Scottish Parliament, 14 December 2017

258 contributions from 83 members. The official report.

Out-of-hospital Cardiac Arrest

Johann Lamont (Labour, Glasgow)

1. To ask the Scottish Government for its response to figures published in the Scottish out-of-hospital cardiac arrest data linkage project, which suggest that people living in the most deprived areas are 43 per cent less likely to survive an out-of-hospital cardiac arrest than those living in more affluent areas. (S5O-01574)

Aileen Campbell (Scottish National Party, Clydesdale)

Reducing inequalities in survival is a priority aim of the out-of-hospital cardiac arrest strategy for Scotland. We know that encouraging bystanders to give cardiopulmonary resuscitation is how maximum impact on survival will be achieved. That is why the save a life for Scotland campaign was launched in 2015 to encourage people to learn CPR and raise awareness of out-of-hospital cardiac arrest.

Save a life for Scotland partners are working with multiply deprived communities across Scotland. The OHCA data linkage project, which is supported by the Scottish Government, is integral to monitoring the impact of the strategy. It will improve the understanding of the links between deprivation and survival to provide robust evidence for effective action.

Johann Lamont (Labour, Glasgow)

The minister may be aware that, according to St Andrew’s First Aid, survival rates for an

out-of-hospital cardiac arrest sit at 6 to 8 per cent, which is lower than the European average of around 10 per cent. That must demand action. Someone who lives in a disadvantaged community is already more likely to have a heart attack. The fact that someone who has a heart attack in a disadvantaged community is far more likely to die, because they have been unable to get the first aid that might save their lives, is a scandal. What steps will the minister take to address that ultimate example of a postcode lottery? Will she meet me to discuss how we might draw on the expertise of

St Andrew’s First Aid and other groups that are committed to giving people first aid skills to ensure that people in our deprived communities have a better chance of survival?

Aileen Campbell (Scottish National Party, Clydesdale)

I will be happy to meet Johann Lamont. I know that she takes a keen interest in this area and has publicly talked about it many times. She is right that we need to reduce inequalities, which is why this information is important. It allows us to concentrate on where we can have an effective impact with our future actions. The strategy looks specifically at equalities throughout, and we continue to move forward with our strategy to increase the number of people who are able to give CPR. Those bystanders can help to prevent loss of life, and we will continue to focus our efforts in that area. We have a target of 500,000 people who are able to give CPR by 2020, and we are pleased that we already have 200,000 people who are able to do that. We are taking lots of actions forward.

Information is critical to enable us to work out where we need to help to reduce those inequalities. I will be happy to meet Johann Lamont to see what more we can do; her keen interest will help to inform our way forward.

Kenneth Gibson (Scottish National Party, Cunninghame North)

Will the minister confirm whether one reason for lower survival rates in the most deprived communities is that people are generally in poorer health than people in the less deprived areas, not least because of higher consumption of alcohol and tobacco and poorer diets. The way to improve survival rates is to focus primarily on improving the general health of people in deprived communities, to reduce the likelihood of cardiac arrest in the first place. Can she confirm that anyone who is treated by the national health service, regardless of where they come from, receives exactly the same level of care?

Aileen Campbell (Scottish National Party, Clydesdale)

Some of the issues around inequalities are absolutely linked to poor health, which is a symptom of wider income inequalities. That is why we are taking action on a wide number of fronts: we are looking to end poverty, we are creating better support for families, we are providing affordable housing and we are providing free school meals—a whole host of areas to help to improve health.

It is also why we are refreshing our alcohol strategy, reducing smoking rates and encouraging active lives and healthier eating. Those are all ways to tackle ingrained inequalities and ensure that people do not suffer from a postcode lottery in their health and wellbeing conditions. We will continue to work to mitigate the impact of United Kingdom Government welfare cuts, which also have an impact on people’s health and wellbeing, and we will continue to focus on using the information from the data linkage project to work out how we can reduce inequalities even further in the roll-out of CPR.

Energy Efficiency (Existing Homes)

Andy Wightman (Green, Lothian)

2. To ask the Scottish Government what action it is taking to improve the energy efficiency of existing homes. (S5O-01575)

Kevin Stewart (Scottish National Party, Aberdeen Central)

Over the next 15 to 20 years, we will transform the energy efficiency of the nation’s homes through Scotland’s energy efficiency programme, building on the significant progress that we have made to date. We are currently making available £0.5 billion over four years and, by the end of 2021, we will have allocated more than £1 billion since 2009 for tackling fuel poverty and improving energy efficiency.

Registered social landlords are making good progress in meeting the energy efficiency standard for social housing by 2020, and we are working with them to consider long-term milestones. We remain committed to introducing energy efficiency standards in the private rented sector, following the consultation on that earlier this year. Next year we will publish a route map for Scotland’s energy efficiency programme, setting out our long-term ambition for the programme and the steps that we will take to achieve it. In the route map we will set out our approach to energy efficiency standards in all homes.

Andy Wightman (Green, Lothian)

It is now two years since the Scottish Government designated energy efficiency as a national infrastructure priority. Why has energy efficiency spending gone down since then? Why do last week’s fuel poverty statistics show that there are still over 1 million homes that fall short of the energy performance certificate rating C that is recommended by the National Institute for Health and Care Excellence? What practical measures will be in the upcoming warm homes bill that will make energy efficiency a national infrastructure priority in relation to existing homes, both rented and owned?

Kevin Stewart (Scottish National Party, Aberdeen Central)

The warm homes bill and the route map for Scotland’s energy efficiency programme will set out in depth our ambitions for energy efficiency across all tenures. I am sure that Mr Wightman will be happy about certain aspects of last week’s figures, particularly the ones that show that there are 100,000 fewer households in Scotland in fuel poverty. That is a good start, and we have ambitions to ensure that even more of Scotland’s people are taken out of fuel poverty. Our ambition, of course, is to eradicate fuel poverty in the future. Some of those conditions are outwith our control. Fuel prices still remain in the control of the Westminster Government, which I hope will take action. However, I can assure Mr Wightman that the warm homes bill and our route map for Scotland’s energy efficiency programme will do much to improve energy efficiency across all tenures.

Graham Simpson (Conservative, Central Scotland)

Last week, we heard that 26.5 per cent of households are now in fuel poverty. That is a welcome reduction of 4 per cent from the previous year, but the Scottish Government was supposed to have eradicated fuel poverty by November last year. Now, the consultation on a new fuel poverty strategy suggests that the Government intends to set a target to have fewer than 10 per cent of households in fuel poverty by 2014. How many more winters will people have to endure before the Government eradicates fuel poverty?

Kevin Stewart (Scottish National Party, Aberdeen Central)

If we did not have to endure a Tory Government, with its policies of austerity, we would be doing much better. The fact that social security has been cut to many households, including households in work, adds to the woes. Beyond that, the United Kingdom Government said that it would take action on fuel prices and has failed to do so. Maybe Mr Simpson would be best placed to talk to his colleagues south of the border to get them to act in a reasonable manner, to get rid of austerity and to put a cap on fuel prices, and then we might be in a better position in Scotland.

Nursing (Training)

Clare Haughey (Scottish National Party, Rutherglen)

3. I refer members to my entry in the register of interests as a registered mental health nurse who holds an honorary contract with NHS Greater Glasgow and Clyde.

To ask the Scottish Government what it is doing to attract more people to train as nurses. (S5O-01576)

Shona Robison (Scottish National Party, Dundee City East)

Last week, the chief nursing officer for Scotland published a report on widening participation in nursing and midwifery education and careers. The report recommends a range of measures to attract people into nursing, including a national campaign to recruit a more diverse workforce, tackle negative stereotypes and provide more flexible routes into education. The report was launched in the same week that we saw the highest ever number of acceptances to nursing and midwifery courses at our universities. The actions set out will allow us to build on that, maximising the number of opportunities available and the number of people who can benefit from them.

Clare Haughey (Scottish National Party, Rutherglen)

Last year, the United Kingdom Government scrapped bursaries for student nurses and introduced fees. Since then there has been an 18 per cent reduction in the number of applications from nursing students. Both the Royal College of Nursing and the president of Universities UK attribute that, in part, to the withdrawal of bursary funding. In contrast, recent Universities and Colleges Admissions Service statistics show an increase of 8 per cent in the number of students enrolling at Scottish universities to train as nurses. Can the cabinet secretary reassure people in Scotland who want to train as nurses that this Government will continue to support them in this essential profession and will not withdraw bursary funding?

Shona Robison (Scottish National Party, Dundee City East)

I absolutely can. The UCAS statistics tell a very interesting story of the position here in Scotland compared with that south of the border. We continue to protect the non-means-tested non-repayable nursing and midwifery student bursary and, of course, free tuition. That is in stark contrast to the UK Government, which has scrapped both in England, resulting in the dire consequences that Clare Haughey described.

We have also increased support for students most in need or facing financial hardship, and we will continue to review the support package to ensure that nursing and midwifery students receive the support that they need. In particular, we will consider whether additional support is needed for students in remote or rural areas or from low-income households.

