Meeting of the Parliament 04 February 2015
The Budget (Scotland) (No 4) Bill confirms our spending plans to deliver a more prosperous and fairer Scotland. Although the latest economic indicators continue to be encouraging, we recognise that a strong economy is successful only if it is underpinned by a society that is fair and equitable.
To ensure that all our citizens have the opportunity to achieve their potential, today’s budget will invest £16.6 million to implement the findings of the Wood commission on developing Scotland’s young workforce; spend £526 million in our colleges and over £1 billion in our universities; expand our modern apprenticeship programme towards a target of 30,000 starts each year by 2020; secure capital investment of around £4.5 billion in our schools, hospitals, homes and transport networks; allocate £81 million to mitigate the most harmful impacts of the United Kingdom Government’s welfare reforms; and deliver more than £200 million to support health and social care integration. Those are just some of the measures that we are taking forward to create a fair and prosperous Scotland.
We have also taken progressive decisions on land and buildings transaction tax, which mean that 50 per cent of residential transactions at the lower end of the property market will be taken out of tax altogether, providing a welcome boost to first-time buyers and the property market into the bargain. Over 90 per cent of taxpayers will pay no tax at all or be better off compared with the UK’s current tax rates.
Our landfill rates balance concerns about waste tourism with the appropriate financial incentives that are needed to deliver our zero waste ambitions.
We will maintain the most competitive business environment in the UK. Some 95 per cent of non-residential tax payers are better or no worse off under LBTT. Not only will we continue to support the small business bonus scheme, which is worth an estimated £172 million to businesses the length and breadth of Scotland in 2015-16, but we will also invest £11 million to match the poundage for business rates south of the border.
I have taken a prudent approach to forecasting revenues from the devolved taxes, and my forecasts have been endorsed as reasonable by the independent fiscal commission. With tax devolution, however, inevitably comes an increase in the exposure to risk, and I have decided to hold £15 million in 2015-16 to provide insurance against such risk.
Our economic strategy is working, but we must continue to act swiftly to address Scotland’s economic challenges. We have established the energy jobs task force to help the economy of the north-east, and we have committed to the apprenticeship guarantee for oil and gas. We give the categorical assurance that we will deploy the leadership, the energy and the resources of our enterprise and skills network to tackle economic problems wherever they emerge in Scotland.
We recognise, however, that in some circumstances the substantive powers to tackle those issues lie outwith our control, and I once again urge the United Kingdom Government to reduce the supplementary charge, invest in exploration credits and back our North Sea oil and gas industry.
Our tax measures will support the housing market, and they are complemented by our investment in housing supply. We are more than two thirds of the way towards delivering our five-year target of 30,000 additional affordable homes by March 2016, including 20,000 homes for social rent.
We recognise that, within that approach, more has to be done to tackle fuel poverty and improve energy efficiency within the housing stock. More than half a million tonnes of carbon and more than £200 million in household fuel bills will be saved over the lifetime of the measures that were installed through our programmes in 2013-14.
Improving energy efficiency not only helps to address both social and environmental inequality but can also improve our housing stock and support our economy by creating and sustaining employment. That is why we are already investing £94 million in 2014-15, which is a higher level of funding than ever before. However, too many people are continuing to struggle with the costs of heating their homes this winter. Having listened to points raised by parliamentary committees, I can announce that we will increase investment in domestic energy efficiency by £20 million to provide a total budget of £114 million in 2015-16. That extra £20 million of investment gives clear and powerful impetus to our efforts to tackle fuel poverty and will have a positive impact on tackling climate change emissions from housing.