Scottish Parliament, 20 November 2024

304 contributions from 51 members. The official report.

Portfolio Question Time

Liam McArthur (Liberal Democrat, Orkney Islands)

The first item of business is portfolio question time, and the first portfolio is Deputy First Minister Responsibilities, Economy and Gaelic. There is a lot of interest in asking supplementary questions in this portfolio and the next, and there is a lot of business to get through this afternoon, so we are tight for time. I make an appeal for brevity in questions and responses, as far as is possible. Members who wish to ask a supplementary question should press their request-to-speak buttons during the relevant question.

Gordon MacDonald (Scottish National Party, Edinburgh Pentlands)

To ask the Scottish Government how it continues to assess the impact of Brexit on Scotland’s economy. (S6O-03973)

Tom Arthur (Scottish National Party, Renfrewshire South)

Independent research continues to track the fiscal and economic impacts of Brexit. To assess the impact of Brexit on Scotland’s economy, the Scottish Government monitors the research as well as data on trade and business conditions for Scotland in the export statistics for Scotland and the business insights and conditions survey. The impact is clear: the latest research from the National Institute of Economic and Social Research finds that the United Kingdom economy was 2.5 per cent smaller in 2023 due to Brexit. For Scotland, that is equivalent to a cut in public revenues of around £2.3 billion.

Gordon MacDonald (Scottish National Party, Edinburgh Pentlands)

The governor of the Bank of England has admitted the damaging economic consequences of Brexit, urging the UK Government to rebuild relations with the European Union. Given that Labour remains inexplicably opposed to reversing the damage of Brexit, does the minister agree that it is now more important than ever that Scotland rejoin the European Union as an independent nation?

Tom Arthur (Scottish National Party, Renfrewshire South)

The member raises a very important point. It is a matter of fact that the UK Government is not just in favour of Brexit but supports staying out of the huge European single market and the customs union. So far, it is refusing to sign up to even the limited youth mobility scheme that the EU is offering to the UK, let alone returning to freedom of movement, which is so important to Scotland and, indeed, the rest of the UK.

Brexit has led to an economy that is smaller and that generates less revenue for public services than Scotland would have had as part of the EU. Given the position of the UK Government and other Westminster parties, it is only by becoming an independent country that Scotland will be able to rejoin the EU and reverse the economic damage.

Murdo Fraser (Conservative, Mid Scotland and Fife)

The Scottish Government’s eminent economic adviser Professor Mark Blyth, of Brown University, has said that, in his view, the economic impact of independence would be “Brexit times 10”. Has the Scottish Government made any assessment of what the impact of independence would be for the Scottish economy, or has it told Professor Blyth that he is wrong?

Tom Arthur (Scottish National Party, Renfrewshire South)

I have huge respect for Professor Blyth and certainly commend his work—particularly his publication of four years ago, “Angrynomics”—to all members of the Parliament, as it makes an important contribution to understanding some of the challenges that we face.

The Scottish Government is committed to an independent Scotland that would be a full member of the European Union. By obtaining membership of the European Union as a full independent state while still enjoying close and cordial relations with the other nations of these islands, we would be able to take advantage of a huge single market, freedom of movement and many of the other benefits that would be conferred. That would offer Scotland a much more positive future than being in a United Kingdom that has committed, against all its economic and social interests, to maintain a distinct position of being in a relationship with the European Union that is completely contradictory to its interests.

Liam McArthur (Liberal Democrat, Orkney Islands)

Question 2 has not been lodged.

Alexander Stewart (Conservative, Mid Scotland and Fife)

To ask the Scottish Government what its response is to the latest “Scottish Economic Bulletin”. (S6O-03975)

Tom Arthur (Scottish National Party, Renfrewshire South)

The Scottish Government welcomes the recent publication of the economic bulletin. It clearly shows the resilience of the Scottish economy, with unemployment remaining low and inflation stabilising around its 2 per cent target. Economic growth is set to improve as we go into 2025, but business conditions remain challenging. The Scottish Government is listening to businesses and will keep working with them to help to create a mutually beneficial environment that supports a fair, green and growing economy.

Alexander Stewart (Conservative, Mid Scotland and Fife)

The latest statistics show that Scotland’s economy grew by just 0.1 per cent in the past few months to August and that the service sector experienced completely flat growth during that period. What action is the Scottish Government taking to attract inward investment, to ensure that Scottish service businesses are in an environment that enables them to thrive and survive?

Tom Arthur (Scottish National Party, Renfrewshire South)

The Scottish Government is absolutely committed to attracting inward investment. As the investment minister, I attended an investment event in London a few weeks ago, and the Deputy First Minister has just returned from meeting investors in London. We are absolutely committed to doing that.

We recognise that, in the lead-up to the United Kingdom Government budget and subsequent announcements, a degree of uncertainty has been created. It seems that that is impacting on demand, which is reflected in economic figures across the UK. However, we are committed to ensuring that Scotland remains an attractive destination for investment and to working collaboratively in partnership to achieve that.

Colin Beattie (Scottish National Party, Midlothian North and Musselburgh)

I welcome the bulletin’s highlighting of the current strength of Scotland’s labour market, with recently published labour statistics showing that Scotland has a lower unemployment rate than the rest of the UK has, along with stand-out growth in employment. What assessment has the minister made of that news, and how can we build on that success to strengthen Scotland’s economy with the limited economic powers that the Scottish Government holds?

Tom Arthur (Scottish National Party, Renfrewshire South)

Scotland’s labour market is resilient and performs well on a range of indicators. Payrolled employment is high, and Scotland has a narrower gender pay gap than the UK has. Growing the economy is a top priority for this Government. As I said earlier, I was pleased to be in London recently to speak with investors about the benefits of Scotland’s economy, and the Deputy First Minister also did so at the start of this week.

Our green industrial strategy and the work of the Scottish National Investment Bank and our enterprise agencies are key to securing further growth in investment, which will, in turn, benefit all of our communities.

Maggie Chapman (Green, North East Scotland)

To ask the Scottish Government to what extent its economic development activities and infrastructure project decisions in the North East Scotland region are aligned with the regional economic strategy. (S6O-03976)

Tom Arthur (Scottish National Party, Renfrewshire South)

Creating new jobs, supporting skills development, increasing investment and accelerating the energy sector’s transition to net zero are key in the activities that we support in the north-east. Those include our £125 million investment in the Aberdeen city region deal, support for projects through the just transition and energy transition funds, and our partnership working with the UK Government to support the development of the north-east Scotland investment zone.

We will continue to leverage our existing strengths in research, innovation and skills to support economic growth for the region and deliver benefits for the people who live there.

Maggie Chapman (Green, North East Scotland)

Economic development is about improving the quality of life and the wellbeing of our people, and it is about delivering good jobs, vibrant and accessible cultural and leisure facilities, good education, housing and much more. Connectivity is crucial to all of that. The Campaign for North East Rail has just completed its outline business case, having published the “Buchan Sustainable Transport Study”, and connecting Peterhead and Fraserburgh by rail will be instrumental to achieving the regional economic development priorities for the region. How is the Scottish Government supporting the aims of CNER, which include job creation, social inclusion and environmental sustainability?

Tom Arthur (Scottish National Party, Renfrewshire South)

The member rightly highlights a range of areas that are vital for economic development and highlights the importance of connectivity in that regard. The Scottish Government is aware of CNER’s study. We are considering the findings, and a decision on the next steps is still to be made. However, we are keen to continue the discussion on how we increase sustainable travel and support better-integrated travel infrastructure for the future needs of the north-east.

Kevin Stewart (Scottish National Party, Aberdeen Central)

Central to the regional economic strategy for the north-east is the facilitation of a just energy transition. Given that more energy firms, such as APA Energy, have announced that they are pulling out of the North Sea basin and the north-east, and given the news that GB Energy will receive only £100 million of funding over its first two years—a far cry from the £8 billion that was promised—can the minister provide an update on the action that the Scottish Government is taking to protect the north-east’s economy, jobs and sustainable growth?

Tom Arthur (Scottish National Party, Renfrewshire South)

I assure Kevin Stewart that the Government is committed to facilitating a just transition for the north-east of Scotland. Our £500 million just transition fund will help to support that journey, maintaining and creating jobs in low-carbon industries and contributing to the region’s future prosperity. Our energy transition fund is supporting four major projects to protect existing jobs, skills and knowledge while creating new jobs.

It was disappointing to see the United Kingdom Labour Government quickly drop its commitment to £20 billion of investment in our green future, and we continue to engage with it on how we can attract private investment, promote growth in high-productivity future-facing sectors and create high-quality, well-paid jobs.

Roz McCall (Conservative, Mid Scotland and Fife)

To ask the Scottish Government what discussions it has had with the United Kingdom Government regarding the reported potential withdrawal of levelling up funding for the city of Dunfermline and any economic impact this may have. (S6O-03977)

Kate Forbes (Scottish National Party, Skye, Lochaber and Badenoch)

We are in regular contact with the United Kingdom Government on a range of issues, including the future of levelling up and other funds. Indeed, I raised that in person with the relevant UK Government minister yesterday.

I have raised the point about uncertainty of funding for a number of levelling-up projects, including in the city of Dunfermline, and I will continue to press for clarity on the future of those projects.

Roz McCall (Conservative, Mid Scotland and Fife)

As I referred to in my initial question, the UK Labour Government has threatened to pull £5 million-worth of crucial levelling-up funding from the city of Dunfermline. That vital cash was intended to renovate St Margaret’s house into a new cultural space; repair and restore the city’s B-listed Fire Station Creative building; turn Tower house into an improved cultural space; and create a new amphitheatre for outdoor performances at the Dunfermline learning campus. I am clear that such withdrawal of funding is a betrayal of Scotland’s newest and fastest-growing city.

Will the Deputy First Minister commit to strenuously making the case for the funding that is necessary to protect those projects and to progress them, or will my constituents be left with nothing?

Kate Forbes (Scottish National Party, Skye, Lochaber and Badenoch)

As a point of principle, the Scottish Government is very supportive of place-based regeneration, and I understand the disappointment that the member has expressed.

The Cabinet Secretary for Finance and Local Government is writing to the Chief Secretary to the Treasury, seeking further information on the UK Government’s intentions for previously committed funding and for previously committed projects that did not receive confirmation of funding in the UK budget. We will, to use the member’s word, continue to strenuously push for maximum support for Dunfermline, and for other areas that have been promised funding.

David Torrance (Scottish National Party, Kirkcaldy)

Westminster promised funding to communities across Scotland, and now, in the face of further austerity, Dunfermline’s projects hang in the balance. Does the Deputy First Minister agree that that funding cannot be another of Labour’s abandoned promises and that, rather than bypassing Scotland’s elected Parliament, any funding should be for this Parliament to deliver for communities?

Kate Forbes (Scottish National Party, Skye, Lochaber and Badenoch)

On the points that David Torrance makes, we appreciate that that uncertainty from the UK Government around projects that have been previously promised is disappointing, but we will continue to work with the UK Government on ensuring that there is funding cover where that has been promised.

I have been encouraged by the Labour Party’s manifesto commitment to restore decision making over the allocation of structural funds to devolved Governments such as the Scottish Government, and I must say that just yesterday I had a very positive meeting with the relevant minister, Alex Norris, to look at how we can work closely together to make every penny go as far as possible in the best interests of our communities.

Stuart McMillan (Scottish National Party, Greenock and Inverclyde)

To ask the Scottish Government whether it will provide an update on work at Ferguson Marine Port Glasgow, in light of the announcement of £14 million-worth of investment into the yard earlier this year. (S6O-03978)

Kate Forbes (Scottish National Party, Skye, Lochaber and Badenoch)

When I visited Ferguson Marine in July, I signalled the Government’s willingness to back the board’s investment plans, subject to due diligence and provided that they met commercial standards. Ferguson Marine, with the support of my officials, has continued to refine its plans in the intervening period, and the funding needs of the business are part of our current budget planning discussion, the outcome of which will be published on 4 December.

Stuart McMillan (Scottish National Party, Greenock and Inverclyde)

I thank the Deputy First Minister for her reply, and I welcome the recent news about the Glen Sannox. She will be very much aware that I regularly speak with the workforce—the workers at the yard—and I know how genuinely talented they actually are.

Will the Deputy First Minister provide an assurance that before the capital investment takes place, and before the announcement on 4 December, the Scottish Government will have discussions with both the shop stewards and the Ferguson Marine board to ensure that there is full support, given that the new machinery and plant is very much needed to help the yards secure future contracts? Will she also provide an update on the appointment of a new permanent chief executive at the yard?

Kate Forbes (Scottish National Party, Skye, Lochaber and Badenoch)

In the week that Glen Sannox achieved full regulatory approval, I start by paying fulsome tribute to the workers and their representatives at Ferguson Marine, including the shop stewards, whom I have had the privilege of meeting on a number of occasions. Their skills and expertise are at the core of the business. I know that it has been an extremely difficult time, but I want to see the workers and shop stewards continue to play a key role in driving the business forward.

I will meet the chair and two members of the Ferguson Marine board tomorrow to discuss the matters that Mr McMillan raises and others. Once a permanent chief executive appointment has been made, the chair will make that public. I am willing to engage with the workers at the yard again, as Mr McMillan has requested.

Ariane Burgess (Green, Highlands and Islands)

To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues regarding any economic analysis it has undertaken of the impact on the wider Scottish economy of fish farming. (S6O-03979)

Kate Forbes (Scottish National Party, Skye, Lochaber and Badenoch)

I have not had specific discussions with ministerial colleagues on analyses of the economic impact of the fish farming sector, but according to the Scottish Government’s marine economy statistics, which were published earlier this month, aquaculture generated in 2022 £337 million of approximate gross value added, or 7 per cent of the Scottish marine economy. I note, too, that it supports around 12,000 jobs across the supply chain. Scottish salmon is the United Kingdom’s largest food export.

Ariane Burgess (Green, Highlands and Islands)

According to the Scottish Government’s own data, there are now just 253 more jobs in the salmon aquaculture sector than there were 30 years ago. Will the Deputy First Minister tell me how many rural jobs have been lost in sectors such as shell fishing, marine tourism and recreational sea angling as a consequence of the mismanagement of the salmon farming industry?

