies, financial crises and the UK Government’s cruel welfare cuts—which, incidentally, Sheffield Hallam University has calculated will take £1 billion out of the Scottish economy by 2020.

In England, there is a Tory tax on education—students in England have to pay £9,000 in tuition fees. Of course, tuition fees were introduced by a Labour Government of which Anas Sarwar was part, as I recall. Here, 120,000 Scottish undergraduates do not have to pay fees.

In England, Tory taxes are higher for sick people. People must pay £8.50 for every item of medicine, so woe betide them if they have multiple conditions. In England, 100,000 people who suffer from long-term conditions are hit by that Tory tax.

There are also Tory taxes that apply to older people. In Scotland, around 77,000 people benefit from free personal care, which is not available in England, and which saves self-funders in residential care almost £9,000 per year. In effect, that is another tax that older people in Scotland do not pay.

The SNP does not need to take lessons from the Tories on taxes. It is Tory tax and benefit changes that are hurting the most vulnerable people more than they hurt the rich. Since 2010, the only income tax rate that the Conservatives have cut is the additional rate, which was cut from 50p to 45p. That gives us an insight into the Conservatives’ priorities. The Tories are the party of hidden taxes. They plan tax cuts for the rich and stealth taxes for people on low and middle incomes—for the sick, for the poor, for struggling families, for students, for the disabled and for the old.

It is 15 years since Theresa May stood up at the Tory party conference and told her colleagues that the Tories were “the Nasty Party”. We have had many changes in politics since then. Mrs May has gone from party chairman to Prime Minister. However, I am afraid that the “Nasty Party” tag still sticks.

16:16  



Oliver Mundell (Dumfriesshire) (Con)

I have to be honest: I am still a relatively new member of the Parliament, and I have been a bit bemused by the circus of the past few weeks. I have been struggling to keep up with Derek Mackay’s budget revisions and—more difficult for me—I have been trying to work out which of my two conclusions is worse: either we have a finance secretary who did not notice the missing millions from his budget, or we have a finance secretary who wilfully hid those millions while hiking up taxes and cutting funding for local government and other public services. I suppose that all that at least clears up some of the confusion about why SNP members thought that they had less money to spend, if they were not actually planning to spend it.

Nonetheless, I came to today’s debate hopeful that, even at the eleventh hour, Derek Mackay might change not just his mind but his mindset. Some of my colleagues may think that I was being a bit naive but, given all the unexpected windfalls and U-turns since the draft budget was published, I was beginning to think that nothing was impossible. In fairness, given that the cabinet secretary likes finding new money so much, and given his Government’s new-found propensity to bound into action in response to Tory concerns, I thought that he might be willing to go the whole hog and embrace the principles of economic growth and competitive taxation to grow the overall tax take.

Instead, the finance secretary is steadfastly anchoring himself to the mistaken belief that it is the level of taxation, not the level of economic success, that will protect our public services and increase living standards. In doing so, he is single-handedly failing in his duty properly to redistribute the wealth of our nation and he is setting out on an economic path that will deny a generation of Scots jobs, economic opportunities and the well-funded public services that they deserve.

Worst of all, while doing all that, the finance secretary is masquerading as a kind of modern Robin Hood. The only problem is that Derek Mackay is not taking from the rich to help the poorest. No, he is more like the sheriff of Nottingham, putting forward a budget that is robbing all of us to pay for 10 years of SNP failure.

Andy Wightman (Lothian) (Green)

Will the member take an intervention?

Joan McAlpine

Will the member take an intervention?

Oliver Mundell

No, thank you.

I fear that this is a case of the emperor’s new clothes. The finance secretary’s new-found powers seem to have gone to his head, and he is parading the naked truth about the SNP’s economic policy in front of the people of Scotland. The truth is that, if the SNP has an economic plan, it must be invisible. Undeterred, the finance secretary soldiers on, believing so strongly in his own spin that he does not even seem to have noticed the outcry—

Derek Mackay

I would like to interrupt the member’s insults for a moment and ask him to turn to his party’s proposition. What area of funding would the Conservatives cut to fund their tax cut for the richest in society?

Oliver Mundell

As we have said repeatedly—I do not know how many times we will have to tell the finance secretary this—by reducing the rate of taxation and maintaining competitive taxes, we can grow the economy.

There is no escaping the fact that Derek Mackay’s Government has been found out. The years of economic indifference are coming home to roost. Blaming the UK Government for years of its own inertia no longer washes. We now know once and for all that this is a socially heartless and economically soulless Government that has chosen—believe me, the austerity of economic self-destruction is a choice—to push thousands of businesses to the wall, to demand that those on middle incomes pay more council tax and to send out an unequivocal message to the financially mobile and those who want to invest in Scotland that we are no longer open for business. All that hurts our economy and means that there will be less money to redistribute in future years. That hurts our schools, our NHS and the most vulnerable in our society, and it is just not good enough.