A92 (Road Safety Improvements)

Jenny Gilruth (Scottish National Party, Mid Fife and Glenrothes)

4. To ask the Scottish Government whether it will provide an update on Transport Scotland’s plans for road safety improvements to the A92. (S5O-01577)

Humza Yousaf (Scottish National Party, Glasgow Pollok)

We are committed to improving safety on our trunk roads, including the A92, where we have been working closely with the communities and local elected members. Since 2007, we have invested more than £35.1 million in the A92, to ensure that it continues to operate safely and efficiently.

A number of studies are under way and planned, and they will identify further improvements that can be made. That will build on the investment that has already been undertaken in recent years, which includes works at a number of junctions, as well as providing better pedestrian facilities at Glenrothes and between Forgan and the Tay bridge.

Jenny Gilruth (Scottish National Party, Mid Fife and Glenrothes)

The minister will be aware that tomorrow I will be leading a walk along the five hazards of the A92. Earlier this year, he agreed with campaigners that he would visit the road himself. Is it still his intention to do so, and can he provide me, as the constituency MSP, with reassurance that improving road safety on the A92 is of paramount importance to the Government?

Humza Yousaf (Scottish National Party, Glasgow Pollok)

I wish the member well for the walk that she is doing along the five hazards of the A92, as it is called. I look forward to hearing an update and some feedback from her. As she rightly said in her question, we have met the community councils, other community stakeholders and elected members. I thank her for the pressure that she has exerted on the important issue of the A92.

As I said in my previous answer, there are a number of studies under way. Transport Scotland last met the community council in August. It promised, on the back of all the conflict and traffic studies that have been done and the various other pieces of work, that it will report back early next year. It is absolutely my intention to visit the A92, which I will do in conjunction with the member’s office.

Restorative Justice

Maurice Corry (Conservative, West Scotland)

5. To ask the Scottish Government what plans it has to develop restorative justice. (S5O-01578)

Michael Matheson (Scottish National Party, Falkirk West)

Following the publication of “Guidance for the Delivery of Restorative Justice in Scotland” on 13 October 2017, we will consult on an order under section 5(2) of the Victims and Witnesses (Scotland) Act 2014, to prescribe who must have regard to the guidance. We will also work closely with justice and third sector partners to ensure access to existing services and to develop further provision to meet the needs of victims.

Maurice Corry (Conservative, West Scotland)

Experts are clear that restorative justice empowers victims and cuts reoffending. I welcome the guidance that has been published, but the fact is that there are simply not enough practitioners out there to use it. Victims deserve the chance to get an explanation from the person who commits the harm. When will the Scottish Government make that the norm, rather than the exception?

Michael Matheson (Scottish National Party, Falkirk West)

I agree that, in the right circumstances, restorative justice can be an effective tool. We are doing some work with Community Justice Scotland to identify where in Scotland restorative justice is provided—a number of local authorities already deliver restorative justice programmes—and where there are gaps. We want to consider what measures can be taken to support those local authorities that do not presently provide restorative justice to deliver such programmes.

I recognise the value of restorative justice for those who have caused harm and those who are victims of crime, and I want to make sure that a more consistent approach is taken across the country. The guidance will assist us in achieving that, and the work that we are doing with Community Justice Scotland will assist us in identifying the areas where we need to make further progress.

Rona Mackay (Scottish National Party, Strathkelvin and Bearsden)

Does the cabinet secretary agree that it must be up to the victim of a crime to decide whether they want to engage in restorative justice practices, and that the necessary support must be in place for them throughout the process?

Michael Matheson (Scottish National Party, Falkirk West)

I do. It is extremely important that the victim and the person who has caused harm participate in the programme on a voluntary basis. That is a key driver of the system. The new guidance that we have issued highlights that that is a key aspect of how we want restorative justice to be delivered.

In addition, people who participate in restorative justice must be assisted by people who are appropriately trained to deliver restorative justice programmes so that the appropriate support and assistance can be provided.

Liam McArthur (Liberal Democrat, Orkney Islands)

I, too, welcome the publication of the guidance in October, which followed the commitment that the Liberal Democrats secured in 2013.

Can the cabinet secretary provide a little more detail on the steps that will be taken to support community safety groups such as Sacro and others to act as facilitators in the restorative justice process?

Michael Matheson (Scottish National Party, Falkirk West)

As the member might be aware, Sacro is one of the organisations on the restorative justice forum that helped to draft the guidance that we issued in October.

Before we decide what our future approach to restorative justice should be, it is important that we identify the good practice that already exists in a number of local authority areas and the areas where there are gaps. At that point, we can consider what would be the most appropriate approach in pursuing further restorative justice programmes. That might take the form of a national strategy to inform work at a local level, but before we consider what would be the most appropriate mechanism for taking forward further restorative justice programmes, we want to identify where the gaps are.

HMP Dumfries (Older Prisoners)

Colin Smyth (Labour, South Scotland)

6. To ask the Scottish Government what action is being taken to improve facilities at HMP Dumfries to meet the needs of older prisoners. (S5O-01579)

Michael Matheson (Scottish National Party, Falkirk West)

The Scottish Prison Service has been actively considering its approach to population management, and older people are one of the population groups that are being looked at.

If an older person with specific needs is admitted to prison, an individual care plan and care package and accommodation adjustments will be put in place, following consultation with the necessary multi-agency partners. Older people with mobility issues are located in a specific area of HMP Dumfries. Disabled access ramps have been put in place in that area to aid accessibility, and additional minor modifications are carried out to meet the needs of individual prisoners when that is required.

Colin Smyth (Labour, South Scotland)

The need to improve facilities for older prisoners in HMP Dumfries was highlighted in the report, “Who Cares? The Lived Experience of Older Prisoners in Scotland’s Prisons”, by Her Majesty’s chief inspector of prisons. Given that need, why was Dumfries not included in the most recent estate development programme? The fact that it was not has raised understandable concerns among staff about the future of the prison.

Will the cabinet secretary give an assurance that bringing the prison up to a reasonable standard will definitely be included in the next phase of the estate development programme? Given the integration of health and social care that is taking place more widely in Scotland, does he intend to revisit the lack of health and social care integration in prisons, where health boards are responsible for healthcare but the Prison Service remains responsible for social care?

Michael Matheson (Scottish National Party, Falkirk West)

The member might misunderstand. The approach of the Scottish Prison Service in meeting the needs of older prisoners within the prison estate is being taken forward as part of the prisoner population management programme rather than by a prisoner segment group of older prisoners. That means that the evidence that has come from HM inspectorate of prisons and the “Who Cares?” report has been taken into account and a dispersal model is being used. Access to all the facilities across the prison estate is being provided, rather than just to a specific establishment.

That includes HMP Dumfries.

The member referred to the capital investment programme that is being taken forward by the Scottish Prison Service. The programme is being taken forward on a phased basis that has seen significant capital investment in the creation of new establishments and the upgrading of existing establishments. At present, that programme is looking at HMP Inverness, HMP Barlinnie and HMP Greenock to see how they will be developed in the future. The next phase will be for HMP Dumfries and HMP Castle Huntly open estate, and they will look at how to phase that programme going forward.

Prisoner healthcare is an area that has now been progressed with the partnership that has been developed between the Scottish Prison Service and individual health boards in each prison area. In order to support that at the national level, we have established the health and justice collaboration improvement board to make sure that prisoner healthcare is driven forward right across the prison estate and in health boards that have that responsibility. One of the improvement board’s key priorities is to make sure that we improve prisoner healthcare overall, and that workstream will be taken forward in the coming months.

The Presiding Officer

Thank you for that very detailed answer.

Income tax

Ruth Davidson (Conservative, Edinburgh Central)

1. Presiding Officer,

“When inflation is rising and living standards are under a lot of pressure, it is not right to increase income tax for those who are on the basic rate.”—[

Official Report

, 3 May 2017; c 9.]

Does the First Minister agree with that statement?

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

The Cabinet Secretary for Finance and the Constitution will set out the details of the budget later this afternoon and will cover our tax proposals and our spending proposals. We will seek to protect our vital public services from the cuts being imposed by the Tories, we will make sure that we protect those who are on low and middle incomes and we will invest in business and the economy. I can tell members that 70 per cent of taxpayers in Scotland and 83 per cent of all adults in Scotland will pay no more income tax after today’s budget than they do now.

Ruth Davidson (Conservative, Edinburgh Central)

We look forward to hearing the details of that later. I can tell by the First Minister’s face that that flourish did not have quite the result that she was looking for. The reason why I asked the question is that I was quoting directly the words of the First Minister herself in May this year. I was not asking her to reveal her budget, although we are pleased to hear any details that might be forthcoming; I was asking whether she agreed with herself that all people who currently pay only the basic rate of income tax, which is 2.2 million people in this country, should not have to pay more. That was the promise that she made. Has she not just told at least some of them that she is breaking that promise?

The First Minister

I encourage Ruth Davidson to listen carefully to the announcements that the finance secretary will make in a couple of hours.