Kate Forbes (Scottish National Party, Skye, Lochaber and Badenoch)

I have outlined the job opportunities available through aquaculture a little bit. On the wider issues that the member raises, she will know that there has been quite a significant change in marine jobs, driven not just by growth in sectors such as fish farming but because of some of the other challenges, not least around recruitment and exporting as a result of Brexit. There has been a significant change when it comes to overall job retention, recruitment to jobs and the creation of new jobs in and around our marine economy.

Liam McArthur (Liberal Democrat, Orkney Islands)

That concludes portfolio questions on Deputy First Minister responsibilities, economy and Gaelic. There will be a brief pause before we move to the next portfolio to allow front benches to change.

Liam McArthur (Liberal Democrat, Orkney Islands)

We move to portfolio questions on finance and local government. I remind members that questions 5 and 7 are grouped together, so any supplementaries on those questions will be taken after the substantive questions have been asked. As ever, members looking to ask a supplementary question should press their request-to-speak buttons during the relevant question.

Unfortunately, the member who is due to ask question 1 is not present in the chamber, for which I will expect an explanation and an apology, so I will have to move to question 2.

Pauline McNeill (Labour, Glasgow)

To ask the Scottish Government whether it will consider ring fencing funding in its forthcoming budget to allocate to a Glasgow airport rail link. (S6O-03982)

Ivan McKee (Scottish National Party, Glasgow Provan)

The Glasgow airport rail link was superseded by the Glasgow airport access project, which was allocated £144 million as part of the Glasgow city region deal in 2014.

The Glasgow connectivity commission and the second strategic transport projects review recommended a wider metro system that could include a link to the airport. In November 2023, the city region deal cabinet decided to refocus funding on progressing Clyde metro. Strathclyde Partnership for Transport, supported by Glasgow City Council, is leading the development of the case for investment, which includes the development of the network and funding options for the project’s delivery.

Pauline McNeill (Labour, Glasgow)

I asked the minister a specific question, which I will ask again: what funding will be allocated specifically for the airport rail link? Glasgow is one of the few major cities in Europe that does not have a direct rail link to its airport. I am sure that the minister, who has a Glasgow constituency, agrees with me that having an airport rail link is fundamental to Glasgow’s economy.

I would like an assurance today that the airport rail link will be a priority for phase 1 of the metro plan that the minister mentioned. Will the minister confirm that the Scottish Government, through Transport Scotland, will allocate the funding to enable the airport rail link to be developed in phase 1 of the project?

Ivan McKee (Scottish National Party, Glasgow Provan)

The decision on the priorities in the Clyde metro project is for the partnership and the city council. I can tell the member that the Scottish Government has provided £72 million—50 per cent—of the £144 million through the Glasgow city region deal towards improving public transport access to the airport. The city region deal has subsequently allocated £12.2 million, half of which came from the Scottish Government, to take forward the development of the Clyde metro project case for investment. Transport Scotland is continuing to provide a project assurance and support role.

Craig Hoy (Conservative, South Scotland)

To ask the Scottish Government when it will publish Scotland’s tax strategy. (S6O-03983)

Shona Robison (Scottish National Party, Dundee City East)

As has already been set out publicly, we aim to publish the tax strategy alongside the draft budget on 4 December.

Craig Hoy (Conservative, South Scotland)

We do not have long to wait.

I asked recently whether Scotland had reached the point where raising taxes any further might be counterproductive. The cabinet secretary’s colleague Ivan McKee said that that was a very strong consideration in the Government’s present thinking. I welcome that. However, if raising tax is potentially counterproductive, cutting tax could be productive, surely, not least for households and businesses that are struggling. Does the cabinet secretary agree with Ivan McKee, and will she follow our commonsense plan to reduce tax to promote growth and reverse the damaging tax differential between Scotland and the rest of the United Kingdom?

Shona Robison (Scottish National Party, Dundee City East)

I assure Craig Hoy that, of course, all considerations in relation to our tax position are carefully gone through, and that will be set out on 4 December.

Ivan McKee did not say that cutting tax was something that the Scottish Government was going to do, because we understand the impact of cutting tax on public services. Our tax policy decisions have raised an estimated £1.5 billion for public services. The Tories want to take an axe to those decisions, but the result of that would be taking an axe to public services, and that is not something that this Government will do.

Stuart McMillan (Scottish National Party, Greenock and Inverclyde)

Will the cabinet secretary provide an update on the stakeholder engagement work that the Scottish Government has undertaken to inform the development of a tax strategy?

Shona Robison (Scottish National Party, Dundee City East)

The Scottish Government has engaged with 65 external organisations to support the development of the upcoming tax strategy publication. That included representatives of Scotland’s business community, think tanks, civic society, tax professionals and local government partners. Our approach to those engagements was designed to gather a range of views to feed into the final tax strategy. The sessions were chaired by ministers, senior Government officials and external stakeholders.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

To ask the Scottish Government what assessment it has made of the implications of the United Kingdom budget for its allocation of capital budget for health projects. (S6O-03984)

Shona Robison (Scottish National Party, Dundee City East)

The capital funding position remains challenging, and infrastructure projects remain under review. The Scottish Government is assessing the full implications of the UK autumn budget and we await the outcome of the UK Government’s spending review in late spring 2025. Full consideration will be given as to which projects are affordable and deliverable and can be included in our revised infrastructure investment plan pipeline.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

The cabinet secretary will be aware of my long-standing fight to get a much-needed new medical centre for Lochgelly—something that was first promised by the Scottish Government back in 2011. Given that I understand that there will be additional capital spend available and that decisions will quite properly be made according to priority, I put it to the cabinet secretary that it must surely be Lochgelly’s turn now.

Shona Robison (Scottish National Party, Dundee City East)

I absolutely agree that it is vital that spending is prioritised based on need and expected impact. We are working with all health boards, including NHS Fife, to consider infrastructure needs across all of Scotland to develop a whole-system national health service infrastructure plan. That will support the continued safe operation of existing facilities as well as determine the longer-term investment priorities. I am happy to continue to discuss that with Annabelle Ewing in the run-up to the revised infrastructure investment pipeline.

Richard Leonard (Labour, Central Scotland)

To ask the Scottish Government whether local authorities will receive a fair budget settlement. (S6O-03985)

Shona Robison (Scottish National Party, Dundee City East)

Yes. The independent Accounts Commission confirmed that the Scottish Government provided a real-terms increase to local government in this year, in 2023-24 and in 2022-23. We will continue to work in partnership with the Convention of Scottish Local Authorities to ensure that local authorities receive a fair settlement in 2025-26.

Richard Leonard (Labour, Central Scotland)

The cabinet secretary mentions the Accounts Commission. It is projecting a budget gap of £392 million next year, rising to a cumulative gap of £780 million by 2026-27. Integration joint boards, which are responsible for caring for the most vulnerable, had a funding shortfall of £357 million last year, which is up 187 per cent. In social care and social work, staff shortages are rife, and more than 6,000 people are waiting for a social care assessment. Every single council in Scotland is making cuts, while nearly all are hiking up fees and charges. Will the cabinet secretary match her warm words about the value of local government with some cold, hard cash to deliver the services that our communities need?

Shona Robison (Scottish National Party, Dundee City East)

First, I will go back to the Accounts Commission. It has confirmed that the Scottish Government provided real-terms funding increases this year, in 2022-23 and in 2023-24. That was against a backdrop of the most severe constraint on public finances in the whole era of devolution, so I think that that was a fair settlement to local government. In fact, the Scottish Parliament information centre confirmed that a real-terms increase in funding was provided to local government in 2024-25.

Do I accept that there are pressures? Yes, there are pressures across the public sector, because the inflation of costs has outpaced spending availability. We will continue to talk to COSLA, with which we are having very constructive discussions, particularly in the area of social care. We will bring those to a conclusion in time for the budget on 4 December.

Mark Griffin (Labour, Central Scotland)

To ask the Scottish Government what early discussion it has had with the Convention of Scottish Local Authorities regarding the detail of the financial settlement that it has received from the United Kingdom Government’s budget. (S6O-03987)

Shona Robison (Scottish National Party, Dundee City East)

We have had unprecedented levels of engagement with COSLA ahead of the budget, in line with the principles that are set out in the Verity house agreement. With regard to the UK budget, the First Minister committed to providing COSLA with an open-book assessment of the impact on the Scottish budget, and that commitment has been delivered in full. We have also been in discussion with COSLA about the adverse impact of the imposition of increased employer national insurance contributions on local government, which COSLA has estimated will cost local authorities an additional £265 million.

Mark Griffin (Labour, Central Scotland)

It is good to hear that the Government is now adhering to the principles of the Verity house agreement, after last-minute budget announcements to its party conference and the breakdown of trust that inevitably followed from those decisions. Will the cabinet secretary share the Government’s planning assumptions for the local budget settlement to COSLA and local authorities in advance, to allow them to properly prepare for the coming financial year and to start to repair that relationship?

Shona Robison (Scottish National Party, Dundee City East)

If we are going to talk about surprise announcements, we should mention the hike in employer national insurance contributions, which applies to local government to the tune of £265 million—that was a bit of a surprise announcement that local government had not expected.

We will continue to work with local government on the budget in the run-up to 4 December, and we are sharing a lot of information. On the information about the budget itself, I would get in quite a lot of difficulty if I did not share that in this place first on 4 December. We will go as far as we can in discussions with COSLA, and those discussions will continue for as long as they are required, up until 4 December.

Pam Gosal (Conservative, West Scotland)

I have spoken to chief executives in local authorities across my region of West Scotland who have said that councils are struggling financially. One local authority chief exec even compared last year’s council tax freeze to a power grab whereby the United Kingdom Government tells the Scottish Government whether or not it can raise taxes. If councils are being dictated to by the Scottish Government, the Verity house agreement is not worth the paper that it is written on. Will the cabinet secretary therefore provide clarity on whether councils will be able to set their own council tax rates in the coming budget?

Shona Robison (Scottish National Party, Dundee City East)

That will be part of the budget announcement on 4 December, and it is part of the discussions with local government. It is a bit of a surprise that Pam Gosal is talking about funding to local government, given that a number of local authorities in England went bust under the auspices of her Government, due to a lack of funding. The funding that is provided to local government in Scotland is much better than what has been provided to councils in England—hence the fragility of so many of them. We will continue to discuss with local government their needs for funding and the position of the council tax within that.

Alexander Stewart (Conservative, Mid Scotland and Fife)

Year after year, local government budgets have been squeezed while COSLA continues to highlight concerns that councils are struggling to find funds to provide for even statutory services. In real terms, the budget for local government this year is lower than it has been in the past, while demand for public services continues to increase. Will the cabinet secretary guarantee that the forthcoming budget settlement will be sufficient for councils to deliver their lifeline statutory services?

Shona Robison (Scottish National Party, Dundee City East)

We started this session of portfolio questions with Craig Hoy demanding that we cut taxes in the budget and, within a few minutes, we get to Alexander Stewart demanding an increase in funding for local government. The Conservatives really need to start talking to one another, because that is economic and financial nonsense. If we want more money for public services, taxes are an important part of that. We cannot cut taxes and have more money for local government as well. [ Interruption .]

Liam McArthur (Liberal Democrat, Orkney Islands)

And we cannot listen to the answers to questions when members are being heckled. I encourage members on the front benches to be quiet.

Foysol Choudhury (Labour, Lothian)

To ask the Scottish Government how it plans to protect the allocation of funding to third sector organisations in its forthcoming budget. (S6O-03986)

Shona Robison (Scottish National Party, Dundee City East)

I know and appreciate the huge importance of the third sector in delivering Scottish Government priorities across all portfolios, especially in eradicating child poverty. That is why we are committed to developing a fairer funding approach for the third sector, despite the financial constraints that we face. The Scottish Government continues to focus on building a more inclusive Scotland and investing in services that are provided by third sector organisations that help and support our communities across Scotland.

Foysol Choudhury (Labour, Lothian)

Edinburgh integration joint board officers recently proposed to end grant funding for 64 third sector organisations. Although that was not taken forward, charities still do not have funding beyond March 2025, and the board’s financial deficit remains. Those organisations provide vital services through prevention and early intervention. Is the cabinet secretary considering using the budget to improve the financial situation of integration joint boards, which fund those important services?

Shona Robison (Scottish National Party, Dundee City East)

The funding that goes to the national health service and local government is the funding that then provides funding for integration joint boards. That is why we are working with local government on its settlement at the moment.

We have also, of course, already committed to providing the NHS with resource consequentials, which we have done for many years and will continue to do.

That is not to take away from some of the pressures, which I absolutely accept. I hope that Foysol Choudhury will accept that the position of those third sector organisations is not helped by the additional employer national insurance contributions that each and every one of them will have to find money for; they will have to find that money from somewhere. That is a real and present danger and problem. I hope that Foysol Choudhury will get behind our calls for the United Kingdom Government to act on that.

Kenneth Gibson (Scottish National Party, Cunninghame North)

Does the cabinet secretary agree with the Scottish Council for Voluntary Organisations that the financial impact on fragile third sector organisations of the increase in employer national insurance contributions, estimated at £75 million a year, will be devastating for the sector? The increase will, for example, cost the Scottish SPCA, Scotland’s oldest and largest animal welfare charity, £400,000 a year.

Does she also agree that the UK Labour Government, which has ham-fistedly imposed those additional costs, should meet them in full?

Shona Robison (Scottish National Party, Dundee City East)

Yes, I do. That is the point that I was making to Foysol Choudhury.

Only weeks before the UK autumn statement, the UK Labour Government proclaimed a new “covenant” with civil society and the third sector, founded on the principles of

“recognition, partnership, participation and transparency”.

Despite those claims in relation to the third sector, we then saw employer national insurance contributions swiftly hiked, without, I think, a thought about the impact on charities and third sector organisations. As Kenny Gibson said, the SCVO estimates that impact to be more than £75 million.

The chancellor has to act. We cannot have that pressure on charities, hospices and voluntary organisations; she will have to think again on that, which is what we have been urging her to do.

Paul O'Kane (Labour, West Scotland)

To ask the Scottish Government what on-going discussions the finance secretary is having with ministerial colleagues and officials regarding the planning of portfolio budgets in the lead-up to the publication of its budget for 2025-26. (S6O-03988)

Shona Robison (Scottish National Party, Dundee City East)

I am in regular engagement with ministerial colleagues in relation to portfolio budgets in advance of presenting the budget next month.