I will undoubtedly be told that I am talking Scotland down or hurling insults, but at least—unlike the Scottish Government—I am not doing Scotland down. Indeed, it is about time that the SNP realised that, by calling out its incompetence, we are actually talking Scotland up. Unlike the fanatical, hard-left separatists, I do not believe that Scotland is too wee or too small to grow, nor do I think that we are shackled by our United Kingdom, and I certainly believe that we can make a success of Brexit. However, we will not achieve any of that by reducing our competitiveness and making ourselves the highest-taxed part of our United Kingdom.

Andy Wightman

Will the member give way?

Oliver Mundell

I am in my final minute.

Perhaps it is because I represent a constituency on the border, where the choice that people have to make about where to live, work and do business is most immediate, but I believe more strongly than ever that we are starting to pay a very high price for SNP rule. That is why I will not be voting with the Scottish Government this evening, and I whole-heartedly back Murdo Fraser’s amendment.

The Deputy Presiding Officer (Linda Fabiani)

The final speaker in the open debate will be George Adam.

16:22  



George Adam (Paisley) (SNP)

I begin by saying how pleased I am to speak in this debate, not only because it is the budget debate and the first time that my good friend and colleague Derek Mackay has presented a budget to us as the Cabinet Secretary for Finance and the Constitution but because it is the first time in history that we, the MSPs of Scotland, have had the power to make new decisions ourselves, for our country. This budget heralds a material change in the financial responsibility of the Scottish Parliament, and it gives us our first opportunity to set income tax rates and thresholds. As such, it is an important step towards Scotland’s future and growth as a country.

The budget is fair, focused and forward thinking, and it seeks to promote Scottish interests and protect Scottish people. It rejects the austerity that is so loved by the Tory party in Westminster and instead secures an additional £900 million to spend on our public services. We believe that money is better spent on the things that matter most to people—the things that can make or break everyday taxpayers and everyday families. Health, education, jobs and local services are the things that make a successful and fair society. By making people and public services our priority, we ensure that Scottish taxpayers get more for their money and a much better deal than people anywhere else in the UK.

Anas Sarwar

Will the member give way?

George Adam

I will take Anas Sarwar’s comedy turn.

Anas Sarwar

The member talks about local services and the NHS. Today, he said on Twitter that 140 characters was not enough to say what his position on the Royal Alexandra hospital is. Will he demand that the health secretary calls in the proposal and rejects the plan to close the RAH kids ward?

George Adam

On three or four occasions, we have heard Kezia Dugdale and Anas Sarwar attack members of my community who have low-wage jobs and low incomes because I stood up for them to try to make sure that families in Paisley would have prosperity in future, so Mr Sarwar should not come to me playing politics with hospitals.

At this point, the Tories will no doubt fixate on what they perceive to be a disregard of Scotland’s highest income tax payers, yet, at the moment, they are being asked to pay only a little more each year than taxpayers in the rest of the UK. That is greatly offset by the savings that those earners will benefit from in respect of free prescriptions, free higher education and other vital public services in Scotland. The difference in comparison to England amounts to around £7.60 a week. Compare that sum to the £8.40 that it costs people who live south of the border for each prescription item.

I have followed the passage of the Budget (Scotland) Bill through the chamber and committees and have seen the debate between Murdo Fraser and Derek Mackay, which has been an example of two different approaches, styles and political beliefs. However, there is one major difference between the two of them. I have known Derek Mackay all his political life, and the big difference is that Derek has won every election in which he has stood as opposed to Murdo Fraser, who has lost every campaign. It seems that the public has real insight when it comes to choosing elected members.

In contrast, the Labour Party’s suggestion for raising tax would undoubtedly affect our low-income taxpayers the most and that is something that the Scottish Government will certainly not get on board with. Instead, the Government will freeze income tax rates. Despite Westminster cutting the Scottish budget, we will not pass on austerity to the household budgets of those in our society with the lowest incomes. Indeed, the SNP Government continues to protect some of the poorest in our society from the negative impacts of the UK Government’s welfare cuts, while attempting to tackle poverty, protect those with disabilities and continue to develop a Scottish social security system that is based on dignity and respect.

Locally, the budget recognises the importance of community resources. Local government is an integral and essential part of the overall good governance of Scotland and continues to be a key partner in the Scottish Government’s transformative programme of public sector reform. In acknowledgement of that, Scotland’s local authorities are to benefit from an additional £160 million investment to spend on local priorities—that is on top of the £240 million that is already pledged for local services. Each council area will also benefit from additional funding through the attainment Scotland fund, which will help to significantly close the attainment gap and further promote a fair and equal society for every Scottish citizen.

In addition, all the extra council tax income that is raised by the reforms to council tax for bands E to H, which is estimated at £111 million in 2017-18, will be retained in full in every local authority. Every authority can then decide how to spend the money, based on its own local priorities and needs. All council tax that is raised locally will be spent locally. The council tax reforms will provide additional support to families of low incomes across all council tax bands by extending the relief that is available to households with children, which could benefit 77,000 families and an estimated 140,000 children.

