Meeting of the Parliament 13 January 2026
We will take forward the dualling of key sections of the A96 and, working with partners, we will ensure that a new station at Winchburgh is delivered.
In 2025, Scotland secured a decade-long stretch as the top UK location outside London for foreign direct investment. Central to that achievement is the work of our enterprise agencies and the Scottish National Investment Bank. I am pleased to say that the budget delivers on our commitment to invest £1 billion in the bank by the end of the current parliamentary session, and it keeps us on track to invest £2 billion over the bank’s first 10 years.
The budget will build on that progress with a package of funding to support disadvantaged and underrepresented young entrepreneurs and to support companies to scale up. The budget also includes enhanced support for VisitScotland and a commitment to multiyear funding to further support town centre regeneration.
The small business bonus scheme, which removes the burden of rates from 100,000 properties—businesses such as hairdressers, bakers and cafes that form the lifeblood of every community—will be continued for the next three years. In response to concerns in the business community about the recent revaluation, we will reduce the basic, intermediate and higher property rates while providing transitional relief worth £184 million over the next three years.
We will provide 15 per cent non-domestic rates relief in 2026-27 and in each of the three years of the revaluation cycle. Over three years, that will be worth £138 million for retail, hospitality and leisure premises that are liable for the basic and intermediate property rates, with a cap of £110,000 per business per year. In our islands and designated remote areas, that business relief will be 100 per cent. In total, including the small business bonus scheme, more than 96 per cent of retail, hospitality and leisure properties will pay zero or reduced rates. Together, that will provide retail, hospitality and leisure premises with support worth £322 million over the next three years.
We are still awaiting details from the UK Government about possible changes to business rates for pubs in England, following press speculation last week. I assure members that, if additional resources become available, we stand ready to use them to provide even further support to the sector in Scotland.
There will be no changes to land and buildings transaction tax, and we will continue to match UK rates with the Scottish landfill tax.
This is a Government that cares about Scotland and all our people. That means that we will work harder than anyone else to secure the best possible deal for our nation and its people. Above all, that means that we are committed to delivering the best cost of living support package that is available anywhere in these isles.
The best cost of living deal in Britain is getting better. That is not only about the cost of living; just as importantly, it is about quality of life. Free prescriptions—which provide a saving of £9.90 per item compared with England—will be continued. Free eye examinations—which represent a saving of £25 compared with England—will be continued. Average council tax and water bills will still be lower than in England and Wales. Peak rail fares have been abolished and will remain abolished for as long as there is an SNP Government. Young Scots are protected from a debt burden that is approaching £30,000 because tuition fees in Scotland are free, and they will be free for as long as there is an SNP Government.
The baby box, which contains items worth £400, is a gift to every new baby that is born in our land. There are free school meals for thousands in our schools, including pupils from primary 1 to primary 5. There is free bus travel for all young Scots under the age of 22 and all older Scots over the age of 60. The provision of 1,140 hours of free, high-quality early learning and childcare, which is worth around £6,000, is welcomed by thousands of young parents.
Those are all policies that help with the cost of living. More than that, they are all policies that are focused in different ways on the wellbeing of our citizens at each and every stage of their lives.
The choices that have been made in this budget enable us to go further and do more. That includes funding to deliver a breakfast club for every Scottish primary and special school by August 2027. What will that mean in practice? It will mean that the morning rush to get everyone organised and out of the house will become that little bit easier. It will mean that there is the chance to drop kids off earlier at school, perhaps opening up new shifts at work. For some families, it will mean saving on the cost of breakfast; for others, it will mean kids getting a breakfast that they would not otherwise receive, fuelling them to learn.
Our plans also include new funding for wraparound activities in the afternoon and early evening. Building on the Scottish Football Association’s excellent extra time initiative, the budget will enable us to trial a programme of activities between 3 pm and 6 pm in a range of primary schools, which will help to get kids active and will offer parents the peace of mind that their children are being looked after, free of screens. By providing more wraparound support, we will give parents greater flexibility and freedom. As a third element, there will be more help for parents during the summer holidays.
To mark Scotland’s hosting of the Commonwealth games and return to the men’s football world cup, there will be investment in a summer of sport. I know just how costly it can be for parents to keep their kids entertained during the long summer holiday. Therefore, this summer, thousands of young Scots will have access to a range of free sport activities, including—with an eye to future Scottish Commonwealth games gold medals—a universal learn-to-swim offer for every primary school child in our land.
That is action by a Government that understands the pressures that many families are facing. It is action that will help to reduce costs, deliver more wraparound care and help to keep more Scottish kids out of poverty.
Self-government works because it enables us to take different decisions that are based on Scotland’s distinct circumstances and our particular priorities and values. That is why we have chosen to invest in the wellbeing of our society. Yes, that is about providing universal access to services that will leave more money in people’s pockets, but it is also about solidarity and a way of seeing the world that reflects who we are as a nation. It is an approach that is about making life a bit easier for all.
In the recent Westminster budget, the UK Government made choices on tax that, taken together, mean that standards of living in the UK will continue to stagnate—or, as the First Minister has described it, will remain as “flat as a pancake”. The chancellor decided to freeze income tax thresholds, including for the basic rate, which means that more of people’s hard-earned cash will get taxed, or taxed at a higher rate, until 2030-31.
I am making a different choice. I can confirm that, this year, while the others remain frozen, the thresholds for the basic and intermediate rates will increase by 7.4 per cent, which is well over twice the rate of inflation. That is an increase in those thresholds of almost 11 per cent in two years.
As a result, even more people in Scotland can expect to pay less tax than they would if they lived in England, Northern Ireland or Wales—more than 55 per cent of Scots are set to pay less income tax because they live in Scotland and have a Government that is led by the SNP.
This is a budget for a stronger NHS and a more prosperous Scotland and a budget that, once again, gives the people of Scotland the best cost of living deal anywhere in the UK. It is a budget that offers new ways to access a GP through walk-in GP clinics; new help for hard-pressed families with more wraparound care; new hope for young Scots who are looking for their first home; and more operations and more appointments in our NHS. Under this budget, more people will pay less income tax because they live here in Scotland. It offers new help and more help. It is a budget for families, a budget for Scotland and a budget that is well worth voting for.