Budget planning with cabinet secretaries and officials has been on-going since the summer. During the first two weeks of November, I met individually with all cabinet secretaries and their officials to discuss portfolio budgets and priorities. Cabinet has discussed the overall Scottish Government budget on several occasions, including on 19 November. We will meet again on 26 November in advance of the budget on 4 December.

Paul O'Kane (Labour, West Scotland)

Correspondence that was obtained under freedom of information legislation shows that, when the cabinet secretary wrote to Cabinet colleagues in the summer requiring ministers to halt all non-essential spending, her colleagues wrote back highlighting significant pressures dating back to the beginning of the budget year.

The justice secretary said that there was “additional portfolio pressure”. The health secretary said that “enhanced spend controls” had already been in place since the beginning of the financial year and that

“more fundamental decisions were required to bring expenditure into line”.

The transport secretary said that the portfolio had been carrying a

“significant resource deficit since budget 2024-25”

and had already been operating in

“an emergency control environment”.

Does the cabinet secretary think that it demonstrates good management of the public finances that portfolios were setting budgets that immediately entered emergency controls as soon as the budget started? When did she know that that was the case? In relation to the discussions that she just referenced, how will she avoid that in the forthcoming budget?

Shona Robison (Scottish National Party, Dundee City East)

Dearie me.

First, no one denied the challenge when I stood here and announced the package that was required to be taken. No one denied the impact and the difficulty in relation to any of that, including that only essential spending could be taken forward. We had to do that, because we did not know where the landing space on resource funding was going to be in order to fund pay deals. We had to take that step, and that is the step that we took.

What we are doing now, in relation to the budget of 4 December, is making sure that portfolios and cabinet secretaries start the year with a clear direction of what they are going to deliver with the funding that is available to them.

What is not prudent financial management is announcing a bombshell about employer national insurance contributions out of the blue and then not fully funding it. At the moment, we do not know whether Scotland’s core public sector—never mind the third sector and the charities that we have heard about—will be funded for the ENIC challenge. If it is not, that will put a pressure on public finances that we could absolutely do without. I suggest that Paul O’Kane gets on the phone to the chancellor, or whoever he has contact with in the UK Government, to make that point on behalf of Scotland’s public services, because it is a very serious matter, and the Labour Party should take it seriously.

Elizabeth Smith (Conservative, Mid Scotland and Fife)

On portfolio planning, in the light of the likely change to three-year planning for budgets, will the cabinet secretary put on record whether that will be in the new Verity house agreement between the Scottish Government and local authorities, which want to be able to plan long term?

Shona Robison (Scottish National Party, Dundee City East)

At last, I have a sensible question from those on the Conservative benches. I am very sympathetic to Liz Smith’s position. It depends on whether we get multiyear funding. Indications from the UK Government on that are very positive, with the spending review for resource and capital due in late spring. If we get into a three-year cycle that is reviewed every two years, I am happy to have a similar arrangement with local government. That would also open up potential for an arrangement with third sector organisations. I am happy to keep Liz Smith informed about that.

Liam McArthur (Liberal Democrat, Orkney Islands)

That concludes portfolio questions. There will be a short pause to allow for front-bench members to organise for the next item of business.

Business Motions

Alison Johnstone (Presiding Officer, Lothian)

The next item of business is consideration of business motion S6M-15545, in the name of Jamie Hepburn, on behalf of the Parliamentary Bureau, on the Prisoners (Early Release) (Scotland) Bill: timetable and procedures for consideration. Any member who wishes to speak to the motion should press their request-to-speak button now.

Motion moved,

That, subject to the Parliament’s agreement that the Prisoners (Early Release) (Scotland) Bill be treated as an Emergency Bill, the Parliament agrees to consider the Prisoners (Early Release) (Scotland) Bill as follows—

Stage 1 on Thursday 21 November 2024;

and, subject to the Parliament’s agreement of the general principles of the Bill, Stages 2 and 3 on Tuesday 26 November 2024.—[Jamie Hepburn]

Alison Johnstone (Presiding Officer, Lothian)

No member has asked to speak to the motion.

The question is, that motion S6M-15545, on the Prisoners (Early Release) (Scotland) Bill: timetable and procedures for consideration, be agreed to. Are we agreed?

Members:

No.

Alison Johnstone (Presiding Officer, Lothian)

There will be a division.

Alison Johnstone (Presiding Officer, Lothian)

The result of the division on motion S6M-15545, in the name of Jamie Hepburn, on the Prisoners (Early Release) (Scotland) Bill: timetable and procedures for consideration, is: For 92, Against 31, Abstentions 0.

Motion agreed to,

That, subject to the Parliament’s agreement that the Prisoners (Early Release) (Scotland) Bill be treated as an Emergency Bill, the Parliament agrees to consider the Prisoners (Early Release) (Scotland) Bill as follows—

Stage 1 on Thursday 21 November 2024;

and, subject to the Parliament’s agreement of the general principles of the Bill, Stages 2 and 3 on Tuesday 26 November 2024.

Alison Johnstone (Presiding Officer, Lothian)

The next item of business is consideration of business motion S6M-15540, in the name of Jamie Hepburn, on behalf of the Parliamentary Bureau, setting out a business programme.

Motion moved,

That the Parliament agrees—

(a) the following programme of business—

Tuesday 26 November 2024

2.00 pm Time for Reflection

followed by Parliamentary Bureau Motions

followed by Topical Questions (if selected)

followed by Committee of the Whole Parliament — Stage 2 Proceedings: Prisoners (Early Release) (Scotland) Bill

followed by Stage 3 Proceedings: Prisoners (Early Release) (Scotland) Bill

followed by Committee Announcements

followed by Business Motions

followed by Parliamentary Bureau Motions

8.00 pm Decision Time

Wednesday 27 November 2024

2.00 pm Parliamentary Bureau Motions

2.00 pm Portfolio Questions: Rural Affairs, Land Reform and Islands; Health and Social Care

followed by Scottish Labour Party Business

followed by Business Motions

followed by Parliamentary Bureau Motions

followed by Approval of SSIs (if required)

5.10 pm Decision Time

followed by Members’ Business

Thursday 28 November 2024

11.40 am Parliamentary Bureau Motions

11.40 am General Questions

12.00 pm First Minister's Questions

followed by Members’ Business

2.00 pm Parliamentary Bureau Motions

2.00 pm Scottish Parliamentary Corporate Body Questions

2.15 pm Portfolio Questions: Social Justice

followed by Ministerial Statement: A96 Corridor Review Publication

followed by Stage 1 Debate: Housing (Scotland) Bill

followed by Financial Resolution: Housing (Scotland) Bill

followed by Business Motions

followed by Parliamentary Bureau Motions

5.00 pm Decision Time

Tuesday 3 December 2024

2.00 pm Time for Reflection

followed by Parliamentary Bureau Motions

followed by Topical Questions (if selected)

followed by Stage 3 Proceedings: Social Security (Amendment) (Scotland) Bill

followed by Committee Announcements

followed by Business Motions

followed by Parliamentary Bureau Motions

5.00 pm Decision Time

followed by Members’ Business

Wednesday 4 December 2024

2.00 pm Parliamentary Bureau Motions

2.00 pm Portfolio Questions: Constitution, External Affairs and Culture, and Parliamentary Business; Justice and Home Affairs

followed by Scottish Government Business

followed by Business Motions

followed by Parliamentary Bureau Motions

followed by Approval of SSIs (if required)

5.00 pm Decision Time

followed by Members’ Business

Thursday 5 December 2024

11.40 am Parliamentary Bureau Motions

11.40 am General Questions

12.00 pm First Minister's Questions

followed by Members’ Business

2.30 pm Parliamentary Bureau Motions

2.30 pm Portfolio Questions: Education and Skills

followed by Scottish Government Business

followed by Business Motions

followed by Parliamentary Bureau Motions

5.00 pm Decision Time

(b) that, for the purposes of Portfolio Questions in the week beginning 25 November 2024, in rule 13.7.3, after the word “except” the words “to the extent to which the Presiding Officer considers that the questions are on the same or similar subject matter or” are inserted.—[Jamie Hepburn.]

Douglas Ross (Conservative, Highlands and Islands)

The business motion adds a statement next Thursday on the publication of the A96 corridor review. Therefore, I wonder whether I can ask the minister, not for details of what will be in the statement, but for information on two points. First, the corridor review was due two years ago, in December 2022, and it has been delayed since then. According to Transport Scotland, there have been 4,600 responses and 11,000 options. Can the minister confirm that members will have sight of the corridor review well in advance of the statement, so that they are able to go through the considerable document and can challenge ministers effectively?

Secondly, without saying what the outcome of the review is, can the minister say whether it is the intention of the Government to give a recommendation to Parliament next week? Again, the communities in Moray, the Highlands and Aberdeenshire have been waiting an awful long time for the outcome of the review, which has so far cost taxpayers £6 million, and they want to know whether, next Thursday, there will be a guarantee that, finally, the Scottish National Party Government will deliver its commitment to fully dual the A96 from Inverness to Aberdeen.

Jamie Hepburn (Scottish National Party, Cumbernauld and Kilsyth)

I am sure that Mr Ross will welcome the fact that we are scheduling the statement, because that will give him the opportunity to ask some of the very questions that he has asked just now. There is, of course, a limit to what I am able to say, because, rightly—as I think that you would expect, Presiding Officer—the first opportunity for those questions to be asked will be after the transport secretary stands on her feet to deliver that statement.

Douglas Ross (Conservative, Highlands and Islands)

That is why, in my remarks, I said that I was not seeking to know what is in the statement. However, does the minister understand that MSPs will be better equipped to question the transport secretary if we see the corridor review in advance, given that there have been almost 5,000 responses to it? Does he also accept that people are expecting a recommendation from the Government next Thursday about whether it is finally going to fully dual the route from Inverness to Aberdeen?

Jamie Hepburn (Scottish National Party, Cumbernauld and Kilsyth)

The latter point actually gets to the heart of the statement. That is an issue for the statement, and Mr Ross will have his opportunity that day to ask questions about the statement, which I presume he will.

I take the point about the notice that is required to be given to members to enable them to properly scrutinise the Government. We have a normal process. I accept that the document is a substantial one, so, right now, along with the transport secretary, I am giving active consideration to how we can facilitate precisely what Mr Ross is looking for, and we will be able to announce something in that regard in due course.

Motion agreed to,

That the Parliament agrees—

(a) the following programme of business—

Tuesday 26 November 2024

2.00 pm Time for Reflection

followed by Parliamentary Bureau Motions

followed by Topical Questions (if selected)

followed by Committee of the Whole Parliament — Stage 2 Proceedings: Prisoners (Early Release) (Scotland) Bill

followed by Stage 3 Proceedings: Prisoners (Early Release) (Scotland) Bill

followed by Committee Announcements

followed by Business Motions

followed by Parliamentary Bureau Motions

8.00 pm Decision Time

Wednesday 27 November 2024

2.00 pm Parliamentary Bureau Motions

2.00 pm Portfolio Questions: Rural Affairs, Land Reform and Islands; Health and Social Care

followed by Scottish Labour Party Business

followed by Business Motions

followed by Parliamentary Bureau Motions

followed by Approval of SSIs (if required)

5.10 pm Decision Time

followed by Members’ Business

Thursday 28 November 2024

11.40 am Parliamentary Bureau Motions

11.40 am General Questions

12.00 pm First Minister's Questions

followed by Members’ Business

2.00 pm Parliamentary Bureau Motions

2.00 pm Scottish Parliamentary Corporate Body Questions

2.15 pm Portfolio Questions: Social Justice

followed by Ministerial Statement: A96 Corridor Review Publication

followed by Stage 1 Debate: Housing (Scotland) Bill

followed by Financial Resolution: Housing (Scotland) Bill

followed by Business Motions

followed by Parliamentary Bureau Motions

5.00 pm Decision Time

Tuesday 3 December 2024

2.00 pm Time for Reflection

followed by Parliamentary Bureau Motions

followed by Topical Questions (if selected)

followed by Stage 3 Proceedings: Social Security (Amendment) (Scotland) Bill

followed by Committee Announcements

followed by Business Motions

followed by Parliamentary Bureau Motions

5.00 pm Decision Time

followed by Members’ Business

Wednesday 4 December 2024

2.00 pm Parliamentary Bureau Motions

2.00 pm Portfolio Questions: Constitution, External Affairs and Culture, and Parliamentary Business; Justice and Home Affairs

followed by Scottish Government Business

followed by Business Motions

followed by Parliamentary Bureau Motions

followed by Approval of SSIs (if required)

5.00 pm Decision Time

followed by Members’ Business

Thursday 5 December 2024

11.40 am Parliamentary Bureau Motions

11.40 am General Questions

12.00 pm First Minister's Questions

followed by Members’ Business

2.30 pm Parliamentary Bureau Motions

2.30 pm Portfolio Questions: Education and Skills

followed by Scottish Government Business

followed by Business Motions

followed by Parliamentary Bureau Motions

5.00 pm Decision Time

(b) that, for the purposes of Portfolio Questions in the week beginning 25 November 2024, in rule 13.7.3, after the word “except” the words “to the extent to which the Presiding Officer considers that the questions are on the same or similar subject matter or” are inserted.

Alison Johnstone (Presiding Officer, Lothian)

The next item of business is consideration of business motion S6M-15553, in the name of Jamie Hepburn, on behalf of the Parliamentary Bureau, on a change to tomorrow’s business.

Motion moved,

That the Parliament agrees to the following revision to the programme of business for Thursday 21 November 2024—

after

followed by Stage 1 Debate: Prisoners (Early Release) (Scotland) Bill

insert

followed by Financial Resolution: Prisoners (Early Release) (Scotland) Bill—[Jamie Hepburn]

Motion agreed to.

Improving Transitions for Young Disabled People

Annabelle Ewing (Scottish National Party, Cowdenbeath)

The next item of business is a statement by Natalie Don-Innes on improving transitions for young disabled people. The minister will take questions at the end of her statement, so there should be no interventions or interruptions.

The Minister for Children, Young People and The Promise (Natalie Don-Innes)

Thank you for the opportunity to make this statement. I extend my thanks to members from across the chamber for raising the important topic of transitions to adulthood for young disabled people. It remains clear that there is cross-party consensus that we should do everything that we can to improve the experience of transition to adulthood for young disabled people, and we will do so. I am heartened that so many members in the chamber share the Government’s ambition to improve their experiences and outcomes during an important period of their lives.