For healthcare, the budget proposes a record investment in the NHS and sends the total health resource spend to a soaring £12.7 billion. During times of difficulty and uncertainty, it is crucial that the NHS remains a priority service for the Scottish people.

In challenging times, the budget delivers for the people of Scotland. The cabinet secretary is showing the way forward to the prosperous, fair Scotland that we all want to live in.

The Deputy Presiding Officer

We come to closing speeches. Despite all the noise this afternoon, I have some time in hand, so I can allow time for interventions if members wish to continue the spirit of debate—although they must speak from a standing position, rather than from their seats.

16:28  



Jackie Baillie (Dumbarton) (Lab)

Labour’s approach from the start of the budget process has been to use the Parliament’s new powers to stop the cuts in full, not in part, so that we can invest in public services and in our people to grow the economy. That stands in stark contrast to the approach of the SNP, which is content to operate simply as a conveyor belt for Tory cuts. We now have the power to do things differently, but that takes political will, which is something that appears to be strangely absent in the SNP.

Every time we debate the subject, the SNP blames the Tories for the cuts. I confess to having a modicum of sympathy for that approach, but when the SNP has the power to change that and refuses to do so, I part company with it.

I remind the Parliament of the First Minister’s pronouncements on the issue of Tory austerity. She used to believe in being anti-austerity—that was at a time when she had fewer powers than she does now. Now that she can actually deliver anti-austerity, is it not a shame that she no longer wants to do so? The SNP always demands more powers—it is, after all, the party of independence. What a shame it is that it does not want to use the powers that it has to protect our public services and our economy.

We have heard from SNP back benchers today a list of good things in the budget. This is not about denying those things, but we believe that this Parliament can and should do more. The SNP cannot really get away from the cuts that it is making—

John Swinney

Will Jackie Baillie give way?

Jackie Baillie

In a second. No amount of double counting on the part of SNP ministers can hide the cuts: the £170 million that has been slashed from local services this year; and the £1.5 billion that has been slashed since 2011, much of it on the Deputy First Minister’s watch. What does he have to say about that?

John Swinney

Jackie Baillie says that there is no denying the good things in the budget. Why on earth, then, is the Labour Party going to vote against every single one of them—against £900 million of investment in local services? Where is the social justice in that absurdity?

Jackie Baillie

That is interesting because there are actually £170 million of cuts; there have been £1.5 billion of cuts on the Deputy First Minister’s watch—he has cut services. I watch him and the First Minister shake their heads. The unfortunate thing for them is that all that is true. They claim to be funding the health service, but we know that across Scotland, the NHS is struggling. NHS Greater Glasgow and Clyde will start to consult on the biggest cuts programme in its history—a staggering £105 million of cuts next year alone. Services will close; patients will suffer.

Let me give members a flavour of that. There is the reduction in mental health services for older people—and here I thought that mental health was supposed to be a priority for this Government; the removal of school nurses from our schools; and, of course, the closure of the children’s ward at the RAH, which the local member, George Adam, failed to mention. That is not to mention the proposals to close the Vale and Inverclyde maternity units, which the Government will not tell us about until after the May election—how deeply cynical that is. Let us not pretend that this is anything other than a budget that cuts.

Let me move on to the SNP-Green deal.

John Swinney

Will the member give way?

Jackie Baillie

No, I have given way to the member already. He might want to comment in a minute.

I have watched their manoeuvres with fascination. They all say that there is an extra £160 million on the table, but that is simply not true. The only new, extra money is £29 million; the other money is already in the budget—it is underspend, shifting budget lines, accounting trickery. Like a cheap conjurer, the finance secretary reaches up his sleeve and pulls out another bankroll of money—but it is only for one year, so we will start off next year with a £130 million cut.

I say to the Greens as gently as I can that I think that they have got very little out of this deal. I am disappointed that progressive and principled politics has been abandoned for low politics and the illusion of influence. I think that the SNP will be smiling tonight. It has played a blinder; and it has played them well.

I welcome the cabinet secretary’s announcement of a 12.5 per cent cap for the north-east, the hospitality industry and renewables, but again it is not new money and again it is only for one year—businesses want to know whether they will receive the same relief next year, or do we have to wait and see what money the cabinet secretary can pull from his other sleeve in 12 months? Also, that is before I even begin to touch on the additional impact on hospitals, universities, nurseries and schools. With the greatest respect, sleight of hand, short-termism and a complete failure to grasp the challenge ahead are no way to run a budget.

As the cabinet secretary knows, we raise a substantial proportion of our own income. The number of people paying tax in Scotland matters and has a direct relationship to the amount that we can spend on public services. Clearly, therefore, we need to grow the economy and grow our tax base. If we have more people in work—more people paying tax—we have more to spend on public services. It really is that simple.

However, at a time when our economy is stagnating, employment is down, unemployment is up and economic inactivity is rising, what does the SNP do? You guessed it—the Scottish Government cuts the budgets of its enterprise and skills agencies: the very bodies that are charged with growing our economy. Having cut the Scottish Enterprise budget by 48 per cent, the Government decides to give some of that money back. We have to welcome that, but it is financial transaction money—it can be used only as loans that need to be repaid. There is still a £50 million cut.

