Chamber
Meeting of the Parliament 25 January 2012
25 Jan 2012 · S4 · Meeting of the Parliament
Item of business
Budget (Scotland) Bill: Stage 1
Yes I do, because the Scottish Government has, since 2008, used a set of measures and interventions to try to offset the difficulties and serious consequences of the economic recession. In 2009 and 2010, we successfully ensured that the recession was shorter and shallower in Scotland than it was in the rest of the United Kingdom. The challenge that we now face, however, is that the economic levers and the resources that we deployed in that period are now essentially being consolidated by the financial constraints of the United Kingdom public finances. That is why Mr Blanchard’s contribution is important. I thought that the Labour Party and the Scottish Government were agreed that the United Kingdom deficit-reduction programme was too aggressive and was harming growth. However, having heard the leadership of the Labour Party in London, I am not so sure that we are agreed on that, although it is exactly what the International Monetary Fund said in its observations yesterday.
The Government’s spending decisions will continue to be guided by our purpose of increasing sustainable economic growth and by working to deliver our programme for government and economic strategy.
The budget that is before Parliament today is focused on economic growth. It uses all the powers that we have to boost public sector capital investment; to improve access to finance and encourage private investment; to enhance economic security in order to support confidence across the Scottish economy; and to take direct action to tackle unemployment. I will set out the actions that we are taking in some of those areas to support the recovery and to lay the foundations for sustainable economic growth.
First, when private sector demand is fragile, public investment can provide a vital boost to economic activity. It comes with the added benefit that it will leave behind a legacy of assets with long-term growth potential. Maximising capital investment has been a central element of the Scottish Government’s action to support and accelerate recovery. It is estimated that every additional £100 million of capital spending supports around 1,400 jobs in the Scottish economy. The Government will ensure that capital is invested in a way that has the greatest beneficial impact on the economy and on public services.
It is also vital that new private investment be encouraged by improving access to finance and by providing the right conditions to attract investment. The Government has taken steps to boost private investment through the establishment of the Scottish Investment Bank, which delivers vital equity-investment schemes. Alongside that, the £70 million national renewables infrastructure fund aims to tap into the appetite in the private sector to invest in renewables in Scotland. It forms part of more than £200 million of investment that is committed to in the spending review.
We are also helping businesses with incentives to grow and export. The budget bill funds the continuation of the small business bonus scheme and of matching the business rates poundage that is set for England. Scotland continues to offer the most generous rates relief regime in the United Kingdom, with tax breaks that are worth more than £500 million a year. Furthermore, any business can choose to spread payment of next year’s inflationary rise in its rates bill over three years through a rates deferral scheme.
The creation of the four new enterprise areas will provide further business incentives across key industries—life sciences, manufacturing, low-carbon technology and renewables.
Exports are a vital source of growth, which is why we have set an ambitious target to increase our exports by 50 per cent by 2017. To support that, our efforts are directed at growth companies, growth sectors and growth markets—countries where there are real opportunities for growth in the years ahead.
Scottish Development International is working with its partners to support 8,000 to 10,000 more businesses to develop the skills to go international by 2015. The Scottish Investment Bank is prioritising lending to support small and medium-sized enterprises that have international ambitions. With banks and pension funds, it has introduced a £94 million Scottish loan fund to support growth companies and exporting companies in accessing loans. The Aberdeen energy firm Phuel Oil Tools Ltd is one of the first companies to access the fund and it has received a £1 million loan.
Most important is that we are taking steps to tackle unemployment, in particular among young people. Our opportunities for all programme guarantees an education or training place for every young person who is not in work, education or a modern apprenticeship. We are also investing in our higher education sector to ensure that those who cannot find jobs can continue to gain skills and improve their employment prospects. We are investing an additional £327 million in Scottish universities over the spending review period, with real-terms increases of more than 5 per cent in each of the three years.
We are helping students directly by continuing to provide support for college bursaries to help young people remain in education and training, by maintaining living cost support for students in higher education, and by introducing a minimum income guarantee of £7,000, starting with those who are from the poorest backgrounds. More than £500 million is being committed to further education in 2012-13. The Cabinet Secretary for Education and Lifelong Learning wrote to colleges this month to confirm the resources that will be available, and he has confirmed our manifesto commitment to maintain student numbers and student support at 2011-12 baseline levels.
