John Swinney on Budget Bill
Deputy First Minister's opening statement to Parliament.
Presiding Officer, the Budget (Scotland) (No 5) Bill for 2016-17 maintains our strong record of managing the public finances using the fiscal powers currently available to us.
It confirms our plans for taxation and expenditure to deliver sustainable economic growth, improve Scotland’s public services and to create a fairer and more prosperous economy with opportunities for all of our citizens to flourish.
It is also an historic budget, given the context provided by this week’s agreement with the UK Government on the fiscal framework that will support the Scotland Bill.
That agreement has significant implications for future Scottish Budgets, which the Scottish Government and Scottish Parliament will need to consider in the coming months.
But let us not forget the significant events that have already occurred. Two weeks ago this Parliament voted to set the Scottish Rate of Income Tax at 10p.
This means that the lowest paid taxpayers in our society are protected, and that the rate of tax paid by Scottish residents in 2016-17 will be the same as it is today.
Our decisions on taxation have been based upon the principles I set out in earlier legislation, and are designed to deliver a coherent tax framework for the people of Scotland.
This first decision on setting a rate of income tax in Scotland has therefore been one of substance and one that has required me to balance the opportunities and risks presented by our new tax powers. It has not been a case of making proposals without identifying how they could be implemented and the effect on individuals.
It has been based on the same approach that I have undertaken when setting all devolved taxes. With Land and Buildings Transactions Tax, the first tax power devolved to this parliament in over 300 years, I delivered a progressive regime – when the UK Government had passed up the opportunity to deliver that reform in the past.
However, progressivity in itself is not sufficient justification for increasing the tax burden on the lowest paid taxpayers. Taxes must also be proportionate to the ability to pay – and I stress the ability to pay. It will be of limited reassurance to our pensioners, or our newly qualified teachers, or our postal workers to know that people on higher salaries would be paying more in increased taxes than they will be as they see their weekly budget come under increased strain.
They won’t care that others are paying more, they’ll care that they are paying more. That’s not a burden that I’m willing to impose.
Instead of increasing the tax burden, this Budget protects household incomes.
It provides leadership to employers across the country by ensuring that over 50,000 of Scotland’s lowest paid workers receive a pay rise and earn at least the Scottish Living Wage. The Budget ensures that:
- our older citizens are able to access free personal care in an integrated health and social care system;
- the tax on ill health that prescription charges represent is abolished saving those with long term illnesses around £104 per year;
- families across the country will benefit from free school meals and 600 hours of early learning and childcare saving £707 per child per year;
- households have their council tax frozen for a 9th consecutive year saving the average Band D household around £1,550 over the course of this parliament; and
- we continue as a Government to mitigate the most damaging effects of the UK Government’s welfare cuts.
That’s what this Government is doing to protect household income in Scotland.
Education lies at the heart of inclusive growth and is essential in our efforts to tacking inequality and we are determined to improve educational outcomes.
- Under this Government, 607 schools have been replaced or refurbished - that’s nearly a quarter of the whole school estate.
- We’ve introduced free school meals for all children in primaries 1 to 3, benefitting almost 130,000 pupils and saving families important resources.
- Our young people achieved a record number of Higher and Advanced Higher passes in 2015 and the number leaving school for a positive destination in education, employment or training is now at a record high of 93 per cent.
- Almost 11,000 more students successfully completed full-time college courses leading to recognised qualifications in 2014-15 than in 2008-09, an increase of 24%.
- This year, record numbers of Scots have applied to go to university here and 18 year olds from our most deprived communities are now 65 per cent more likely to apply than they were in 2006.
- The percentage of newly qualified teachers in employment after their probation period has increased.
That’s the effect of the Government’s investment.
We have not scrapped the Education Maintenance Allowance – we have expanded it, enabling more young people from low income families to stay on at school or in college.
We have not scrapped maintenance grants for the poorest students – we have increased the level of bursary.
We have not scrapped disabled students’ allowance – we are continuing to provide this vital support.
And we have not made and will never make education dependent on the ability to pay. No front door fees. No back door taxes. We will keep tuition free, saving 120,000 students in Scotland up to £27,000 over the course of their degree.
But we know there is more that we need to do. We want to create a world class education system which delivers success for all our children. Our overall aim is to raise standards everywhere, but to raise them most, in the areas that need it most.
As the First Minister has indicated on several occasions, action in this area is an absolute priority for the Government.
We previously announced the four-year £100 million Attainment Scotland Fund to support schools in our poorest neighbourhoods to raise attainment.
It’s now about to enter its second year of operation and over the next three years, we still have £80 million of the fund to spend.
I have looked at this carefully. I have considered the resources I have available, including my latest assessment of forecast receipts from the devolved taxes.
And, I have decided we are in a position to do more. We must go further and we must go faster.
I can today confirm to Parliament that I intend to double the amount of funding we had planned to allocate to the Attainment Scotland Fund over the next three years, from £80 million to a total of £160 million.
Ministerial colleagues will announce further details in due course, but I would hope that all members in the chamber will welcome this substantial additional investment in measures to help ensure that every child has the opportunity to realise their potential.
The budget doesn’t just lay the foundations for our children’s future but this Government will continue to invest heavily in Scotland’s infrastructure, using all levers at our disposal to maximise investment and support economic growth.
We will also continue to offer a competitive advantage for the majority of business ratepayers within the United Kingdom.
I have reflected on feedback from a number of businesses and can confirm to Parliament today that I have moderated the adjustment to the level of relief available for empty industrial properties proposed in the draft budget: 100% relief will now be available for six months rather than three as originally proposed. I will also extend the fresh start and new start reliefs for the duration of 2016-17.
Finally I look forward to the forthcoming review of business rates which will be detailed shortly and the opportunity that provides to test our business rates policies to continue to support investment and growth.
The Budget provides a further commitment to extend digital applications in public services, to increase use of shared services and to reduce overlap between public services.
We will reform our innovation landscape.
We will invest £250 million to deliver the most significant reform to health and social care since the creation of the National Health Service in Scotland in 1948.
We will invest a further £200 million over the next five years in six new elective treatment centres.
And as well as maintaining 1,000 additional police officers, the frontline police resource budget will be protected in real-terms and we have allocated further funding to support continuing reform.
And we will continue to prioritise the preventative interventions across our services, including by building on the success to date of the Early Years Collaborative.
I welcome the agreement of Scotland’s local authorities to the financial settlement we are providing which, when taken together as a package of funding, will enable them to increase the pace of reform and improve essential public services to communities all over the country.
My priority all along has been to deliver a financial settlement that councils can accept in order that we can pursue our shared priorities to protect household incomes, improve outcomes for people through health and social care integration and by improving educational attainment – today’s announcement of further, targeted funding will I hope be welcomed as part of that journey.
As I said in my opening remarks, in presenting this Budget to Parliament for its approval today, we must also look to the future.
As we debate the Budget that is before Members of this Parliament today, we should recognise that those representing the people of Scotland in the next Parliament will have further choices to make and opportunities to consider.
I believe that the Budget deserves support from across the chamber.
I move that the Parliament agrees that the Budget (Scotland) (No 5) Bill be passed.