Labour will not support grubby back-room deals among parties that are more interested in the next independence referendum than in growing the economy and investing in public services. This budget does not protect the poorest or public services—it tinkers at the margins, and it is timid and lacks vision. That is why we will vote against it at decision time.

16:35  



Douglas Ross (Highlands and Islands) (Con)

As a new MSP, this is my first stage 3 budget debate, so I can only surmise how such debates must have gone in the past. I assumed that when we got to this stage, there would be very little new to add, and that may have been the case in the past, before we got Derek Mackay, the cabinet secretary for U-turns. I could give him other titles, such as the cabinet secretary for the Scottish Parliament information centre, given how often he deflected to SPICe any difficult questions over his funding for additional business rates relief; or the cabinet secretary for money trees and cash down the back of the sofa—I accept that that is not particularly catchy, but it accurately describes how Derek Mackay has navigated his first budget.

Derek Mackay has long been considered a rising star in the SNP, but some must now be questioning his abilities. He is a finance secretary with more than £500 million more in real terms to spend in this budget than his predecessor had, but he can manage only to conjure up a budget that taxes hard-working families more, does not deliver for businesses and cuts funding to local authorities while expecting them to deliver more.

Kate Forbes

If Douglas Ross is so concerned about cuts to local councils, how does he anticipate funding them when he is so determined to cut taxes for the rich?

Douglas Ross

I will come on to both funding for local councils and our tax proposals later, because it is important to give those areas the full amount of time.

We know that the only way that the budget will be passed tonight is through an alliance between the parties that support Scottish separation from the rest of the United Kingdom. What of the Greens, then, half of whom are in the chamber just now? Derek Mackay was—shamefully—described as a “white knight” by Richard Lochhead on Tuesday, so what could we call Patrick Harvie? My colleague Murdo Fraser offered his own choice description during the stage 1 debate, but I have another description: the Greens are pusillanimous—they lack courage, they are timid and they give in too easily.

We all remember Patrick Harvie telling members in the chamber that he had not negotiated enough from the SNP to meet the commitments in his party’s manifesto, on which he had been elected just nine months earlier, but he felt that he had to do a deal. How the SNP and Derek Mackay must have laughed as the Green Party professed to having wrung every last penny of concessions out of the SNP only for another £44.6 million to be found for the business rates increases.

Patrick Harvie

We know that the Tories’ main concern is the Scottish Government’s refusal to cut taxes for the richest 10 per cent. Does Douglas Ross at least acknowledge, as Maurice Goldman failed to do, that people on the higher rate are high earners? Mr Goldman seems to think that £43,000 is a middle income. Does Mr Ross accept that the only people he is trying to protect are the richest 10 per cent in society?

Douglas Ross

I do not accept that, and I do not accept Patrick Harvie calling my colleague Maurice Golding “Maurice Goldman”—[Interruption.]

I say to Patrick Harvie that people—hard-working taxpayers—will suffer as a result of the budget, and it is wrong of SNP and Green members who have pushed this budget through to profess any differently. The public know that it is hard-working families who will suffer because of the vote that SNP and Green members are about to take.

The Minister for Local Government and Housing (Kevin Stewart)

Will the member give way?

Clare Adamson

Will the member give way?

Andy Wightman

Will the member give way?

Douglas Ross

I am sorry—I want to make a bit of progress if I can. I will try to come back to those who are intervening if possible.

If I may, I would like to ask a question of the cabinet secretary, on business rates. I did welcome the additional funding that he announced on Tuesday, but I would like to raise a particular point on behalf of an operator of a bowling alley in Elgin. The bowling alley previously had a rateable value of £41,000 a year, which went up to £70,000—a 70 per cent increase. Through his own work, Darren Margach, the owner and managing director, managed to get that back down to 30 per cent, but the increase is still crippling. I ask the cabinet secretary: since the bowling alley is also a restaurant and bar, will it be included in the 12.5 per cent cap? I would like to get this important point on the record. I give way to Mr Mackay.

Derek Mackay

It would be totally inappropriate for me to give individual tax advice to individual companies in the course of a stage 3 debate. My retort is: given that situation, why are the Tories about, in just a matter of minutes, to vote against a relief package for tens of thousands of businesses across this land?

Douglas Ross

I would say that I am grateful for that intervention but I am not. If the cabinet secretary wants to make the discussion wider than about just one business, will he tell me why some bowling alleys across Scotland saw a 20 per cent reduction, but Darren Margach and Pinz bowling alley in Elgin had a 30 per cent increase? If we take them out, there is an overall decrease in business rates; but there is an increase when we include them.

Derek Mackay

Will the member give way?

