Meeting of the Parliament 06 February 2020
I thank the minister for providing advance sight of her statement, and I congratulate her on her delivery of it in circumstances that none of us wanted to see. As an aside, I believe that this is the first time that the Scottish budget has been delivered by a woman and by an England-qualified chartered accountant.
The backdrop to this budget is a substantial increase in the block grant, thanks to extra spending at Westminster. The Scottish Government is benefiting from a Boris bonus that is worth at least £1.1 billion in real terms. What is essential is that that money is not squandered but used to the benefit of the Scottish people. Against the background of that budget increase, there can be no case for additional tax rises or for any further cuts in our vital front-line services.
Our priorities for this budget are for it to provide measures that will help to grow the Scottish economy and support vital public services. When it comes to tax, we have made it very clear that there must be no further divergence between personal taxation in Scotland and that payable elsewhere in the United Kingdom. What the minister announced on tax thresholds will widen the tax differential, and we could not support that.
Thanks to the Fraser of Allander institute, we know that the tax changes that were introduced by the former finance secretary, egged on by the Greens, which made Scotland the highest taxed part of the United Kingdom, have not raised any additional revenue for the Scottish public services; all that they have done is fill the black hole that has been created by the fact that the Scottish economy is growing more slowly than that of the rest of the UK under the Scottish National Party’s stewardship.
We know that, over the past year, the Scottish economy has grown at less than half the UK rate, and I expect that the Scottish Fiscal Commission will tell us today that that trend will continue. No additional taxes would therefore be appropriate, which is why in this budget, we need to see action to support business. The announcement on reducing the large business supplement is welcome, but it does not go far enough for us, or for business, particularly for the large retailers that are suffering at the moment.
We welcome the extra money for health that was made possible only because of additional spending by the UK Government.
When it comes to local government, which has borne the brunt of cuts in previous budgets, we have been clear that that cannot be the case this year. Councils are key to initiatives to tackle climate change, but when their budgets are cut, they cannot progress those. We will therefore scrutinise closely the additional commitments put upon councils to ensure that they are fully funded, with no hidden cuts to the core grant, as in previous years.
I have two specific questions for the finance minister. First, she has told us that every penny at her disposal has been accounted for. Of course, we have heard that exact line from her former boss, year on year. However, miraculously in the three to four weeks after producing his budget, he would suddenly find a few hundred million pounds extra from down the back of his sofa to lubricate his budget negotiations. Perhaps the finance minister can save us all a bit of time by telling us today exactly how much money is hidden away, in addition to what is in the budget before us. That would make forward budget discussions much easier. We will give the budget serious consideration, and we are prepared to engage seriously with the Scottish Government on whether we can support it.
Finally, will the finance minister accept that all the additional spending that Scotland benefits from is supported by the union dividend, which is now worth almost £2,000 for every man, woman and child in Scotland? We learnt this week that, without it, Scotland would be facing a deficit of over £10 billion, or up to 7.3 per cent of GDP. Will she acknowledge that it is Scotland’s place in the United Kingdom, coupled with this year’s Boris bonus, that supports this budget and public services in Scotland?