Based on our work to develop the national transitions to adulthood strategy and the evidence that the Education, Children and Young People Committee heard on Pam Duncan-Glancy’s member’s bill, I know that there are excellent examples of local authorities, education, health and social care services and others working to improve the experiences of disabled children and young people across Scotland who are transitioning to adulthood.

Earlier today, I had the pleasure of meeting some of the young people and families who benefit from NHS Lothian and Spina Bifida Hydrocephalus Scotland’s transition clinic, which the Scottish Government helped to support. I heard at first hand about the positive impact of multi-agency collaboration and co-operation that places young people and their families at the heart of the transition process.

Improving transitions for young disabled people remains of critical importance to the Scottish Government. The Minister for Equalities and I continue to work across Government to ensure continued focus and urgency on that agenda. The debate provides an opportunity to update the Parliament on our continued efforts to improve young disabled people’s experiences of transitions. I will also provide further details regarding our commitment to introducing Scotland’s first national transitions to adulthood strategy.

I give the Parliament a commitment that I will engage constructively with Opposition parties on those matters, and I confirm that the Government remains open to strengthening the framework that is required to improve the experiences of young disabled people at points of transition, which is the goal that we all seek to achieve.

First, I want to be clear that the Government is taking action now to improve young disabled people’s experiences of transitions; we are not waiting until we publish the strategy. Given what was said during the stage 1 debate on the Disabled Children and Young People (Transitions to Adulthood) (Scotland) Bill, I know that members from across the chamber want to ensure that we are driving urgent action, so I want to reassure them, disabled children and young people and those who support them that we are doing so.

As members will remember, there was agreement across the parties that, although the ambitions of Ms Duncan-Glancy’s bill to improve the experiences and outcomes for young disabled people were wholly welcome, it remained unclear how the bill would work in practice to resolve the issues being experienced.

As we heard in the chamber last year, the Education, Children and Young People Committee was thorough in its evidence gathering and its discussions with stakeholders, including young disabled people and organisations such as the Association for Real Change Scotland. Many stakeholders expressed doubt that the bill could deliver on its laudable aim of resolving the issues that are experienced by young disabled people as they transition to young adult life. However, I am fully aware that those stakeholders rightly expect the Scottish Government to uphold the commitment that it has made to support young disabled people, and they also expect all of us in the chamber to look beyond party politics and focus on the people at the heart of the issue, who have asked us to work together with them to get this right.

Today, I will set out some of the actions that the Scottish Government is already taking and our next steps as we prepare the strategy.

As well as the work by NHS Lothian and Spina Bifida Hydrocephalus Scotland, there are other examples of excellent practice across Scotland. For example, there is the work of ARC Scotland. Between 2020 and 2023, the Scottish Government funded ARC’s principles into practice trials in 10 local authority areas to improve the lived experiences of young people who need additional support to make the transition to young adult life. Building on the success of those trials, we continue to provide grant funding to ARC Scotland through the children, young people, families and adult learning third sector fund. The funding will enable ARC to continue to run the Scottish Transitions Forum and to support the wider implementation of the principles into practice and compass programmes across Scotland.

We have invested more than £20 million in the Independent Living Fund Scotland’s transition fund, since it opened at the end of 2017, to support young disabled people to make a smoother transition from childhood to adulthood by promoting independence, community participation, social inclusion and confidence.

In 2024-25, we have continued to provide funding to support Enable Scotland’s stepping up transitions programme, which connects young disabled people to fair work, education and productive activities that are designed to support a successful transition into adult life and work.

We are ensuring that all young people in Scotland, including young disabled people, have access to quality careers advice through the national careers service, which is led by Skills Development Scotland. Developing the Young Workforce school co-ordinators also continue to link young people with employers.

We have recently incorporated the United Nations Convention on the Rights of the Child into domestic law, ensuring that we are a country that respects, protects and fulfils the rights of all children, including disabled children. As part of our work to implement the United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Act 2024, the Scottish Government has funded NHS Education for Scotland to support health boards and the Improvement Service in implementing a children’s human rights approach in their practice.

We are supporting other public bodies, such as the Independent Living Fund and others that have a role in supporting young people with their transition to adult life, to ensure that they take a children’s human rights approach. Our work with NES includes supporting health boards to consider children’s rights during transitions to adulthood.

In 2023, we published the getting it right for every child child’s plan practice statement, which includes new guidance for transitions and makes it clear that particular consideration should be given to disabled children and young people. The guidance complements the existing suite of GIRFEC policy and practice guidance that we published in September 2022.

Building on GIRFEC best practice, the Scottish Government is co-designing getting it right for everyone with place-based pathfinders in areas such as Fife, North Lanarkshire and the city of Aberdeen, with those pathfinders considering young people transitioning from children’s services to adult services.

We are developing the GIRFE team around the person toolkit and testing it with pathfinders and partners. The toolkit will help to support positive, early conversations about transitions for young people, with a focus on early planning, accessible information and the co-ordination of professionals around the person. The toolkit is due to be published soon.

Those are just some of the examples of the actions that are being taken across the Scottish Government to improve young disabled people’s experiences of transitions to adulthood. Despite those fantastic efforts, however, I understand that experiences differ and that some young disabled people are not getting the support that they need at the right time. I am clear that all those who have responsibility for transitions must do more to improve the experiences of disabled children and young people, and that doing nothing is not an option.

That is why, in addition to the range of work that I have already set out and more, the Scottish Government remains committed to introducing the national transitions to adulthood strategy. That will help to ensure that there is a joined-up approach, so that all young disabled people in Scotland can experience a supported and positive transition to young adult life.

I would like to take the opportunity that is before the Parliament today to state that the Scottish Government’s recent decision to extend the planned timeline for publishing the strategy has not been taken lightly. However, it was considered necessary if we were to give the fullest consideration to the extensive and invaluable contributions that were made by stakeholders who attended our recent engagement sessions between May and August 2024. The revision was also necessary to ensure that appropriate actions and priorities are considered and discussed across the Government, and we are working on that now. There must also be sufficient time to ensure that the strategy can be published in a range of accessible formats so that it meets the needs of those whom it aims to support.

The decision to extend the timeline was made in collaboration with the external strategic working group, which was set up to support the development of the strategy and which includes key stakeholder representatives of young disabled people, their parent carers, disabled people’s organisations and others who support them.

I hope that members from across the chamber are reassured that the Scottish Government continues to take urgent action and maintain focus on work that supports improved experiences of transitions to adulthood for young disabled people in Scotland. The Government remains committed to delivering progress towards that goal, and we will continue to work collaboratively with young disabled people and their families, with those who provide the high-quality support and planned transitions that we know every young disabled person should have, and with colleagues from across the chamber to ensure that all young disabled people who are making the transition to adulthood in Scotland are empowered to achieve their full potential.

I take the opportunity to again extend an invitation to all parties to work with us to ensure that we get this right. As a Parliament, we owe it to the young people of Scotland to put aside political differences and work together to deliver a strategy that supports young disabled people as they navigate one of the most important periods of their life. I made it clear to Ms Duncan-Glancy during the consideration of her bill that I would be willing to work closely on the transition strategy, and my position is the same today. I urge any member who has feedback on the development of the draft strategy to get in touch with me so that we can ensure that it is delivered as soon as possible. We all have a duty to work together to get this right.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

The minister will now take questions on the issues that were raised in her statement. I intend to allow around 20 minutes for that, after which we will move on to the next item of business, and I invite members who wish to ask a question to press their request-to-speak buttons.

Roz McCall (Conservative, Mid Scotland and Fife)

I thank the minister for advance sight of her statement.

The Scottish Conservatives still believe that improving outcomes for disabled people in their transition into adulthood is the right thing to do, especially given the poor experiences of transitions that many disabled young people continue to have. However, the fact that we are one year on since the Scottish Government reiterated its commitment to publishing a transition to adulthood strategy by the end of this year, and we are no further forward, is disappointing to say the least. Despite warm words such as “commitment”, “reassure”, “developing” and “soon”, and talk of a further statement of intent, we are here today with a ministerial statement that contains no concrete timeline for delivery.

Can the minister therefore guarantee that the strategy will be completed before the end of this parliamentary session? Will the statement of intent list actions by the Scottish Government that it is taking forward in the absence of that strategy? When will those actions start to make a tangible difference to the lives of young people as they transition to adulthood? Given the reliance on the third sector to deliver those tangible differences, can the minister confirm continued funding for those projects?

Natalie Don-Innes

As I said in my statement, I appreciate that it is disappointing that the strategy has been delayed, but it is for a very good reason. We have always been clear that we would seek to develop a strategy that both recognised the urgency of the improvements that we have heard are required and allowed sufficient time to support the engagement and participation of those that it would affect.

The online survey seeking feedback on the statement of intent received 151 responses. We conducted a further period of engagement between May and August 2024, during which we engaged with more than 500 people. I am now committed to ensuring that each and every one of those responses is given the consideration that it deserves. With that in mind, and in collaboration with the external strategic working group that has been set up to support the strategy’s development, we are allowing that additional time. I aim to publish the strategy in spring 2025, but I will absolutely publish it sooner if I feel that that is a possibility.

Pam Duncan-Glancy (Labour, Glasgow)

I thank the minister for advance sight of her statement and for agreeing to our request to give the statement. However, I am really disappointed with where we are and what has been said today.

I introduced my bill in 2022 because I believed—and I still do—that disabled children and young people need extra support at transition to give them a fighting chance in future. However, my bill was rejected and this Government promised to introduce a national transitions to adulthood strategy. The minister at the time, Clare Haughey, said on behalf of the Government that

“we are not resting on our laurels.”—[Official Report, Education, Children and Young People Committee, 22 February 2023; c 51.]

That the strategy is now delayed, a year since my bill was rejected—and, indeed, eight years since the Government promised a strategy in its 2016 manifesto—makes it hard to see how the Government is not resting on its laurels when it comes that commitment. Also, to use as a reason for that delay engagement with a group of people who have been consistently engaged and who have been telling the Government about this issue is really unfortunate.

In 2023, 2,202 young disabled people finished school. They could have had support, had the Government published the promised strategy. The fact that this Government is delaying the strategy again is a betrayal, and the Government needs to answer to the thousands of disabled children who have missed out. After all, what is the point in a Government if it takes more than eight years to commit to something that it said that it would do in its manifesto? Does the minister agree with Martin Luther King that a right delayed is a right denied?

Natalie Don-Innes

I am sorry to hear of any instance of any child or young person not getting the support that they need. In relation to Ms Duncan-Glancy’s bill, it is quite clear that the Parliament agreed last year that the bill would not resolve the challenges facing disabled young people in the transition to adult life.

Ms Duncan-Glancy talks about progress. I am absolutely not resting on my laurels—and this Government is not resting on its laurels—when it comes to making improvements for young disabled people. I have already laid out in my statement a number of actions that we are making progress on. Work is continuing to progress and develop the strategy and, as I have said, I have committed to publishing it in spring 2025.

I will continue to engage with Ms Duncan-Glancy on where she feels that those improvements could be made, but I emphasise that I hold as much urgency in relation to this as I believe the member does.

Karen Adam (Scottish National Party, Banffshire and Buchan Coast)

It is vital that disabled young people have informed choice and control about the support provided to them. Can the minister say a bit more about how the Scottish Government will ensure that the rights and preferences of disabled children and young people are at the heart of decision-making processes in their individual transitions to young adult life?

Natalie Don-Innes

Absolutely. I assure Ms Adam that, as with almost everything in my role, I believe that children and young people should be at the heart of decision making. Early transitions planning should be available to young disabled people and a holistic, person-centred approach should be adopted to empower young people to dream big and to identify and pursue their goals and aspirations.

That priority has already been set out in the statement of intent, and it is underpinned by the UNCRC, which, as Parliament knows and as I have mentioned in my statement, we have recently incorporated. In particular, article 23 states that

“States Parties recognize that a mentally or physically disabled child should enjoy a full and decent life, in conditions which ensure dignity, promote self-reliance and facilitate the child’s active participation in the community”,

and article 13 states that

“The child shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers”.

I believe that, in line with a lot of Scottish Government priorities and with legislation, those are, and will be, key considerations in the strategy’s development.

Rona Mackay (Scottish National Party, Strathkelvin and Bearsden)

I, too, welcome the minister’s comments about the need to bring disabled young people along on this journey with us. Following the Government’s statement of intent on transitions and the establishment of the working group, extensive consultation with stakeholders, including disabled young people and their families, has taken place. Can the minister say more about that engagement and outline how it will continue?

Natalie Don-Innes

Absolutely. When we engaged more widely on the strategy between May and August 2024, we took a solution-focused approach to understanding what is working well and what could be even better in relation to each of the strategy’s priorities, as set out in the statement of intent. During that period, as I have said, we engaged with more than 500 people across Scotland, including parents, carers and professionals from a range of sectors who are supporting young disabled people and, most crucially, young disabled people themselves. I extend my sincerest thanks to everyone involved in that process.

Throughout the strategy’s development, we have worked directly with some groups of young disabled people, including ARC Scotland’s divergent influencers, Children in Scotland’s inclusion ambassadors and Independent Living Fund Scotland’s young ambassadors. The views of those groups continue to be sought via representation on that external strategic working group.

Post publication, the greatest measure of the strategy’s success will be direct feedback from young disabled people. We will continue to engage with young disabled people, their families and others who support them to ensure that the strategy is having its intended impact.

Daniel Johnson (Labour, Edinburgh Southern)

The Scottish Government recently published its guidance on the use of seclusion and restraint. Transitions have just one mention in that guidance, in paragraph 29, which is a single sentence. Is that area—or, indeed, are other areas of the guidance—for future revision? Would the Government be willing to discuss how transitions could be included in my bill? Does she agree that the best prevention of the use of seclusion and restraint is, after all, adequate support plans being in place at every point of transition?

Natalie Don-Innes

I would certainly be happy to discuss that with the member. I know that the Cabinet Secretary for Education and Skills is leading on that work, and we would be happy to discuss the issues that Mr Johnson has raised.

Audrey Nicoll (Scottish National Party, Aberdeen South and North Kincardine)

Although a lot of disabled young people will transition to college or to the world of work, many of them will go to university. What support is the Scottish Government able to provide for disabled students in that particular space?

Natalie Don-Innes

The Scottish Government is committed to ensuring that all students with a disability, a long-term medical condition or additional support needs are supported as they study in further and higher education. As an initial step, we have opened up living costs support to disabled students who are studying in full-time, distance-learning courses and who are unable to study in campus-based courses because of their disability.