Douglas Ross

No, I cannot give way any further. The matter is of genuine concern—

The Deputy Presiding Officer

Mr Ross—

Douglas Ross

Well, if the cabinet secretary could answer as regards Pinz bowling alley in Elgin—

Derek Mackay

Presiding Officer, as I have said, lowering the poundage for businesses results in a tax reduction for businesses across the land. In addition to all the new national reliefs and the extension of the small business bonus, I have asked local authorities what other areas they might wish to protect with the extra £160 million that we have given to them. Within that, the Conservatives need to step up to the plate and support local authorities in making those decisions.

Douglas Ross

I understand why the cabinet secretary will not give an answer here today, but I raise a genuine concern, so I will write to him and I would appreciate a full response for my constituent.

Before I move on, I will take a final look at stage 1 and a very—[Interruption.] Mr Swinney!

What I would say—[Interruption.]

The Deputy Presiding Officer

Mr Ross, please sit down. Mr Swinney, please sit down.

If members wish to have a debate with no backchat, they should please respect that. If all parties want to take part in this kind of heckling, it is for me to decide when there has been too much, and not for anyone else, Mr Ross, please.

Douglas Ross

Thank you, Presiding Officer.

I was reflecting on the stage 1 proceedings. Just after that, SNP cabinet ministers—John Swinney included—went into tweet overdrive. They were hailing the deal that they had done with the Greens, all of them saying how bad Labour and the Conservatives were for voting down the budget and all of them with the same omission—I looked at the tweets and a number of them all failed to mention a different group in this Parliament. Which group was that? It was the Liberal Democrats. They never got a mention in any of the tweets about the stage 1 debate.

That got me wondering, so I thought that I ought to check the voting record of the Liberal Democrat MSPs. They had all also voted against the budget, so why were they not included in the criticism? I began to wonder whether it was because they are the smallest party in Parliament; or was it because the SNP is now worried that the Greens realise that they have been sold short on their deal and so it will need the Liberal Democrats to prop it up in future? The tweets that we have seen so far were very telling.

I want to mention briefly—

Willie Rennie

Will the member take an intervention?

Douglas Ross

I give way to Mr Rennie.

Willie Rennie

I do not really need Douglas Ross to stand up for me. [Laughter.] What we really need is a change in the budget to deliver investment for the future. Is that something that he will support next time round?

Douglas Ross

Given how unsuccessful Mr Rennie was in his negotiations with the Scottish Government, I do not think that I will be taking any lectures from him on how to go about budget negotiations in the future.

I would like to go over a number of the points that were made, but I do not think that I have the time. However, I will raise a couple of issues if I have a bit more time. I like to mention things that were said during a debate.

Kate Forbes said that it is a privilege to be a parliamentary liaison officer to the cabinet secretary and now we all know why: she gets reports from the cabinet secretary before they are released to the rest of Parliament, and puts out a press release. No wonder she thinks it is a privilege if that is how she deals with her role.

As the stage 3 debate on the budget comes to a conclusion, the door closes on an unprecedented opportunity to grow Scotland’s economy. Let us be clear that our economy is underperforming. Tonight, the Greens and the SNP will make Scotland the highest-taxed part of the United Kingdom, but the reality is that Derek Mackay did not need the tax rises at all. As Murdo Fraser pointed out during Tuesday’s debate on the Scottish rate resolution, the total being raised by creating the income tax differential is £108 million—substantially less than the £185 million that the SNP had seemingly stashed away for a rainy day.

We should make no mistake about it: Scots can see past the smoke and mirrors of the SNP. They want a strong Opposition that holds the Government to account on decisions that will affect not only Scotland’s bottom line, but their own.

The Scottish Conservatives will not support the budget at decision time tonight because it is a bad proposition for the people of Scotland. Bruce Crawford and Tom Arthur said that this is an historic day. The budget is indeed historic, but it will be remembered not for the powers gained, but for the opportunity lost.

16:46  



Derek Mackay

I said at earlier stages of the budget process that I would embark on a process of negotiation to find consensus in this Parliament, and I feel as if I have done that, as this debate has evidenced. Well, there is not a consensus among members in every part of the chamber to vote for the budget. Perhaps that was too much to ask. I know that I have been described as a magician, but I am not a miracle worker who could get the better together alliance to vote with us to unlock extra investment for the public services of Scotland.

Many elements of the debate have actually been quite disappointing when we think about the seriousness of what we are discussing—all our public services and the tax rates that we are now responsible for. This was an opportunity for us as a Parliament to show how we have matured and how we will respond to the powers that we have. Therefore, the most disappointing contribution has to be that of Douglas Ross, who spent his summing up on behalf of the Conservatives indulging to a large degree in personal insults and abuse.

Douglas Ross

Will the cabinet secretary give way?

Derek Mackay

No. I am sorry. If the member chooses to spend his summing-up time on behalf of the Conservatives simply insulting me, that does a disservice to his own party and to the entire country.

The budget is about £39 billion-worth of services. That is what we have been discussing. Members across the chamber may find points of difference to oppose the budget on, but many members have been able to express reasons to support the budget and the choices that this Parliament will make.