In the budget, we will be balancing a number of different priorities. Of course, as the Opposition is fond of telling me, we are a minority Government and we require to build consensus around our budget proposals. We also have to deal with one of the most challenging economic and fiscal contexts that any Government in the lifetime of this Parliament has ever faced. As we heard confirmed this morning on the radio by the Fraser of Allander institute, our day-to-day spending for next year is being cut in real terms by more than £200 million and, over the next two years, Tory cuts will take £500 million in real terms out of the spending that this Parliament has available for our nurses, doctors, teachers and police officers. In light of that, is it not a bit rich for the Tories to come to this chamber and lecture anybody about tax and public spending?

On top of that, of course, as we found out just last week, every household across not just Scotland but the United Kingdom will be facing a bill of £1,400 to pay for the Tories’ Brexit obsession—that is the bill just to rip the UK and Scotland, against our will, out of the European Union.

In light of all of that, the proposals that we put forward this afternoon will be responsible and balanced. They will protect our vital public services from Tory cuts, protect the majority of taxpayers and invest in business and the economy. In doing all that, they will stand in stark contrast to anything that the Tories are doing.

Ruth Davidson (Conservative, Edinburgh Central)

The First Minister has just revealed that there will be tax rises in the budget, so perhaps she should listen to what Scotland’s small businesses are saying about that. This week, the Federation of Small Businesses gave her a blunt warning, when it revealed that three fifths of Scotland’s small businesses do not want any change in income tax rates—or they do not want them to go up—and two thirds believe that income tax increases would damage the economy. We are talking not about multimillion pound corporations but about small and medium-sized firms, which are the lifeblood of the economy and support 1.2 million Scottish jobs, yet the First Minister has just told them that there will be tax rises that they do not want. So who should we trust to know what they are talking about when it comes to growing the economy? Is it Scotland’s small business owners, who are warning against the very tax rises that the First Minister has just revealed, or the finance secretary, who wants to push taxes up?

The First Minister

I met representatives of the Federation of Small Businesses just last week, and one of the many things that they said to me was how highly they value the small business bonus, which is the most generous small business rates scheme anywhere in the UK. I do not think that I am revealing too much—although the finance secretary is starting to look at me with a worried expression on his face—when I say that the small business bonus scheme will be protected in the budget this afternoon. That of course lifts 100,000 small businesses out of business rates altogether, which is another way in which the budget will invest in business and in growing our economy.

There will be a lot of interest for Ruth Davidson and others when the finance secretary gets to his feet this afternoon to outline how the Scottish Government will protect people the length and breadth of our country from the cuts that are being imposed on us by Ruth Davidson’s party.

Ruth Davidson (Conservative, Edinburgh Central)

Time and again, ahead of elections, the Scottish National Party Government makes promises to people on tax. Only in May this year, the First Minister was absolutely clear when she said

that it is “not right” for any person on the basic rate to pay more. That would protect 2.2 million people in this country, but she has just stood up and said that some of them are going to take a hit. It is a simple matter of trust. Promises were made and she has failed to meet them, so how can Scottish workers ever trust her again?

The First Minister

I suggest that Ruth Davidson listens carefully to the budget this afternoon because, when Derek Mackay stands up and outlines his budget proposals, much of what Ruth Davidson has been saying over the past weeks will be seen to be complete and utter nonsense. We will set out fair, balanced and progressive budget proposals that protect our public services from more than £200 million in real-terms cuts being imposed by the Tories. [

Interruption

.] The Tories do not like hearing that fact, so let me repeat it: our spending is being cut by more than £200 million in real terms next year. The proposals that we put forward this afternoon will set out how we are protecting our national health service, our education system and other vital public services from that while protecting the vast majority of taxpayers and investing in business and the economy.

Of course, I am not sure how bothered Ruth Davidson really is by all of this because, no sooner have the Tories slumped back into third place in Scottish politics than we have Ruth Davidson setting out her escape plan for when she plans to jump ship to Westminster.

Members

Cheerio, cheerio, cheerio!

Kenneth Macintosh (Labour, West Scotland)

Order.

Affordable Housing

Richard Leonard (Labour, Central Scotland)

2. Every time we raise Scotland’s housing crisis with the Scottish Government, it spins out the same line: “We will build 50,000 affordable homes and 35,000 homes for social rent by the end of this parliamentary session.” This week, new housing statistics revealed that the Government is way off course from meeting its targets. Can the First Minister explain how those vital homes will be built?

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

We have set a target, and we will meet that target, to build 50,000 affordable homes over the life of this parliamentary session.

Richard Leonard was not a member in the previous parliamentary session, so he might not know that in the previous session we had a target of 35,000 affordable homes, and that periodically over the course of the session we had to listen to Labour MSP after Labour MSP tell us that we had no chance of meeting the target.

Well, do you know what? We met that target in the previous parliamentary session, and we will meet the new target for this parliamentary session. The finance secretary will set out funding plans to support the target in his budget this afternoon, and the announcement that he makes in the budget will be part of an overall funding commitment of £3 billion over this parliamentary session to build 50,000 affordable homes.

That is the record of this Government. Of course, Richard Leonard is the latest leader of the party that, when it was last in office, managed to build a grand total of six council houses.

Richard Leonard (Labour, Central Scotland)

I seem to recall a redefinition of the target in the previous session of the Scottish Parliament.

The shortage of affordable housing is a key cause of homelessness, so we should be thankful for the important work that is being done by the homelessness prevention and strategy group, which has fought for Government funding to help rough sleepers this winter. However, as long as the supply of affordable housing is stalling, and as long as this Government cuts the local authority budgets that provide housing support, temporary accommodation and funding for women’s aid and refuges, the strategy group is fighting an uphill battle to prevent homelessness.

Earlier this week, the director of Shelter Scotland, Graeme Brown, said:

“Some people think that homelessness in Scotland is getting better and can be fixed overnight. Sadly, over the last year, things got worse.”

Does the First Minister agree with the director of Shelter Scotland that last year things got worse?

The First Minister

This Government is increasing funding for affordable housing and, as I said, over this parliamentary session will invest £3 billion—a record sum—to deliver 50,000 affordable homes.

It is exactly because, like Shelter, I am so concerned about the rise in rough sleeping, in particular, that in the programme for government I announced the establishment of the homelessness prevention and strategy group, about which Richard Leonard just spoke. Within the first few weeks of being established, the group had already made its first recommendations to help to tackle rough sleeping this winter; the Government accepted all the recommendations and provided additional funding to help to implement them. We will consider, on a continuing basis, further recommendations that the group makes.

The reason why rough sleeping is increasing is the welfare cuts that are being imposed on Scotland by the Tory Government—[

Interruption

.] Right now, Labour MSPs are shaking their heads at the notion that welfare cuts are leading to an increase in rough sleeping, which, frankly, is a fact. I again call on Richard Leonard to join members of my party in calling for the devolution of all welfare powers to this Parliament, so that we can put a stop to the cuts at source.

Richard Leonard (Labour, Central Scotland)

We will see how committed the First Minister is to stopping the cuts this afternoon, when the Government announces its budget.

I want to share the experiences of Hanibelle, who is a young woman in Edinburgh who turned to the Crisis charity for help. She is a recovering drug addict and survivor of domestic abuse, and she became homeless. This week marked one whole year of her being stuck in unsuitable temporary accommodation. She has said that, in that accommodation, she is faced with

“People’s smoke coming through cracks in the walls and floors ... Sleeping in sheets that look like Swiss cheese from cigarette burns ... Blood spatter on the walls of the bathroom from people injecting heroin”.

What Hanibelle and thousands like her need is an affordable home and the local authority services that will get them back on their feet. Hanibelle does not have a choice, but the First Minister does. This afternoon, will she choose to use the powers of the Parliament to invest in lifeline council services and end Scotland’s homelessness crisis once and for all?

The First Minister

We will see in just a couple of hours the choices that the Scottish Government is making to protect Scotland from the cuts that are being imposed by the Westminster Tory Government.

Hanibelle’s experience, which Richard Leonard has just outlined, is completely unacceptable. That is why the homelessness strategy group, which we have already spoken about, has as its remit not just tackling rough sleeping but tackling and looking to improve the use of temporary accommodation. That is also why we announced in the programme for government an increase in funding to tackle alcohol and drug addiction and why we are establishing a £50 million fund to help to tackle homelessness and rough sleeping. Those measures and other measures will be outlined in our budget this afternoon.

When Richard Leonard sees the choices that we are making, I hope that he will stay consistent with what he has said in the chamber and back our choices in the budget, because they are the right choices for the people of this country.

The Presiding Officer

We have a couple of constituency supplementaries.

Health Funding

Elaine Smith (Labour, Central Scotland)

The family of a 91-year-old constituent have asked me to raise her extremely distressing health and care issue, which has wider implications. The elderly deaf and blind woman, who has a stoma bag, was discharged from hospital with insufficient care, only one daily district nurse visit, and at times no assistance available via the home care alarm. On several occasions, she therefore suffered the indignity, distress and discomfort of a burst stoma bag, and her family believes that her life is at risk. If that is happening to one elderly vulnerable person, many others will also be suffering as a result of funding cuts and the lack of adequate stoma care. Does the First Minister think that that is acceptable? If not, what will she do about it?

