:00:18. > :00:19.Good afternoon and welcome to a special programme
:00:20. > :00:24.with live coverage of the Scottish draft budget.
:00:25. > :00:25.With me to dissect, digest and ruminate
:00:26. > :00:28.on Finance Secretary Derek Mackay's fiscal offering are the politics
:00:29. > :00:30.Professor Nicola McEwan and the economics commentator Alf
:00:31. > :00:44.What are we expecting? It is going to be interesting to see if we have
:00:45. > :00:47.surprises, most of the things that have been talked about tax have
:00:48. > :00:53.already been flagged but we have had the political shock about the
:00:54. > :00:56.European Union referendum so we are going to see if the finance
:00:57. > :01:01.secretary can come up with anything to counteract that for the Scottish
:01:02. > :01:04.economy. The complication, the fact that we have just had the election.
:01:05. > :01:10.It is not unreasonable for the Scottish Government to say we've
:01:11. > :01:16.just fought a campaign, with promises tax about so we are going
:01:17. > :01:22.to do what we promised in the manifesto. It is not unreasonable
:01:23. > :01:28.but it is a minority government, not as much as 2007 but still going to
:01:29. > :01:35.have to agree with one political party between and February. Are you
:01:36. > :01:39.expecting anything radical? You would have thought that the context
:01:40. > :01:44.of the Brexit decision and ongoing debate about the impact it is good
:01:45. > :01:49.to have on the economy and the Scottish economy, with and that they
:01:50. > :01:57.would be doing something to counteract the downward shift. But I
:01:58. > :02:01.do not think he has got an awful lot of wriggle room to do anything
:02:02. > :02:06.significant. Politicians in Scotland have been reluctant to do dramatic
:02:07. > :02:14.things about tax. In the past we have had powers and not use them.
:02:15. > :02:20.Some constraints that make it difficult to do anything
:02:21. > :02:28.significant. You can understand why politicians are reluctant to either
:02:29. > :02:34.put tax up, cut tax, lose revenue. But it is extraordinary that we have
:02:35. > :02:39.had and been through the devolution referendum, creation of the Scottish
:02:40. > :02:50.Parliament, independence referendum the changes political parties
:02:51. > :02:57.running, and the Scottish Parliament has had powers to change the basic
:02:58. > :03:01.rate? And also, the vote from the people. We have not done anything
:03:02. > :03:10.with that. It is true for all of the parties. They tended to play games
:03:11. > :03:21.around have movement here, concession there. And some of which,
:03:22. > :03:27.delivering little. And playing around, this time, they'll say that
:03:28. > :03:31.they are not going to change bands for the upper rate? It is
:03:32. > :03:37.politically easier not to implement the cuts made by the UK Government
:03:38. > :03:39.than impose the additional tax rise. The added complexity for the
:03:40. > :03:41.Scottish Government and the finance secretary...
:03:42. > :03:44.It's time now to cross to the Parliament, where
:03:45. > :03:53.the Finance Secretary is making his pre-budget speech.
:03:54. > :03:58.Challenging economic, political circumstances. The tax and spending
:03:59. > :04:02.proposals that I am going to set out today are going to improve public
:04:03. > :04:07.services, support the economy and provide foundations for future
:04:08. > :04:10.sustainable growth and prosperity. Over the coming weeks I am going to
:04:11. > :04:20.work with all the parties and stakeholders. The Scottish economy
:04:21. > :04:26.has grown over the past year despite weak global growth, low oil prices,
:04:27. > :04:31.an unemployment although it has been varying from month to month, it is
:04:32. > :04:39.higher employment than the 2008 financial crisis. The UK's
:04:40. > :04:44.government plans for hard Brexit represent risk to the Scottish
:04:45. > :04:49.Government. Pressure on household budgets and companies reevaluating
:04:50. > :04:52.plans. These risks are compounded by the UK Government's continued
:04:53. > :04:58.austerity programme and over the coming years we agree to these cuts
:04:59. > :05:05.to funding, public services and Social Security. Between 2010, 2011,
:05:06. > :05:18.and 19/20, conservative austerity are going to see the budget, will
:05:19. > :05:22.see capital investment fall by 9%. 2.9 billion in real terms. 3.5
:05:23. > :05:26.billion cuts by 2019/20. That is still to come. As a result of these
:05:27. > :05:31.pressures, the economic forecasts that I am publishing today are going
:05:32. > :05:42.to underpin the tax projections. It assumes that Scottish GDP is going
:05:43. > :05:47.to rise by 1% at 16/17, 1.3% 17/18. Two could this into context,
:05:48. > :05:55.Scotland's GDP has historically grown by 2% a year. And these lower
:05:56. > :06:00.forecast rate for -- represent the uncertainty following Brexit. But we
:06:01. > :06:07.want to provide support for the economy, household incomes through
:06:08. > :06:09.the fair and balanced tax spendings and proposals. This government is
:06:10. > :06:14.not going to follow the damaging approach of Westminster. The
:06:15. > :06:19.devolved powers mean that more of the money that we spend will be
:06:20. > :06:29.funded from taxes, from this Parliament. In addition to currently
:06:30. > :06:31.devolved taxes, we are going to introduce a bill to devolve air
:06:32. > :06:36.passenger duty, the air departure tax. VAT taxes going to be
:06:37. > :06:42.operational from 2018, reduce the burden by 15% by the end of this
:06:43. > :06:48.Parliament. Improving international connectivity, boosting to resign.
