16/12/2015 Politics Scotland


16/12/2015

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Good afternoon and welcome to Politics Scotland.

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The Finance Secretary, John Swinney, is preparing to deliver his budget

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For the first time, he will have to set a Scottish

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and reaction from the opposition parties,

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live from the Scottish Parliament chamber

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And John Swinney will be getting to his feet in about ten minutes

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to set out those spending plans, which cover 2016 and 2017.

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My guest for the day is the journalist and political

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and I'm also joined by our business correspondent David Henderson.

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David, remind us what these new tax powers are.

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-- this is not the fowl and the full power that is being exercised today.

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-- the vow. On income tax, probably in 2018, we can expect full income

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tax powers to come the way of the Scottish parliament. Those are still

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being debated by Westminster. They will give complete control over tax

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rates and tax bands. What we have now our plans which were recommended

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by the Carmen commission -- Calman commission. Here is how it works if

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the UK Government cuts 10% from the amount of money that Scotland gets

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through income tax, it is then left to the Scottish parliament in

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practice, to John Swinney, to set what rate he wants for income tax.

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If he sets it at 10%, it raises money back up to where it was

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before, so we see no change and nobody notices any difference in

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their income tax bill. He can lower it going he can raise it but if he

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raises it, of course... ) the difference is he has to set it. They

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have always had the tartan tax. Even if it is the same commie he has two

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segment that is my political decision. I have made a political

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decision not to raise or lower taxes. He cannot just leave it. The

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decision he makes becomes an easy one because of the limitations of

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the system. Basically, the power to control income tax requires him to

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make a decision that applies to income tax right across the piece.

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So, he cannot raise bands, he cannot raise tax for high earners and

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reduce it for low earners. It is all or nothing. It is up or down. It

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affects everyone. As a result, particularly because this measure

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will not kick in until 6th of April, a month before the Scottish

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elections, we do not expect him to do anything dramatic or radical

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today, just leave it. You have a prediction for us. A prediction of

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sorts. What has amazed me somewhat is, since April, John Swinney has

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had the ability to borrow money. He has had those powers since last

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year. He can borrow up to ?380 million. Up until now he has not

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used those borrowing powers. We have an election in four or five months'

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time, I would be surprised if we do not see something that John Swinney

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takes a bit of that money from the borrowing powers just give the

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economy are bit of the lift, maybe in construction or road building or

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something as you go towards the May election. He is going to have one

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heck of a fast construction project if it is going to make a difference

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next April. If it has been announced and the money is there coming he

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hopes that will give the feel-good factor to carry him through to the

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election. Do you think income tax will not change? I would be very

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surprised if it does. And we'll be bringing

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you the Finance Secretary's budget But, first, our political editor

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Brian Taylor is at the Scottish I do not know if you heard what we

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were saying that possibly a dip in capital spending by using borrowing,

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leading income tax well alone is that what you are expecting? I think

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leave income tax well alone. It will take a particularly courageous

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finance secretary to hike up Scotland prop Mike income tax just

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weeks before asking the people of Scotland to give an endorsement.

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John Swinney has suggested he favours the use of progressive

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taxation powers, by which he means levying a bit more from the

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relatively well off. The ability to hike the upper rates more than the

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standard rate, as was mentioned. The Calman plan, which is currently in

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place, the Scotland act 2012 does not allow that differentiation to be

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made. The Smith commission proposals, currently going through

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the new bill, would allow that to be made because it would alter all of

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the income tax rates and bands. The Treasury says some 14% increase over

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five years. John Swinney says it is fine and dandy but from his

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perspective it does not make up from the cuts in capital which happened.

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The Treasury says you are getting more in the wake of cash on

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day-to-day spending. He says it is a big cut. You have alternative

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interpretations of the decisions the Chancellor is about to take. On

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spending, current spending, the truth is, it is mucking about at the

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edges, isn't it? So much of the budget is spent on things like

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schools and hospitals. You will not change that around very much. Any

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leeway is limited stop These decisions have to be taken by the

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finance secretary. Will they protect the health service? Yes, they have

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to go if they want to win support from the people of Scotland, just as

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the Chancellor does in England. They have already announced they want to

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double the provision of childcare. Expect to see that funded. Given the

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current circumstances regarding concerns over terrorism, the

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determination by the SNP to maintain police numbers, I expect the police

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budget to be protected. Nicola Sturgeon has said she wants to

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support schools. Back at sit down very narrowly. What is left the

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broader local government budget, the budget for local authorities. Would

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I spec to see that constrained? Yes, I would. I am sure your festive

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braces have gone viral. Does that sound reasonable to you? On

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spending, there is not much room for manoeuvre. The room for manoeuvre is

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getting smaller by the year. If you say, I am going to protect health

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and do nothing to produce -- reduce health and keep the education budget

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protected, that is the vast majority of the budget. If you are also

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saying you're protecting the police, the room for manoeuvre is suckered

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into areas like council spending. If I were on the council right now, I

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would be worried. There is not anywhere else you can see where the

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axe will fall. Something else that will change over the next view

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years, there will be at least some responsibility the Scottish

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parliament will have for welfare. That is a whole area of spending

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which is at least as big as departmental spending. It is

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excluded from the Scottish budget at the moment. There is quite a limited

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focus in today's statement, as you say, welfare is left to one side

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now. There is this commitment already being made to the NHS, to

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schools. So, you wonder where the knife will fall. John Swinney is

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boxed in. After the Autumn Statement from the Chancellor, we know the

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budget will fall. It will fall by just over 5% in terms of day-to-day

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spending. This is in real terms? There is a squeeze. He has to do

