Meeting of the Parliament 13 June 2024
I definitely do not acknowledge that. If we listen to many people who are running businesses and operating in the economy in Scotland, the last thing that they want now is a higher tax burden and higher tax differentials with the rest of the UK. I am afraid that I do not accept what the member says at all.
There are some green shoots of recovery, such as inward investment in green energy and the life sciences, but the general trend for business and industry—as spelled out in blunt terms—is pretty depressing.
At the start of my speech, I cited the factors that business and industry want to see in order to be confident about the future, and business and industry has sent a very strong message back to the Scottish Government, both privately and publicly. As Neil Gray announced earlier in the session, when he was Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, the new deal for business has not been working well enough.
Another serious challenge relates to local government. The Scottish Government certainly does not need me to tell it that the mood in local government is fractious. There were high hopes for the Verity house agreement, but that was blown apart by the Government’s failure to engage with local government, whether on the council tax freeze or the question of multiyear budget funding—we still have not had an answer on that—and by the years of underfunding.
On top of that, we have seen an unhelpful stand-off on the UK Government levelling-up money, which many councils have greatly welcomed but which the Scottish Government seems to have a permanent problem with. The tensions between the Scottish Government and local authorities are not helpful and neither is the tension between the UK Government and Holyrood, because, in this age of deep mistrust in politics, the general public wants to see different levels of government working together.
Let me address the important issue of capital budgets. We know from economic analysts, particularly those who have presented to the Finance and Public Administration Committee, that there was a cut in real terms to UK Government budgets. I acknowledged that at the time of the UK Government budget. More could have been done to protect infrastructure and investment, which, as the Financial Times pointed out, has been weak not only in Scotland but in the UK.
However, it would be helpful if we could have an acknowledgement from the Scottish Government that the block grant is at its highest level ever—the recent Fraser of Allander Institute analysis makes that abundantly clear—and that it has additional ability to increase its capital borrowing, thanks to the fiscal framework that the cabinet secretary signed alongside the UK Government. Let us not forget that the current failures in the Scottish economy are largely due to Scottish Government policy choices.