I say to the Labour Party that I listened closely to what it and others wanted, and there were specific requests that I tried to deliver as part of the budget process. Members can describe them as U-turns if they want to, but the way that I look at it is that trying to listen to what parties in this Parliament wanted, to respond to that and to build a budget that tried to build that consensus felt like the right thing to do. I listened carefully to what local government and members of this Parliament said about our council tax proposition and how we should fund attainment. We increased the attainment fund to enhance what was proposed in our manifesto and we changed how that resource would be raised in order to listen to voices in Parliament. We also acted on rail fares and local services, but it looks as if the Labour Party, from a very dogmatic position, will still vote against the budget this evening.

Kezia Dugdale

The cabinet secretary will understand that our main opposition to the SNP’s budget is about its failure to use its tax powers. In the conversations that we had throughout the budget process, which I felt were consensual and worth while, the cabinet secretary said that he may be willing in future years to revisit the question of a higher top rate of tax. Can he tell us whether he is still open to that?

Derek Mackay

The Scottish Government has been clear that we would not take an unnecessary gamble with the additional rate, so, yes, that policy is still under review. We may revisit the additional rate, but we will do so based on the evidence. The First Minister has specifically instructed the Council of Economic Advisers to look at the issue so that, if we are to change the rate, we will do what is intended, which is raise revenue for public services rather than jeopardise it.

I turn to the Liberal Democrats to say that I know that, like many members of the Opposition, they might not be willing to vote for the budget. However, I think that all members of the Opposition are willing the budget to go through this evening because they know that it is a sensible and balanced budget that will deliver for Scotland.

The Greens have worked with us constructively and I will return to that point.

Willie Rennie

I want to give the finance secretary another opportunity to abuse me and satisfy Douglas Ross.

Can the finance secretary set out why he is not taking the opportunity to use the new tax powers to do something different on mental health and education?

Derek Mackay

We are using our new tax powers, but in a fair, balanced and proportionate way. We are not passing austerity on to the families of Scotland and basic rate tax payers. At the same time, we are investing an extra £900 million in our public services, and spending more on the key areas that Willie Rennie asked me about, including police, mental health, the NHS and, specifically, education in a way that I would have thought Willie Rennie would have welcomed. I will not, have not, and do not intend to abuse Willie Rennie now, or any other member in future, because that does not fit with the seriousness of the subject that we are discussing.

It is always interesting that, when I turn my attention to the Conservatives, it motivates the Labour Party to get involved. The Tories have put into the public domain their priorities for the budget, which did not include education, police, enterprise, innovation, or international trade. I will tell you what the Conservatives’ requests were: a tax cut for the biggest businesses; a tax cut for owners of higher-value homes who want to sell their houses; and a tax cut for the top 10 per cent of income earners in this country. Those are the Conservatives’ priorities. They are not about all those requests for extra expenditure that many Conservatives make day after day and week after week; they requested tax cuts for the richest in our society. That is not the choice that the Government will be making this evening.

Murdo Fraser

I offer the cabinet secretary a final opportunity to answer my point. If he will not listen to us, why will he not listen to the Scottish business community voices that have told him time and again that creating a tax differential between Scotland and the rest of the UK is highly dangerous? Why will he not listen to that?

Derek Mackay

The only people who are saying that that will be the impact of our policies are the Tories who are talking Scotland down. I do not believe that there will be a mass exodus from Scotland as a consequence of our policies, especially when we look at the other side of the balance sheet and the social contract that we are delivering for our country with free education, no prescription charges, free personal care and lower council tax. That is the kind of thing that will encourage people to continue to live, work and invest in Scotland. The Tories are certainly not a branch of Scottish Enterprise with their attitude towards this country; they are doing Scotland down while we are building Scotland up.

There was also criticism from the Conservatives of the Scottish growth scheme. It has been approved by the Treasury and it will be a sound scheme that will support Scottish business. We revisited the tax argument, which was determined on Tuesday. That does make me wonder what element of the £900 million of the extra expenditure for the public services of Scotland the Tories oppose and will vote against this evening.

The Tories’ hypocrisy has been shown on one issue above all else: business rates. The Government took early action and then took further action to ensure that they were in place in advance of the new financial year. I hear the Conservative members grumbling about 11th-hour actions, but the Chancellor is still to respond on what he will do with business rates south of the border.

On support for business rates, it was this Government that lowered the poundage and increased the small business bonus threshold, lifting 100,000 properties out of rates altogether, and ensuring that 70 per cent of businesses will pay no rates or lower rates as a consequence of our decisions. As well as opposing all that, the Tories at local level have also opposed local rates relief schemes. We hear the Tories making a lot of noise, but they make no difference when it comes to the decisions of our country.

The Greens, however, have made a constructive contribution to budget setting in this country. The Tories are for tax rises, but only for the poor, the sick or those seeking education; they are quite happy to raise and charge taxes in those areas. They might well be a strong Opposition—

Members: We are!