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something. His focus, if he is to make savings, will have to be not on

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the NHS and schools, it will be other departments. He may be looking

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at local authority spending. He may be lurking there. What can he do on

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that front? He is likely to be committed I would have thought he

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would be likely to commit to extending the freeze on council tax

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for another year. He might, for example, say two councils, you can

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only increase council tax if you spend it on things I want you to

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spend it on. That is what George Osborne did. We saw council tax as a

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result of rising in England by 2%. Who knows? John Swinney might do the

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same. We will hear from you after the main event which is the draft

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budget for 2016. Let's hear what he has to say. The Deputy First

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Minister will take questions at the end of his statement. There will

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therefore be no interventions or interruptions. I called on John

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Swinney, Deputy First Minister. The Scottish Government's this is to

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sustain deliverable economic growth and create the opportunity for all

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of our citizens to flourish. We believe with a relentless focus on

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tap inequality and boosting productivity, we can create

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foundations for a stronger and inclusive economy. That team has to

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be delivered with a significant constrained public spending

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environment. As a consequence of UK Government austerity, the UK

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Government will continue -- the Scottish budget will continue to

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fall. If we want to improve our services, we must be prepared to

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continually reform the way we deliver them. This budget is driven

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by two themes were supporting inclusive growth and protecting and

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reforming public services. We will delivering collusive growth by

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focusing on investment, innovation, infrastructure and skills and by

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maintaining a competitive business environment. We will protect and

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reform public services by delivering on service integration at local

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level, as a shift in prevention. What I am announcing today will lay

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the foundations for the reforms which will defined the next

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Parliament. We will deliver a step change in educational attainment and

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provide greater focus in the innovation system, greater taxes and

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use taxes in a way that supports our central purpose. The current

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financial landscape presents us with a challenge and a choice. Scotland

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can accept these Tory cuts or we can rise to the challenge and choose the

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Scottish alternative to austerity. We choose to rise to the challenge,

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we choose the Scottish alternative, we choose to put reform and growth

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at the heart of this budget. APPLAUSE

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Residing officer, we will build on the Scottish Government record of

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delivering for the people in this country. Over the last period,

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employment has risen and unemployment has fallen. We have

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invested heavily in infrastructure, modernising services and boosting

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construction. We have invested in Scotland's NHS, staff numbers and at

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record levels. We have delivered curriculum for excellence and a

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record number of higher and advanced higher passes were achieved in 2015.

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We have delivered 600 hours of high-quality early learning and

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childcare. Our country is safer with crime at a 41 year low. We are on

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track to reach our 2020 interim climate change targets. We are

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confident of taking that record to the people of this country.

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APPLAUSE This year's ground for government

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reinforced our commitment to build on the strong foundations. It is

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made more difficult to achieve by the continued austerity agenda. By

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2020, our budget will be 12.5% lower in real terms than when the

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Conservatives came to power. That is the equivalent of ?1 in every ?8 we

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spent being cut by Westminster by 2020. Even our capital budget will

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bestow more -- will be more than half ?1 billion lower in 2021 than

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it was in 2010/ 11. Whilst you recognise public finances need to be

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sustainable, the scale of the cuts is unnecessary. We laid out clear

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and detailed plans to reduce the deficit and debt while allowing

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public investment in the economy. The Conservatives rejected that

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plan. Their ideological obsession with austerity is born out of choice

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rather than the 70. We will not make the same choice. We will not make

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the poorest in society bear the burden.

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APPLAUSE This vision and commitment to

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fairness underpins our approach to taxation. We recognise that to

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support the public services we all rely on, we must assure tax policies

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are built on the principle that the tax burden should be proportionate

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to the ability to pay. The budget marks the first time the Scottish

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governor will propose a Scottish rate of income tax. From April 2016,

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the UK Government will reduce the block grant by ?4.9 billion with a

:14:52.:14:57.

partial devolution of income tax powers. At the same time, switch of

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10p of income tax in Scotland. I am required now to set the rate in

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Scotland. The current power allows for one single rate to be set here

:15:08.:15:12.

in Scotland and applied equally to all three income tax bands, the

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basic, higher and additional rates. This means any rate set above 10p

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would increase the tax paid by all Scottish taxpayers. By its nature,

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exercising this power would have a distal portion at effect on the

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amount of tax paid by those on the lowest incomes. -- a

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disproportionate effect. We would cut the tax bill paid by all

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taxpayers. Those on the highest incomes would see the greatest

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benefit. The simple fact is this. The tax power does not enable me to

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target help to those on the lowest of incomes. I do, however, have the

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power to insure this tax does not inflict an additional burden on

:15:56.:16:00.

those on low incomes. I can therefore confirm there will be no

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change in income tax rates next year. I propose that the Scottish

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rate of income tax will be set at 10p in the pounds. The rate people

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pay this year will be the same rate they will pay next year. I hope,

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providing officer, that from 2017/18, this parliament will have

:16:21.:16:23.

more flexibility in setting income tax rates. That will depend on

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reaching agreement on a new fiscal framework and final passage of the

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Scotland Billboard I confirm that subject to achieving these outcomes,

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the Government will set out our longer-term intentions with regard

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to income tax, head of the dissolution of Parliament at the end

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of March. Residing officer, the setting of the Scottish rate marks

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the latest tax power to be transferred to Scotland. Revenue

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Scotland has been responsible for the collection of landfill tax. We

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are on track to meet forecast revenues for the year. Scottish

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landfill tax returns covering the first six months of this financial

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year amounted to over ?74 million, against a forecast of ?117 million

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for the year as a whole. Land and buildings transaction tax revenues