The Government’s spending decisions will continue to be guided by our purpose of increasing sustainable economic growth and by working to deliver our programme for government and economic strategy.
The budget that is before Parliament today is focused on economic growth. It uses all the powers that we have to boost public sector capital investment; to improve access to finance and encourage private investment; to enhance economic security in order to support confidence across the Scottish economy; and to take direct action to tackle unemployment. I will set out the actions that we are taking in some of those areas to support the recovery and to lay the foundations for sustainable economic growth.
First, when private sector demand is fragile, public investment can provide a vital boost to economic activity. It comes with the added benefit that it will leave behind a legacy of assets with long-term growth potential. Maximising capital investment has been a central element of the Scottish Government’s action to support and accelerate recovery. It is estimated that every additional £100 million of capital spending supports around 1,400 jobs in the Scottish economy. The Government will ensure that capital is invested in a way that has the greatest beneficial impact on the economy and on public services.
It is also vital that new private investment be encouraged by improving access to finance and by providing the right conditions to attract investment. The Government has taken steps to boost private investment through the establishment of the Scottish Investment Bank, which delivers vital equity-investment schemes. Alongside that, the £70 million national renewables infrastructure fund aims to tap into the appetite in the private sector to invest in renewables in Scotland. It forms part of more than £200 million of investment that is committed to in the spending review.
We are also helping businesses with incentives to grow and export. The budget bill funds the continuation of the small business bonus scheme and of matching the business rates poundage that is set for England. Scotland continues to offer the most generous rates relief regime in the United Kingdom, with tax breaks that are worth more than £500 million a year. Furthermore, any business can choose to spread payment of next year’s inflationary rise in its rates bill over three years through a rates deferral scheme.
The creation of the four new enterprise areas will provide further business incentives across key industries—life sciences, manufacturing, low-carbon technology and renewables.
Exports are a vital source of growth, which is why we have set an ambitious target to increase our exports by 50 per cent by 2017. To support that, our efforts are directed at growth companies, growth sectors and growth markets—countries where there are real opportunities for growth in the years ahead.
Scottish Development International is working with its partners to support 8,000 to 10,000 more businesses to develop the skills to go international by 2015. The Scottish Investment Bank is prioritising lending to support small and medium-sized enterprises that have international ambitions. With banks and pension funds, it has introduced a £94 million Scottish loan fund to support growth companies and exporting companies in accessing loans. The Aberdeen energy firm Phuel Oil Tools Ltd is one of the first companies to access the fund and it has received a £1 million loan.
Most important is that we are taking steps to tackle unemployment, in particular among young people. Our opportunities for all programme guarantees an education or training place for every young person who is not in work, education or a modern apprenticeship. We are also investing in our higher education sector to ensure that those who cannot find jobs can continue to gain skills and improve their employment prospects. We are investing an additional £327 million in Scottish universities over the spending review period, with real-terms increases of more than 5 per cent in each of the three years.
We are helping students directly by continuing to provide support for college bursaries to help young people remain in education and training, by maintaining living cost support for students in higher education, and by introducing a minimum income guarantee of £7,000, starting with those who are from the poorest backgrounds. More than £500 million is being committed to further education in 2012-13. The Cabinet Secretary for Education and Lifelong Learning wrote to colleges this month to confirm the resources that will be available, and he has confirmed our manifesto commitment to maintain student numbers and student support at 2011-12 baseline levels.
In the same item of business
The Presiding Officer (Tricia Marwick)
NPA
The next item of business is a debate on motion S4M-01773, in the name of John Swinney, on stage 1 of the Budget (Scotland) Bill. Will members who wish to ta...
The Cabinet Secretary for Finance, Employment and Sustainable Growth (John Swinney)
SNP
Last week, I introduced the Budget (Scotland) Bill for 2012-13, which will implement the draft budget that I set out in September last year. I thank all thos...
Gavin Brown (Lothian) (Con)
Con
I am grateful to the cabinet secretary for giving way so early in his speech. Does he accept that this year’s budget is a cash-terms increase?