:06:49. > :06:52.The tax proposals for 17/18, I am grateful to the fiscal commission
:06:53. > :06:58.for scrutinising the forecasts and endorsing them. This government is
:06:59. > :07:00.committed to the principle -based approach, to the tax commission,
:07:01. > :07:06.that it should be proportionate to the ability to pay. The land and
:07:07. > :07:13.building transaction tax has already lifted 15,000 households out of tax
:07:14. > :07:17.compared to stamp duty, supporting people to home ownership. Following
:07:18. > :07:24.the successful introduction of the tax, this budget proposes to keep
:07:25. > :07:28.residential and nonresidential bands the same as this year, tax freeze
:07:29. > :07:34.maintaining the progressive approach. I also propose that the
:07:35. > :07:37.Scottish landfill tax, contributing to environmental objectives is only
:07:38. > :07:44.going to rise in line with inflation. The Scotland act income
:07:45. > :07:49.tax powers, being used for the first time, we have to have a balanced
:07:50. > :07:53.approach. I am not going to pass the costs of United Kingdom austerity to
:07:54. > :08:02.the household budgets of the lowest income taxpayers. I can confirm that
:08:03. > :08:08.we will protect low and middle income taxpayers at a time of rising
:08:09. > :08:15.inflation, freezing the basic rate of income tax. But we cannot accept
:08:16. > :08:19.top earners benefiting, I am going to limit the entries at the higher
:08:20. > :08:30.rate threshold to inflation and not give the substantial real term tax
:08:31. > :08:37.cut to the top 10% of earners. ?43,430. And while I sympathise with
:08:38. > :08:39.those who have campaigned for an increase to the additional rate, I
:08:40. > :08:45.have had to balance that with the rest to the economy and this
:08:46. > :08:49.government's approach, endorsed by the electorate, it is the correct
:08:50. > :08:59.thing to do for the economy, jobs and public services. For the first
:09:00. > :09:03.time, there is now a direct link between Scotland's economic
:09:04. > :09:05.performance and public spending. This government has consistently
:09:06. > :09:12.deliver a competitive environment for business, and reviewed tax
:09:13. > :09:18.powers to support growth. Not only have we ensure that small businesses
:09:19. > :09:29.pay zero on low rates, large businesses enjoy a lower rate than
:09:30. > :09:32.the rest of the United Kingdom. I am pleased to set out today that
:09:33. > :09:40.measures confirm a highly competitive business regime for
:09:41. > :09:51.Scotland, for 17/18, particularly for the thousands of small
:09:52. > :09:55.businesses in Scotland. First, I will reduce business rate poundage
:09:56. > :09:59.by 3.7% to 46.6p. We will expand the small business bonus scheme by
:10:00. > :10:08.raising the eligibility, 100% relief, to the rateable value of
:10:09. > :10:14.?15,000, lifting 100,000 properties out of rates altogether. I have
:10:15. > :10:19.listened carefully to businesses, just as I cannot cut tax for the
:10:20. > :10:25.wealthiest individuals, I cannot cut the rate of the large business
:10:26. > :10:27.supplement. But I will restrict the supplement, to the largest
:10:28. > :10:34.businesses, by increasing the threshold to 51,000, reducing the
:10:35. > :10:39.tax burden on 8000 businesses. In addition, I will match the
:10:40. > :10:46.Chancellor's recently announced raise relief for rural areas. And
:10:47. > :10:51.fibre infrastructure. Finally, the question of transitional relief,
:10:52. > :10:55.following evaluation. If we were to introduce that, Edward implement a
:10:56. > :11:00.significant burden on small businesses. That is not the way
:11:01. > :11:06.forward, so given that all businesses will benefit from the
:11:07. > :11:13.lower poundage, I do not propose to add notes are traditional scheme.
:11:14. > :11:17.The small business bonus extended, and a large supplement focused only
:11:18. > :11:26.on the biggest businesses. That is a good deal for Scottish businesses,
:11:27. > :11:34.and a great deal for Scottish jobs. But we will not stop. To help small
:11:35. > :11:38.businesses grow, we were once the ?500 million scheme in 2017.
:11:39. > :11:44.Offering financial support for business investment. Three year
:11:45. > :11:49.scheme, improved by the Treasury, will guarantee small to medium-sized
:11:50. > :11:59.businesses, who would otherwise struggled to grow because of the
:12:00. > :12:03.lack of trainers. Innovation hubs at Brussels, Berlin, building on the
:12:04. > :12:09.success of Dublin and we will double the number of people working for
:12:10. > :12:15.Scottish exports. We will support the rural economy through the food
:12:16. > :12:19.Drink industry, and ?100 million investment in digital connectivity,
:12:20. > :12:27.driving forward superfast broadband to 100% having access by 2021.
:12:28. > :12:29.Today's budget reaffirms this government's commitment to
:12:30. > :12:41.reinvestment. Over the next year we will complete the complaint M8, M73,
:12:42. > :12:44.M74 improvements. The iconic Queensferry Crossing. Progress on
:12:45. > :12:50.the A9, A96. We will also complete the electrification Glasgow to
:12:51. > :12:56.Edinburgh rail line, introducing longer, faster, greener trains. That
:12:57. > :13:02.is part of the ?5 billion investment plans on the rail network by 2019.
:13:03. > :13:13.Following recent performance issues, some people have called for the rail
:13:14. > :13:17.fare freeze. Big cumulative cost would in reality be 58 million. This
:13:18. > :13:20.would compromise the investment programme, that is so vital to
:13:21. > :13:25.improving the performance of the rail network. But we recognise that
:13:26. > :13:31.investment can mean disruption for passengers. As we upgrade lines and
:13:32. > :13:37.introduce new statements. I can announce today that in the coming
:13:38. > :13:43.financial year, we will invest not 2 million, but three million, targeted
:13:44. > :13:49.fare reductions, to ease costs for passengers, thanking them for
:13:50. > :13:52.patience. The Minister for transport will sit out more detailed tomorrow.
:13:53. > :13:57.Investment on the transport network is complemented by funding for the
:13:58. > :14:05.city deals, Glasgow Aberdeen and Inverness. We will continue to
:14:06. > :14:10.support city deals for Edinburgh, Dundee, Perth and Stirling. I have
:14:11. > :14:13.also announced that I have signed today, with Dundee City Council, the
:14:14. > :14:22.national agreement to allow the Dundee waterfront growth to go
:14:23. > :14:27.ahead. Supporting 500 jobs. I will be inviting proposals from councils
:14:28. > :14:32.for two for the tax incremental projects over the coming years.
:14:33. > :14:37.Leveraging private investment and infrastructure. This budget invests
:14:38. > :14:43.heavily on housing. We deliver the target of building 30,000 affordable
:14:44. > :14:49.homes at the last Parliament. We will deliver, looking forward, at
:14:50. > :14:54.least 50,000 new affordable homes, including 5000 for social rent over
:14:55. > :15:02.the life of this Parliament. Today's budget confirms capital funding of
:15:03. > :15:05.around 470,000 for 17/18, coupled with other mechanisms to help
:15:06. > :15:11.deliver this commitment. Presiding Officer, this budget secures
:15:12. > :15:17.infrastructure investment of around ?4 billion. That investment is going
:15:18. > :15:20.to underpin productivity, growth, and support an estimated 40,000
:15:21. > :15:28.jobs. Investment on housing also helps tackle climate change, through
:15:29. > :15:34.efficiency of the housing stock and today's budget is going to help meet
:15:35. > :15:40.climate change targets. I have increased funding for woodland
:15:41. > :15:46.creation, and the sustainable action fund and I can confirm today of the
:15:47. > :15:49.funding of more than ?140 million, to support energy-efficient
:15:50. > :15:56.programmes as part of the commitment to invest at least ?500 million over
:15:57. > :16:00.the Parliament. Long-term economic growth requires people as well as
:16:01. > :16:07.business. Closing the attainment gap, reducing child poverty, and
:16:08. > :16:11.increasing access to quality education is going to have long-term
:16:12. > :16:15.benefits for the economy and finances. We are prioritising
:16:16. > :16:21.education, and this budget provides resources. We will invest in skills,
:16:22. > :16:23.training, building on opportunities for all initiatives and extensive
:16:24. > :16:32.consultation on the apprenticeship levy. Revenues from the levy means
:16:33. > :16:36.that Scotland will receive 221 million, from 17/18. Let me be
:16:37. > :16:47.clear, it has been suggested that this is a new fund of 221 million.
:16:48. > :16:51.It is not. The UK Government has given with one hand, taken away with
:16:52. > :16:54.the other. The levy replaces existing funding for
:16:55. > :17:01.apprenticeships. However, I tend to and from today that 221 million will
:17:02. > :17:02.be committed to interventions that support skills, training, and
:17:03. > :17:14.employment in Scotland. 2017-18 will see the next stage in
:17:15. > :17:18.that expansion to 30,000 modern apprenticeship new starts per year.