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exceeded ?218 million for the first seven months of this financial year,

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which also compares favourably with our forecast revenues of ?381

:17:24.:17:29.

million forged 2015/ 16. In setting the rates for 2016/17, we have

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listened to the views of the property industry and other key

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stakeholders. For residential, nonresidential and lease

:17:46.:17:47.

transactions, I want to ensure the system remains progressive. This

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means more than 10,000 additional purchases will be taken out of tax

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compared to the UK wide stamp duty system it replaced last year. It

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will result in a reduced tax charge for over 36,000 house purchases at

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or below ?330,000. Overall, 93% of house buyers pay no tax or less tax

:18:10.:18:14.

than understand duty. I am however conscious of the issue of second

:18:15.:18:18.

homes. We need to ensure the opportunities for first-time buyers

:18:19.:18:22.

to enter the market in Scotland are as strong as they possibly can be.

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We need to make certain that tax changes elsewhere in the United

:18:28.:18:30.

Kingdom to not make it harder for people to get onto the property

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ladder. That is why I have announced my intention to implement a

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supplement to land and buildings transaction tax for those purchasing

:18:40.:18:43.

an additional home for ?40,000 or more. Such properties will be

:18:44.:18:50.

subject to of 3% of the total purchase price, payable in addition

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to the existing LB TT charge. We will surely bring forward

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legislation to seek parliament approval to introduce a supplement

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to ensure it takes effect from 1st of April 20 16. In keeping with the

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Scottish approach to taxation, we will work closely with stakeholders

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in developing the specific policy and legislative proposals

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underpinning this. For Scottish landfill tax, I plan to ensure the

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lower rate of tax to ?2 65 per tonne. The standard rate of tax to

:19:22.:19:34.

?2.84 per tonne. I said I would set the credit rate for the Scottish

:19:35.:19:38.

landfill communities fund 10% higher than the UK as a whole. The UK

:19:39.:19:43.

Government announced plans to drop its equivalent rate to 4.2%. I

:19:44.:19:47.

believe this is the wrong decision for our environment. Therefore, we

:19:48.:19:53.

will maintain existing credit rate of 5.6%, ensuring landfill site

:19:54.:19:58.

operators contribute more to community and environmental projects

:19:59.:20:00.

and elsewhere in the United Kingdom. Early this week we received the

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report of the cross-party commission on local taxation. We welcomed the

:20:06.:20:10.

fact that four of the five parties in parliament took part and reached

:20:11.:20:14.

agreement on a set of crucial principles that local tax should be

:20:15.:20:18.

more progressive, broader and more empowering to local government. The

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Government will now consider this report carefully and in the New

:20:22.:20:24.

Year, we will set out plans to reform the council tax in a way that

:20:25.:20:29.

will deliver sustainable finances and greater fairness for local

:20:30.:20:33.

taxpayers. I can also announce today that I intend to enter into a

:20:34.:20:36.

consultation with local governor about possible future assignation of

:20:37.:20:42.

a proportion of income tax receipts, thereby giving local authorities an

:20:43.:20:47.

incentive to boost economic growth in their areas. Residing officer,

:20:48.:20:52.

taken together, we expect to raise ?671 million from the holy default

:20:53.:20:59.

taxes in 2016/ 17. These forecasts have been assessed as reasonable.

:21:00.:21:05.

The report will be published setting out its own assessment. I'm grateful

:21:06.:21:09.

for the work and for the scrutiny that has been applied over the past

:21:10.:21:15.

12 months. The commission's port challenges us to improve the

:21:16.:21:20.

robustness of forecasting methodology is. For the first time

:21:21.:21:25.

we are publishing five-year forecasts. This will aid

:21:26.:21:28.

transparency around the medium-term assessment of the Scottish finances.

:21:29.:21:34.

Eight strong and sustainable economy lies at the heart of a successful

:21:35.:21:40.

Scotland. Economic strategy set out our approach to deliver the dual

:21:41.:21:47.

uncomplimentary objectives of tackling the economy and boosting

:21:48.:21:50.

competitiveness. This gives us the revenues needed to tackle

:21:51.:21:57.

inequality. We also believe tackling economic inequality boosts growth.

:21:58.:22:01.

It boosts prosperity. The draft budget provides resources to deliver

:22:02.:22:07.

this by supporting innovation, investment, internationalisation and

:22:08.:22:11.

inclusive growth. We will work in partnership with employers,

:22:12.:22:14.

employees and trade unions through the Scottish business Pledge and

:22:15.:22:18.

that fair work convention to deliver their work and inclusive growth. One

:22:19.:22:20.

of our most significant investments in the future of the Scottish

:22:21.:22:26.

economy is the delivery of 600 hours of free high-quality, early learning

:22:27.:22:31.

and childcare for all three and four-year-olds and bone

:22:32.:22:33.

22-year-olds. We are going further. We are committed to the ambitious

:22:34.:22:41.

plan to double free nursery provision. The First Minister set

:22:42.:22:45.

out in the programme for government the priority replays on educational

:22:46.:22:50.

attainment for the yesterday, the OECD report examining curricular

:22:51.:22:53.

mixers provided encouragement that Scotland is on the right track in

:22:54.:22:58.

our schools. Just this morning, new figures were publishing record

:22:59.:23:03.

number of school leavers in positive destinations, work, education or

:23:04.:23:06.

training. We have a good education system that we are committed to

:23:07.:23:10.

making it better. We must raise attainment for all and close the gap

:23:11.:23:21.

that has existed for decades between children in our most and least

:23:22.:23:23.

deprived areas. The budget makes provision for that commitment, with

:23:24.:23:25.