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

From what Elaine Smith has just said, I do not think that that is at all acceptable. If she can provide the details of her constituent’s case to the Cabinet Secretary for Health and Sport this afternoon, she will immediately look into it and then correspond with her. Elaine Smith can then feed that back to her constituents. I hope that Elaine Smith finds that response helpful as a way of taking the issue forward.

Civil Aviation Authority (Medical Certification)

Bob Doris (Scottish National Party, Glasgow Maryhill and Springburn)

A constituent of mine is close to securing a training placement with a commercial airline but, because they are HIV positive, the Civil Aviation Authority will not issue the required medical certification. It cites European Aviation Safety Agency rules. I understand that a deviation from those rules can be permitted. If my constituent stayed in the USA, Canada, New Zealand or Australia, or had contracted HIV as an existing commercial pilot, there would be no issues. Does the First Minister agree that that situation amounts to discrimination? Will the Scottish Government make representations to the CAA to seek to end that injustice and therefore allow my constituent to pursue their dreams?

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

I am not aware of the full details of that case, but I am very clear that any employment policies or regulations in that area must be based on the most up-to-date facts about HIV, and not on outdated information or misconceptions. I understand that the Civil Aviation Authority has already said that it supports a rule change in the area and that it is working with the European Aviation Safety Agency to reassess the regulation. I will write to the CAA to make clear my support for that rule change.

We can all play a part in making life better for those who live with HIV, and we should all continue to work to eradicate the stigma around the virus and to tackle the false myths and prejudices that, unfortunately, still surround it.

Public Sector Pay

Patrick Harvie (Green, Glasgow)

3. At this time of year, perhaps everybody wants to unwrap their Christmas present a wee bit early and, when it comes to the budget, we are no different. There are many thousands of people in Scotland who want to know whether there is anything in store for them. I am talking about the people who work to deliver our vital public services in every community in Scotland. They have seen their wages cut year after year in real terms, and they want to know whether their pay will again be cut this year or whether there is hope of at least an inflation-based increase. Does the First Minister agree with Grahame Smith of the Scottish Trades Union Congress, who has made the case—for not only this budget, but the longer term—that the pay settlement must begin the process of restoring the lost value in people’s wages and that it must be fully funded by the Scottish Government across our public services?

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

The Scottish Government has already committed to lifting the 1 per cent public sector pay cap, and we remain the only Government in the United Kingdom to have made that commitment. Alongside the budget this afternoon, the finance secretary will also publish the public sector pay policy, which will include further details of the approach that we will take. As I have said previously, we want to see fair pay settlements for our public sector workers that recognise the rising cost of living, but are also affordable. We will set that out this afternoon. I am sure that Patrick Harvie will understand that he will have to wait just a little bit longer to unwrap the full details.

Patrick Harvie (Green, Glasgow)

One area that we will not have to wait any longer for, because we know that it will not be in the budget this afternoon, is a tax giveaway to the aviation industry. The Scottish National Party policy to halve and then scrap air departure tax was kicked down the road by at least one year, ostensibly for technical reasons, and a consultation and an economic assessment were planned. The results were published last week—they were so unhelpful to the Government that I can almost sympathise. Will the First Minister confirm that the consultation responses were overwhelmingly hostile to the Government’s policy, showing opposition of 96 per cent when all the responses were counted? Can she explain why one of the central economic arguments, which was that the bulk of the tax cut would benefit the wealthiest in society, was entirely ignored by the economic assessment?

The First Minister

Patrick Harvie and I have had exchanges on the issue in the chamber in the past. We want balanced policies across the whole range of policy areas—policies that help to boost our economy and those that protect our public services. That is the approach that this Government will take. As Patrick Harvie said, the issue will not feature in the budget this afternoon—not “ostensibly” for technical reasons but actually for technical reasons. We will continue to discuss those issues with the UK Government and will report back to this Parliament in due course.

Ferry Services (Pay)

Liam McArthur (Liberal Democrat, Orkney Islands)

Last week, I warned the Government that the growing disparity in pay between Orkney Ferries crew and their counterparts in CalMac, which is funded directly by Scottish ministers, risked industrial action on Orkney’s lifeline internal ferry services. This week, the National Union of Rail, Maritime and Transport Workers confirmed that its members have voted to take such action. The consequences for the island communities who are utterly reliant on those services could be disastrous. Will the First Minister, even at the 11th hour, ensure that her finance secretary comes to the chamber this afternoon with a budget that honours his and the Government’s commitment, as well as the will of this Parliament, and which delivers fair funding for Orkney and Shetland’s internal ferry services?

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

First, these are services that are run by the councils, not by CalMac or the Scottish Government. The finance secretary will continue to engage with those councils, as he has before, about what the future might hold for the services. We are open to constructive discussions in future on that issue.

Liam McArthur and his colleagues ask us to put such a provision into the budget, but they still refuse to say that they will back the budget, even if that provision were in it. We will continue to have those discussions and will look to do the right thing by our island communities.

Fish Farm Expansion (Moratorium)

Mark Ruskell (Green, Mid Scotland and Fife)

An investigation that was screened on BBC1 this week showed that hundreds of tonnes of dead salmon are being shipped across Scotland in lorries that leak waste on to the roadside. Any farming system in which more than one quarter of the livestock are diseased and die before they reach the market has a massive problem. Will the First Minister put in place a moratorium on fish farm expansion until this Parliament’s Rural Economy and Connectivity Committee and Environment, Climate Change and Land Reform Committee have concluded their inquiries into the sector?

The First Minister

I am happy to ask the environment secretary to have discussions with the member on the issue. I understand people’s concerns about aspects of fish farming, and I know that some of the revelations in the documentary add to them. I know that those are issues of concern to the environment secretary, too, and she will be happy to discuss them further with the member.

Secondary Schools (Classrooms)

Daniel Johnson (Labour, Edinburgh Southern)

An independent report detailed in today’s newspapers predicts that Scotland will need an additional 500 classrooms in our secondary schools by 2020. That will come as no surprise to those in south Edinburgh, because, despite there being two new secondary schools, local forecasts show that the area will still be hundreds of places short within the next two to three years. Will today’s budget commit the funds required to build the extra classrooms that we need to meet the shortfall in south Edinburgh and across Scotland, given the increased capital at the Scottish Government’s disposal?

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

Of course, it is for individual local authorities to plan their education provision based on their assessments of need now and in future. However, I point out to the member that since this Government took office, more than 700 new or refurbished schools have come into existence across the country, and 86 per cent of young people are now learning in schools that are classed as being in good or satisfactory condition, which is a considerable increase since we took office. We will continue to discuss the issue with councils on an on-going basis, because it is absolutely essential that we have the right education provision where the numbers of young people are growing. I know that Edinburgh is one such case.

Brexit (Regulatory Alignment)

Christine Grahame (Scottish National Party, Midlothian South, Tweeddale and Lauderdale)

4. To ask the First Minister what the Scottish Government understands by the term “regulatory alignment”, and what this means for commerce between Scotland and Northern Ireland. (S5F-01841)

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

We are seeking clarification from the United Kingdom Government on precisely what it means by regulatory alignment and what the impact would be for Scotland. The Irish Government has been clear that it would facilitate the free movement of people, goods and services across the border to Northern Ireland. On that basis, we would understand the agreement to create equivalent rules to those of the European single market.

Of course, if a differential deal is to be available to one part of the UK, it should be available to others. As we have made very clear to the UK Government, it would be entirely wrong and unfair for Scotland to be placed at a competitive disadvantage.

Christine Grahame (Scottish National Party, Midlothian South, Tweeddale and Lauderdale)

According to a House of Commons report, UK ministers will have to import 19,000 European Union rules and regulations into the statute book as a consequence of withdrawing from the EU. Does regulatory alignment mean keeping most of, if not all, the 19,000 rules and regulations? Given that cutting EU red tape was fundamental to the leave campaign, does the First Minister agree that this must be the biggest political fudge since records began? Indeed, speaking of fudge, will the fudge regulation still be in force as one of the 19,000?

The First Minister

Knowing the Tories, fudge regulations will definitely be safe from a cull

.

Christine Grahame talks about the claims made by the leave campaign. Of course, that was the campaign that told us that Brexit would deliver £350 million a week extra for the national health service. We are still waiting for that; instead, we now find out that we are facing a bill of almost £50 billion just to leave the European Union.

The regulatory alignment issue is important. The legislative consequences of Brexit will be a major undertaking, but this is just one part of the massive effort that, if the UK Government continues on this course, will need to be put in place to get a deal that will be worse than the one that we already have as part of the EU. If there is to be alignment, that underlines even further the importance of the UK as a whole staying within the single market and the customs union. That would be the least damaging outcome for our economy, and I hope that we see people in the House of Commons coming together, as many of them did last night to defeat the Government on one particular amendment—although I note that no Scottish Tories were able to stand up to the Government—to keep the UK in the single market and the customs union.

Lewis Macdonald (Labour, North East Scotland)

The First Minister will be aware of the detail of last Friday’s joint report by the UK Government and the EU, which says that the basic principles of regulatory alignment

“must be upheld in all circumstances, irrespective of the nature of any future agreement”.