:17:19. > :17:21.We will also respond to these employers by establishing a flexible
:17:22. > :17:26.workforce development fund. Details of funding have been published
:17:27. > :17:29.today, and the Minister for employability and training. Help
:17:30. > :17:33.further information tomorrow. This Budget also fund the expansion of
:17:34. > :17:39.early learning and childcare to 1140 hours by the end of this Parliament
:17:40. > :17:46.by providing an initial ?60 million to support the first phase of
:17:47. > :17:48.workforce and infrastructure development. Future years will see
:17:49. > :17:51.significant additional investment, as we deliver on our commitment to
:17:52. > :17:55.transform childcare in our country. The defining mission of this
:17:56. > :17:59.Government is to raise educational attainment and skills. At the
:18:00. > :18:04.election we pledged ?750 million over the course of this Parliament
:18:05. > :18:08.to the attainment fun. And, in a radical departure, we said that ?100
:18:09. > :18:12.million per year from that fund would be spent at the discretion of
:18:13. > :18:18.Scotland's schools to help close the attainment gap. The revenue we
:18:19. > :18:21.identified to this fund, this new stream of direct support, with the
:18:22. > :18:25.increase in the council tax that will be paid by those in the higher
:18:26. > :18:29.band homes. I know that many MSPs did not agree with that proposal.
:18:30. > :18:34.Parliament debated, Parliament voted, and I have listened to
:18:35. > :18:36.Parliament's use. However, I will not sacrifice the educational
:18:37. > :18:43.chances of Scotland's purists pupils -- poorest pupils. I will not
:18:44. > :18:46.abandon plans over significant new resources. Instead, I can announce
:18:47. > :18:51.today that I will not simply make good on our pledge, I will go
:18:52. > :18:56.further. Next year, instead of 100 marine pounds going direct to
:18:57. > :19:04.schools, ?120 million will be spent at the discretion of head teachers.
:19:05. > :19:09.APPLAUSE This ?120 million will fund a new
:19:10. > :19:15.pupil equity scheme. Schools across the country will be allocated around
:19:16. > :19:21.?1200 for each pupil eligible for free school meals. And what is more,
:19:22. > :19:25.I will not fund this from the council tax, instead, I will use the
:19:26. > :19:31.Scottish Government's on resources. Councils will keep the full value of
:19:32. > :19:35.the revenue from the council tax rebranding. Every penny raised
:19:36. > :19:44.locally will be spent locally, as councils see fit. And we will
:19:45. > :19:49.deliver a pledge to help schools close by attainment gap from central
:19:50. > :19:54.funds. We have listened, we have acted, and we will deliver for
:19:55. > :19:59.Scotland's poorest pupils. APPLAUSE
:20:00. > :20:03.But we will not stop there. At a national level we will also provide
:20:04. > :20:06.central funding for closing by attainment gap of ?50 million,
:20:07. > :20:10.maintain the pupil - teacher ratio following this week's increase in
:20:11. > :20:16.teacher numbers, provide ?60 million for a flat early learning and
:20:17. > :20:20.childcare commitment and will invest over ?1.6 billion in higher and
:20:21. > :20:28.further education, ensuring access for eligible students and
:20:29. > :20:33.maintaining 160,000 college places. These commitments I'm announcing the
:20:34. > :20:38.date mean that overall, national investment in education and skills
:20:39. > :20:43.will increase by ?170 million this coming year. Let nobody be in any
:20:44. > :20:47.doubt, from birth and the earliest years, through school and beyond,
:20:48. > :20:55.education is this Goverment's number one priority. However, this
:20:56. > :21:02.educational attainment will commit a reference to address poverty and
:21:03. > :21:06.build a more equal society. As part of a social contract with the people
:21:07. > :21:10.of Scotland, we will provide ?47 million to continue to mitigate the
:21:11. > :21:14.tax, and we will abolish it at the earliest opportunity -- the bedroom
:21:15. > :21:18.tax. We will continue our support for the independent living fun. As
:21:19. > :21:23.part of our new powers, we will begin to build a social security
:21:24. > :21:29.system built on dignity and respect. I have published a public sector pay
:21:30. > :21:34.Bolasie, 2017-18, that guarantees the Scottish living wage offers
:21:35. > :21:40.those earning less than ?22,000 a basic pay award of more than 1%, and
:21:41. > :21:45.caps are the basic awards at 1%, whilst continuing our no compulsory
:21:46. > :21:49.redundancy policy. Today's Budget also delivers on our commitment to
:21:50. > :21:53.protect the resorts Budget for policing in real terms, supporting
:21:54. > :21:57.front line policing as we seek to maintain record low levels of
:21:58. > :22:06.recorded crime. We have also made a clear commitment to increase the NHS
:22:07. > :22:08.revenue Budget by ?500 million above inflation by the end of this
:22:09. > :22:11.Parliament, going beyond anything offered by any other party in this
:22:12. > :22:15.Chamber. That will see the sheriff front line NHS Budget invested in
:22:16. > :22:21.primary care, community care, social care, and mental health all rise. We
:22:22. > :22:26.will invest ?72 million next year, in an improvement fund for primary
:22:27. > :22:31.care and GP services, and over ?150 million in mental health over five
:22:32. > :22:38.years. Overall, next year we will invest an additional ?300 million in
:22:39. > :22:42.NHS resource budgets. ?120 million more than inflation, a massive step
:22:43. > :22:49.towards our promise to Scotland's health service.
:22:50. > :22:55.APPLAUSE As I set out, local government will
:22:56. > :23:01.receive ?120 million from central government to fund a shared ambition
:23:02. > :23:04.is to close the attainment gap. In addition, we will maintain council's
:23:05. > :23:11.share of capital spending with an increase of ?150 million in 2016-17.
:23:12. > :23:15.If we stopped here, the Scottish Government funding for local
:23:16. > :23:21.government services would be set to fall by just ?47.4 million next
:23:22. > :23:28.year. However, I want to do more to protect vital local services. So
:23:29. > :23:32.I've decided to go further. Last year, we transferred a quarter of ?1
:23:33. > :23:36.billion from the NHS to support health and social care partnerships,
:23:37. > :23:41.and I can announce today that on top of that transfer, we will provide
:23:42. > :23:46.additional funding of ?107 million from the NHS next year. This is
:23:47. > :23:51.additional funding which will deliver the living wage for social
:23:52. > :23:55.care workers and protect overall investment in these crucial
:23:56. > :23:59.services. This will secure a total of ?8 billion for health and social
:24:00. > :24:05.care services, ensuring that people have access to the right care at the
:24:06. > :24:09.right time, and in the right place. This additional investment in social
:24:10. > :24:14.care means that in the coming year, there will be no overall reduction
:24:15. > :24:17.in the funding provided by the Scottish Government to support local
:24:18. > :24:26.government services. APPLAUSE
:24:27. > :24:31.Funding will increase why ?59.6 million. Of course, government
:24:32. > :24:36.funding is not council's only source of revenue next year. As I've
:24:37. > :24:41.already said, the ?111 million that will be raised through the council
:24:42. > :24:44.tax rebranding will be retained locally, and local authorities will
:24:45. > :24:48.also be free to set an increase in the council tax generally by up to
:24:49. > :24:54.3% next year. Generating, if they so choose, a further ?70 million.