?33 million investment in attainment programmes for 2016/17 which will

:23:26.:23:33.

reach the Scottish attainment challenge. It reaffirms our

:23:34.:23:36.

commitment to improving the wider education system. We will continue

:23:37.:23:39.

to invest in high-quality schools and community health facilities

:23:40.:23:46.

throughout new Hub programme. In this difficult financial context, I

:23:47.:23:52.

have protected college funding, delivering the budget stability the

:23:53.:23:55.

further education system needs. We will deliver on our promise to

:23:56.:23:59.

expand the education maintenance allowance and modern apprenticeship

:24:00.:24:04.

programmes to help more young people fulfil their potential and into

:24:05.:24:07.

positive rewarding employment. The Scottish Government has placed the

:24:08.:24:11.

principle of higher education based on utility to learn not the ability

:24:12.:24:17.

to pay at the heart of what believe. I can confirm we will continue to

:24:18.:24:21.

fund our commitment to free tuition. We have backed up our commitment to

:24:22.:24:26.

keeping universities world class by investing over ?4 billion in the

:24:27.:24:29.

higher education sector over the last four years. Now we will renew

:24:30.:24:37.

this commitment, investing a further ?1 billion in 2016/17 to support the

:24:38.:24:42.

continued success of our world-class universities, delivering high

:24:43.:24:44.

quality learning and research excellence. We want to go further.

:24:45.:24:49.

We want to see a new relationship with higher education, a long-term

:24:50.:24:54.

partnership underpinned by ongoing significant investment to support

:24:55.:24:56.

the delivery of key shared priorities. That is our ambition and

:24:57.:25:01.

we welcome the constructive approach universities have taken as we

:25:02.:25:04.

discuss with them how to make this a reality. Critical to that long-term

:25:05.:25:10.

approaches our investment in higher education research. This budget

:25:11.:25:14.

settlement will enable the core research budget for higher education

:25:15.:25:17.

to be protected as a key investment for the future of Scotland. The

:25:18.:25:23.

Government is always prioritising investment in infrastructure to

:25:24.:25:27.

stimulate the economy. We are on track to build 30,000 affordable

:25:28.:25:30.

homes over the course of this Parliament. We recognise the

:25:31.:25:33.

importance of extending our commitment on housing to create the

:25:34.:25:37.

quality of accommodation people require to provide continued

:25:38.:25:42.

stimulus to the construction industry. We are committed to

:25:43.:25:46.

building 50,000 new homes jarring the next Parliament. I am delighted

:25:47.:25:50.

to announce that as the first step towards this will be increasing the

:25:51.:25:55.

budget for affordable housing next year by ?90 million, enabling us to

:25:56.:26:00.

invest around ?690 million in housing supply. On fuel poverty, we

:26:01.:26:09.

will continue to invest to help people have affordable homes,

:26:10.:26:12.

building on achievements to date through a home energy efficiency

:26:13.:26:18.

plan in Scotland. In total, over ?100 million to tackle fuel poverty

:26:19.:26:22.

and climate change and help improve the condition of Scotland's home.

:26:23.:26:26.

The development of energy efficiency is a national infrastructure

:26:27.:26:31.

priority will create change in improving energy efficiency and the

:26:32.:26:37.

heating of homes, reducing fuel bills and greenhouse gas emissions.

:26:38.:26:43.

Our investment in collectivity is essential in our vision of

:26:44.:26:47.

harnessing the opportunities for growth and improving public services

:26:48.:26:51.

across all aspects of Scottish life. We will invest ?130 million in

:26:52.:26:57.

Scotland's Digital structure to help meet our 2017 target that 95% of

:26:58.:27:03.

premises in Scotland will have access to next-generation broadband,

:27:04.:27:06.

alongside our investment through the emergency services project, which

:27:07.:27:10.

will enhance mobile coverage into the bargain. We will invest almost

:27:11.:27:16.

?1 billion in transport projects, on rail this will include the

:27:17.:27:24.

completion of the electrification of the line. It includes the

:27:25.:27:29.

construction of the first section of another line. I can announce that

:27:30.:27:34.

new projects are also able to succeed. I have authorising the

:27:35.:27:39.

commencement of work in 2016 /17 to the bypass in Ayrshire and on the

:27:40.:27:45.

Aberdeen Western peripheral Route, I confirm work will begin in 2016 to

:27:46.:27:51.

improvements to the roundabout in the city of Aberdeen. -- at a

:27:52.:28:00.

roundabout. The fourth replacement crossing is on track to be

:28:01.:28:05.

completed. Alongside these major projects, we will invest in trunk

:28:06.:28:11.

roads and motorways. Investment will also be made to support ferry

:28:12.:28:15.

services with two new 100 metres vessels. We will also continue to

:28:16.:28:24.

support air travel through the air this can scheme which offers a 50%

:28:25.:28:30.

discount on core airfares. We are committed to a significant programme

:28:31.:28:36.

of investment in the sewage infrastructure for the 2015/21

:28:37.:28:42.

period, worth ?3.5 billion, and including 250 million to upgrade

:28:43.:28:45.

Glasgow's waste water infrastructure and improve the environment of the

:28:46.:28:49.

