Meeting of the Parliament (Hybrid) 28 January 2021
I thank the cabinet secretary for advance sight of her statement, and I take the opportunity, on behalf of Conservative members, to congratulate her on the recent happy news of her engagement. It is good to see her recognising the benefits of being in a union.
Our view is clear that we need a budget that focuses 100 per cent on management of the pandemic and our economic recovery, thereafter. We will measure all the announcements in the budget today against the essential test of whether they will assist efforts in that respect and, in particular, whether they will help to protect jobs and safeguard our economy over the coming year. We will reject any plans to waste precious resources—money or time—on a campaign for another divisive independence referendum, because we need a budget that is about building up, not breaking up.
The background to the budget is that the Scottish Government has had unprecedented support from the UK Treasury over the past year. We have a guaranteed minimum additional spend of £8.6 billion in the current financial year to support the NHS and individuals and businesses across Scotland, which is in addition to the billions in direct support that have been provided through the furlough scheme and other Treasury initiatives.
With all that money, it is essential that the Scottish Government gets the cash out the door to needy businesses and individuals across Scotland who have cried out for it. That support carries forward to next year, with an additional £1.3 billion to help to manage the pandemic, and a £1.1 billion increase in the general budget.
Even without additional Covid resources, the budget for the coming year will be the highest in the history of devolution, and will give the Scottish Government more money to spend than at any previous point in history. All that help is possible because of the broad shoulders of the UK Government, which supports the people, businesses and public services of Scotland in these challenging times.
Unlike Governments in so many other places in the world, the Scottish Government’s income is protected through the fiscal framework, which means that as long as tax revenues in Scotland perform in line with those elsewhere in the UK, no cuts will be required in the budget.
When it comes to the detail of the budget for the coming year, we have been clear that there should be no new income tax rises. The consumer spending that will follow the easing of restrictions will be a major driver in future economic growth, so any income tax increases would hold back that recovery. In that respect, today’s announcements on income tax are welcome, although we are only at the first stage of the budget process.
We need provision of Covid support for businesses into next year, assurances that relevant business grants will continue for as long as restrictions remain in force and a guarantee that the existing 100 per cent rates relief for leisure, hospitality and retail businesses will continue not just for three months, but for 12. The Scottish Government has already been given the funds to make that happen, and it should be an absolute priority for its budget.
We know that the pandemic has put further strain on our councils as many individuals, families and businesses have become dependent on their services. We have set out our view that we need fair funding for our councils, such that they receive a set proportion of the Scottish Government’s budget. For years, the Scottish National Party has underfunded local government to finance its own priorities, so we need the percentage increase in local government finance for next year to at least match the Scottish Government’s own budget increase, in order to start the process of moving towards fairer funding. From today’s announcement, that increase appears to fall short of that ask.
Finally, this is not the time to waste Government resources on preparation of another independence referendum bill.