:24:55. > :24:58.Residing officer, the measures I have announced today mean that the
:24:59. > :25:02.total support from the Scottish Government and local taxation
:25:03. > :25:07.provides an increase in spending power and local government services,
:25:08. > :25:15.not of 59.6 million, but of 240.6 million, or 2.3%.
:25:16. > :25:20.APPLAUSE That is a settlement which invests
:25:21. > :25:25.in education, invests in social care and invests in local services.
:25:26. > :25:30.Presiding Officer, this is a Budget for growth and public services, for
:25:31. > :25:35.an environment and our communities. It delivers increased investment in
:25:36. > :25:39.education, record investment in the NHS, protects low income households
:25:40. > :25:45.from tax hikes, and supports more and better jobs. Overall, it
:25:46. > :25:50.delivers ?700 million of additional spending on an economy and public
:25:51. > :25:51.services. This is a Budget for Scotland, and I commend it to
:25:52. > :25:57.Parliament. APPLAUSE
:25:58. > :26:04.STUDIO: That was Derek Mackay outlining his Draft Budget for
:26:05. > :26:10.2017-18. Quick reaction? I got the sense as it went on, with 50 million
:26:11. > :26:14.here, 45 million put back there, that there was a lot of shuffling of
:26:15. > :26:18.small numbers around the edges, but the overall picture is really not
:26:19. > :26:22.that different. Except that some of the ways in which they had
:26:23. > :26:26.previously planned to do it, like taking the local government money
:26:27. > :26:32.and putting it into... We will talk about that shuffling very briefly?
:26:33. > :26:36.Big increase in local services and local government, that is with a nod
:26:37. > :26:39.to the local elections next year, which are a massive opportunity for
:26:40. > :26:43.the SNP to change the representation. We will be back in a
:26:44. > :26:48.moment. That's Macio what the Conservatives have to say. I think
:26:49. > :26:51.Murdo Fraser is speaking now. To use these new powers to support economic
:26:52. > :26:55.growth and tackle our underperforming economy. It is much
:26:56. > :27:01.to be regretted that he has chosen instead to hike taxes on families
:27:02. > :27:04.and businesses in Scotland, risking choking of economic recovery and
:27:05. > :27:09.depriving Scottish public services of vital tax revenue. This will make
:27:10. > :27:13.Scotland by highest taxed part of the United Kingdom, and as it
:27:14. > :27:17.stands, this is not a Budget we can support. Despite his complaint about
:27:18. > :27:21.Westminster cuts, the finance secretary has received an additional
:27:22. > :27:26.?140 million in real terms from the Treasury compare to the current
:27:27. > :27:29.year. This package included an extra ?800 million for capital. We said
:27:30. > :27:33.that we want to see that spent four priority areas, in housing,
:27:34. > :27:40.energy-efficient sea, digital infrastructure and projects. I look
:27:41. > :27:43.forward to hearing about more detail about the Goverment's capital plans.
:27:44. > :27:45.As Ruth Davidson made clear earlier today, we welcome the dramatic
:27:46. > :27:50.climb-down on using council tax funding for a national policy of
:27:51. > :27:54.educational attainment fun. An affront to the principle of local
:27:55. > :27:57.accountability, an assault on local government, just proving the power
:27:58. > :28:03.of the strong opposition provided from the Scottish Conservatives.
:28:04. > :28:07.Now, the First Minister said earlier that this Budget would protect local
:28:08. > :28:11.services. But what the supporting documents tell us is that local
:28:12. > :28:17.councils face a cut in the revenue grants of ?130 million. Even if they
:28:18. > :28:22.are allowed to keep all of the council tax increases. How does this
:28:23. > :28:25.cut protect local services? The finance secretary accuses the UK
:28:26. > :28:29.Government of giving with one hand and taking away with the other.
:28:30. > :28:34.Hasn't he just played exactly the same trick and local authorities?
:28:35. > :28:38.Now, by residing officer, we welcome the signal to cut air passenger duty
:28:39. > :28:43.to help grow the economy. But why not apply this logic to other taxes?
:28:44. > :28:48.Scottish businesses have been crying out for relief from business rates.
:28:49. > :28:52.This Budget retains the punitive level of the large business
:28:53. > :28:56.supplement at double the UK rate, putting Scottish businesses at a
:28:57. > :29:00.competitive disadvantage. Not matching the UK increases for the
:29:01. > :29:04.40% rate of tax, the finance secretary is making Scotland the
:29:05. > :29:08.most expensive part of the UK in which to live, work and do business.
:29:09. > :29:12.The First Minister's can picture of her growth commission, the former
:29:13. > :29:19.macroeconomy spokesman in this Chamber -- the former economic
:29:20. > :29:25.spokesman. The finance secretary won't listen to us, will he at least
:29:26. > :29:28.listen to the First Minister's on adviser and think again on tax?
:29:29. > :29:33.Presiding Officer, yesterday the finance secretary said he would
:29:34. > :29:36.deliver a Budget that was pro-enterprise, pro-entrepreneur
:29:37. > :29:41.progrowth. By hitting the Scottish economy with higher taxes, hasn't he
:29:42. > :29:49.failed on all three counts? Cabinet Secretary? I thank Murdo Fraser has
:29:50. > :29:55.forgotten a number of things, not least that it is this Tory
:29:56. > :30:01.government's office that has reduced the Scottish financial support by
:30:02. > :30:05.around 9%. 9% real terms reductions to Scotland's budgets as they took
:30:06. > :30:11.office. That put into a value context, ?2.9 billion reduction to
:30:12. > :30:15.Scotland's Budget over the period of a decade. You see, what we
:30:16. > :30:20.discovered yesterday in the tax debate, not only did the Tories want
:30:21. > :30:24.a different position on tax just undercut, but they are actually
:30:25. > :30:28.anted evolution. Now, you are against devolution, and you are
:30:29. > :30:34.making different choices on the things that we value, such as the
:30:35. > :30:37.NHS, free prescriptions, free education, concessionary travel.
:30:38. > :30:40.Ruth Davidson, the Leader of the Opposition, shaking her head. She
:30:41. > :30:44.clearly hasn't seen the press releases that Murdo Fraser writes
:30:45. > :30:47.for the Conservative Party. Her Budget has outlined a range of
:30:48. > :30:50.measures that are very pro-enterprise and pro-business that
:30:51. > :30:55.will grow the economy. You see, the Tories want to have it both ways.
