Cabinet Secretary for Finance & Sustainable Growth John Swinney
Budget (Scotland) Bill - Stage 3 Debate
February 4, 2009
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Presiding Officer. At Decision Time last Wednesday, there could not have been one Member of this Parliament who believed that this institution was in a good place. In the intervening seven days, we have seen real and substantial co-operation across the political spectrum to ensure that Parliament fulfils one of its central requirements - to put in place a Budget that adequately funds public services and supports the development of the Scottish economy.
And that requirement could not be more relevant and of greater significance at this stage in the development of our country.
As people face up to uncertainties over their employment or their ability to support their mortgage or the future of their business, they expect Parliament to fulfil its obligation to them and to take wise decisions about the future. The people of Scotland expect politicians of all parties to reach mature agreement on an effective budget which meets the nation's needs in these challenging economic times.
This afternoon - as a consequence of productive discussion over the last week - I am certain Parliament will fulfil its obligation to the public.
I express the Government's appreciation for the constructive attitude taken by all parties represented in this Chamber over the last few days.
We have listened hard to what other parties have said, and we have been flexible where we can. Our Budget Bill as introduced had at its core the need to deliver real action on the economy. And our discussions with others have without doubt strengthened the capability of the Budget to deliver on this aim.
Of course, our dialogue with other parties has been longstanding. Labour's 15 point plan included a number of practical and constructive suggestions to help the economy, which the Government has taken forward. This has included expanding the Manufacturing Advisory Service and supporting Credit Unions. The Conservatives have argued for more support to encourage new entrants into business. The Liberal Democrats have argued for a strategic approach to key economic and financial issues and the Greens have made a strong case for a home insulation programme. We want to take forward this input in a constructive way.
Strategic aim of Budget
The total Scottish Budget is in the order of £33 billion. In the Budget we are seeking to boost public spending. We are seeking to bring forward capital projects to get construction workers and apprentices into jobs. And we are seeking to help businesses and families wherever we can.
Through our spending, we will continue to deliver on the commitments we have made during our first 20 months in office. We will reduce business rates for small companies, provide the resources to freeze the council tax, put more police on our streets, work to tackle climate change and invest in our health and public services.
Building on the concordat, we will also take forward our proposals in partnership with local government, in recognition of the leadership that local authorities are showing in every part of our country.
Economic recovery
i. Skills
Through our economic recovery programme we will focus on the skills that Scotland's people need to remain in the workforce and keep our businesses competitive.
I have already announced to Parliament the enhancements we will make to PACE to help people deal with redundancy.
I am pleased that the Scottish Funding Council will support this initiative further by allocating £7million of its own budget so that colleges can work more closely with PACE.
Over the last few days, we have revisited the arguments put forward by the Labour party about additional measures to boost skills and employability, as we work to meet out target of 50,000 Scots in appropriate training by the end of this parliament.
I am pleased to announce that we will provide £16 million in 2009-2010 to increase apprenticeship recruitment. By our detailed calculations, we believe that this will allow for the recruitment of 18,500 new apprentices in our economy at this vital time.
We will actively promote these opportunities to a broad range of groups in society and across a broad range of sectors in the economy including tourism and shipbuilding. We will give sympathetic consideration to increasing the number of Modern Apprenticeships in 2010-11, when the experience of the next year and the financial position becomes clearer and these issues will be considered by an summit on apprenticeships that the Cabinet Secretary for Education and Lifelong Learning will convene at the request of the Labour Party.
This investment will be in addition to the £50 million we plan to draw in from the European Social Fund to assist with skills development and employability initiatives - and the money that we have worked hard to secure through that scheme to support people in employment who may be facing redundancy.
At the same time, we know that we need to do more for young people who have faced tough times.
I am therefore pleased to announce that we will now be providing additional funding for Columba 1400 so that this vital charity can do even more to help our disadvantaged young people reach their potential.
ii. Infrastructure
Through this Budget, we are targeting resources to help those who need it most and to offset the effects of recession by providing a jobs boost for Scotland.
Our spending plans include a major programme of capital investment of more than £3.5 billion both this year and next.
