Budget stage 1 debate: Deputy First Minister's speech

Presiding Officer.

The Scottish Government, like governments all over the world, has been faced with a difficult set of choices in setting its Budget. As I indicated to Parliament when I addressed the Budget settlement in December, the volatile financial environment, including record levels of inflation and a cost of living crisis, combine to create an exceptionally difficult fiscal landscape. The IMF’s report on Tuesday reflects this and indicates that the UK is predicted to be the only major economy to shrink this year.

Against that very challenging backdrop, we have taken decisive action to deliver a meaningful and progressive budget for the year ahead that delivers for the people of Scotland. With the powers available to us, we have chosen to commit substantial resources to prioritise support for families and the most vulnerable, to invest in our public services, and to support businesses through these difficult days.

A central tenet of this budget is that we have asked the people of Scotland to contribute a fair share of their taxable income – and in the case of higher earners to pay slightly more than they have in the past - to help to create a fairer society, one in which we all want to live, and enjoy a range of benefits which are not available throughout the United Kingdom.

Whether that is free prescriptions, tuition fees, personal care or concessionary travel – the people of Scotland have access to a social contract with Government that delivers so much more to each and every person who chooses to live in Scotland.

Together with our partners in the Scottish Green Party we are working to create a progressive path for Scotland.

The 2023-24 Scottish Budget supports an ambitious path for Scotland which focuses on:

• eradicating child poverty;
• transforming the economy to deliver a just transition to Net Zero; and
• providing sustainable public services for the people of our country

This Government leads by example in the bold steps it is taking to address poverty in Scotland.

This is demonstrated through our Social Security system which has been developed with dignity, fairness and respect at its heart.

We are committing £442 million in the year ahead to our unique Scottish Child Payment.  This is the most ambitious child poverty reduction measure in the United Kingdom.

I am proud that this Government has not only delivered the Child Payment but has expedited its increase early and above inflation to £25 per week per eligible child from November 2022. That is an increase of 150% in 8 months,  providing practical support to families most affected by the cost crisis.

Indeed, the Scottish Fiscal Commission forecasts that around 387,000 children could benefit from the Scottish Child Payment in 2023-24.

The Scottish Government recognises that the burden of high inflation is felt most by households on the lowest incomes, which is why we are uprating all remaining Scottish benefits by 10.1% from April 2023.

We have also gone beyond the energy support provided by the UK Government to provide £20 million for the Fuel Insecurity Fund to help households at risk of disconnection – continuing this funding into 2023-24 as energy prices continue to bite.

Next year, Presiding Officer, we will support our investment in ensuring that children get the best start in life, with investment of around £1 billion in high quality early learning and childcare provision, and a further £42 million to be invested in holiday food provision and expanding our support for school age childcare.

Presiding Officer, Scotland is built on the foundations of our public services. For those reasons the government has prioritised investment in the National Health Service and I’m delighted that we are in a position to provide over £1 billion of an increase to the health service in Scotland. That provides over £13 billion for NHS health and social care services in Scotland, supporting NHS Boards to continue to drive forward our five-year Recovery Plan. For social care and integration, we’re deliving £1.7 billion of improvements, as we prepare for the introduction of the National Care Service, and we’ll support the delivery of the £10.90 real Living Wage for adult social care with an additional £100 million.

Investment in local services continues to be a priority and we have reconfirmed our commitment to work with local government, recognising the importance of collaboration and partnership, and to work with accountability in delivering high quality person-centered public services.

This budget provides over £13.2 billion for local government in Scotland – which is an increase of over £570 million for essential public services delivered by councils.

We will also invest almost £3.4 billion across the justice system in 2023-24, including an additional £80 million for the Scottish Police Authority.

Presiding Officer, as we look to a more sustainable, greener future in Scotland, our ambitions to deliver economic growth must be achieved through delivering a just transition to Net Zero.

Over a decade ago, the government led the way with its inspiring  climate change targets.

As we now work to deliver a Net Zero future, the Scottish Government will continue to lead the way by investing over £4.6 billion in our Net Zero, Energy and Transport Portfolio.

This includes over £1.4 billion to maintain, improve and decarbonise Scotland’s rail network, ensuring that this critical infrastructure continues to serve the needs of the people of Scotland.

We have provided substantial funding to help households face the cost of living crisis. Next year’s Budget will continue this and will spend over £360 million across our Heat in Buildings and Fuel Poverty budgets.

Protecting Scotland’s natural environment continues to be a priority and we will also spend almost £467 million on restoring our peatlands, expanding Scotland’s forests and tackling the causes of climate change and biodiversity loss all contributing to the achievement of the Net Zero ambitions.

The government is committed to sustained investment to support businesses and our economy, which is why we’re providing the Scottish National Investment Bank with an additional £244 million to continue its investment in Scottish businesses, projects and communities.

Over the next 5 years – and this will be one of the most significant investments the government makes - we will invest £42 million to boost entrepreneurship by supporting start-ups in Scotland through our national network of Techscalers and pre-scalers.

And of course as we manage the transition to Net Zero, we must ensure that communities are well supported with an investment of £50 million in the Just Transition Fund for the North East and for Scotland.

In the course of the pre-Budget dialogue, businesses asked me to freeze the poundage in business rates, and the government has been able to do that, which is expected to save ratepayers over £300 million in the forthcoming year, which combined with the transitional reliefs that will be applied to the forthcoming revaluation and the continuation of the Small Business Bonus Scheme, will remove 100,000 properties from business rates altogether.

This package ensures that Scotland has the lowest poundage in the UK for the fifth year in a row. It supports a package of reliefs worth an estimated £744 million.

This budget, Presiding Officer, delivers the priorities of a progressive Government.

It provides us with an opportunity to demonstrate how we can collaboratively and successfully as a Parliament, in the most difficult times, deliver support and the best outcomes to the people of Scotland. 

Presiding Officer, I believe this budget represents a fair and ambitious package and I urge all members across the chamber to support it today.