Can she tell us what her Government’s understanding is of the nature of that commitment and, in particular, how it is liable “in all circumstances” to be enforced?

The First Minister

Presumably it is a commitment that the UK Government will have to abide by. To hear David Davis at the weekend almost trying to wriggle out of the commitments before the European Council had even had the opportunity to endorse them says everything that needs to be said about the lack of trust that many on the European side of the negotiations have in the UK Government.

It is important that, as the negotiations progress—as we hope that they will—people can trust the commitments that the UK Government gives and, on the evidence of what happened at the weekend, that that trust exists is perhaps doubtful. The most important thing is that the negotiations are in the interests of the economy and of people right across the UK.

I wish that we were staying in the EU, but, given that the UK is leaving it, I want to see us stay in the single market and the customs union, and I hope that the Labour Party at Westminster will eventually get round to supporting that as well.

Scottish Survey of Literacy and Numeracy

Elizabeth Smith (Conservative, Mid Scotland and Fife)

5. To ask the First Minister for what reason the Scottish survey of literacy and numeracy has been abandoned. (S5F-01815)

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

The SSLN has been replaced with more detailed and comprehensive information. It gave us a national picture of children’s progress in literacy and numeracy, but did not provide any detailed information for local authorities and schools about the progress of individual children. The achievement of curriculum for excellence levels data that we now publish is a much more comprehensive data collection. For the first time ever under CFE, it gives us the attainment levels of every child in Scotland at key stages in primary and secondary school, and provides detailed data at all levels of the system to help us to identify what works in raising attainment and closing the attainment gap.

Elizabeth Smith (Conservative, Mid Scotland and Fife)

Every education expert in the land is telling the Scottish Government that it needs to improve the quality of the data set that can measure progress in our schools. They make the point that the Government’s assertion that things will get better will hold water only if standardised assessment is actually standardised across the country, and is less dependent on the wide variations in teacher judgment across local authorities. Does the First Minister not agree that parents have a right to expect use of data that is reliable and is respected for having a good track record, and that the decision to abandon SSLN at this in time, in favour of experimental data, was ill advised?

The First Minister

No, I do not agree with that. SSLN was important but, as First Minister, I know that the information that it provided was nowhere near detailed enough to allow us to target actions on improving performance and closing the attainment gap. As I have just said, the data that we now publish is much more comprehensive.

I also disagree with Liz Smith about teacher judgment. The International Council of Education Advisers said that we should provide a consistent support framework to teachers and then trust in their professionalism, which is exactly what we are doing.

As far as data is concerned, this year’s CFE levels data is more robust than last year’s, due to the quality assurance and moderation work that has been done in schools across Scotland. Of course, next year, that consistency and reliability will be further enhanced by the use of standardised assessments in all schools.

Let me repeat—because this is the most important point—that CFE levels data gives us the attainment levels of every child in Scotland at key stages in primary and secondary school, and provides detailed data at all levels. It helps us to target action to raise attainment and to close the attainment gap, which is what is most important in all of this.

Iain Gray (Labour, East Lothian)

The truth is that educationists and the First Minister’s own statisticians have told her clearly that the literacy and numeracy survey was statistically valid for allowing national progress to be tracked, and that the new attainment data that she is using simply is not, and never will be. If raising attainment is really her priority, why will she not measure national progress properly, simply by reintroducing the literacy and numeracy survey, or is she afraid of what it might show?

The First Minister

The data that we now publish will tell us all much more than we have ever had before about the performance not just of Scottish education generally, but of every child in the Scottish education system. As First Minister, it is my view—I know that it is also the view of the Cabinet Secretary for Education and Skills—that when we look at the actions that we need to take to improve attainment in our schools, we want to have comprehensive and robust data. The SSLN did not give us that: it was, as I have said previously in the chamber, based on samples of as few as 12 pupils in some schools. We need comprehensive data, which is what the CFE levels data will give us. That is important.

Extreme Winter Weather (Remote and Rural Areas)

Rhoda Grant (Labour, Highlands and Islands)

6. To ask the First Minister what contingencies the Scottish Government has put in place to deal with the effects of extreme winter weather on rural and remote areas. (S5F-01828)

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

We recognise the serious impact that extreme winter weather can have on rural and remote communities. Our dedicated resilience operation actively monitors all weather and flood alerts and can be activated at any time, on any day of the year. Indeed, last week, during storm Caroline, the Deputy First Minister convened the resilience committee to ensure that all appropriate support was in place.

We also work closely with the emergency services, local authorities, health boards, power companies and others to ensure that we understand any challenges that are happening on the ground across Scotland, and to ensure that they can respond and co-ordinate appropriately at local level when any kind of emergency occurs.

Rhoda Grant (Labour, Highlands and Islands)

Already this winter, constituents have contacted me with concerns about how the weather is impacting on health services. One gentleman reached Inverness and was waiting for his appointment at Raigmore hospital when he was contacted by Stagecoach to say that his bus home had been cancelled due to bad weather. It cost him £200 to get home by taxi that night.

Constituents in Caithness are all very concerned because recent service changes are forcing more of them to go to Inverness to access health services. Already this winter, the county has been cut off because of landslides on the rail line and road closures due to accidents. Sadly, that is a common occurrence. What is the First Minister doing to make sure that my constituents do not face further trauma while accessing services this winter?

The First Minister

If Rhoda Grant wants to provide us with the details of the specific constituency case that she outlined, we would be happy to look into that.

We cannot take away altogether the impacts of bad weather during the winter—I think that everybody understands that—but we do have to work to make sure that everybody is pulling together to mitigate the impacts as much as possible. That is what we are doing—that is what is done at local level through resilience partnerships, which fully involve national health service colleagues, and it is what we co-ordinate at national level through our resilience committee.

On the wider issues around health in the Highlands, I understand the concerns that have been raised, particularly in relation to the number of outpatient visits that involve people having to travel to Raigmore hospital in Inverness, some of whom live 100 miles away. That is why NHS Highland has been working to develop long-term sustainable services across Caithness, and why it is reviewing the wider provision of hospital and adult community services. Those are important issues, which we will continue to work on with others.

However, as I said at the outset, if there are particular constituency cases that Rhoda Grant wishes the Cabinet Secretary for Health and Sport or other relevant ministers to look into, I ask her to pass us the details of them, please.

Domestic Abuse

Michelle Ballantyne (Conservative, South Scotland)

7. To ask the First Minister what discussions the Scottish Government has had with Police Scotland regarding tackling domestic abuse over the festive period. (S5F-01825)

Nicola Sturgeon (Scottish National Party, Glasgow Southside)

On Sunday 10 December, Police Scotland launched its anti-domestic abuse campaign. The campaign will run over the festive period, when, sadly, reports of domestic abuse increase by around a quarter. The campaign makes it clear that Police Scotland will take all necessary action to deal with the perpetrators of domestic abuse, and I hope that the member and the chamber will, like the Scottish Government, fully support that important and necessary campaign.

Michelle Ballantyne (Conservative, South Scotland)

I welcome the First Minister’s comments, particularly in the context of the Scottish Borders, where there has been a 40 per cent increase in the reported incidence of domestic abuse since 2008 and where more must be done to protect and support victims. That should be our utmost priority.

According to the Scottish Government’s figures, more than 12,000 people were convicted of a crime with a domestic abuse aggravator in 2015-16, many of whom were given a short sentence. Given the devastating impact of some domestic abuse, does the First Minister agree with me that abolishing prison sentences of less than a year, which allows perpetrators to escape with little if any punishment or rehabilitation, is an appalling way to treat victims whose lives have been tortured by abuse and that any Government that is genuinely serious about eradicating domestic abuse would not adopt such a policy?

The First Minister

No, I do not agree with that, because I do not really agree with the premise on which the question is based.

In the interests of consensus on an issue on which we should all try to come together and agree, I think that Michelle Ballantyne is right to say that protecting and supporting victims should be our absolute top priority.

I know that

Michelle Ballantyne

is particularly interested in the Scottish Borders, and I hope that she will agree with me that Scottish Borders Council’s domestic abuse advocacy support service is a great example of innovative partnership work. If an increase in the number of reports of domestic abuse through the advocacy service or, indeed, through the police shows an increased level of confidence among victims to come forward and report incidents, we should welcome that. The Scottish Government’s funding for that service in the Scottish Borders has totalled £585,000 since its launch in 2012.

Let me come to the less consensual part of my answer. Michelle Ballantyne said that we are abolishing short sentences—that is not the case. We are looking to create a presumption against short sentences, and many people working in the criminal justice field think that that is the right thing to do to reduce reoffending. However, the decision on the sentence in any individual case is always a matter for the judge who has heard the case—it is not a matter for me, as the First Minister, for the Scottish Government or, indeed, for any politician in this chamber. It is absolutely right and proper that decisions on sentencing rest, ultimately, with judges.

Bank Branch Closures

Linda Fabiani (Scottish National Party, East Kilbride)

The next item of business is a members’ business debate on motion S5M-09362, in the name of Kate Forbes, on bank branch closures in Scotland. The debate will be concluded without any question being put.