Universities operate independently of the Scottish Government, but each college or university has a duty under the Equality Act 2010 to make reasonable adjustments to ensure that students with disabilities, including those with long-term medical conditions, are not placed at a disadvantage. Scottish universities are covered by the public sector equality duty, which requires them to, among other things,

“report ... on mainstreaming the equality duty ... publish equality outcomes and report progress”

and

“assess and review policies and practices.”

The regulatory body for the Equality Act 2010 is the Equality and Human Rights Commission, and more detail of its work in Scotland can be found on its website.

Ross Greer (Green, West Scotland)

A successful transition to adulthood is made far more likely if a disabled young person has had a successful experience in education. However, if every action in the Government’s additional support for learning action plan were implemented and delivered in full, it would still make next to no difference to the appalling situation that is faced in our schools by many children and young people with additional needs. As much as I welcome the commitment to work with other parties, does the minister agree that, as a minimum, the transition strategy must be far more ambitious and substantial than the additional support for learning strategy is?

Natalie Don-Innes

If people feel that across the board, it will—absolutely—come back to us through our engagement. I have told members about the groups that we are engaging with, and we are engaging fully. I am standing here, talking about the delay to the strategy, because I want to ensure that each of those responses is considered fully. If that issue comes up, I will be happy to give it the consideration that it deserves in order to ensure that all young disabled people have the support that they require when they are making that transition to adulthood.

Alex Cole-Hamilton (Liberal Democrat, Edinburgh Western)

Each week at our surgeries, we all meet constituents who are being failed because they are unable to properly access the support that they need when they are transitioning to adulthood. Last year, when we debated Pam Duncan-Glancy’s bill, the Scottish Government persuaded the majority of MSPs in the chamber that support was otherwise accessible and that there was too much duplication and overlap with key aspects of existing legislation, but the strategy that has been promised to resolve that is still delayed. Is the minister persuaded that the duplication of which her Government spoke will be swept up in a strategy that is still to come? Is she confident that that is achievable without further legislation?

Natalie Don-Innes

I am confident that it is achievable. I highlight to the member that, although the Government opposed the bill, the committee that scrutinised the bill agreed that it would not have the intended outcomes. That was clear to members across the chamber. I have been clear, and I have highlighted when the strategy will come out. I believe that it is possible to make improvements without further legislative change.

As I highlighted in the statement, we are looking to improve things in a number of ways. As I said, there are new responsibilities under the UNCRC and in relation to implementing GIRFEC and GIRFE. I believe that things are improving every day, although, of course, I am sorry to hear of any instances of Mr Cole-Hamilton’s constituents not receiving the support that they need.

Clare Adamson (Scottish National Party, Motherwell and Wishaw)

The Scottish Government has made substantial progress in reducing the disability employment gap, but we know that that depends very much on third sector and social enterprise support. Given the reaction to the national insurance increases for employers and the concerns that have been raised by the third sector, will the minister outline how she is engaging with the third sector in developing the strategy?

Natalie Don-Innes

I have already laid out how we have engaged with the third sector, and I will be very clear: I engage with the third sector on a daily basis. I understand the concerns that third sector organisations have around the national insurance contributions, and I understand the huge impact that they have on the ground. We will continue discussions with those organisations about how best we can support them.

Jeremy Balfour (Conservative, Lothian)

A number of things seem to be missing from the minister’s statement and answers today, not least any meaningful metrics by which we can judge the success of the Government’s actions. How does the minister plan to measure whether her policies are successful? How will she collect that data so that Parliament can scrutinise it more carefully?

Natalie Don-Innes

Progress on the statement will be monitored and reviewed. The best judgement of whether the actions that we are taking are successful will come from scrutiny in the Parliament by Opposition members and scrutiny by children and young people. I want to hear those voices, because they will continue to tell us where we are getting it right, where we are getting it wrong and where we need to go further.

The actions that are laid out in the strategy will be monitored to ensure that they have the effect that we want them to have in providing that support.

Emma Harper (Scottish National Party, South Scotland)

It is important that children and young people receive all the support that they need to flourish and thrive, including children and young people with a disability or additional needs who are in rural areas such as my South Scotland region. Will the minister set out what the Scottish Government is doing on additional support for learning for children and families in more remote and rural areas?

Natalie Don-Innes

Absolutely. Scotland’s approach to supporting children and young people in their learning has inclusion at its heart. That is why, last week, we published the third progress report on the additional support for learning action plan, which sets out the progress that was made between November 2022 and June 2024 towards the delivery of the actions that are set out in the ASL action plan. The plan was developed in partnership with the Convention of Scottish Local Authorities and ASL project board members. To complement the progress report, an updated ASL action plan was also published, which outlines the steps that we are taking to meet the recommendations that were set out in the review.

A range of actions have been carried out to date. We have established the success looks different awards to co-create and collaborate with children, young people and their families. Work has begun to establish parent groups in local authorities, and professional learning opportunities for our teaching and support staff continue to be a priority.

I highlight that the responsibility for the delivery of education is devolved at a range of levels across education authorities and schools and through the actions of individual members of staff, including in rural locations. Partner organisations, including health boards, social work services, further and higher education and the third sector, all have a role to play in delivering additional support for learning as part of delivering educational outcomes for children and young people.

Miles Briggs (Conservative, Lothian)

I apologise again for arriving late in the chamber.

I ask the minister to be honest with the chamber. A year on, we do not seem to have seen any progress whatsoever. All the progress that the minister outlined in her statement has been made by the third sector. Although we welcome that, we have not seen progress from the Government, eight years on from when it said that we would. I ask the minister a simple question: how will she measure progress over the next year? Will it be the number of people who are going to more positive destinations? Or will there be no measurement of what the Government intends to take forward over the next 12 months?

Natalie Don-Innes

On the member’s comments about what has happened in the past year, I have set out a range of areas in which I feel that we are seeing progress. I am happy to commit to providing a full progress update on the actions that I set out last year, if the member and the Parliament would find that helpful.

On the progress that we are making, we are focusing on the getting it right for every child approach and on strengthening implementation by working in partnership with a range of services and stakeholders to ensure that that approach is embedded across all sectors. For adult services, work is on-going to develop GIRFE, which, as I have said, builds on existing adult practice and best practice learning from GIRFEC.

Although, as I have said, progress will be analysed—I am happy to provide progress reports when that is required—the best tell of whether we are getting it right is what we are hearing from the children and young people who are experiencing the services. If we are hearing that we are not going far enough or fast enough, the Government will have to consider that.

Martin Whitfield (Labour, South Scotland)

Roz McCall asked about funding. The children, young people and families early intervention fund, which is the vehicle through which the third sector is funded, is due to end in March 2025. Can the minister confirm that funding will continue beyond that date?

Natalie Don-Innes

I am not able to confirm that prior to the announcement of the budget on 4 December, as the member will know. However, I assure him that I engage with third sector organisations practically daily—I did so during my visit this morning, which I have mentioned—and I hear how important the funding is to them. I absolutely understand and hear the calls from the third sector about the uncertainty around funding.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

That concludes the statement on improving transitions for young disabled people. There will be a short pause before we move on to the next item of business, to allow front-bench teams to change position should they wish to do so.

National Insurance Increase (Impact on Public Services)

Annabelle Ewing (Scottish National Party, Cowdenbeath)

The next item of business is a debate on motion S6M-15529, in the name of Neil Gray, on the impact of the national insurance increase on public services. I invite members who wish to participate in the debate to press their request-to-speak buttons.

Neil Gray (Scottish National Party, Airdrie and Shotts)

During the recent United Kingdom general election, we highlighted the real and pressing challenges in United Kingdom public finances. At the time, those challenges were largely dismissed by the Labour Party. Rachel Reeves said:

“I am under no illusion about the scale of the challenge we face”

and

“we don’t need higher taxes”.

Although I have a degree of sympathy for the Chancellor of the Exchequer with regard to the challenges that she inherited, Labour has not chosen to meet those challenges by looking to those with the broadest shoulders, as we called for. Instead, Labour has delivered a hike to employer national insurance contributions, without, it would appear, first considering the impact that that would have. Rather than a progressive approach, Labour has chosen a regressive tax on employment. That approach was in line with Labour not realising the consequence that was first seen in July in relation to the winter fuel payments, where, without any consultation with the Scottish Government, Labour decided to cut the funding for that vital benefit to Scottish pensioners.

Crucially, the Chancellor of the Exchequer has not committed to fully reimbursing the costs of the increase to those providing public services. Those costs will be challenging for the Scottish Government to bear. We expect the uplift next year to the Scottish Government’s overall resource funding position to be only around 1 per cent in real terms, before national insurance contribution consequentials. In short, if the UK Government does not fully reimburse those costs, there will be a significant detrimental impact on the delivery of public services.

Alex Cole-Hamilton (Liberal Democrat, Edinburgh Western)

Does the cabinet secretary recognise that there is not only an increase in the percentage of employer national insurance contributions but a decrease in the annual earnings threshold, which will sweep far more workers into the category of workers for whom employers must pay national insurance, which will increase the bill to employers? That is of particular importance with regard to care home providers. We have seen a mass exodus of providers from the market in the Highlands already, and the change will only accelerate the problem.

Neil Gray (Scottish National Party, Airdrie and Shotts)

I agree with Alex Cole-Hamilton about the impact that the changes will have. This morning at Leith surgery, I heard the exact point that he was referencing about lower-paid workers being brought into that category, which will have a disproportionate impact on those who employ lower-paid workers. The point that he makes is absolutely right, which is why I hope that we can count on the support of the Liberal Democrats for our motion at decision time.

The decision to increase employer national insurance contributions will increase the direct costs that are faced by the Scottish public sector by well in excess of £500 million in 2025-26—costs that could not be foreseen prior to the budget just a few weeks ago. In the days that followed the announcement, it was evident that neither the chancellor nor her colleagues seemed to understand the impact of the decision, with the chancellor saying one thing and the Chief Secretary to the Treasury saying another. We heard that the costs had been reimbursed and also that the costs had not yet been reimbursed. At one point, the chief secretary claimed that many primary and social care providers would benefit from the more generous employment allowance introduced by the budget, but the employment allowance is not available to any contractor that does more than half their work in the public sector.

Now, just two weeks before our budget, we still do not know how much funding we will receive. In fact, we will not get formal confirmation until after the coming budget process has been concluded—perhaps as late as May.

Today, the Scottish Government has published its estimates of the direct costs to the Scottish public sector from that change, looking across our health and social care services, education providers, the third sector and others. We have shared those costs with the Treasury and have asked it for urgent clarification on the level of compensation that Scotland will receive. If the chancellor does not fund that in full and instead relies on the Barnett formula, it could be that, with costs of more than £500 million, at best £380 million would be forthcoming. Depending on what is reimbursed, that could be a cost to services of around £140 million to £200 million. If the reimbursement is less than £380 million, that will put the Scottish budget in an extremely difficult position.

Murdo Fraser (Conservative, Mid Scotland and Fife)

I do not disagree with many of the points that the cabinet secretary has made. However, there is something missing from his speech, and from his motion, and that is any reference to the impact on the private sector, which provides the earnings and the taxes that support public services.

Has the Scottish Government, as part of the work that it is doing, undertaken any analysis of the impact of the national insurance increase on Scotland’s private sector?

Neil Gray (Scottish National Party, Airdrie and Shotts)

I appreciate the point that Murdo Fraser makes, because I think that the increase is regressive for growth, which is supposedly the UK Government’s number 1 priority. The UK Government’s own figures, from the Office for Budget Responsibility, demonstrate that the increase is going to have a negative impact on growth.

Later in my speech, I will come to some of the elements in the private sector that have a contractual relationship with public services, and Ivan McKee will touch in greater detail on the impact on the wider economy, which Murdo Fraser is right to point out.

The funding situation means that Scotland’s public services would pay the cost of the UK Government’s tax increase. It would mean that what the UK Government’s budget gives to Scotland with one hand, the chancellor will take away with the other.

As members know, NHS Scotland is our largest employer, with more than 180,000 staff working day in, day out to protect the nation’s wellbeing. My officials have estimated that the total direct costs to the national health service alone in 2025-26 will be almost £200 million as a result of the change.

We also estimate at this stage that there will be a further £40 million cost impact on independent contractors that provide vital NHS services, such as general practitioners, dentists, pharmacists and optometrists. That is not included in the £500 million, which is of acute concern to me. The chancellor has decided not to include any funding for independent contractors, which means not a penny for the GP practices on which our communities rely.

Dr Iain Morrison, chair of the Scottish general practitioners committee, recently told The Scotsman :

“These additional costs could threaten the viability of practices and lead to cutbacks in services—which ultimately means that it is patients who will suffer.”

I have also heard directly from Dr Morrison—and I will be meeting him later today—on his concerns regarding the national insurance uplift, and from professionals representing NHS dental, ophthalmic and pharmaceutical sectors. I am grateful for all their submissions.

Craig Hoy (Conservative, South Scotland)

Will the cabinet secretary give way?

Neil Gray (Scottish National Party, Airdrie and Shotts)

All are clear that failing to mitigate the cost pressures that are felt by contractors risks jobs and NHS service delivery now, and jeopardises our on-going reform and ambition to move to a preventative and community-based model of care in Scotland.

Do I have time in hand for an intervention, Deputy Presiding Officer?

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Yes.

Neil Gray (Scottish National Party, Airdrie and Shotts)

I give way to Mr Hoy.

Craig Hoy (Conservative, South Scotland)

Will the cabinet secretary concede that the cost pressures that GPs and dentists face were already in place as a result of decisions that were taken by his Government? It is the cumulative impact that is now effectively the straw that could break the camel’s back.

Neil Gray (Scottish National Party, Airdrie and Shotts)

No—I recognise that the uplift that we have given to GP services is challenging, but it aligns with the recommendations from the review body on doctors’ and dentists’ remuneration. I am looking at what more I can do as I look to shift the resource and the balance of care from secondary care services into primary and community care services, and I continue to engage with the British Medical Association and with Dr Morrison and others on that point.

The decision, however, strikes at the heart of our GP practices being able to employ an additional receptionist to cope with the additional lists in some areas, or an additional advanced nurse practitioner. Those are the staff who can help to deliver the services that we need in communities, and that is why the increase is such a regressive step.