And, in addition to that, I have already said that will be bringing forward an additional £230million of accelerated capital expenditure in 2009-10 to improve health facilities across the country and, with our local government partners, to deliver major infrastructure projects.
Through this spending, colleges and universities will benefit from improvements.
This money will generate work and support jobs - 4,700 in total on the basis of our detailed plans - and, it will provide a much needed lifeline for our economy at a crucial time.
Improving infrastructure means investing in Scotland's town centres so that they are able to face major challenges in this economic climate. This has been a cause championed by the Conservatives and a proposal argued for by Labour - and we have listened.
That is why we will bring forward in the autumn budget revision a town centre regeneration fund of £60 million that will deliver real improvements in towns the length and breadth of Scotland.
As part of this Budget, too, we will invest to improve our built environment in other ways.
As I announced last week, the Government will take forward stage 1 of a programme of home insulation measures that we have discussed with the Green Party. In Scotland, more than half a million suitable homes do not have cavity wall insulation and 1 million have no, or inadequate, loft insulation. This is a real waste of resources and it contributes to fuel poverty.
That's why, through this Budget, we'll provide £15million from Government and leverage in £15million from other sources to provide up to 90,000 homes with energy efficiency advice and assistance and with insulation where suitable and appropriate - the biggest such scheme to be implemented in Scotland.
The scheme will area based and targeted at those who need it most.
We are clear that those who are able to pay should make a contribution and those who aren't able to pay will receive this service free.
iii. Employment
Through this Budget, we will also invest in our companies to help safeguard jobs in all our constituencies.
This Budget will allow us to complete the full implementation of the Small Business Bonus Scheme in April 2009.
And, on top of the £180 million we have already committed to spend from the 2007-13 European Programmes, we will also bring forward a significant share of the remaining £385 million of European Structural Funds.
That, in turn, will support 300 high quality projects nationwide that will stimulate the Scottish economy - again, bring jobs to all our constituencies.
And, we will go further.
We have listened to the suggestion put forward by the Liberal Democrats that a Finance Sector Jobs Task Force should be established within the context of Financial Services Advisory Board (FiSAB). I am pleased to announce today that we will be taking that forward at the next meeting of FiSAB on 10 February.
Over the last few days, we have listened to the case put forward by others to provide greater help to new businesses.
Even in the face of recession businesses can thrive - and, we want to do all that we can to ensure that this generation of young Scottish business talent is being supported in these challenging times.
That is why, in response to representations from across the political spectrum, we now propose to provide a grant to the Princes Scottish Youth Business Trust to assist them in their valuable work with young 18-25 year old entrepreneurs.
Strategic financial and economic issues
i. Borrowing powers
Presiding officer. Challenging economic conditions require a country to draw upon all the mechanisms at its disposal to assist recovery.
I welcome the Liberal Democrats case they have made to the Calman Commission that "the Scottish Parliament should have the power to borrow" and in response to this suggestion I can confirm that the Government will submit evidence to the Calman Commission on extending the powers of the Scottish Parliament, particularly to borrow.
Looking ahead…. it is important that this parliament faces up to the responsibility of recalibrating our strategic financial plans in the light of the changing and the reducing profile of public funding over the forthcoming years.
We have accepted the proposals from the Liberal Democrats to have a joint strategic review of public spending in Scotland.
The Government believes this is required to face the very difficult challenges arising from the changed public spending assumptions made in the Chancellor's November Pre-Budget report.
I will chair this review and invite the political parties across this Chamber to take part in this valuable and significant initiative.
Conclusion
In the last seven days, Parliament has focused on delivering a Budget for economic recovery. But I believe we have achieved a great deal more than that.
We have demonstrated we have an overwhelming will to take the correct action to support public services and the Scottish economy.
We have demonstrated that in the face of major challenges over the future of public spending we can agree on a way ahead.
We have demonstrated that when necessary Government and Opposition can find common ground.
That is the Parliament that the people elected and as a Parliament we have the opportunity to deliver for our people.
I commend the Budget Bill to Parliament.