This is probably the most subscribed members’ business debate that we have had. We are really pushed for time because we will have statements this afternoon from 2 o’clock, so I cannot extend the debate. Therefore, timing is crucial. I will try to get through everyone. Members speaking in the open debate will have one and a half minutes.

Rachael Hamilton (Conservative, Ettrick, Roxburgh and Berwickshire)

How long?

The Deputy Presiding Officer

One and a half minutes.

Neil Findlay (Labour, Lothian)

On a point of order, Presiding Officer. Are you saying that this is a half-an-hour debate and that it will go no further?

The Deputy Presiding Officer

That will be at my discretion. We need time to fix the chamber for this afternoon’s formal business, and I do not have the time to extend this members’ business debate as I would usually do given the number of members who want to speak in it.

Motion moved,

That the Parliament is deeply concerned by the successive waves of bank branch closures across Scotland in 2017, including the recent announcement that RBS plans to close 62 branches; recognises that, while many customers choose to bank online, not every person or business can access all services in this manner and might have to travel over an hour to their nearest branch; believes that these closures will have the greatest impact on older and vulnerable customers who depend on staff and services in their local branch, cash-based businesses that need to make deposits and withdrawals as locally as possible and rural communities, such as those in Skye, Lochaber and Badenoch, which it believes have been almost abandoned by the banks in recent years, and notes the calls on the banks responsible to improve their customer service to loyal and dependent customers.

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

We are having this debate because so many people across Scotland feel powerless as national banks close branches at a faster rate than ever before, withdrawing from communities and leaving many customers behind. So many members want to speak in the debate because we have a responsibility to highlight our constituents’ concerns, despite banking being a reserved matter and the Scottish Government having no formal power to intervene. My colleague Ian Blackford MP raised the matter at Prime Minister’s questions yesterday, and I am pleased to raise it here today.

The recent announcement by the Royal Bank of Scotland that it will close 62 branches in Scotland is just the latest such announcement, but it is certainly the most ruthless and it means that there will be only 89 RBS branches open in Scotland compared to around 300 in April 2013. I believe that RBS should reverse its decision not least because, in 2008, we collectively bailed out the Royal Bank of Scotland and we, the taxpayers, are still the majority shareholder. The very customers who feel powerless and will be the most disadvantaged are those whose taxes funded that bailout.

Moreover, RBS is not the only bank that is closing branches—I have no doubt that other members who speak in the debate will talk about closures by the Bank of Scotland, the Clydesdale Bank and others—and it is the most fragile and vulnerable customers who will suffer most from those branch closures. Yes, many people are choosing to bank online or on their phone app, but not everybody is, not everybody can and not everybody will. The concern is about the older and vulnerable customers who do not have access to the internet and still visit their local branch on a weekly basis because they trust the staff and they struggle to access services in other ways.

Alasdair Allan (Scottish National Party, Na h-Eileanan an Iar)

Does the member agree that RBS’s initial announcement, in which it

reassured people on the island of Barra that they could still use bank and ATM facilities in Lochboisdale, some 27 miles away by sea, shows that RBS has a complete indifference to the needs of island customers in particular?

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

I agree with the member that it is the communities of remote and rural Scotland, which have been badly hit by closures already and which have unreliable ATMs and patchy broadband, that will suffer the most

.

Kyle of Lochalsh, whose RBS branch is to close, attracts hundreds of visitors during the summer and has a lot of small businesses and residents, but almost three quarters of its population cannot access broadband speeds of up to 10Mbps. If RBS’s closures go ahead in six months’ time, 26 bank branches across the Highlands will have closed in the past two and a half years: 14 RBS branches, 10 Bank of Scotland branches and two Clydesdale branches. Cash-based businesses that operate in largely cash-based economies such as the tourism economy, which is a big growth sector in the Highlands, will also struggle.

When RBS closes its branch in Beauly in six months’ time, it will be closing the last bank branch in the town. There are 13 towns in Scotland where the last bank branch will be leaving, despite RBS’s commitment not to close the last bank in town. What will that mean? Alasdair Allan has highlighted what it will mean for his island community, and for my communities it could mean up to an hour or more of travel to a branch for older people, for businesses that have tight timescales and for customers who, for a host of reasons, rely on public transport.

Last week, I visited three of the four RBS branches in my constituency that face closure—in Beauly, Kyle of Lochalsh and Aviemore—and I will visit the Mallaig branch soon. Those closures will come swiftly after Bank of Scotland branch closures in Fortrose, Broadford, Kingussie and Beauly. There is no doubt that branch staff are doing everything that they can to support customers and advise them about alternatives such as depositing and withdrawing cash at the Post Office, visiting a mobile branch or accessing the nearest ATM. I was amazed at the dedication and care of the RBS staff and managers in Kyle, Beauly and Aviemore, whose sole focus at the moment is the customers, whom they have known for years. Those staff and managers did not make the closure decisions, but they are the ones who are taking the flak and dealing with anxious and worried customers. I recommend that any customers who are concerned pop into their branch as soon as possible to speak to a member of staff.

I call on RBS to reconsider its decision to close those branches for the sake of the people of Kyle, Mallaig, Beauly and Aviemore and for the sake of communities across Scotland.

Edward Mountain (Conservative, Highlands and Islands)

I thank Kate Forbes for securing the debate.

RBS’s decision to close 62 branches in Scotland has been met with justified anger. Frankly, it is no wonder. In 2009, RBS boasted that it was “Here for you”, wherever “you” may live. However, it appears that that is not now the case.

When the going got tough for RBS, the taxpayers did not desert the bank; they rescued it. In return, RBS has been promising to maintain branches across the country. Now, RBS is deserting rural Scotland and, as Kate Forbes has eloquently said, the Highlands will be one of the areas that are hardest hit by that. If RBS does not back down from these closures, there will be a real threat to the high streets in the Highlands and to rural businesses such as tourism businesses. Let us not pretend that anything else will be the case.

As Kate Forbes said, branches—along with their ATMs—are closing in Kyle, Mallaig, Nairn, Aviemore, Beauly, Granton-on-Spey, Inverness, Tain, Tongue and Wick. Customers and businesses need the reassuring presence of a local branch alongside the first-class digital service that they get—if they can get it, because, of course, in areas across the Highlands, the broadband is so poor that digital banking is just a dream.

It is clear that not enough thought has been put into the decision to close local branches, and I urge RBS to reconsider. I call on RBS to stand by its customers—the very customers who stood by it in the hard times that it faced.

Richard Lyle (Scottish National Party, Uddingston and Bellshill)

I refer members to my entry in the register of members’ interests, as I am an ex-employee of RBS and receive a monthly pension from it. I thank Kate Forbes for bringing the debate to the chamber.

I joined Royscot Financial Services in 1990. That company dealt in financial services and was part of the RBS group of companies. When I joined RBS, the shares were worth £1. Steadily, over the years, the share price climbed as the bank made what some would call extortionate profits. The bank wanted to make a £2 billion profit to fit in with the year 2000, and it did. In fact, it fact went on to make annual profits of between £6 billion and £12 billion in the early part of this century. Those were heady days, and the price per share finally reached £20. Buying other banks was the downfall of RBS. The price per share fell like a stone and reached—I believe—10p at its lowest.

I blame the stock market and certain people who should have known better for the bank’s downfall. Customers should not pay for those people’s mistakes. RBS promised that there would always be a local branch in people’s high streets, but it is now making many of its loyal staff redundant and is closing branches, including two in my constituency.

RBS says that it is closing the branches because of falling footfall. Well, I am sorry, but I dispute the figures. Most people want to go to their local branch. Most people cannot deal with apps or new technology—some people are dinosaurs.

RBS should be a bank that cares. I say to RBS that it should look out, because it has gone a step too far. Bellshill previously had four banks on its main street but the proposed closure will leave us with only one.

Again, I thank Kate Forbes for bringing the matter to the chamber.

Richard Leonard (Labour, Central Scotland)

The people own a controlling majority stake in RBS. If RBS bosses will not listen to reason and pull back from these closures, and if the Tory chancellor, Philip Hammond, will not intervene to stop it doing what it is doing, we must mobilise the people.

On 8 December, I wrote to the chancellor, requesting that he step in and call a halt to this social and economic vandalism. Earlier this week, I held discussions with the shadow chancellor, John McDonnell, and we discussed the red book from last month’s autumn budget statement, which made grim reading. Growth figures were significantly revised down. Worse, I can reveal that hidden away in the public finance section of the red book is the news that the Tory chancellor now has his sights set on a sell-off of RBS. Following the downgrading of the economic growth forecasts, Philip Hammond proposes to fix public sector net borrowing by selling off RBS at a bargain-basement price.

This afternoon, I call on the Scottish Government and the Scottish Conservatives to stand up for Scotland and to call on Philip Hammond not to sell off RBS and to veto the closure of these bank branches across Scotland. We should step up the campaign because, in the end, if we, the people, own RBS, we ought to control it.