Having to wait until May 2025 for confirmation is—as I heard when I was at Leith surgery this morning—too late for our independent contractors such as GPs. They will have to make hiring decisions now without knowing how much those staff will ultimately cost. Many of those contractors are ineligible for the employment allowance, ironically as a direct result of the work that they provide for the NHS, so they will bear the full brunt of the change. That is the case not only in Scotland, but across the UK. However, in Scotland, we recognise the importance of our independent contracting partners, even if Labour’s budget fails to do so.

While the impact on health and social care is profound, the changes to national insurance will impact on all areas of the public sector in Scotland. The Convention of Scottish Local Authorities estimates that the impact on local government will be £265 million, after accounting for the impact on teachers’ pay. Our police service will face increased costs of more than £25 million, our prison service will face an additional £6 million bill, and our Fire and Rescue Service will face further costs of more than £5 million.

Scotland’s universities and colleges will see cost increases of £60 million, and for those helping the most vulnerable in our communities, the additional costs will bring significant anxiety and growing concern after years of cost pressures posed by the pandemic and the ensuing cost of living crisis.

Social care services will be particularly penalised by the chancellor’s decisions, facing costs of more than £84 million—a move that Donald Macaskill, the chief executive of Scottish Care, whose event some of us were at on Friday, has called

“the straw that breaks the camel’s back”.

The Scottish Council for Voluntary Organisations has estimated that the third sector—that vital network of charities, social enterprises and grass-roots community groups that work to support our population’s wellbeing—will now have to send an additional £75 million to the UK Exchequer each year. That begs the question why, when faced with a need to increase revenue, the chancellor did not ask those with the broadest shoulders to contribute more. Why did she decide to balance the budget on the backs of charities, care providers, hospices and health services?

It is clear that although the financial impact to Scotland’s public sector is extensive—reaching more than £500 million—the wider non-financial costs to services and our economy might be far greater. Ivan McKee will speak about that in his closing speech.

Those challenges were avoidable. The Scottish Government will do everything that it can to protect its public services and the voluntary sector, but we cannot do that without the means. Had the UK Government chosen to discuss the possibility of raising employer national insurance contributions with the devolved Governments, we could have helped it to understand the challenges for Scotland. We are now, unfortunately, past that point.

The folly of Labour’s position in its amendment today is stark. The cost to the directly funded public sector is more than £500 million. It is even greater when we consider that the UK Government refuses to protect GPs, social care providers and others. The ridiculous and unsustainable folly of Labour’s position in Scotland is that the 1 per cent real-terms increase to our block grant is to pay for it, but the costs outweigh the available funds.

Once again, it all boils down to Scottish Labour asking Scottish public services to pay for a bad UK decision. What a shameful position it has got itself into, where it will sell out our Scottish public services to fill the UK Treasury’s coffers. This Government will not stand for it, and I ask the Parliament to support our motion to ensure that we send a message that we will not stand for the sell-out of our public services.

I move,

That the Parliament believes that the UK Government should fully reimburse the over £500 million costs of employer national insurance contributions to the delivery of public services in Scotland as a result of the UK Autumn Statement; recognises that, if the Chancellor of the Exchequer does not fully reimburse these costs, it will have a detrimental impact on the services that the people of Scotland rely on, and notes with concern the wider impact of the increase in employer national insurance contributions on the education, hospice and charitable sectors, not least for those who deliver services such as social care.

Craig Hoy (Conservative, South Scotland)

In politics, there are lies, damned lies, and then there are the election commitments and employment claims from Labour’s new Chancellor of the Exchequer. Rachel Reeves might or might not be an economist, but it is now crystal clear that she is supremely capable of being economical with the truth. It is clearer by the day that people, businesses and our public services will pay the ultimate price.

When it comes to national insurance, let us be clear about what the Labour Party’s manifesto said. It said:

“Labour will not increase taxes on working people, which is why we will not increase National Insurance”.

In recent weeks, Labour has argued that its commitment applied only to working people, not to employers. However, Rachel Reeves’s broken-promise budget—

Jackie Baillie (Labour, Dumbarton)

Will Craig Hoy take an intervention?

Craig Hoy (Conservative, South Scotland)

I will. Perhaps Jackie Baillie can give us her interpretation.

Jackie Baillie (Labour, Dumbarton)

I genuinely find it quite extraordinary that 14 years of the Tories has just been wiped out at a stroke. What happened to Boris Johnson and Liz Truss, who crashed the economy and placed us in the position that we are now in? The Conservatives need to have some self-awareness.

Craig Hoy (Conservative, South Scotland)

Jackie Baillie is forgetting that inflation was falling, interest rates were falling and economic growth was on an upward path, which the OBR now says is under threat as a result of the Labour Party’s budget.

The devil is always in the detail of any chancellor’s statement, and we should be alert to that. That is priced into politics. However, this budget is not priced in because few, if any, chancellors have sought to raise tax by such a staggering amount in a single budget—£40 billion—and no chancellor has sought to do it in such an underhand way.

For the record, Labour’s manifesto did not state explicitly that the commitment applied only to employee national insurance—I accept that. However, we know that it was deliberately opaque. Paul Johnson, the director of the Institute for Fiscal Studies, reinforced that point when he stated publicly that increasing employer national insurance contributions is a

“straightforward breach of a manifesto commitment.”

Even if we give the UK Labour Government the benefit of the doubt—even Scottish Labour members will struggle to do that today—it remains clear that a rise in employer contributions still amounts to a tax on working people and on public service delivery.

The OBR forecasts that about three quarters of employer national insurance contributions will be passed on to employees, including those effectively delivering Scotland’s public services. Scotland’s public sector will be hit unduly hard because it is larger and because the workers in it are paid more than in the rest of the UK.

Today, we will hear that this £25 billion tax on jobs will hit many organisations that directly and indirectly deliver our public services. It could cost councils alone £265 million. It will hit our general practitioner surgeries, universities, care homes, the palliative care sector and independent nurseries, and a huge range of third sector organisations and private contractors now face severe financial pressures.

In short, the decision will cost jobs and result in lower real-terms wages, thereby reducing the overall amount that the measure will raise after its indirect consequences are accounted for.

The OBR also says that passing on employer national insurance contributions increases will contribute to a “sharp” slowdown in real household disposable income growth in 2026-27 and 2027-28—the growth that the UK Government said that its budget would deliver for Scotland. In other words, the increases will undermine growth here in Scotland and across the UK.

Therefore, it is no surprise that alarm bells are ringing across the public sector and in the many organisations delivering services on behalf of the state. Those concerned about the negative impact of all that come from a variety of well-respected groups in Scotland, all of which are now issuing similar stark warnings.

The chairman of the British Medical Association’s Scottish general practitioners committee, Dr Iain Morrison, said:

“We would call on both governments to urgently provide reassurances on additional funding and ensure GPs will not be forced to shoulder the burden of these extra employment costs at the expense of the care they will be able to provide to patients.”

It is increasingly clear that the impact will not just be on GPs but on the third sector and charities. Marie Curie warns that Scotland’s hospice sector began this year with a predicted £15 million budget deficit, and that was before NHS pay awards were announced. The organisation says that, without urgent support, further service cuts and vulnerable patients being turned away will become unavoidable, and it calls on ministers, including Scottish ministers to act now. It added:

“With the additional funding from the UK Government, the Scottish Government now has the opportunity and financial means to demonstrate its commitment to supporting essential palliative care services.”

Neil Gray (Scottish National Party, Airdrie and Shotts)

I recognise the challenges that Craig Hoy mentions. However, does he accept that, as we have set out, the resource block grant uplift is less than 1 per cent and therefore amounts to a very narrow window of opportunity to provide investment? Does he agree that it would be better to tackle the issue at source, and to ensure that the UK Government properly mitigates its proposals rather than the Scottish Government having to mitigate a bad UK decision once again?

Craig Hoy (Conservative, South Scotland)

I accept that in terms of the consequences of the increase to national insurance contributions, but perhaps the Scottish Government would have had more cash to play with at this point had it not agreed those inflation-busting public sector pay increases, which were not in its budget last year and have led to the black hole in finances that the additional £1.5 billion is now being used to fill.

It is not just health-related organisations that have expressed concern. The Scottish Council for Voluntary Organisations warns that the scale of additional costs put the sector’s essential services, jobs and organisations at risk.

Peter Mathieson of the University of Edinburgh, which has already announced the potential for job cuts, is warning that the small increase to tuition fees for students generates income that will be way below the significant increase in staff costs resulting from the national insurance increase. That is why organisations across Scotland, which are charged with delivering many of Scotland’s public services, are rightly concerned and are demanding that they are fully reimbursed for the additional employer national insurance costs.

However, I make this appeal to Scottish ministers: as they consider their own budget, they must pass on every single additional penny that they receive from the UK Government to cover national insurance payments. That includes to local government, where the Scottish Government has an appalling record of pocketing the cash and giving the Scottish local authorities the leftover.

Douglas Lumsden (Conservative, North East Scotland)

This afternoon, I heard from Aberdeenshire Council that it has an extra £10.7 million of additional costs in relation to national insurance. In relation to the real living wage, there is an extra £1.5 million in costs, and in relation to the health and social care partnership, there is an extra £6.3 million. Because of the Labour autumn budget, Aberdeenshire Council will have to find an extra £18.5 million.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Mr Lumsden, that is a very long intervention.

Douglas Lumsden (Conservative, North East Scotland)

Does the member agree—

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Mr Hoy, I think that you have heard enough to respond to that. In doing so, I ask that you start to bring your remarks to a close.

Craig Hoy (Conservative, South Scotland)

I thank Douglas Lumsden for his very succinct intervention.

I fully accept that there are cost pressures in councils right across Scotland. The Scottish Government cannot absolve itself of blame there, either. It, too, has made poor financial decisions, wasting £2.7 billion of taxpayers’ money this term alone, while short-changing Scotland’s councils.

The Scottish Government has failed to grow the Scottish economy; it would have had an additional £600 million to spend this year alone had it done so.

It is now clear that, together, the Labour Party and the Scottish National Party have contributed to an environment—

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Mr Hoy, you will have to conclude. Please move your amendment. Thank you.

Craig Hoy (Conservative, South Scotland)

—that threatens the very survival of public services across Scotland.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Mr Hoy, please conclude and move your amendment.

Craig Hoy (Conservative, South Scotland)

I conclude on that point.

I move amendment S6M-15529.2, to leave out from “should” to end and insert:

“increasing employer national insurance contributions will have a detrimental impact on all sectors of Scotland’s economy, including the public, private and voluntary sectors; further believes that it will harm the ability of the NHS in Scotland to deliver services and will undermine social care and third sector organisations involved in public sector delivery; recognises that the rise in employer national insurance contributions is a breach of the Labour Party’s manifesto promise, which stated that it will not increase national insurance; acknowledges that this tax rise on jobs will disproportionately impact Scotland due to a higher number of public sector workers and higher public sector pay levels; notes that the Scottish Government’s policy decisions have already increased the tax burden on hardworking people and businesses in Scotland; calls on the UK Government to reverse its increase to employer national insurance contributions, and further calls on the Scottish Government to use its Budget on 4 December 2024 to start the process of reversing the increased tax burden that it has imposed on Scotland’s economy.”

Annabelle Ewing (Scottish National Party, Cowdenbeath)

I call Jackie Baillie to speak to and move amendment S6M-15529.3.

Jackie Baillie (Labour, Dumbarton)

It is not often that the SNP Government holds a debate on any aspect of health, as it normally wants to run away from its own dismal record. However, if there is an opportunity to blame someone else, it is first in the queue.

What is puzzling—[ Interruption .] What is genuinely puzzling is that the Scottish Government is still supposedly in discussion with the UK Government, and I have not heard that negotiations have ended. Perhaps more negotiation and less posturing would serve the people of Scotland much better.

I turn to the substance of the motion.

Ivan McKee (Scottish National Party, Glasgow Provan)

Will Jackie Baillie give way?

Jackie Baillie (Labour, Dumbarton)

No, I have to make progress.

The Labour UK Government made a choice in the budget to protect working people and invest in public services. It had to fix 14 years of mess—

Kevin Stewart (Scottish National Party, Aberdeen Central)

Will the member give way?

Jackie Baillie (Labour, Dumbarton)

No—the fact that you are loud does not mean that I will give way.

It had to fix 14 years of mess that it inherited from the previous Tory Government.

The budget keeps our promises to Scotland. It has ended the era of austerity, provides billions for investment in public services and prioritises economic growth. It is no secret that public services in Scotland are in crisis after years and years of cuts and mismanagement by the SNP Government. There has been repeated failure—

Neil Gray (Scottish National Party, Airdrie and Shotts)

Will Jackie Baillie give way?

Jackie Baillie (Labour, Dumbarton)

—to reform our school system, and performance in international comparisons continues to decline. One in six Scots is on an NHS waiting list. I will give way to the cabinet secretary if he will tell me how he is going to fix that.

Neil Gray (Scottish National Party, Airdrie and Shotts)

The opportunity to fix that is made much harder by the decision on national insurance contributions.

The Labour amendment asks us to use the less than 1 per cent uplift to our resource budget to mitigate a bad UK Government decision. That is surely an unsustainable position for any party in the Scottish Parliament that has to defend Scottish public services.

Jackie Baillie (Labour, Dumbarton)

I did not hear a question in there, nor an explanation of why one in six Scots is on an NHS waiting list. NHS workers are struggling to treat patients in a system that is not facing up to the reality of an ageing population and doing so with equipment that is, frankly, years out of date. Hospices have been asking the SNP for help for almost two years. Third sector care providers have been warning about the crisis in social care for years, and the cabinet secretary has done nothing. Instead of listening to them and making a difference, the SNP has prioritised division and managed decline.

The Scottish Government has been given the largest increase in its budget in history, outside of the Covid years. It is now for the Government to decide how to deliver that increase to the front-line services that people depend on. There is an extra £789 million of funding for health and social care this year and an additional £1.72 billion for next year. I understand the concerns of those in the health and care sector, but I also understand that Scotland will receive additional money to help the public sector to manage the changes to national insurance. Of course, it will be for the Scottish Government to decide how that money is disbursed. The SNP can now decide whether it will give extra funding to hospices, GPs, dentists and care providers.

Ivan McKee (Scottish National Party, Glasgow Provan)

Will Jackie Baillie give way on that point?

Jackie Baillie (Labour, Dumbarton)

Just listen for a minute.