:30:56. > :31:01.They want to reduce tax, but of course only tax for the very richest
:31:02. > :31:06.in our society. Whilst in this Parliament, the nicer, softer,
:31:07. > :31:10.Scottish Tories, want to increase expenditure in many areas. You can't
:31:11. > :31:16.have it both ways. The Tories can't cut tax as they proposed, and spend
:31:17. > :31:20.more on public services. They haven't even suggested how to do so
:31:21. > :31:25.in this Budget. In terms of business rates, this is a very strong package
:31:26. > :31:30.for business rates. A very strong package for business rates that will
:31:31. > :31:34.continue to grow our economy. And particularly, yes, supporting small
:31:35. > :31:37.businesses with a range of measures. I would have thought that Murdo
:31:38. > :31:41.Fraser could at least have welcomed back. And he asked about the capital
:31:42. > :31:46.investment plan, and there is much detail that has been provided. He
:31:47. > :31:50.says he was demanding more investment in housing, energy
:31:51. > :31:55.efficiency, and digital. There is more investment in all these areas,
:31:56. > :31:59.substantially more investment. And I suspect the Tories will vote against
:32:00. > :32:04.it, nonetheless. But the key issue here is we are giving more resources
:32:05. > :32:09.to our vital public services, opposed by the Conservatives. And
:32:10. > :32:12.whilst we build a very pro-Scottish economic message, it is clear that
:32:13. > :32:21.the Tories want to talk Scotland down. That's why...
:32:22. > :32:28.energy-efficient i will keep listening. To the local authorities,
:32:29. > :32:35.and the parties at the Parliament. That is why we are going to fund the
:32:36. > :32:37.attainment gap, supporting local government and delivering on the
:32:38. > :32:43.commitment for educational attainment. For all of these areas,
:32:44. > :32:47.I think the record of the government is strong and the proposals that we
:32:48. > :32:57.have set out is going to deliver the programme for government. Kezia
:32:58. > :33:06.Dugdale. This budget today is going to see the heart ripped out of
:33:07. > :33:17.public services. School results in decline.
:33:18. > :33:25.Valued NHS workers overstretched. Real terms cut of ?327 million, to
:33:26. > :33:31.local services. It is in black and white, on page 91. SNP members would
:33:32. > :33:40.do well, to read that. Holding councils to ransom, forcing them to
:33:41. > :33:45.use tax powers, where the SNP refused to use the road. They could
:33:46. > :33:49.have asked the top 1%, but again, refusing to do the correct thing.
:33:50. > :33:55.This budget as is an conservative cuts to the people of Scotland. It
:33:56. > :34:00.makes Derek Mackay no better than the Conservative Chancellor. We have
:34:01. > :34:07.to power to do things differently, we can stop the cuts, we can protect
:34:08. > :34:13.local services and grow the economy, getting well paid jobs. Scottish
:34:14. > :34:18.Labour cannot support this budget with over ?300 million of cuts to
:34:19. > :34:22.local services. Scotland needs the plan for investment, for jobs and
:34:23. > :34:29.the economy. The plan to protect public services from SNP cuts.
:34:30. > :34:35.Cabinet secretary. Presiding Officer, I cannot help but reflect
:34:36. > :34:42.on the terms of the tax position, Jeremy Corbyn sitting on this issue.
:34:43. > :34:49.Does Kezia Dugdale think that Jeremy Corbyn is no better than a Tory? But
:34:50. > :34:57.in relation to overall public spending, Kezia Dugdale said no new
:34:58. > :35:01.public spending for public services. Not true. 700 million extra for
:35:02. > :35:07.public services in Scotland. Coming from the Scottish Government
:35:08. > :35:13.details, at the document. When you look at all the detail, for local
:35:14. > :35:23.authorities, the ability to raise council tax and the wider package,
:35:24. > :35:26.it is a good deal fair deal. And no wonder Cosla have not rejected the
:35:27. > :35:33.package, they note that it is a good package set out by the Scottish
:35:34. > :35:38.Government. We have listened to the points of difference. Delivering on
:35:39. > :35:40.the priority areas. And even on that, I would have thought that the
:35:41. > :35:49.Labour Party would have welcomed more money for education, I remember
:35:50. > :35:53.Alec Rowley seeing that we should find this centrally. We have not
:35:54. > :35:59.just delivered on the commitment, we have surpassed the commitment, ?120
:36:00. > :36:03.million for the attainment fund. The Labour Party should reflect on the
:36:04. > :36:14.positives of this budget, reconsider other position and welcome this
:36:15. > :36:20.substantial increase. Bruce Crawford. I am of course delighted
:36:21. > :36:26.that the Cabinet Secretary of the UK Government has followed the
:36:27. > :36:32.startling city region deal, -- Stirling. However, with regards to
:36:33. > :36:38.the bigger picture, with the Cabinet secretary confirmed that this good
:36:39. > :36:45.news, 300 million uplift for NHS resource funding in Scotland is
:36:46. > :36:50.above inflation increases? Matching Barnett consequential is and
:36:51. > :37:00.certainly greater than the promises from any other party in the chamber.
:37:01. > :37:10.We can leave them, to discuss the ins and outs. Alf... It was
:37:11. > :37:15.peculiar, watching that, it is the difficulty that the SNP finance
:37:16. > :37:23.secretary finds himself in. He starts by saying it is terrible,
:37:24. > :37:27.because of these awful Tory cuts, 9%, and by the end, he says why will
:37:28. > :37:35.labour not recognise that we are spending 700 million of new money.
:37:36. > :37:41.As if no cuts? Where are the cuts coming? You cannot get the answer.
:37:42. > :37:52.That document that most of us have not read it yet, absorbed, numbers
:37:53. > :37:56.here, there, you can possibly come up with 700 million overall. But the
:37:57. > :38:01.Parliament, minority government again. They have got to do deals
:38:02. > :38:08.with each other. Getting this budget through at all. I think the
:38:09. > :38:17.political rhetoric, and the shaping of that majority, against the fiscal
:38:18. > :38:25.reality of the marginal budgeting here and there... Not much new
:38:26. > :38:31.impact anywhere. That is the fiscal reality, but the political reality
:38:32. > :38:34.is that we have the local elections next May and the battle to try to
:38:35. > :38:39.get this budget going through before that happens and more council
:38:40. > :38:45.support for the SNP in the aftermath. What about transparency?
:38:46. > :38:50.If it is true, and I'm sure that it is, the budget in real terms is
:38:51. > :38:56.going to be cut. They could say this is what we are not going to be able
:38:57. > :39:00.to spend money on, and as far as he has transfer budgets... The obvious
:39:01. > :39:06.one from the NHS budget to local authorities to help with social
:39:07. > :39:17.care... It was obvious, even listening to that it was not new
:39:18. > :39:20.money. This proportion of the money is new money, this is just shuffling
:39:21. > :39:25.budgets... And the other one that remains to be seen, if he is not
:39:26. > :39:31.using the council tax rises for the attainment fund. The general
:39:32. > :39:36.resources from the central government, where does that money
:39:37. > :39:39.come from? That was not clear from the speech today. But you have the
:39:40. > :39:47.transparency process that is going to kick in. Before the budget is
:39:48. > :39:52.bordered on. -- voted. We should have answers? We should have
:39:53. > :39:57.answers. Parliament does not have as much time because we're having the
:39:58. > :40:01.budget in December, rather than September, because they wanted to
:40:02. > :40:11.wait on the Chancellor's Autumn Statement. But the chance that some
:40:12. > :40:15.of this could come out in the wash. If they are having the budget cut by
:40:16. > :40:22.real terms, they have said that education is the priority and
:40:23. > :40:30.spending 500 million in addition to inflation on the NHS. I think I
:40:31. > :40:34.heard, police funding maintained. Just before you answer that, we can
:40:35. > :40:45.go back to Parliament for one moment. Patrick Harvie speaking.