Kenneth Gibson (Scottish National Party, Cunninghame North)

I congratulate Kate Forbes on securing the debate. This latest round of RBS closures is not just a blow to North Ayrshire’s people, businesses and communities, but rather the latest insult demonstrating the sheer contempt that RBS has for its customers and branch staff.

Kilbirnie and Saltcoats will join already closed Dalry and West Kilbride branches, leaving Brodick and Largs as the only RBS branches in my constituency. It seems that RBS had no intention of fulfilling its much trumpeted promise not to close the last remaining bank in our community, and I am annoyed that loyal customers were used as a prop in what appears to have been an elaborate public relations stunt.

Closure of 62 Scottish branch buildings will raise just £8.7 million, according to the

Sunday Mail

—if they are sold at all. As we know, empty bank buildings litter many of our high streets, and even if that sum is realised, it will still be much less than the eye-watering £16 million bonuses paid to RBS executives this year or the £11 million sponsorship of Scottish rugby by RBS.

That would be shocking enough from any high street bank, but it is even more galling from RBS, which is 72.9 per cent owned by the United Kingdom taxpayer. Understandably, people are looking for answers and recognition of their investment.

This decision was provoked by the promotion of mobile and online banking, but it is incredibly short-sighted to assume that those things meet the needs of all customers. When challenged, RBS points to its mobile branches as the final word in rural and semi-rural banking, yet across Ayrshire, many people complain about the inaccessibility of mobile banks, which require customers to climb four high steps. It is appalling that wheelchair users are expected to conduct their business outside the van in all weathers, and that RBS refuses to even meet or engage with campaigners.

RBS says that this decision is final, and that more closures and job cuts could be on the way. That is totally unacceptable. On behalf of constituents, I urge the Westminster Government to exercise its majority shareholding to force RBS to engage with staff and local communities. No one should be left behind because of RBS’s appalling actions.

The Deputy Presiding Officer

If members go over time, it may disadvantage other people.

Mark Ruskell (Green, Mid Scotland and Fife)

I thank Kate Forbes for galvanising Parliament today.

Nine of the bank closures will take place in my region. Branches in Aberfeldy, Alloa, Bannockburn, Bridge of Allan, Comrie, Dunblane, Kinross, Perth and Pitlochry are all scheduled to shut.

The Courier

newspaper has highlighted that this is the latest in a long line of closures to hit communities, with RBS branches in Lochgelly and Dalgety Bay shutting earlier this year. In Dunblane and Bridge of Allan, my Green colleague Councillor Tollemache has been working with both community councils, and public meetings have been arranged for the new year in the hope of retaining at least some services.

RBS stated that it would never close the last bank in town. It is clear that that is exactly what it is doing and no amount of couthy marketing campaigns proclaiming

“We are with you every day”

will change the fact that it is abandoning communities to a computer server in Gogarburn.

RBS says that services can be accessed at post offices, but those are also becoming scarce, with more than a quarter having closed since 2002. A weekly mobile banking service does not offer security for cash-based businesses that are required to make daily deposits, so there could be serious insurance implications for those businesses—that is a point that I would like the minister to reflect on in closing.

It is time for the UK Government to use its decisive share in RBS to deliver a network that is fit for Scotland’s communities and people in the 21st century.

Mairi Gougeon (Scottish National Party, Angus North and Mearns)

My sincere thanks to Kate Forbes for bringing forward the debate and allowing all members to vent their frustrations at what is yet another disgraceful set of closures by a bank that will hit all our constituencies and the communities within them hard.

I was angry and appalled to hear the news two weeks ago that RBS was set to close a branch in Montrose in my constituency, as were many other members. It is one closure, but it comes straight on the back of three RBS closures over the past two years—across Brechin, Stonehaven and Laurencekirk—and fresh on the back of Clydesdale Bank closures that saw three out of the four in my constituency close, affecting Brechin, Stonehaven and Forfar.

I have been inundated by angry and seriously concerned constituents: those who work with people with learning disabilities, those who work with the elderly, elderly people themselves and people who are dependent on public transport. Those people who were affected by the last round of closures were directed from all parts of the north-east of Scotland to the Montrose branch, which is now set to close.

RBS expects people to use the post office—which would put more pressure on post offices, as they are being expected to pick up the RBS slack on top of the slack of the other banks that have abandoned their communities—or mobile banks, which have a severe lack of accessibility for those with mobility problems, lack of access to the full range of services and only a limited time in each location that is served.

All of that is happening at a time when RBS is expected to shell out millions upon millions in bonuses. Well, enough is enough. We, the people in here and out there, own more than 70 per cent of the bank. RBS therefore has a duty to work in the public interest, and we demand that it does so by reversing the decision and keeping the branches open.

Mike Rumbles (Liberal Democrat, North East Scotland)

I live 7 miles north of the village of Alford in rural Aberdeenshire and used the RBS branch there. When the bank announced the closure of the branch in September 2015, it recommended that I move my business to its branch in Westhill, some 19 miles away—it is, in fact, 26 miles from my home. I declined to do that, but I know that many of the Alford RBS customers did, and the nearest other RBS branch was in Huntly, 21 miles north of Alford. Then, last October, RBS announced that it was closing its Westhill branch—the one that customers had just been advised to move all their accounts to. Never mind. The Huntly branch was staying open, just 21 miles north of Alford. Would you believe it, Presiding Officer? In its latest round of branch closures, RBS has decided, in its wisdom, to close the Huntly branch too.

RBS has taken decisions on branch closures in isolation. It is a business, after all, and it is in the business of making a profit. However, I simply ask RBS—and indeed the other banks—to think outside the box. Solutions are what we need. They could still make a profit and provide a service to our rural communities by working together. Would that not be novel? Banks could even work with their competitors in a community hub, offering facilities that local people could access with greater ease. If the banks continue to work in silos, we could see them all withdraw their services from our towns and villages, and that way lies disaster.

I ask the minister to knock the banks’ heads together so that they can co-operate to save the services and keep a profit for themselves. That would be a win-win situation.

Jenny Gilruth (Scottish National Party, Mid Fife and Glenrothes)

I congratulate my friend and colleague Kate Forbes on securing today’s debate. Time is limited, so I will focus on the closure of the RBS branch in Leven. I could talk about 2014—and no, I do not mean that. I mean the closure of branches in Markinch, Lundin Links and Thornton, each with populations of roughly 2,000 whom RBS left behind. Let us not kid ourselves. RBS has been closing branches in swathes for years, but it sticks in the craw somewhat in 2017, the year in which the bank recorded a profit of £871 million in the third quarter. Merry Christmas to the shareholders.

In my constituency, the Leven branch shut its doors on 3 October. There was no consultation. I found out about it, and about the replacement mobile banking service, via email. The bank now visits Leven three times a week, but the sum total of opening hours is just a shocking four and a half hours. All time slots fall within the hours of a normal working day; two fall across the morning period and one is over lunch. In addition, as has been said by my friend Mairi Gougeon, those mobile banks are not accessible.

I do not think that it is coincidental that, within weeks of RBS announcing that it was shutting shop and the Clydesdale Bank doing likewise, WH Smith shut too. However, Leven High Street is just a mirror image of every other town across Scotland, as we have heard today. Once the banks go, the shops close, and then what? RBS claims that it had to shut the Leven branch because of footfall, but it could not give my office the figures for the months before it closed.

My constituents are being let down by a bank that they own and that the UK Government has washed its hands of. It is not good enough. I stand with colleagues across the chamber today in demanding a Royal Bank for Scotland not for its shareholders.

Rachael Hamilton (Conservative, Ettrick, Roxburgh and Berwickshire)

I thank Kate Forbes for bringing the motion to Parliament. The news that RBS has decided to shut 62 branches is devastating. As Kate Forbes highlighted, rural areas will be hit the hardest. The Scottish Borders will see significant detrimental impact. It is disappointing that those in rural areas have seemingly been forgotten in the decision. Banks have a moral obligation to ensure continued access to services, especially for older or vulnerable residents. Clearly, RBS is not living up to that obligation.

The Borders is up in arms. Only three years ago, the bank shut its branches in Chirnside, Greenlaw and Newtown St Boswells. Closures forecast for Selkirk, Duns, Eyemouth, Hawick, Jedburgh and Melrose will cause further disruption and woe. Those who cannot, or would prefer not to, bank digitally now have to find another way to get to the bank—once on their doorstep, now miles away. In the Borders, where broadband is slow, digital banking is not as easy as some would suggest, and not everyone can drive. That is why many people retire to towns, in order to access services easily.

Previous closures in the Borders have already impacted footfall on the high streets. Constituents in Hawick now face a 40-mile round trip to their nearest bank. Furthermore, the post office or mobile bank is no substitute for a bank teller. Traders are now expected to shut shop to get to their bank, damaging their business productivity and shortening opening hours.

On small business Saturday, I spoke to traders and shoppers on the high street in Jedburgh, who told me how shocked they were by the news that RBS was shutting. A constituent in Coldstream pleaded with me last week to contact their ATM provider, as one was out of order and the other had not been topped up with cash. That is what we are now facing. I really hope that RBS will reconsider the closures.