That is devolution, because the Scottish Government will get the money and can decide its priorities for allocation.

I know that Wes Streeting will allocate funding to hospices shortly, taking account of the pressures on their services, so why cannot Neil Gray do so now? The cabinet secretary could make a commitment now about how the money that he receives will be spent. Perhaps he can tell the Parliament whether he intends to use it to cover employer contributions for civil servants in St Andrew’s house or Victoria Quay. I am sure that members will want to be reminded that the civil service in Scotland has grown from 15,800 staff in 2007 to 26,900 in 2024. Will the cabinet secretary tell us now that any money for national insurance contributions will be spent on those who deliver health and social care services in our communities rather than on the army of civil servants?

Neil Gray (Scottish National Party, Airdrie and Shotts)

That is an appalling example of obfuscation from Jackie Baillie. She is suggesting nonsense about what has been projected, but the UK Government has said that it will not pass on support to GP contractors, social care providers or anybody who operates with a public contract in the health service. Therefore, we will not be expected to do that with the money that comes to us. That is an appalling example of a defence of an appalling position from the UK Government. Jackie Baillie surely has to realise that the chancellor must step in and ensure that there is proper mitigation for Scottish public services.

Jackie Baillie (Labour, Dumbarton)

I look forward to the debate but, frankly, that was not an intervention—it was much longer than that, so I hope that I will get some time back.

In the list that the Government has published, there is £10 million for Scottish Government employer national insurance contributions. The cabinet secretary could use that to fund the hospice movement, to fund GPs and to do things differently.

The Scottish Government has already received significant resources, but who trusts it to spend those wisely? We have 17 years of evidence that demonstrates that the Government is financially incompetent. I know that the people of Scotland will take a very dim view if the NHS and social care do not start to improve soon. The single biggest threat to Scotland’s NHS and social care is the SNP’s dangerous incompetence, and no amount of deflection and scaremongering can hide that.

The Chancellor of the Exchequer is considering the impact of the changes to employer national insurance contributions before they come into force in April. As a result of those changes, around half of all businesses that are liable for national insurance will pay the same or less than they were paying previously, and around 57,000 businesses in Scotland will pay nothing at all. Two people on the SNP benches, who I know will benefit, have set up companies to avoid paying tax and national insurance on their additional earnings. That hypocrisy is breathtaking.

The SNP must get on with the discussions with the UK Labour Government, listen to calls from stakeholders and use the money that it has to ensure that public service delivery is prioritised. While the SNP carps from the sidelines and mismanages Scotland’s budgets, Labour is delivering record levels of funding for Scotland, supporting the NHS and cleaning up the mess that the Tories left behind. Disappointingly, after 17 years, all that the SNP can do is posture and let Scotland down.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

I remind all members who are seeking to speak in the debate to ensure that they have pressed their request-to-speak button.

I call Ross Greer to open on—[ Interruption .] Ms Baillie, did you move your amendment?

Jackie Baillie (Labour, Dumbarton)

I move amendment S6M-15529.3, to leave out from “believes” to end and insert:

“understands that the decisions taken by the Chancellor of the Exchequer in the Autumn Statement were necessary to fix the foundations of the economy and fund public services; welcomes the increase to the Scottish devolved budget of £1.5 billion in 2024-25 and £3.4 billion next year, which will deliver the highest ever devolved budget settlement in 2025-26; recognises that the Chancellor of the Exchequer has committed to providing funding to the public sector to support it with additional costs associated with changes to employer national insurance contributions, and calls on the Scottish Government to engage with organisations in the education, care and charitable sectors in the deployment of this additional funding, and to use its Budget to guarantee the sustainable delivery of frontline public services.”

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Thank you.

I call Ross Greer to open on behalf of the Scottish Greens.

Ross Greer (Green, West Scotland)

Thank you, Deputy Presiding Officer. I certainly was not going to move that amendment.

If this morning’s polling did not confirm it, that contribution from Jackie Baillie shows just how rattled members of the Labour Party in Scotland are by the appalling decisions that their colleagues in the UK Government are taking.

I wanted to start on a positive, because the Greens believe that the UK Government should increase spending, and I welcome the principle behind the budget and the fact that spending has increased. I recognise that we need to invest and increase spending on public services to recover from 14 years of UK Conservative austerity.

I do not agree with all the Labour Government’s spending decisions—including on dead ends such as carbon capture and storage, for example—but that is for another debate. Employer national insurance contributions, however, had to be one of the worst places that it could have gone to raise additional revenue. That has been proven by the flood of emails into all our inboxes from concerned employers, workers and parents—I will come on to childcare in a moment.

As well as the decision itself, the process has been appalling. How do the Labour Party and the UK Government expect the Scottish Government, local councils, charities and third sector organisations to be able to set competent budgets when nobody knows what their plan is for mitigating the situation? No one yet knows what the consequentials for the Scottish Government will be. Jackie Baillie repeatedly mentioned hospices, but nobody yet knows what level of compensation hospices will receive.

The stakeholders that I have spoken to have had indications from the Treasury that Scotland is simply going to get a Barnett consequential share. What I did not hear from Jackie Baillie was any recognition of the fact that, because of the size of our public sector, there will be a huge shortfall in funding for Scotland.

I did not believe that the Labour Party wanted a smaller state until I heard Jackie Baillie’s speech, but it sounds as though she wants more civil servants to lose their jobs. I would be interested to hear her party leader clarify that when he is invited to speak to the Scottish Trades Union Congress in a few months’ time.

Kevin Stewart (Scottish National Party, Aberdeen Central)

We have heard Jackie Baillie say today that she wants civil servants to lose their jobs. She talked about the growth in the civil service in Scotland, but she did not talk about the fact that, because we now have greater powers, we require more folk to deliver those public services for people.

Ross Greer (Green, West Scotland)

I am grateful to Mr Stewart for that intervention. The most obvious example of the expansion that he talked about is Social Security Scotland, with payments such as the game-changing Scottish child payment lifting tens of thousands of children out of poverty. I am proud that we have more civil servants in Scotland delivering such measures.

COSLA has briefed us all, I am sure, over the past few weeks on the impact that the employer NI contribution increase will have on local authorities. It reckons that the direct cost to councils will be £265 million and that, just in adult social care, the additional cost for the services that it contracts out will be £85 million. That is before we get to the third sector and private providers in children’s social care and early learning and childcare. The cost is massive.

If we consider early learning and childcare, the cost for Government is significant, but the cost for parents and carers will be significant as well, because providers will pass on the increase through an increase in their fees. The Pregnant Then Screwed campaign has pointed out that it will lead to parents—mums, in particular—leaving the workforce to care for their children. That will have a wider negative economic impact on the tax base and our economy as a whole and on the businesses that they will leave at a time of existing labour shortages.

The Barnett consequential share alone would not take into account council arm’s-length external organisations—ALEOs—because there is a different landscape in Scotland compared with the situation in England. In addition, there is the £40 million question mark around dentistry, optometry and pharmacy, which the cabinet secretary mentioned. The Labour Party has not taken any of that into account, and it has not provided clarity to anyone.

Jackie Baillie and I both know the wonderful work that is done by Children’s Hospices Across Scotland at Robin house in Balloch. The hospice sector across the UK, including in England, still does not know whether it will be partially or fully compensated by the UK Government. I would welcome Jackie Baillie clarifying on behalf of the Labour Party whether the hospice sector and the palliative care sector in England are going to be fully compensated. If they are, I would argue for that to be directly passed on to Scotland. However, as yet, we have received absolutely no clarity, and those who provide end-of-life care at the most difficult point in a family’s life are unable to plan ahead for their next financial year. That is shocking. I cannot believe that we are here, just a few weeks into what was supposed to be a progressive change of Government at Westminster.

Alex Cole-Hamilton (Liberal Democrat, Edinburgh Western)

I am grateful for the opportunity to speak in the debate, because there is a great deal of concern out there. Let me put this plainly from the start—the decision of the chancellor, Rachel Reeves, to increase employer national insurance contributions without ensuring that GPs, care home providers and charitable organisations such as those in the hospice community, which we have just heard about from Ross Greer, are not compensated is a huge mistake that risks stretching primary care, social care and the voluntary sector to breaking point.

Even before those tax rises, GPs in my constituency had told me time and again how up against it they are right now, and patients feel that, too. There was a time when people could see their GP at the first time of asking, but our constituents now tell us that sometimes they have to phone dozens of times to get an appointment that is several weeks hence. Extra national insurance contributions will mean that many GP practices cannot follow through with recruitment plans that could have helped to ease the pressure.

Sandesh Gulhane (Conservative, Glasgow)

Given that you are involved in budget conversations, will you say how the Liberal Democrats would fix the crisis in general practice?

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Always speak through the chair.

Alex Cole-Hamilton (Liberal Democrat, Edinburgh Western)

I am grateful for Sandesh Gulhane’s intervention. It will not surprise anyone who is watching the debate to know that, as we did in the general election campaign, the Lib Dems prioritise early access to primary care. That means ensuring that primary care has the resources that it needs to see people fast.

GPs are being punished by a flaw that is at the heart of the rules. They are being treated as private contractors, but their work is entirely in the public sector. They are not entitled to employment allowance, which would reduce their national insurance liability by up to £5,000 each year. The Institute of General Practice Management estimates that the rise will mean that the average GP surgery’s tax bill will go up by around £20,000 a year, which is equivalent to hundreds of appointments.

Neil Gray (Scottish National Party, Airdrie and Shotts)

Will the member take an intervention?

Alex Cole-Hamilton (Liberal Democrat, Edinburgh Western)

I will, if I can have the time back.

Annabelle Ewing (Scottish National Party, Cowdenbeath)

Yes, you can.

Neil Gray (Scottish National Party, Airdrie and Shotts)

Alex Cole-Hamilton made an important point. We share an ambition to see more resource going into primary care. Does he recognise that, if there is not full mitigation of the cost of the national insurance uplift to the entire public sector, that will put at risk the Government’s ability to make further investments in primary care?

Alex Cole-Hamilton (Liberal Democrat, Edinburgh Western)

The UK Government is not the sole arbiter of what the Scottish Government can put into primary care, but I recognise that that becomes all the harder if mitigation is not put in place.

It is not only GPs who are stuck between a rock and a hard place; other care providers will be forced to make cutbacks, too. Ross Greer spoke eloquently about the challenge for pharmacies and hospices. Many dental practices are struggling and might be forced to reduce their already limited NHS provision as a result, which would have serious consequences for already sparse patient access. Dental deserts have emerged across our country as a matter of course. Today, my party uncovered that the UK Government made no assessment of its tax hike on dentistry before making the change, and the British Dental Association has said that that is “reckless”.

Scotland’s social care sector is in crisis. It, too, will be hit hard. In the Highlands, we have already seen a rash of closures across care homes, which will be accelerated by the increase in employer NI contributions. I met care providers who are ashen faced about the landscape that they see. They pointed out that, as I said in my intervention on the cabinet secretary, the issue is not only the increase in the NI percentage but the decrease in the earnings threshold, which is drawing in more part-time workers. Already, thousands of people who are too frail to go home are left languishing in hospitals—sometimes for months—because of the lack of care home places or care packages in the community to receive them. Not only is that unbearable for patients, but it causes a delay—an interruption in flow—across our national health service. None of that has been helped by the Scottish National Party’s decision to plough its time and money into the so-called national care service, which nobody now wants and which the Scottish Government should scrap immediately.

The last thing that the sector needs is for the UK Government to heap on more financial pressure through staffing costs. Labour needs to rethink that, because it is giving with one hand to the NHS but taking away with the other. If it will not cancel its counterproductive tax on jobs—which this tax is—it should exempt GPs and care providers, so as not to make the health and social care crisis worse.

Liam McArthur (Liberal Democrat, Orkney Islands)

We move to the open debate.

Kevin Stewart (Scottish National Party, Aberdeen Central)

Let us be clear that we are in this mess because Labour tried to secure Tory votes by promising not to raise income tax, national insurance and VAT, despite knowing fine well about the multibillion-pound black hole in the Westminster budget that was left by the Tories. Labour broke its promise by raising employer national insurance contributions. It now claims that the public sector will be protected from the tax hike, but it will not give a straight answer as to who is a public sector worker and who is not.

Labour certainly cannot give a straight answer on whether the block grant to the Scottish Government will include compensation for the national insurance hike on public sector workers or whether it expects the Scottish Government to add the national insurance hike to the long list of Westminster mistakes that Scotland has to mitigate.

The Scottish budget will be published in two weeks, but the Cabinet Secretary for Finance and Local Government does not have answers to basic questions from Labour. We need to have some of those answers from Labour today. Will the block grant include additional compensation for the national insurance hike on public sector workers? Are GPs and their receptionists public sector workers? Will Labour reimburse them, or will it push its national insurance hike on hard-pressed GPs, knowing that the BMA has said that that will force general practices to close?

What about council workers? Will Labour reimburse the tax grab on them, or does it expect councils to sack teachers and scaffies to make up the difference? What about our colleges and universities? Job losses have already been announced.

Others also face Labour’s axe. Will Labour reimburse care workers? The Coalition of Care and Support Providers in Scotland has made it clear that, if Labour does not do so, the effect on the social care sector will be catastrophic. Sue Freeth, the chief executive of VSA in Aberdeen, has said that there will be

“a catastrophic impact on Scotland’s social care providers, including VSA.”

VSA looks after 2,000 people across 25 services in Aberdeen and the north-east of Scotland. The impact of the changes on VSA alone will mean that it will have to find up to £468,000. Sue Freeth has said:

“It is crucial that Westminster reverse this regressive policy for our sector, as this will cause Scotland to have an even greater crisis in public services.”

If the care system in Scotland has to bear the costs and then contracts or collapses because of Labour cuts, will the Labour Party pay for the hundreds of millions of pounds of extra NHS spending that will be required to treat frail older people in Scotland? Such questions must be answered.

One of the other hardest-hit sectors will be childcare. Mr Greer mentioned the thoughts of Pregnant Then Screwed, Scotland on all of this. Let us look at the quotes from parents. One parent said that they would likely have to leave their job in the NHS. That would be a double whammy.

The policy has been a huge mistake by the Labour Party. We need answers to all those questions. We need to see the cash from Rachel Reeves or else the public sector and public sector delivery in Scotland will suffer.

Liam McArthur (Liberal Democrat, Orkney Islands)

You need to conclude.