River Clyde and tackle flooding. On flooding specifically, there have

:28:50.:28:52.

been a number of incidents issue that have caused enormous distress

:28:53.:28:56.

to members of the public. In this financial year, we will provide ?4

:28:57.:29:01.

million to the local authority areas affected most by the flooding. It

:29:02.:29:10.

will help with recovery and help households and businesses access the

:29:11.:29:14.

support they require. Scotland's businesses are key to creating jobs

:29:15.:29:18.

and boosting prosperity. This draft budget maintains the bonus scheme

:29:19.:29:25.

where homes across Scotland will benefit from reduced or zero

:29:26.:29:31.

business rates. This matches the English poundage rate. Mindful of

:29:32.:29:35.

the views and representations of many in the business community that

:29:36.:29:38.

the future business rates in Scotland, I share with Scottish

:29:39.:29:42.

business recognition that our system of business rates must minimise

:29:43.:29:45.

barriers to investment, be responsive to economic conditions

:29:46.:29:49.

and support long-term economic growth and investment. I can

:29:50.:29:52.

therefore announce we will relaunch -- we will launch a review of the

:29:53.:29:57.

rate system in Scotland. Over the last two years the levels of

:29:58.:30:00.

inflation coupled with below inflation increases in poundage have

:30:01.:30:05.

generated lower income than anticipated. Those income

:30:06.:30:08.

projections have not kept pace with benefits to business from the small

:30:09.:30:12.

business bonus scheme. That is why our proposing today to increase the

:30:13.:30:16.

large business supplement to nondomestic rates and make changes

:30:17.:30:20.

to other released. Taken together, this will raise around ?130 million

:30:21.:30:23.

to fund invested in the economy. The budget also in this is the

:30:24.:30:40.

importance of third sector. The busy economy is now in a sustained PDA of

:30:41.:30:48.

course, but the future health relies on improving productivity, from

:30:49.:30:53.

innovation. We are committing funding, about ?345 million, to

:30:54.:31:00.

support research and innovation, from the funding council. They have

:31:01.:31:07.

committed ?124 million, to the network of innovation centres, but

:31:08.:31:11.

we believe that the approach needs greater focus, to achieve economic

:31:12.:31:17.

impact. The Scottish Government is going to work with partners,

:31:18.:31:23.

including agencies, universities, to align the approach to innovation,

:31:24.:31:26.

get funding, and simplify the landscape. This ambitious reform,

:31:27.:31:34.

the next, allows us to create an environment that drives new

:31:35.:31:39.

products, services, through improved collaboration. One of the two key

:31:40.:31:48.

elements of the budget. The other element, the reform of the public

:31:49.:31:54.

services. Public services play a vital part in shaping the economy

:31:55.:31:58.

and society, making a major contribution to the well-being of

:31:59.:32:03.

communities, promoting prosperity and enable people to participate in

:32:04.:32:08.

society. Having removed the ring fencing of local authority budgets,

:32:09.:32:12.

we have encouraged a greater degree of working at local level, with

:32:13.:32:16.

public bodies, meeting the needs of individual citizens. The Christie

:32:17.:32:24.

commission reinforce this, the integration of public services and a

:32:25.:32:30.

shift towards preventative spending. Since then we have reformed the

:32:31.:32:34.

delivery of college education, and the police and Fire Services as a

:32:35.:32:39.

result. This budget underscores the commitment, to continue reforming.

:32:40.:32:46.

We will take steps to extend Digital publications, increase the use of

:32:47.:32:51.

the services, make more effective use of public assets, and reduce

:32:52.:32:58.

overlap between public services. Presiding Officer, the police

:32:59.:33:01.

service qui a vital role protecting communities. In the last few years,

:33:02.:33:06.

they have undergone difficult but necessary reform. A distinctive

:33:07.:33:10.

build on that. We will provide you the protection, to the front line

:33:11.:33:17.

resource in budget, and if we're going to be re-elected, for every

:33:18.:33:22.

year of the next Parliament, a boost of ?100 billion. When this

:33:23.:33:27.

parliament passed legislation, it agreed that the current financial

:33:28.:33:31.

year would effectively marked the end of the time-limited police

:33:32.:33:34.

reform budget. But given the challenges facing the police,

:33:35.:33:40.

arising from the security situation, we are announcing more support

:33:41.:33:44.

today. Instead of removing the reform budget as Parliament

:33:45.:33:48.

intended, in order to consolidate reforms and support the police, I am

:33:49.:33:54.

committing another ?55 million next year, to this important task of

:33:55.:34:02.

Divinity safety. -- community. In all of these reforms, the objective

:34:03.:34:11.

is to provide cohesion public services, the government has

:34:12.:34:19.

invested significant importance. From 2012 to 2016, local funding has

:34:20.:34:24.

been maintained on a like-for-like basis, with extra resources

:34:25.:34:26.

allocated to do with responsibilities. Compare this to

:34:27.:34:38.

England. Facing a cut in funding, of 27.4%, and more reductions in this

:34:39.:34:43.

and the next financial year. Local government has been a founding

:34:44.:34:46.

partner, in the reform of health and Social Care Act services. The

:34:47.:34:50.

government is making a radical reform, to the way that social care

:34:51.:34:55.

is paid for. It intends to allocate 250 million, from the health

:34:56.:35:01.

service, and the social there, in 2016 and 2017. This is going to

:35:02.:35:12.

build the capacity of community services, and have the largest

:35:13.:35:16.

impact, since the creation of the National Health Service in Scotland

:35:17.:35:20.

in the it will mean fewer people have to go to hospital, but when it

:35:21.:35:24.

is necessary people will get home quickly. And it is addresses the

:35:25.:35:34.

underlying thought, the boundary between NHS and local government

:35:35.:35:39.

spending. It has stopped so many attempts, to improve cure, but it

:35:40.:35:51.

ceases to exist. A strong but challenging financial settlement for

:35:52.:35:54.

local government, we have to recognise that it will support the

:35:55.:36:03.

delivery, but essential service, we won't ditch with local government,

:36:04.:36:07.

in terms of the financial settlement, in advance of stage

:36:08.:36:13.

three can settlement. The key to those discussions, the focus on

:36:14.:36:17.

reform. Local government an essential partners, leading to the

:36:18.:36:20.

creation of sustainable public services.

