Hansard

I start by thanking the Finance and Constitution Committee for its report, to which I will respond ahead of stage 3.

Today, we are reminded of the difference that one year can make. At this point in our consideration of last year’s budget bill, we had yet to pivot to respond to the emerging threat of the virus; that was to come in the following days. Since then, it has been clear that only by working together as a Parliament can we provide the support that our people, businesses and communities need and deserve.

That is what I have worked hard to do with this budget. I am committed to building the consensus across the chamber that we need to deliver this budget for Scotland. Why? Simply because this budget is key to supporting our economy and public services, to funding the vaccination programme and to laying the foundations for recovery. To do all that, the budget needs to pass, and that is why I appeal to parties across the Parliament to work together to secure its passage.

The constantly evolving impacts of Covid, combined with the financial uncertainty presented by the delayed United Kingdom budget, have meant that this has been a challenging budget to produce, and I recognise that it has also been difficult for Parliament to scrutinise it. I have been as open and transparent as possible in updating Parliament on our funding position. That includes the £1.1 billion of additional spending proposals that I announced last week for next year’s budget.

The delayed UK budget in March is key to confirming what the actual funding position will be for Scotland next year. It is likely that that will mean that we need to make further changes to the bill following the UK budget to ensure that the allocations reflect the available resources and to secure parliamentary support.

Over the past few weeks, I have met every party in Parliament several times, and I thank all members for their consideration of the budget and their willingness to engage in discussions. The additional £1.1 billion of spending proposals that I outlined last week reflected the cross-Parliament priorities that were identified in those discussions. It included the Liberal Democrats’ request for an increase in spending for mental health and education; it responded to the Greens’ suggestion to focus on energy efficiency measures and further steps to tackle poverty and inequalities; and it reflected the cross-party ask to extend non-domestic rates relief, increase the funds for affordable homes and enhance local government’s budget. That is because my overarching objective is to support the people of Scotland through these most challenging of months.

That brings me to the two reasoned amendments to the Budget (Scotland) (No 5) Bill today. I should state at the outset that the Government does not vote for reasoned amendments to the budget bill until negotiations with other parties have been completed. I ask Labour and the Tories to continue to negotiate in good faith before stage 2 and after the UK Government’s budget in order to make progress on their proposals.

I thank Jackie Baillie for the various discussions that we have had over the past few weeks in relation to her amendment. I remain fully committed to exploring her proposals in advance of stage 2 and after the UK Government’s budget, which will provide greater clarity on the funding that is available to us.

I am sympathetic to considering the further steps that we can take to support carers and so will carefully examine that proposal in detail over the next fortnight. Two main issues still need to be considered to ensure that the proposal is deliverable, which is why I regret that I cannot support the amendment as it stands.

One of those issues is that the Government has already committed to collective bargaining—a principle to which I know the Labour Party also holds—and I would not want anything to cut across that. Secondly, the proposal needs to be affordable. Ultimately, the Government and I need to ensure that proposals on pay, which are recurring and so cannot be covered by one-off Covid consequentials, can be funded, particularly when there will be knock-on impacts on other workforces. My public commitment today, however, is to explore carers’ pay with officials and Jackie Baillie on behalf of the Labour Party over the coming weeks to see whether we can come to a compromise.

On Murdo Fraser’s amendment, I have repeatedly thanked local government for their efforts over the past year, which is why I provided a further £275 million to local government in this past week’s statement. Anything further is subject to the UK Government’s budget, as all funding has been committed, including the pre-emptive assumption of an additional £500 million of Covid consequentials and a pledge to support businesses.

I know that the Liberal Democrats and the Greens have further asks. I hope that all parties will consider enabling the bill to pass at stage 1 so that those proposals can be considered in good faith.

While engagement across party lines continues, the budget is already delivering the certainty that businesses need. A key ask from businesses, and from members of the Parliament, was to extend this year’s rates relief for retail, hospitality and leisure for the whole of next year. I was pleased to propose that extended relief in my statement last week and to provide that certainty to businesses in these critically impacted sectors. On top of that, we now provide for the lowest poundage available anywhere in the UK, saving ratepayers more than £120 million when compared with previously published plans.

This pandemic is first and foremost a health crisis. We have a commitment to ensure that all health consequentials are passed on in full. We have not only delivered that commitment for next year but exceeded it. As I announced last week, we are proposing to provide £120 million of additional funding to help tackle the pandemic’s significant mental health impacts, exceeding the Liberal Democrats’ ask for an additional £100 million for mental health. At the same time, we are providing further support for the recovery of the national health service with an additional £60 million to continue that vital work. Overall, the budget provides a record level of spending on our health front line.

Members across the chamber have asked that we provide a fair settlement for local government. Next year’s local government settlement will be £11.6 billion. In addition, local government will receive £259 million of non-recurring additional Covid funding. The settlement not only gives local authorities the resources and flexibility to respond to the new challenges that the pandemic has created but, through our policy of guaranteeing non-domestic rates revenues, provides continued fiscal certainty that does not exist in England.