:40:46. > :40:49.High earners will get a tax cut. Those could be UK Government
:40:50. > :41:00.decisions, but the Scottish Government has the power to reverse
:41:01. > :41:05.those effects and has chosen not to. 1% cap on pay. MSPS enjoy a 1.8%
:41:06. > :41:08.increase. And the dispute with local government and the tax-free to the
:41:09. > :41:15.most polluting form of transport. Is it not clear that if the Cabinet
:41:16. > :41:18.secretary wants to persuade public-sector unions, local
:41:19. > :41:23.government and parliament, he is going to have to do a lot more
:41:24. > :41:31.listening over the coming months and make meaningful changes. Of course,
:41:32. > :41:35.I've listened to all the voices. I think I have shown that I was
:41:36. > :41:41.willing to do that about how we fund and support the attainment fund, and
:41:42. > :41:44.for local government. But the most important people that we should be
:41:45. > :41:50.listening to, the people of Scotland. I can remain Patrick
:41:51. > :41:53.Harvie, we secured the mandate at the election, and put this to
:41:54. > :41:58.Parliament. I will continue to engage with all of the parties of
:41:59. > :42:01.the Parliament to see if we can get some mutual agreement. But it is
:42:02. > :42:07.said to me not the case that we're going to follow the Conservatives,
:42:08. > :42:13.passing on tax cut for the richest, an Patrick Harvie on a number of
:42:14. > :42:19.occasions has pointed to government ministers on our tax position.
:42:20. > :42:23.Scottish Government ministers have taken the pay freeze since 2008. I
:42:24. > :42:28.think that is the correct thing to do. Some other members should
:42:29. > :42:32.reflect that. But it is not about passing on austerity to the other
:42:33. > :42:36.members of Scotland. That is what we would do if we followed the labour
:42:37. > :42:40.approach, increasing the basic rate. It is not a choice that we are
:42:41. > :42:46.willing to make. I will continue to engage with all matters, in relation
:42:47. > :42:51.to the budget. And just to explain, apart from the fact that Patrick
:42:52. > :42:54.Harvie is intrinsically interesting, one reason for listening to him is
:42:55. > :42:58.that the Scottish Government is not a majority government. It needs to
:42:59. > :43:10.make a deal with another party, to at least abstain. The other person,
:43:11. > :43:17.Willie Rennie. An urgent need to use the brand-new powers to raise 500
:43:18. > :43:22.million for education, to get it back to the best. That is the best
:43:23. > :43:25.way to boost the economy. I cannot see the skill of what is required in
:43:26. > :43:31.this budget. We need a transformational budget, and this
:43:32. > :43:38.falls well short. Is the First Minister said today, acres of common
:43:39. > :43:43.ground between parties but I have to tell the finance secretary that he
:43:44. > :43:46.has got miles to travel before we get to an agreement. The Liberal
:43:47. > :43:55.Democrats, pragmatic and reasonable people... But is the finance
:43:56. > :44:01.secretary prepared to make the necessary changes in this budget, to
:44:02. > :44:11.meet the urgent need for education and the economy? Of course, I can
:44:12. > :44:13.say to Willie Rennie, SC is pragmatic and reasonable, if the
:44:14. > :44:19.talks to me in a positive and constructive spirit he can see the
:44:20. > :44:32.positivity of this budget. And I willing to engage to listen to what
:44:33. > :44:38.we can do differently? Yes, I am. I can hear the Conservatives
:44:39. > :44:42.complaining, to my left and say, but it is going to be easier to engage
:44:43. > :44:50.with other parties at this chamber, than it would be with the Tory party
:44:51. > :44:53.who just want tax cuts for the rich, undermining Scotland's message. But
:44:54. > :44:59.what Willie Rennie has raised about the Highlands and Islands
:45:00. > :45:04.enterprise, it is a strong package of support for the whole country and
:45:05. > :45:08.specifically enterprise agencies provide assistance. I can give you
:45:09. > :45:13.one example of the government stepping in. Look at the dealer was
:45:14. > :45:16.able to be done at Lochaber, government intervention has secured
:45:17. > :45:19.hundreds of jobs and potentially hundreds of new jobs. That is the
:45:20. > :45:28.sort of invention this government has made. Steel, shipyards,
:45:29. > :45:32.Lochaber. Those are the direct interventions that we can make,
:45:33. > :45:39.supporting the economy for food and drink, exports, and skills. And the
:45:40. > :45:42.University budget is increasing as a consequence of this budget. The
:45:43. > :45:45.Highlands and Islands can also enjoy the business reach reduction that I
:45:46. > :45:53.have outlined, interventions of support from the Scottish growth
:45:54. > :45:58.scheme. You look at the totality, and overall it is a strong package
:45:59. > :46:03.for growth, whale supporting some of the more vulnerable communities.
:46:04. > :46:09.That was Derek Mackay, replying to Willie Rennie, and as we have
:46:10. > :46:11.explained, we have got to Patrick Harvie and then Willie Rennie
:46:12. > :46:17.because the Scottish Government is going to need the support of one of
:46:18. > :46:21.the party to at least abstain, this is just the draft budget. Some
:46:22. > :46:27.people have thought the most likely candidates, the Liberal Democrats or
:46:28. > :46:32.Greens. I need not have explained at about Willie Rennie. It was
:46:33. > :46:37.blatantly obvious that he was trained to start negotiations. The
:46:38. > :46:44.last thing that the SNP had them a naughty government, 2007, it was the
:46:45. > :46:55.Tory party that they were doing deals with! I was involved. With one
:46:56. > :47:00.of the budget, the way they got round it, giving Annabel Goldie a
:47:01. > :47:07.town improvement package. And an alcohol treatment centre. It was a
:47:08. > :47:10.lot of money, 50 million, for that team centre improvement that was
:47:11. > :47:15.through the carbon generation companies. Basically, spend that by
:47:16. > :47:20.April. Frankly, as somebody who was involved, it had no impact. But that
:47:21. > :47:26.is the way that it was done. Who knows how they are going to try to
:47:27. > :47:29.square the circle. It is unlikely? The Conservatives the main
:47:30. > :47:39.opposition, and secondly, I remember with Davidson sitting and saying I
:47:40. > :47:45.am not going to do what my predecessor did.
:47:46. > :47:51.The SNP don't have any interest in doing deals with the Conservatives,
:47:52. > :47:56.as the finance secretary was making clear. It is a different context
:47:57. > :48:01.now, last time they were a minority, now they are only two seats short of
:48:02. > :48:04.a majority. The Greens are the most likely candidates but they were
:48:05. > :48:11.making it clear that the support will have to be bought by some
:48:12. > :48:19.significant commitments. Willie Rennie said, you've got miles to go.
