Meeting of the Parliament 05 February 2020
Tomorrow, the Cabinet Secretary for Finance, Economy and Fair Work will set out his budget for the coming financial year. I think that we are all looking forward to that occasion; it is the highlight of my year, Presiding Officer. We think that this afternoon is good opportunity to set out what we believe his budget priorities should be, and to allow members of other parties to set out their thoughts.
I am not so naive as to think that what is said in the debate will necessarily influence the finance secretary’s thinking ahead of tomorrow; indeed, I fully expect his budget documents, if they have not already been printed, to be on their way to the printers.
However, tomorrow is just the start of the budget process. Over the next four weeks, there will be discussion, scrutiny and negotiation. Today, we are setting out our stall. I hope that the debate will be positive and constructive. Who knows? We might be able to find a degree of consensus about our collective priorities for the budget for the coming year.
I start by setting out a little of the background to this year’s budget. I appreciate that with the United Kingdom budget not being delivered until 11 March, we do not yet have precise figures to inform our budget settlement. Nevertheless, a great deal of information is already in the public domain, which enables the Cabinet Secretary for Finance, Economy and Fair Work to go ahead and put proposals to Parliament. That is what the Welsh Government has done; indeed, it presented its budget proposals to the National Assembly for Wales back in December.
Therefore, let no one pretend that the timing of the UK budget has made it impossible for the finance secretary to bring forward his budget plans. Indeed, historically, Scottish budgets have been presented in September, well ahead of UK budgets in March of the following year. The current fiscal framework was negotiated and agreed by the Scottish Government against precisely that backdrop. I therefore hope that we will hear no more faux outrage from the Scottish National Party about budget timings.
We know from spending decisions that have already been made that the block grant from Westminster will grow by at least £1.1 billion from this year to next year. According to the Fraser of Allander institute, that amounts to a 2.1 per cent real-terms increase. That Boris bonus gives the finance secretary considerable extra money to spend.
However, that is not the entire picture, because the block grant has to be adjusted in two respects. First, we know that we are carrying forward a negative reconciliation of approximately £200 million that is due to overestimation of tax revenues by the Scottish Government three years ago.