:36:21.:36:31.

This government is absolutely committed, I am going to be

:36:32.:36:43.

allocating more than ?500 million, resulting in total planned spending,

:36:44.:36:47.

of nearly 13 billion, next year, an increase of 6.5% on numbers for

:36:48.:36:59.

2015, 20 16. But let me make this clear. The nature of the challenges

:37:00.:37:04.

facing us, the National Health Service, mean that additional money

:37:05.:37:09.

will not equip that properly, for the future. To be blunt, if all that

:37:10.:37:15.

we do is find the health service, to do more of the scene, it will not

:37:16.:37:21.

cope with the pressure. To protect the National Health Service, we need

:37:22.:37:24.

to do more than death extra money, we need to deliver fundamental

:37:25.:37:28.

reform and change the way that it delivers care. That despite this

:37:29.:37:35.

additional investment is just as important, than the skill of the

:37:36.:37:41.

resources involved. In addition to the fundamental realignment, this

:37:42.:37:46.

investment will support more reforms, shaping the National Health

:37:47.:37:48.

Service and equipping for the future. We intend to transform

:37:49.:37:59.

primary care, an extra ?45 million, multidisciplinary teams working

:38:00.:38:01.

together, to meet the needs of communities. Secondly, an additional

:38:02.:38:08.

elective capacity, to meet the needs of an older population. We will

:38:09.:38:12.

invest ?200 million over the next five years, six new treatment

:38:13.:38:25.

centres, and their ability to carry out these operations. Investment for

:38:26.:38:28.

reform Soviet protect the National Health Service, for the long term,

:38:29.:38:34.

and this budget shows that the precious National Health Service is

:38:35.:38:36.

going to be safe in the hands of this government, now and in the

:38:37.:38:48.

future. We are committed to being term increases, in the National

:38:49.:38:51.

Health Service budget, not just 2016 and 2017, but the generation of the

:38:52.:38:57.

next Parliament if we are going to be re-elected. The Scottish

:38:58.:39:06.

Parliament has been forced to do this, it is not practical to undergo

:39:07.:39:12.

the full spending review, Scottish ministers continue to discuss the

:39:13.:39:18.

framework, as part of the Scotland Bill. That will have an impact on

:39:19.:39:25.

the resources available. It is possible to set out the vision, we

:39:26.:39:32.

will continue to reject austerity, continue to prioritise investment in

:39:33.:39:35.

public services that people value the most. And we will undertake

:39:36.:39:40.

ambitious reforms, to ensure this remains sustainable. We will invest

:39:41.:39:47.

in schools, to ensure children have the opportunity to the full

:39:48.:39:52.

potential, support the attainment challenge, and implement the

:39:53.:39:56.

recommendations of the commission, developing the workforce. We will

:39:57.:40:01.

also create a stronger economy, investing in innovation, and

:40:02.:40:05.

structure. We will support job creation, and employers, living

:40:06.:40:12.

wage, increasing productivity. We will tackle inequalities, making

:40:13.:40:22.

Scotland fairer, but what we will not do, is full in the UK

:40:23.:40:27.

Government's footsteps, targeting the most vulnerable people in

:40:28.:40:32.

society. This brings me to the final part of this budget statement. The

:40:33.:40:37.

welfare reform agenda of the UK Government is presenting

:40:38.:40:41.

difficulties for families in Scotland, impacting on the most

:40:42.:40:46.

wrong. In contrast, the Scottish Government continues to do for the

:40:47.:40:50.

time, to protect and comes. I can't inform the day, we maintain the

:40:51.:40:59.

commitment -- can confirm today, the allocation of 38 million, up to 340

:41:00.:41:08.

million for the council tax reduction, and more for the Beijing

:41:09.:41:15.

tax. We will continue to help family budgets, free prescriptions, eye

:41:16.:41:26.

checks, travel for old, disabled and young people. Free school meals for

:41:27.:41:29.

children. We told its support for those on low incomes, requiring that

:41:30.:41:39.

employers or pay the -- all pay the living wage. Band maintaining the no

:41:40.:41:45.

compulsory redundancy policy. Personal and no sincere, -- nursing

:41:46.:41:58.

care, will also be maintained. I turn to the council tax. This week's

:41:59.:42:04.

report said that the card and it's a tax system is unfair. It also said

:42:05.:42:11.

many people pay too much. Correct. This government is committed to

:42:12.:42:17.

protecting household budgets, and I have already frozen income tax

:42:18.:42:20.

rates. We proposed to freeze the case of tax, -- council tax, we will

:42:21.:42:30.

keep that promise, and do that next year. This means council tax will be

:42:31.:42:35.

frozen for nine consecutive years. Saving the average household, ?1500,

:42:36.:42:46.

on a band D bill. Dual freeze on income and council tax. Helping

:42:47.:42:56.

families, week in, week out, across Scotland. The government is looking

:42:57.:43:01.

to promote the economy, the lover opportunities, and protect public

:43:02.:43:06.

services for the future. It is a budget for reform, a budget for

:43:07.:43:10.

Scotland, and I commend this to Parliament. Thank you. Order. Deputy

:43:11.:43:33.