:48:20. > :48:24.In one way, the Greens are the most natural ally because they are both
:48:25. > :48:28.pro-independence parties. That issue still dominates politics in the
:48:29. > :48:34.Scottish Parliament. But it's very difficult to see where they concede
:48:35. > :48:37.there. Not only a present duty, I wouldn't have thought. Certainly not
:48:38. > :48:41.on tax proposals. They would halve it on the Parliament. The Greens are
:48:42. > :48:45.very much against that. Blog what they could potentially do is give a
:48:46. > :48:52.bit more of the energy efficiency measures. But the Greens wouldn't
:48:53. > :48:56.have to vote for the Budget, they would simply have too abstain,
:48:57. > :49:00.wouldn't they? They could potentially get something like that,
:49:01. > :49:02.you know, something to do with the environment and say, well, we
:49:03. > :49:06.disagree with the impacts but because we have got this we are not
:49:07. > :49:12.going to break for it, and we won't vote against it. It's quite hard to
:49:13. > :49:17.abstain, you know, with local government, it's quite hard to say,
:49:18. > :49:20.this is critically important, how our country taxes itself. And then
:49:21. > :49:28.to say, we're not taking a position on either party. By 40% the end of
:49:29. > :49:34.the Parliament, the Green says, we have forced them to... OK, let's go
:49:35. > :49:40.back to what we were talking about before. This thing you have to do if
:49:41. > :49:43.you are an SNP finance secretary. Claim that everything is disastrous
:49:44. > :49:47.because of Tory cuts, and on the other hand claim you are spending
:49:48. > :49:51.extra money. How do we square that? If we are going to have NHS Budget
:49:52. > :49:54.is more than inflation, if we are going to spend all of this extra
:49:55. > :50:04.money on education, and as Derek Mackay said, something has got to
:50:05. > :50:08.give somewhere. And also the local authorities' spending is not going
:50:09. > :50:13.to be cut, as he claims, where rather cuts coming? Some of it is
:50:14. > :50:17.also revenue. There are assumptions in the about revenues that will be
:50:18. > :50:21.forthcoming on the growth, the anticipated growth of the Scottish
:50:22. > :50:26.economy, the tax revenues as well. So we will have to see the detail of
:50:27. > :50:31.this. One of the things that I find really interesting there is that the
:50:32. > :50:35.new tax powers might not have had a radical impact in terms of changing
:50:36. > :50:39.tax structures or tax policy in Scotland just yet, but what it has
:50:40. > :50:42.done is changed the nature of political debate. That was
:50:43. > :50:46.old-fashioned left- right politics, and its use the SNP down to the
:50:47. > :50:50.ground because they can appear radical and progressive -- it seems
:50:51. > :50:56.the SNP. And then they can appear moderate and centrists in reference
:50:57. > :51:00.to the Labour Party on the left. And electorally, I think if we assume
:51:01. > :51:03.that the Scottish electorate is somewhere in between Labour and the
:51:04. > :51:07.Conservatives, then that is quite useful for them. The SNP could have
:51:08. > :51:11.hired the Labour Party and Conservative Party just to make the
:51:12. > :51:16.point a little more! I'm not quite sure I would put it like that, but
:51:17. > :51:19.it is certainly pragmatic politics. If they are going to the middle
:51:20. > :51:27.ground... The more underlying issue as we go forward, from a period of
:51:28. > :51:30.the posterity, as we go forward with the threat of Brexit and the
:51:31. > :51:34.consequences of all of that, is whether, in the modern environment,
:51:35. > :51:38.a government, whether it is a devolved government or a fully
:51:39. > :51:42.independent, in control government, what it does about fiscal matters,
:51:43. > :51:46.you know, how it taxes and how it spends. It is moving in the
:51:47. > :51:51.landscape that is much more difficult to navigate than it ever
:51:52. > :51:55.was before. I mean, I just thought as he went through that speech, a
:51:56. > :52:01.little bit here and there, it really was coming you know, it lost the
:52:02. > :52:05.power that budgets used to have two actually shape the landscape ahead.
:52:06. > :52:09.Because there's really nothing much in the that's going to change a
:52:10. > :52:13.thing very much. What surprised me, OK, there was talk of what he would
:52:14. > :52:17.do with business rates. But he said at the beginning, you know, this was
:52:18. > :52:21.going to be a Budget that was going to shape Scotland's economy. There
:52:22. > :52:25.was no real economic narrative at all, was the? Imagine the days of
:52:26. > :52:30.Alex Hammond, he would have been announcing, I would have do this to
:52:31. > :52:38.set up a new renewables industry, I've been to China to do this deal,
:52:39. > :52:45.- Alex Salmond. He would also have cut Corporation Tax. There was an
:52:46. > :52:52.Alex Salmond so sounding narrative of, I will use this position of the
:52:53. > :52:55.Scottish Government to implement an industrial strategy for Scotland,
:52:56. > :53:00.but that wasn't even mentioned, was it? There was no big vision. It was
:53:01. > :53:04.as if Derek Mackay had a Scrabble board and he was moving the ought
:53:05. > :53:08.letter here and there and hoping the odd letter would pop out and it
:53:09. > :53:12.would say growth. I didn't get any sense that was happening. It was a
:53:13. > :53:16.game. Were you surprised? It wouldn't have been that difficult,
:53:17. > :53:20.even at a level of rhetoric to try and give some overarching narrative
:53:21. > :53:24.about economic growth and what they're going to do? It's partly in
:53:25. > :53:29.issue of style, different politicians have different styles,
:53:30. > :53:32.of course. I think also this administration and at this First
:53:33. > :53:38.Minister has been keen to emphasise inclusion, back-ups towards
:53:39. > :53:42.inclusive growth, -- perhaps towards. Worries and Alex Salmond it
:53:43. > :53:48.was the sustainable economic growth with the central theme -- whereas.
:53:49. > :53:51.Talking about the economy and economic growth, and also the story
:53:52. > :53:56.of today's Budget is the tax powers and how they will be used. But also
:53:57. > :53:59.trying to put an emphasis upon inclusion of public services and
:54:00. > :54:05.with a nod to the local elections next year. The substance of this, is
:54:06. > :54:09.that the only thing that is really changed, on tax, that this change to
:54:10. > :54:15.the 40p rate, the threshold in the rest of the UK, you won't have to be
:54:16. > :54:21.40p unless you are earning ?50,000. Here it is going to be increased
:54:22. > :54:24.only by inflation. Realistically, the Tories claim, that will mean
:54:25. > :54:28.better off people in Scotland might go and live in England, but
:54:29. > :54:31.realistically? There's not a whole lot of evidence to suggest that that
:54:32. > :54:35.kind of mobility takes place. There's other issues around whether
:54:36. > :54:40.that has any impact on people decision to come to Scotland. But I
:54:41. > :54:44.think what the new tax powers, I hope, do, is allow us to have a
:54:45. > :54:48.mature debate about the balance between tax and spending. So, yes,
:54:49. > :54:54.taxpayers in Scotland may be paying a little bit more than taxpayers and
:54:55. > :54:58.the rest of the UK. But how do they evaluate that in light of the
:54:59. > :55:02.services that they get, so they are not paying tuition fees or
:55:03. > :55:05.prescription charges? And people's evaluation of that and the balance
:55:06. > :55:10.of that will be different of course. But that's a judgment to be made.