Kevin Stewart (Scottish National Party, Aberdeen Central)

It is clear that the policy has been a big mistake. Labour needs to ensure that it resolves its error.

Elizabeth Smith (Conservative, Mid Scotland and Fife)

Fifty prominent Scottish businessmen told the Prime Minister that the main threat to Britain’s economic recovery was putting a tax on jobs, which is exactly what increasing employer national insurance contributions is. That was back in 2010, when—if Jackie Baillie cares to remember—Gordon Brown and David Cameron were fighting it out for the keys to number 10 and, indeed, when the late Alex Salmond supported the Scottish businesses’ line of attack, because he feared the worst about the effects on the Scottish economy.

That tax on jobs, which is now in place thanks to the UK Labour Government, means that employers will have to fork out £900 extra for each employee on median average earnings and £770 extra for those on the minimum wage.

A knowledge of just the most basic economics tells us what will happen: costs will rise, jobs will be lost and prices will rise for consumers. That knowledge also tells us that the policy will make the hiring of staff and the creation of new jobs, especially in labour-intensive industries such as retail and hospitality, much more challenging, which, in turn, is likely to have a negative effect on economic growth—the very thing that we so desperately need.

Where is the logic in a policy that our universities, for example, have said will cost them more than £45 million? That is on top of the serious funding gap that Anton Muscatelli spoke about at the weekend when it comes to being the main driver of economic growth and innovation.

Labour’s rationale is to plug what it says is a £22 billion black hole—a statistic that we know is much disputed by economists. It wants to ensure that much money is available for investment in public services—especially schools and the national health service—and it has told us that there are other policies that will help business, so no one should get too worried.

The trouble is that any potential benefits are immediately countered by several significant negative externalities. As the chancellor was speaking, the UK’s disability charities, which provide such vital services to some of the most vulnerable in our society, were telling the Prime Minister that the national insurance rise will mean life-changing cuts. Robert Kilgour of Independent Care Homes Scotland also said that it was a “killer blow” to the sector. In other words, it is public sector good and private sector bad all over again. My colleague Sandesh Gulhane will expand on what that means for the medical profession. The concern about the tax hike on employer national insurance is that it is proving to be an existential threat to many businesses.

I will say a bit more about that in the context of the Scottish economy and the current predictions from the Scottish Fiscal Commission. I would not be a Conservative if I did not believe in lower taxes and a smaller state; I see that the public sector now accounts for 22 per cent of the workforce. I also believe in rewarding aspiration and supporting innovation and entrepreneurship. I therefore strongly believe that we need to develop a more effective working partnership between the public and private sectors, as has been done in many other European nations.

In Scottish National Party economic theory, the SNP expands on the social contract, which, according to the First Minister’s statements and other ministers’ speeches, is based on ensuring that the social infrastructure across the country is coherent and generous when it comes to supporting our communities and our most vulnerable groups. That principle is all well and good, but it cannot be put into practice unless there is sufficient money to sustain the delivery and quality of public services. Herein lies the dilemma for the SNP, because its big-state, high-tax economy is not producing the revenues that Scotland so desperately needs to create. It is therefore of little surprise that the combination of that problem, together with Labour’s national insurance hike, has led to businesses screaming from the rooftops. I do not blame them.

Stuart McMillan (Scottish National Party, Greenock and Inverclyde)

I remind members that I am the chair of Moving On Inverclyde, a local recovery service and third sector organisation.

We have already heard today that the uplift that is coming is less than 1 per cent. We have also heard Craig Hoy and the Conservatives criticise public sector workers getting wage rises, and Jackie Baillie admitting that we have had 14 years of austerity affecting the economy. That is quite interesting, given that, previously, those 14 years of austerity seemed to affect elsewhere in the UK, not Scotland.

Craig Hoy (Conservative, South Scotland)

Will the member draw a distinction between public sector workers at the front line—after all, we all support significant wage rises there when they are affordable—and the army of spin doctors and other backroom staff that has ballooned under the SNP, particularly since the Covid pandemic?

Stuart McMillan (Scottish National Party, Greenock and Inverclyde)

That seems to run contrary to Mr Hoy’s comments earlier in the debate. However, as my colleague Kevin Stewart indicated after Ross Greer’s contribution, the fact is that the Scottish Parliament now has additional powers, and we need additional civil servants to deal with them. If Mr Hoy does not like that, that is entirely up to him.

Jackie Baillie, who I see is leaving the chamber, listed some UK budget actions in her contribution, so let me list some other actions—or inactions—in the UK budget. The budget failed to scrap the two-child benefit cap, which, according to the Child Poverty Action Group, affects 1.6 million children, with families losing up to £3,455 per child. It scrapped the universality of the winter fuel payment, which Labour’s own figures show could result in 4,000 excess deaths this winter. Estimates suggest that the cost to the NHS will be just shy of £1 billion, £100 million of which will be in Scotland.

The Women Against State Pension Inequality—the WASPI women—were once again forgotten about. As for the triple lock for pensioners, the chancellor claimed that state pensioners would get a £470 uplift, but, as money expert Martin Lewis has pointed out, that is “simply factually not true”.

Labour also targeted students by raising tuition fees in England and Wales, despite previously ruling out such action. There has also been the broken promise of lower energy bills, now that we know that energy costs are going up. We also cannot forget the fact that mortgages are now going up, too, thanks to Labour’s budget and Labour’s actions.

The list goes on, but those are just some examples, and they are indicative of the same misery that the Tories inflicted on us for 14 years. It was announced this morning that the Labour-led Inverclyde Council has launched funding to mitigate the winter fuel payment decision taken by its bosses at Westminster.

All of that is before we even get to Labour’s decision to increase national insurance contributions for employers. Although some might have agreed at the outset that it is reasonable to place that additional tax burden on employers, given the challenging financial situation that the UK finds itself in, it will have a knock-on effect on employees and customers, as we have already heard from colleagues. Labour is raiding the payroll accounts of charities, care homes and small businesses with this national insurance hike.

We also know about pharmacies, general practices and dental practices, hospices and housing associations—the list goes on. Indeed, in my constituency, the Ardgowan hospice and the Cloch Housing Association have raised with me directly the impact that the national insurance hike will have on their operations. We are talking about thousands of pounds being handed back to the UK Government in national insurance payments that we will not see any return on.

Therefore, I see no change from Labour; what I see is a consistent approach to what we had with the Tories in Westminster. I see an out-of-touch, red-and-blue Westminster establishment that is so far removed from reality that the only option for Scotland is for us to become an independent nation.

Carol Mochan (Labour, South Scotland)

The lack of insight from those on the Tory benches today is astounding. Let us be absolutely clear that 14 years of Tory chaos and decline have very much led us down the path to where we are today.

Elizabeth Smith (Conservative, Mid Scotland and Fife)

Will the member give way?

Carol Mochan (Labour, South Scotland)

No, thanks—I want to make progress in my first minute.

Our public services are seen as an essential part of society by anyone who considers themselves part of the Labour and trade union movement. They are, to put it quite simply, part of our core belief system. Not only are they a testament to genuine, lasting politics, but they stand as a legacy of the serious transformational power that a Government can wield. I am proud to say that, when we look at our country’s history, we see that, at every level of government, that has been at its best when Labour is in power.

However, whether it be my party or other parties—

Stuart McMillan (Scottish National Party, Greenock and Inverclyde)

Will the member give way?

Carol Mochan (Labour, South Scotland)

I want to make progress.

However, whether it be my party or other parties in Government, if there is a shared belief and a shared goal, we should all work together to get the best outcomes for our communities. My plea to the Scottish Government is to use that ability to be transformational. It can improve Scotland’s public services and give people a better future.

Neil Gray (Scottish National Party, Airdrie and Shotts)

How does Carol Mochan expect us to take forward transformational change on a 1 per cent real-terms uplift, if the majority of that is going to be spent paying down the Treasury costs of a national insurance uplift?

Carol Mochan (Labour, South Scotland)

What I am saying is this: let us have a discussion about what is actually happening. I hope that, as I go through my speech, we will be able to have a think about that.

In today’s debate, I ask the Government—indeed, the cabinet secretary—to recognise the powers that we have here in Scotland, to acknowledge the increase in funding that is coming to Scotland, and to debate the transformation that we can have with a UK Labour Government that, by the admission of the Scottish Government, the cabinet secretary and others, is seeking to have a positive relationship with devolved Administrations. I repeat—a positive relationship with devolved Administrations. It is an important point.

I accept that the public, public services and the third sector rightly have an interest in the issue of how we fund public services. It is important that, if the Government of the day alters that funding, we provide people with clarity as to why those decisions have been made. People have a right to know, which is why we should be clear and transparent in all our Parliaments—and, of course, in this one.

As the Labour amendment indicates, this move is, in the long term, about improving public services and getting this country on a firm footing.

Craig Hoy (Conservative, South Scotland)

Will the member take an intervention?

Carol Mochan (Labour, South Scotland)

I want to make progress.

In order to even get close to achieving that, however, we require a sustainable public sector that everyone can benefit from. That is an achievement in which, I must say, the Scottish Government has often seemed to lack interest, given its decisions in recent years. It is disappointing that the SNP’s posture in its motion, after 17 years in Government, is about the UK Government and not about an opportunity to discuss what we can do.

In the recent UK budget, Labour chose to protect working people, which meant asking the wealthiest—and business—to pay their fair share. That will not be an overnight process after more than a decade of devastating Tory austerity, but it is a solid step in the right direction. Scotland is set to receive an extra £3.4 billion in Treasury funding—our biggest settlement since devolution. I say that again: it is the biggest block grant in the history of devolution, and the SNP Government has a responsibility to discuss its delivery. What will it choose to do? Will it choose our front-line services?

I remind the chamber that, in that increased block grant, Labour has taken into account the effect on the public sector of the additional national insurance contributions that it will be subject to. That is responsible governance. The UK Government has made it clear that it will listen to the devolved Governments and take the liabilities that they face into account. That is an open and on-going discussion, in which I hope that the Scottish Government will engage constructively.

I see that the minister is laughing. I am seriously trying to ask—

Ivan McKee (Scottish National Party, Glasgow Provan)

Will the member give way?

Carol Mochan (Labour, South Scotland)

Of course.

Ivan McKee (Scottish National Party, Glasgow Provan)

That is completely delusional—I just heard another member say that—when the reality is that, if the UK Government were serious about the matter, it would have done its homework, done the calculations, known what the numbers were and had that conversation before it made the announcement. It has not done that; it is back-pedalling and does not know what the numbers are. We know what the numbers are and what the impact is, so if the UK Government will not pay in full, that is not a negotiation. It is undercutting public services, which the member claims to care so much about.

Liam McArthur (Liberal Democrat, Orkney Islands)

I can give you the time back, Ms Mochan.

Carol Mochan (Labour, South Scotland)

Thank you.

If only we could have constructive conversations in this chamber. That comment comes from a minister in a Government that has implemented an uncosted council tax freeze and which has put the public sector under enormous pressure. The same SNP that has drastically cut local government funds in its draft budget, which will put pressure on every part of our economy, and which has one in six Scots on a waiting list and a burgeoning two-tier healthcare system, does not allow us to discuss those things. I ask the minister and the Cabinet Secretary for Health and Social Care to take the time to do so.

I say again that Labour has chosen to protect working people, which means that it is asking those with the broadest shoulders to take on as much as they can. Those are the initial steps. We know that more discussion needs to be had, but I hope that the Scottish Government will take action and discuss with the UK Government what can be done and where to go to ensure that we have an excellent public service in Scotland.

Liam McArthur (Liberal Democrat, Orkney Islands)

I call Clare Adamson.

Clare Adamson (Scottish National Party, Motherwell and Wishaw)

Presiding Officer, can I check the timings?

Liam McArthur (Liberal Democrat, Orkney Islands)

There has been some question about them as a result of the reallocation of timings among the Labour group. Ms Mochan was entitled to six minutes, but open-debate speakers are otherwise restricted to four minutes.

Clare Adamson (Scottish National Party, Motherwell and Wishaw)

Thank you for clarifying that, Presiding Officer.

This afternoon, we had a Government statement on transitions for disabled people. As convener of the Education and Skills Committee in the previous session of the Parliament, I know how important it was to Johann Lamont to do something about transitions for disabled people, so I was delighted when Pam Duncan-Glancy continued that campaign in this session of the Parliament.

I asked the minister earlier this afternoon about how vital third sector organisations and social enterprises will be to delivering the ambitions for transitions for disabled people. One of the most heart-wrenching emails that I received this week about the national insurance hike was from Potential Living, a Scottish charity that was created by parents and carers in Motherwell in 1982, which provides care to people with additional support needs in the Motherwell, Wishaw and Bellshill areas. Potential Living, which employs nearly 200 people, is one of many charities in my area that are worried about the devastating impact that the hike will have on them.

I want to get to some fundamental truths in my contribution. My MSP colleagues on the Opposition benches will already know them. They are starting to accept a few truths that have long been denied. First, I do not believe that Labour MSPs and MPs support the hike in employers’ national insurance contributions. They know as well as I do that such a hike will be passed on to lower-income workers through earnings drag, redundancies, pay-rise squeezes and an increase in the cost of living as other organisations pass those costs on to consumers. It is a disproportionate hit that working people can ill afford during a cost of living crisis. Fixing the financial devastation that was left by the Tories should not be done on the backs of the people who are the most vulnerable and least able, whether that is cutting the winter fuel payment or the disproportionate impact on lower earners from the national insurance hike.

The second truth is that the UK Government made the move to avoid breaking a pre-election promise, but it is just semantics, because it will be passed on to working people. The third truth is that Labour MSPs received the same briefings that I did in advance of the debate—a litany of briefings from social enterprises, charities, social care providers, GPs and hospices, all warning of the calamitous impact that this regressive tax hike will have on their already stretched finances.

The fourth truth, as they have shown, is that Labour MSPs have to defend the hike because their London bosses have told them to. They know that it is wrong, and they know that charities, care providers and social enterprises, which do crucial work in all our communities, are not an acceptable target. This fiscal measure is not in line with their values, but they have to defend it.

The final truth, which has long been denied, is one that I hope the public are starting to appreciate. It does not matter whether it is the Tories or Labour or any other political entity that is imposing fiscal and economic policy in Scotland—what matters is that it is being imposed. There has been no consultation and, as the minister said, we have had no input and no say. The only way that we can fix that is with Scottish independence.