Derek Mackay

Oh, yes. Tonight they will be strongly opposing the police, strongly opposing the NHS, strongly opposing the extension of childcare, strongly opposing more support for business and strongly opposing connectivity as well as a new skills fund. They are a strong Opposition to the good ideas that are coming from this Government and this Parliament.

Some have said that there has been no support for this budget. Given that the Conservatives do not want to hear from me, I will mention others who have commented. The chair of Colleges Scotland said:

“The increased investment in Scotland’s colleges is very welcome indeed, particularly in these tough financial times.”

Liz Cameron from the Scottish Chambers of Commerce has said:

“We are pleased that key infrastructure budgets such as roads and digital infrastructure are set to rise substantially over the coming year.”

The Educational Institute of Scotland welcomed

“the announcement of additional investment to support schools in this area.”

The Federation of Small Businesses said:

“By giving full rates relief to 100,000 Scottish firms, the government has lifted the prospects of smaller businesses facing a tough 2017.”

Furthermore, on the new skills fund, the FSB said:

“We called for a new flexible fund to help firms develop their skills—especially the ones they need to tap the power of the digital economy. So what was announced today, while we need to see the details, sounds like it fits the bill perfectly.”

Finally, Hugh Aitken from the Confederation of British Industry Scotland said:

“The commitments in this budget, on housing, and digital and transport connectivity, will lay the foundations to allow firms to get on with growing our economy and creating jobs for the long term.”

Bruce Crawford very helpfully covered the economic incoherence of the Conservative Party, whose members, when asked how they would meet any new spending commitment, would say every time how they would spend the resources—[Interruption.] Murdo Fraser is heckling me; perhaps I will recap his economic madness. The Conservatives promised me a new economics book, but all I get from them are daft dossiers that normally begin with inaccurate figures. They said that, to fund their policies, they would re-spend money that had already been spent or, with a status quo tax policy, magically increase their revenues to be retrospectively spent at the start of a financial year based on future economic growth. That is the economic madness of the Conservatives, and I will not take their advice on economics.

Nor will I take the advice of the Labour Party on how to run a budget. Let us look at Clackmannanshire, whose administration faced a budget decision today. The Labour leader resigned, the whole administration resigned and now they have no budget. Therefore, I will take no lessons from the Labour Party on how to run a budget.

In my final minute, I want to say that this budget is good for Scotland. It invests an additional £900 million in our public services, makes record investment in the NHS, expands childcare, provides more to tackle the attainment gap in our schools, gives more support to our colleges, makes more investment in infrastructure, expands broadband and supports our business environment. It is a budget of which I am proud, and I urge every member to support it this evening.

Final vote on the Bill

After the final discussion of the Bill, MSPs vote on whether they think it should become law.

Final vote transcript

The Presiding Officer (Ken Macintosh)

There are two questions to be put as a result of today’s business.

The first question is, that amendment S5M-04168.2, in the name of Murdo Fraser, which seeks to amend motion S5M-04168, in the name of Derek Mackay, on the Budget (Scotland) Bill, be agreed to. Are we agreed?

Members: No.

The Presiding Officer

There will be a division.

For

Whittle, Brian (South Scotland) (Con)
Wells, Annie (Glasgow) (Con)
Tomkins, Adam (Glasgow) (Con)
Thomson, Ross (North East Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Simpson, Graham (Central Scotland) (Con)
Scott, John (Ayr) (Con)
Ross, Douglas (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lamont, John (Ettrick, Roxburgh and Berwickshire) (Con)
Kerr, Liam (North East Scotland) (Con)
Harris, Alison (Central Scotland) (Con)
Hamilton, Rachael (South Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Golden, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Corry, Maurice (West Scotland) (Con)
Chapman, Peter (North East Scotland) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Carlaw, Jackson (Eastwood) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Briggs, Miles (Lothian) (Con)
Bowman, Bill (North East Scotland) (Con)
Balfour, Jeremy (Lothian) (Con)

Against

Yousaf, Humza (Glasgow Pollok) (SNP)
Wightman, Andy (Lothian) (Green)
White, Sandra (Glasgow Kelvin) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Swinney, John (Perthshire North) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Smyth, Colin (South Scotland) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Scott, Tavish (Shetland Islands) (LD)
Sarwar, Anas (Glasgow) (Lab)
Russell, Michael (Argyll and Bute) (SNP)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Rumbles, Mike (North East Scotland) (LD)
Rowley, Alex (Mid Scotland and Fife) (Lab)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Robison, Shona (Dundee City East) (SNP)
Rennie, Willie (North East Fife) (LD)
Paterson, Gil (Clydebank and Milngavie) (SNP)
McNeill, Pauline (Glasgow) (Lab)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McDonald, Mark (Aberdeen Donside) (SNP)
McArthur, Liam (Orkney Islands) (LD)
McAlpine, Joan (South Scotland) (SNP)
Matheson, Michael (Falkirk West) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
Lochhead, Richard (Moray) (SNP)
Leonard, Richard (Central Scotland) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lamont, Johann (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Kelly, James (Glasgow) (Lab)
Johnstone, Alison (Lothian) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Hyslop, Fiona (Linlithgow) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Harvie, Patrick (Glasgow) (Green)
Harper, Emma (South Scotland) (SNP)
Griffin, Mark (Central Scotland) (Lab)
Greer, Ross (West Scotland) (Green)
Gray, Iain (East Lothian) (Lab)
Grant, Rhoda (Highlands and Islands) (Lab)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Finnie, John (Highlands and Islands) (Green)
Findlay, Neil (Lothian) (Lab)
Fee, Mary (West Scotland) (Lab)
Fabiani, Linda (East Kilbride) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Evans, Mairi (Angus North and Mearns) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dey, Graeme (Angus South) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Crawford, Bruce (Stirling) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Bibby, Neil (West Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Baillie, Jackie (Dumbarton) (Lab)
Arthur, Tom (Renfrewshire South) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Adam, George (Paisley) (SNP)