First Minister will take questions. After that, the next item of

:43:34.:43:45.

business. Thank you. Let me thank the finance secretary. So much,

:43:46.:43:54.

hidden. We're not just talking about the statement. My disappointment, in

:43:55.:44:02.

my memory, first time in this Parliament, it has been redacted.

:44:03.:44:12.

Genuinely disappointing. This is a historic budget. Probably the most

:44:13.:44:16.

significant since the Scottish Parliament opened. Major attacks and

:44:17.:44:30.

will powers, they could have outline plans, to Interstate 80, and close

:44:31.:44:33.

the gap between the richest and the police. He says he has delivered on

:44:34.:44:42.

that. -- poorest. But he has not rejected austerity, simply managing

:44:43.:44:47.

that. Scottish Labour, calling for the genuine budget, but instead,

:44:48.:44:56.

what we have from the SNP... The budget for an election. Short term.

:44:57.:45:04.

All the cuts hidden. But we know they are still to come. The finance

:45:05.:45:12.

minister should have laid out the plans, across the budget, for at

:45:13.:45:19.

least three years. Scottish spending review. He selected the good news,

:45:20.:45:27.

hid the bad. Austerity, hidden, not avoided. People deserve to know the

:45:28.:45:35.

truth. The SNP credibility on the economy has been questioned by

:45:36.:45:41.

experts. Growth is down. We are behind the rest of the United

:45:42.:45:48.

Kingdom. Oil prices low. And employment statistics, double

:45:49.:45:59.

prerecession levels. -- below. After nine years, the finance secretary

:46:00.:46:02.

has only just discovered tea can do something about productivity. A

:46:03.:46:12.

freeze is not progressive. It does not help the poorest people. The

:46:13.:46:19.

Scottish Government have given us recycled announcements. They have

:46:20.:46:23.

told us what budgets they are increasing, but not what is being

:46:24.:46:27.

cut. The finance secretary has said he is protecting schools, he said he

:46:28.:46:36.

is increasing health, social care, but slashing the budgets of

:46:37.:46:47.

councils. The experts have told us that they are more significant,

:46:48.:46:58.

these are the hidden cuts, that the Scottish National Party are not

:46:59.:47:01.

telling us about. The most significant budget, from a party,

:47:02.:47:06.

telling us they were going to stand up against Conservative austerity,

:47:07.:47:13.

deliver a long-term plan, no. Doesn't deliver the anti-austerity

:47:14.:47:24.

alternative? After nine years, a majority in parliament, more power

:47:25.:47:29.

than before, insubstantial parts of this budget, John Swinney is simply

:47:30.:47:40.

copy and George Osborne. -- copying. That is not anti-austerity. Scotland

:47:41.:47:50.

deserves better than that. On the first point... I think this

:47:51.:47:56.

highlights the atrocious lack of communication within the Labour

:47:57.:48:06.

Party. Not the first time a financial statement has been

:48:07.:48:09.

redacted. It was done last year, so I was able to announce the

:48:10.:48:14.

Parliament, the tax rates being put forward. I cannot remember who the

:48:15.:48:19.

Labour finance spokesperson was, I have gone through so many over the

:48:20.:48:25.

years. If Jackie had talked to them... They would have found out

:48:26.:48:36.

that was redacted last year. That as a basic illustration, of how lacking

:48:37.:48:46.

in detail Jackie Baillie is. In those several minutes, the

:48:47.:48:50.

contribution to Parliament, not a single alternative proposition from

:48:51.:49:01.

Jackie Baillie. This is a character trait of Jackie Baillie. All that

:49:02.:49:07.

the Labour Party deliver, abuse, of the people, they do not produce

:49:08.:49:11.

alternatives of what they would do differently. This is now the chance

:49:12.:49:21.

for Jackie Baillie to redeem also. The opportunity, through the

:49:22.:49:27.

process, now that I have published hundreds of pages of financial

:49:28.:49:32.

information. The choices that we have made. Jackie Baillie can look

:49:33.:49:35.

at this, decide what she would do differently. What taxes she would

:49:36.:49:45.

put up. All the regions, changes. What I have put forward, the budget

:49:46.:49:49.

that protects the incomes of the lost income households in Scotland.

:49:50.:49:53.

That is the most effective way that we can use the powers available to

:49:54.:49:59.

us, to help the people we are elected to serve. Mr Fraser. This is

:50:00.:50:15.

a historic budget. For the first time, since devolution, not just

:50:16.:50:21.

concerned about the devolution of resources, he has the powers to

:50:22.:50:25.

visit the budget, amending the rate of income tax. The finance secretary

:50:26.:50:32.

has chosen to sit that at the same rate elsewhere in the United

:50:33.:50:36.

Kingdom. We applaud that decision. We do not believe that hard-pressed

:50:37.:50:40.

families in Scotland should pay more tax than those elsewhere. But it

:50:41.:50:47.

cannot be forgotten the finance secretary had a choice. He chose not

:50:48.:50:53.

to increase the resources, by waving additional taxes. We need to

:50:54.:50:59.

remember, the total budget for the coming year, in cash terms, 400

:51:00.:51:10.

million higher. In the returns, smoggy trees, but that is

:51:11.:51:14.

substantially less than the most recent underspend. In that context,

:51:15.:51:25.

any talk of cuts Wilshere data was. But it is still the position, it is

:51:26.:51:29.

too more, the solution is in the run hands. He could have chosen to raise

:51:30.:51:37.

the rate of income tax. He has portrayed himself as the prisoner of

:51:38.:51:42.

Westminster austerity. But he has been given the key to the door of

:51:43.:51:51.

his cell. I trust we are not going to hear any more about austerity,

:51:52.:51:56.

when they have chosen not to increase the size of the budget.