John Swinney
SNP
The words that I have used in my speech are:“another real-terms reduction to our total departmental expenditure limit”.That is what the Government faces. We ...
Ken Macintosh (Eastwood) (Lab)
Lab
Further to that, does the cabinet secretary believe that plan MacB is making a difference to the Scottish economy?
John Swinney
SNP
Yes I do, because the Scottish Government has, since 2008, used a set of measures and interventions to try to offset the difficulties and serious consequence...
Ken Macintosh
Lab
It is good to hear the minister’s words about his commitment to tackling youth unemployment, but how will cutting the colleges budget by 20 per cent, followi...
John Swinney
SNP
The Government is ensuring that it supports the further and higher education sectors effectively. I have recounted the resources that we are applying in the ...
Gavin Brown
Con
Some of that capital transfer comes from savings from the Forth crossing. For about the fifth time in the chamber, I ask the cabinet secretary whether he wil...
John Swinney
SNP
For about the fifth time, I say that I have explained to Mr Brown the basis of what is happening. Savings in the Forth replacement crossing budget have been ...
Ken Macintosh
Lab
Will the cabinet secretary take an intervention?
John Swinney
SNP
I need to bring my remarks to a close.Our recently published infrastructure investment plan secures the project pipeline, thereby bringing stability and pred...
Ken Macintosh (Eastwood) (Lab)
Lab
None of us can be in any doubt about the seriousness of the economic difficulties that we face. Last week’s unemployment figures simply confirmed the damage ...
Mary Scanlon (Highlands and Islands) (Con)
Con
In addressing the underlying problems, will Ken Macintosh acknowledge that 43 per cent of people on benefits in Scotland have an underlying mental health pro...
Ken Macintosh
Lab
I welcome Ms Scanlon’s question. It is important that the welfare system be sustained and that we all feel that we are part of it. It should be there for eve...
John Swinney
SNP
Before Mr Macintosh moves on from capital spending, will he accept that the size of the capital DEL budget that the Scottish Government has at its disposal i...
Ken Macintosh
Lab
I am arguing first that the budget is not radical enough overall and secondly, that the budget does not deliver on the claims that the minister makes for it....
The Deputy Presiding Officer (John Scott)
Con
I remind members to speak through the chair, please.
John Swinney
SNP
Those are Mr Macintosh’s opinions; of course, we can trade opinions. However, on the factual point that I made, I want Mr Macintosh to consider whether the c...
Ken Macintosh
Lab
Mr Swinney seems to be avoiding the key point that I am making about his claims for the budget. He can excuse himself and say that plan MacB is working, but ...
Ken Macintosh
Lab
SNP members’ approval is interesting, so I ask them what levers of economic power they have in mind. Perhaps they mean control over currency—the pound or the...
John Mason (Glasgow Shettleston) (SNP)
SNP
The member has been talking about capital expenditure. Does he accept that one power that we do not currently have but which we could have is borrowing power...
Ken Macintosh
Lab
We will get more borrowing powers if the SNP supports the Scotland Bill. It will be interesting to see whether that happens.As I understand it, the First Min...
Gavin Brown (Lothian) (Con)
Con
Prior to the publication of the draft budget and every day since then, the Scottish Conservatives have said that the budget must focus on jobs and the econom...
Kenneth Gibson (Cunninghame North) (SNP)
SNP
Does Mr Brown accept that, when the SNP drew up its manifesto, we did not anticipate an inflation rate of 5.2 per cent? He talks about cash terms, but the re...
Gavin Brown
Con
If the SNP Government had read the Bank of England’s inflation reports prior to the election, it would have anticipated sharp increases in inflation for 2011...
Maureen Watt (Aberdeen South and North Kincardine) (SNP)
SNP
Given that the cabinet secretary has had to make cuts, is it not reasonable and realistic to make the cuts in the areas where other methods of finance can be...
Gavin Brown
Con
I think that we got a bit of policy on the hoof there; I am not sure whether that has been cleared by the SNP front bench. If we follow that argument to its ...
John Swinney
SNP
Will the member give way?
The Deputy Presiding Officer
Con
The member is in his last minute.