The Presiding Officer

The result of the division is: For 31, Against 94, Abstentions 0.

Amendment disagreed to.

The Presiding Officer

The final question is, that motion S5M-04168, in the name of Derek Mackay, on the Budget (Scotland) Bill, be agreed to. Are we agreed?

Members: No.

The Presiding Officer

There will be a division.

For

Yousaf, Humza (Glasgow Pollok) (SNP)
Wightman, Andy (Lothian) (Green)
White, Sandra (Glasgow Kelvin) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Swinney, John (Perthshire North) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Russell, Michael (Argyll and Bute) (SNP)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Robison, Shona (Dundee City East) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McDonald, Mark (Aberdeen Donside) (SNP)
McAlpine, Joan (South Scotland) (SNP)
Matheson, Michael (Falkirk West) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
Lochhead, Richard (Moray) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Johnstone, Alison (Lothian) (Green)
Hyslop, Fiona (Linlithgow) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Harvie, Patrick (Glasgow) (Green)
Harper, Emma (South Scotland) (SNP)
Greer, Ross (West Scotland) (Green)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Finnie, John (Highlands and Islands) (Green)
Fabiani, Linda (East Kilbride) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Evans, Mairi (Angus North and Mearns) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dey, Graeme (Angus South) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Crawford, Bruce (Stirling) (SNP)
Constance, Angela (Almond Valley) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Adam, George (Paisley) (SNP)

Against

Whittle, Brian (South Scotland) (Con)
Wells, Annie (Glasgow) (Con)
Tomkins, Adam (Glasgow) (Con)
Thomson, Ross (North East Scotland) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smith, Elaine (Central Scotland) (Lab)
Simpson, Graham (Central Scotland) (Con)
Scott, Tavish (Shetland Islands) (LD)
Scott, John (Ayr) (Con)
Sarwar, Anas (Glasgow) (Lab)
Rumbles, Mike (North East Scotland) (LD)
Rowley, Alex (Mid Scotland and Fife) (Lab)
Ross, Douglas (Highlands and Islands) (Con)
Rennie, Willie (North East Fife) (LD)
Mundell, Oliver (Dumfriesshire) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mitchell, Margaret (Central Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
McArthur, Liam (Orkney Islands) (LD)
Macdonald, Lewis (North East Scotland) (Lab)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lindhurst, Gordon (Lothian) (Con)
Leonard, Richard (Central Scotland) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lamont, John (Ettrick, Roxburgh and Berwickshire) (Con)
Lamont, Johann (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kelly, James (Glasgow) (Lab)
Johnson, Daniel (Edinburgh Southern) (Lab)
Harris, Alison (Central Scotland) (Con)
Hamilton, Rachael (South Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Greene, Jamie (West Scotland) (Con)
Gray, Iain (East Lothian) (Lab)
Grant, Rhoda (Highlands and Islands) (Lab)
Golden, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Findlay, Neil (Lothian) (Lab)
Fee, Mary (West Scotland) (Lab)
Dugdale, Kezia (Lothian) (Lab)
Davidson, Ruth (Edinburgh Central) (Con)
Corry, Maurice (West Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Chapman, Peter (North East Scotland) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Carlaw, Jackson (Eastwood) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Briggs, Miles (Lothian) (Con)
Bowman, Bill (North East Scotland) (Con)
Bibby, Neil (West Scotland) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Balfour, Jeremy (Lothian) (Con)
Baillie, Jackie (Dumbarton) (Lab)

The Presiding Officer

The result of the division is: For 68, Against 57, Abstentions 0.

Motion agreed to,

That the Parliament agrees that the Budget (Scotland) Bill be passed.

Meeting closed at 17:06.  



Scottish rates resolution

Before considering the Bill at Stage 3, the Parliament debated and agreed to a motion about income tax.

It was agreed to charge income tax on some non-savings and non-dividend income of a Scottish taxpayer in tax year 2017/18.

Budget (Scotland) (No1) Bill [Session 5] as passed

An 'as passed' version of the Bill was not produced because no amendments were made at Stage 3.

This Bill was passed on 21 February 2017 and became law on 31 March 2017
Find the Act on legislation.gov.uk

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