:55:11. > :55:17.Again, it's marginal. The top rate hasn't gone up from 40p to 41 or 45
:55:18. > :55:20.or 50 or anywhere else, it's still 40p. And where this is going to
:55:21. > :55:25.really pinch is at the point where somebody is paying 20p and gets to
:55:26. > :55:31.an earning level where they may move into the band of 40p. So the people
:55:32. > :55:33.who are really going to be affected are, I hesitate to say middle
:55:34. > :55:40.earners because they are above the immediate, but it is people like,
:55:41. > :55:45.you know, senior teachers, who might take on a head ship, or a young
:55:46. > :55:49.doctor who might want to move to a better specialism somewhere else.
:55:50. > :55:54.And for them, the choice will then be, you know, do I stay here in
:55:55. > :56:00.Scotland, or do I come to Scotland, where I'm going to be paying 40p
:56:01. > :56:03.earlier, or a couple of thousand pounds of income, than I would do if
:56:04. > :56:08.I were in England. And it will be that kind of choice that will be,
:56:09. > :56:12.you know, for people who are in a dynamic phase of their career, and
:56:13. > :56:18.deciding, do I want to stay here or do we not want to stay here, I think
:56:19. > :56:24.in the first year, the maximum extra you will pay... Compare to England
:56:25. > :56:29.it is 300 and then it goes up to 800. This has got slightly confused.
:56:30. > :56:33.This is not extra tax you are paying. You simply don't get the
:56:34. > :56:37.benefit of a tax cut. It's when you start paying the higher rate. Used
:56:38. > :56:40.are doing it earlier in Scotland now stop right but the point is you do
:56:41. > :56:43.it earlier now anyway. You just don't get the advantage go right of
:56:44. > :56:48.a tax-cut happening in England. The other side of that is that there is
:56:49. > :56:51.no extra money for the Scottish Government. It simply means they
:56:52. > :56:56.don't have to find money to make up forgetting tax cut. Both these
:56:57. > :57:03.things have rather got confused in this time really. Another thing that
:57:04. > :57:06.is going to cause confusion that we have alluded to is we are going to
:57:07. > :57:09.have to look very closely to see where budgets have been shuffled
:57:10. > :57:11.from one to the other. There were some obvious ones there. NHS
:57:12. > :57:14.spending has been taken out of the NHS Budget and put the local
:57:15. > :57:18.authorities to pay for this integration of NHS and health and
:57:19. > :57:22.social care. And at the same time, local authorities get to keep the
:57:23. > :57:26.extra money they are raising in council tax and that doesn't get
:57:27. > :57:29.hypothecated, to use the jargon, for educational care. That is going to
:57:30. > :57:33.be quite complicated and difficult to find out, if you are a local
:57:34. > :57:37.government Chief Executive, whether you are getting a good or a bad
:57:38. > :57:42.deal? I think they will clearly be looking at the tables in that Budget
:57:43. > :57:45.document very closely and all of the debates and evidence sessions that
:57:46. > :57:50.the finance committee will undertake in the coming weeks and months. So,
:57:51. > :57:54.yes, what's still to be revealed. Is going to be quite, dated. Local
:57:55. > :58:00.government Chief Executive is, and also local councils, -- quite
:58:01. > :58:03.complicated. They have these new council tax demands for the coming
:58:04. > :58:08.year going out. At exactly the time they don't want them to go out,
:58:09. > :58:11.because it is going to be saying for a number of the electors that there
:58:12. > :58:15.is going to be a higher cost in terms of these bands that are likely
:58:16. > :58:20.to increase. An issue we haven't talked about, there wasn't much in
:58:21. > :58:26.the Budget, but perhaps I missed a bit there, capital spending. Because
:58:27. > :58:33.that was the big theme in the Autumn Statement that Philip Hammond made,
:58:34. > :58:37.?800 million for the Scottish Government over the life of the
:58:38. > :58:40.Parliament. There is a complication, because and accountancy rules
:58:41. > :58:43.brought in by the European Union looks like most of that is not all
:58:44. > :58:48.of that might be eaten up for a couple of years by reclassifying
:58:49. > :58:51.these PFI or nonprofit distributing measures as they are called, they
:58:52. > :58:57.will have to come onto the books. You talked about capital funding
:58:58. > :59:00.being 4 billion overall creating 30,000 jobs. But what he didn't talk
:59:01. > :59:07.about at all was just what you've talked about, that the new European
:59:08. > :59:14.standards mean that things that previously looked as if they could
:59:15. > :59:18.be resident in the SNP version of PFI, which they call nonprofit
:59:19. > :59:22.distributing, and some of that is, you know, we know of the Aberdeen
:59:23. > :59:27.bypass is definitely now on the books. It's the one that's been
:59:28. > :59:30.decided. There is a couple of hospitals, one in Edinburgh and one
:59:31. > :59:33.in Dumfries and Galloway, and by mashed or blood centre, they are now
:59:34. > :59:39.going into the books. If they go into the books and not of the books,
:59:40. > :59:43.even when a rising tide of capital spending, Philip Hammond announced
:59:44. > :59:51.the extra 820 million over the life of the Parliament, even if it comes
:59:52. > :59:55.in, it may be just accounted for by all of these items coming onto the
:59:56. > :00:00.books and having to be covered by that extra funding, so there is then
:00:01. > :00:03.not a lot of money for big new capital projects, which modern
:00:04. > :00:07.politicians of all stripes now talk about as, this is the way forward,
:00:08. > :00:11.you know, we spend more on infrastructure, it's never been
:00:12. > :00:15.cheaper to borrow. Time is running out. They've got limited borrowing
:00:16. > :00:22.powers as well. They are not the British Government, they can't just
:00:23. > :00:24.borrow money. The borrowing powers were extended in the latest
:00:25. > :00:28.devolution settlement but they are constrained by these new
:00:29. > :00:31.developments. In effect, I know this is complicated, what this means is
:00:32. > :00:35.that things were effectively off the balance sheet and paid for by
:00:36. > :00:39.revenue over very many years, they now get stopped right on the Budget
:00:40. > :00:44.and account for, you can't spend the money on other things. I have
:00:45. > :00:47.explained it, it is complicated, these things are now accounted for
:00:48. > :00:49.on the books, as it were. That's all from me this afternoon -
:00:50. > :00:52.I'll be back at the weekend for Sunday Politics Scotland
:00:53. > :00:54.on BBC One from 11.35 You all right there?
:00:55. > :01:01.Oh, it's a very exciting day A very young MasterChef Gregg
:01:02. > :01:06.Wallace is paying us a visit. He's probably going to tell everyone
:01:07. > :01:10.how the nation consumes There he is.
:01:11. > :01:18.Over here! Oh, finally meeting him! What are you doing?! Oh, the
:01:19. > :01:27.filling's going all over the place! Tonight, our subject
:01:28. > :01:33.is the entire universe, which we'll be covering
:01:34. > :01:37.in one hour. We have dancers representing
:01:38. > :01:40.elementary particles in the Big Bang.
:01:41. > :01:42.Noel Fielding and Warwick Davies Brian Cox attempting to give
:01:43. > :01:46.a semi-serious lecture. Morecambe and Wise-impersonating
:01:47. > :01:48.quantum mechanics. A star twerking on Brian Cox's
:01:49. > :01:52.thigh. Tim Peake! Beautiful knees! Plenty of laughing
:01:53. > :01:56.at Brian Cox's expense.