:51:57.:52:02.

They had the chance, flunked it. The Scottish Conservatives will detail

:52:03.:52:08.

and scrutinise the budget, suggest constructive changes. For the

:52:09.:52:12.

moment, we welcome the extra money for housing, and nondomestic rates.

:52:13.:52:20.

Straight from the Conservative manifesto. Conservatives lead... SNP

:52:21.:52:32.

follow. I am disappointed the finance secretary has not brought

:52:33.:52:38.

forward great changes, to wind and action, it is already having a

:52:39.:52:42.

detrimental impact on the market. -- land. Looking at the significant

:52:43.:52:57.

shortfall, but I do welcome him following George Osborne's lead in

:52:58.:53:03.

increasing by 3%, the supplement for second only homes. Conservatives

:53:04.:53:13.

lead. SNP follow. I know it is early days, the scrutiny of the budget,

:53:14.:53:21.

but the fundamental problem in the argument that Mr Fraser deployed.

:53:22.:53:25.

That they had not taken states to increase the amount of money

:53:26.:53:33.

available. I have. The business rates, ?130 million. That was not

:53:34.:53:40.

sneaked in. I have expressed that the Parliament. ?130 million. All of

:53:41.:53:51.

that pre amble, of total inflated nonsense from Mr Fraser. Punctured

:53:52.:53:59.

by that fact! I have used the opportunity to increase the money

:54:00.:54:04.

available. We can ignore that part of his rant. We will not ignore the

:54:05.:54:16.

last part of his rant, we'll dismantle! Mr Fraser may have wanted

:54:17.:54:24.

me to use the Scottish rate of income tax, to increase the level of

:54:25.:54:37.

tax that could have been lifted, -- levied. I can see why that would

:54:38.:54:45.

have suited Mr Fraser. It would have led to an increase of 2.6%. That was

:54:46.:54:53.

John Swinney. Talking about the budget.

:54:54.:54:59.

Hamish Macdonell is still with me and we're also

:55:00.:55:01.

joined by our Business and Economy Editor, Douglas Fraser.

:55:02.:55:03.

Let's take a look at some of the key points from

:55:04.:55:06.

No change with the income tax? Going into the election, he did not want

:55:07.:55:14.

to increase that. People will say the same -- see the same bills. 10p

:55:15.:55:31.

going to the Chancellor. 10p going to the Scottish tragedy. He could

:55:32.:55:34.

have cut that, but that would have gone against anti-austerity. More

:55:35.:55:45.

tax on second homes? He has forward what George Osborne has done. I

:55:46.:55:47.

think that would include landlords as well. 3% extra on top. Stamp

:55:48.:56:00.

duty. Fully evolved. One of the reasons George Osborne was doing

:56:01.:56:09.

that, a problem of overheating the south east of England, trying to

:56:10.:56:16.

cool it down. That was part of the agenda for Westminster, but he wants

:56:17.:56:26.

to level the playing field. We were talking about how the Chancellor

:56:27.:56:36.

would be brave to put taxes up. Murdo Fraser having a stab. He said

:56:37.:56:39.

we were supposed to vote for independence, countering

:56:40.:56:46.

conservative austerity. They had the chance to put income tax. Where is

:56:47.:56:57.

anti-austerity? He said that he had to get some money from somewhere.

:56:58.:57:00.

Some of the receipts have not been the size that they would have liked.

:57:01.:57:11.

He said that he did not seek it through, -- sneak, but he needed the

:57:12.:57:20.

money from somewhere, it would not be suicide, but it would be

:57:21.:57:24.

difficult to tell the public. I will find it from big business. Spending.

:57:25.:57:33.

Some of that. Police... Echoing George is on. -- George Osborne.

:57:34.:57:46.

Particularly, in Scotland, from several forces down to one. The

:57:47.:57:52.

response on that. On health, they have stuck to what they said. Except

:57:53.:57:59.

for one significant element. 250 million out of the hill service, to

:58:00.:58:03.

give that to councils. And also slashing Tencel budgets. -- council.

:58:04.:58:12.

Social justice, down about 600 million. But getting more

:58:13.:58:17.

responsibility. Tandy force the council 's to spend that? -- can

:58:18.:58:28.

they force. Or could the councils just take that? Legal requirements,

:58:29.:58:38.

to deliver on expectations that central government has for social

:58:39.:58:45.

care. These are added responsibilities. 250 million.

:58:46.:58:51.

Significant message to his own party, backbenchers, that more money

:58:52.:58:54.

is not always the answer. He said that reform would be more important

:58:55.:59:01.

than finance. This is an issue, that not just the Scottish National

:59:02.:59:08.

Party, but also the previous coalition were criticised for. Just

:59:09.:59:13.

wanting to spend more money? He talked about reform, in general, I

:59:14.:59:21.

was not getting specifics. Merging health and social care. But he

:59:22.:59:25.

talked about reform as though that would see the money.

:59:26.:59:27.

That's all we have time for this afternoon.

:59:28.:59:29.

You can see further analysis of the Budget statement

:59:30.:59:32.

on Reporting Scotland at 6:30pm tonight on BBC One Scotland.

:59:33.:59:34.

First Minister's Questions is tomorrow at noon here on BBC Two.

:59:35.:59:37.

'and each object has a story to tell.'

:59:38.:00:06.

'for their favourite outdoor events around the country,

:00:07.:00:14.

'I'll be pitching up with my silver trailer

:00:15.:00:17.

'to meet the locals with their precious antiques and collectables.'

:00:18.:00:20.

I'm feeling inspired myself. Thank you very much.

:00:21.:00:24.

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