Colin Smyth (Labour, South Scotland)

I thank Kate Forbes for her motion. Nearly a quarter of the latest RBS closures come in South Scotland. Communities in Annan, Gretna, Langholm and Lockerbie in Dumfries and Galloway, Biggar, Carnwath and Douglas in South Lanarkshire, Dunbar and North Berwick in East Lothian, Duns, Eyemouth, Hawick, Jedburgh and Selkirk in the Scottish Borders, and Penicuik in Midlothian will all see their branches axed by RBS. It is less than a year since the closure of branches in Newton Stewart in Dumfries and Galloway, as well as Cumnock, Mauchline, Prestwick, Troon and Girvan in Ayrshire. Across South Scotland, our towns and villages are being left without a single bank branch, despite a previous commitment by RBS not to close a branch if it is the last bank in town.

Of course, misleading the public is what RBS does. Recently, RBS business customers in Langholm received a letter from their bank that appeared to hint at the closure of their local branch. When challenged on that issue, RBS denied that it would happen and yet, weeks later, closure is exactly what it has announced. RBS says that it will try to avoid compulsory redundancies during the latest closures, but the scale of the closures is such that loyal and hard-working staff are being left with no reasonable relocation options.

Despite the 165 jobs that are on the line in the UK Government-owned RBS, how did the Secretary of State for Scotland, David Mundell, initially respond to the news? He got his photo taken outside RBS in Biggar. Staff and customers do not need sympathetic words and photo calls; they need direct intervention by the UK Government to stop the closures now. We need legislation from the UK Government to ensure that, where a bank is the last in town, there can be no closure without full consultation with customers and the final decision is made not by the bank but by the Financial Conduct Authority.

Stewart Stevenson (Scottish National Party, Banffshire and Buchan Coast)

I draw members’ attention to my entry in the register of interests. I remind banks that they do not stand apart from wider society—they exist to serve it, and they depend on its support for their continued existence and their special privileges.

The Bank of Scotland opened its doors in 1695 and drew opprobrium in 1715 when its board backed a Jacobite rebellion. That led to the foundation of the Hanoverian Royal Bank of Scotland and nearly closed the Bank of Scotland. Today, with RBS and others removing branch-based services from communities across Scotland, particularly in Banff in my constituency, there is a significant risk to some banks’ future success.

Banks should set aside short-term financial targets to ensure their long-term survival. They can do so by re-earning the trust and support of local people by being part of communities through having a meaningful physical presence in them. In 1826, the Bank of Scotland manager in Kirkcaldy angered his customer, David Landale, was challenged to a duel, accepted the challenge and lost. The bank lost a manager and could not even take possession of the gun that killed him. Fall out with your customers at your peril! Today’s gun levelled at the banks may merely be metaphorical, but it could be just as deadly.

Brian Whittle (Conservative, South Scotland)

I, too, thank Kate Forbes for bringing the debate to the chamber.

As has been highlighted already, the bank closures will have a hugely detrimental effect on communities across the country, especially in the more rural towns in my area, such as Cumnock, Mauchline and Girvan. Moreover, they will disproportionately affect those who are most vulnerable, including the elderly. In Girvan, for instance, I heard from Age Concern Scotland that people will have to travel to either Ayr or Stranraer, often by public transport, which takes hours.

While we rightly call out the banks and lobby against the closures, I suggest that it is also important that we engage with the banks to try to develop solutions on the ground in the communities that are affected. For example, in Girvan, when Age Concern highlighted its concern about the use of technology, I contacted RBS and it sent somebody along to give a workshop with Age Concern to try to address those concerns, which it continues to do.

In addition, the route that the mobile banks take and their accessibility are under review in my area, following feedback from constituents that was passed on to the bank.

It is absolutely right that we exert as much pressure as we can in relation to the closures, but I encourage members to engage with the banks to look at practical solutions that would mitigate the worst of the cuts while continuing to bring the utmost pressure to bear.

Claire Baker (Labour, Mid Scotland and Fife)

Today, the widespread bank closures face a lot of criticism. In

my region, the recent announcement of further RBS closures will rip local banking out of the heart of communities. Villages and towns such as Comrie, Kinross and Alloa will now join Cowdenbeath, Burntisland and Leven in having their branches closed and access to banking services restricted. Across all banks, 26 branches have closed in my region this year alone.

The banks argue that, as more people use online banking services, the branches are no longer viable, but many people—including the elderly and the technology poor—rely on them. Even those who are online face significant digital access challenges because of poor broadband connection speeds. Aberfeldy, Comrie, Kinross and Pitlochry are in the bottom 20 per cent in the UK for download speeds.

In addition, it is assumed that people who use online banking no longer need a convenient branch, which is just not true. People still need to deposit cash, particularly those who run small businesses. This week, I spoke to a local solicitor who is under time pressure to deposit cheques. It will be extremely difficult for him to deposit cheques in the required timeframe, because there are only four branches of his bank left in the whole of Fife.

People want to discuss their financial arrangements, whether they involve loans, mortgages or savings, and to have decisions made locally. We need to find a solution that ensures access to essential banking services. We cannot allow banking services across the country to be decimated. There must be alternatives to the direction that is being taken. Widespread bank closures only risk customer dissatisfaction and put unreasonable strain on bank employees. RBS and other high street banks need to recognise the strength of public feeling and rethink the closures.

Fulton MacGregor (Scottish National Party, Coatbridge and Chryston)

As others have done, I thank Kate Forbes.

I echo what other members have said in stating how disappointed I am that RBS has taken the decision to close 62 branches across Scotland. I am grateful that the Coatbridge branch is not one of them, as I do not think that the high street in Coatbridge could take any more pain. There have been several high street bank closures in Coatbridge already, and the Department for Work and Pensions is ruthlessly moving hundreds of staff out of its town centre operation. Those factors, among others, led me to pull together a stakeholders group to work with the council and local business owners to try desperately to save our town centre. I thank the minister for the answers that he gave yesterday.

I want to focus on the branch that is closing in my constituency—the Stepps branch. It is literally the last bank in town, and it not just for Stepps. Residents who use the Stepps branch will need to travel more than 3 miles to Kirkintilloch to get to their closest high street branch. Users of the Stepps branch come from not just Stepps but the surrounding villages of Chryston, Moodiesburn and Auchinloch. For the elderly, disabled, people without their own transport and those in poverty, getting to an alternative branch will be a significant added challenge, so I urge RBS to consider all its customers’ needs before taking the proposed action.

Those very people are the ones who are most unlikely to know that their branch is closing. For example, on the day that the announcement was made, I went over to show my support for the staff. A queue of mainly elderly customers was forming, and I overheard one of them say, “Have you heard that the branch in Airdrie is closing?” They were oblivious to the fact that their branch was to close. I am sure that Alex Neil will pick that up in his speech. The proposed closure of the Stepps branch has gone under the radar in Stepps, which is why I have taken every opportunity to raise it.

Gordon Lindhurst (Conservative, Lothian)

It gives me no pleasure to speak in this very important debate. What I have to say echoes much of what has been said by others across the chamber.

I have raised the issue of the bank branch closures in Juniper Green and Balerno in my region a number of times in Parliament. Yet again, it appears that elderly and disabled customers and others have been forgotten in the latest round of planned RBS closures. Banks appear to assume that their preferred option for banking—online platforms—will solve the problem of access to banking for everyone, but that is not the case.

This week, an elderly resident told me how upset she was about the proposed closure of the RBS branch in Linlithgow. “At least there’s still the Bank of Scotland that I can go to,” she said in a resigned fashion. There is at least one bank left—for now. Within the week, Santander also announced the closure of its Linlithgow branch, leaving it and RBS with only two branches each in the whole of West Lothian. The Clydesdale Bank Linlithgow branch that I used as a customer closed several years ago.

I have sat with bank representatives discussing spreadsheets on branch usage, and reams of statistics showing how many or how few people use or do not use whichever particular branch is set to close at that point in time. What they completely missed was any attempt to provide an alternative plan for the way forward, whether on their own or in conjunction with other banks.

Many points could be made and, in closing, I echo what Mike Rumbles said. Banks are not in the same position as ordinary private companies, least of all RBS. They are underwritten by the taxpayers who guarantee the deposits in their accounts. What is their plan for future provision of services to those people?

The Deputy Presiding Officer

I really have to stop you there, Mr Lindhurst.

Rhoda Grant (Labour, Highlands and Islands)

I congratulate Kate Forbes on securing the debate.

These closures will have a devastating impact on all of Scotland but especially on the Highlands and Islands, where 13 branches will close. The justification for the closures is cynical. We have the worst broadband in Scotland—indeed in the UK—and therefore the ability to bank online is a distant dream rather than a reality.

Possibly the worst of the proposals is the closure of the branch in Castlebay. It means that people will have more than 20 miles to drive and a ferry to catch just to get to the bank, and then they need to try to get back home again. That will probably mean that it will take the best part of a day to access the bank, not to mention the added costs. Added to that, it is a place where my constituents have had some of the worst problems with accessing broadband. What of elderly people who cannot make the ferry journey to get their pension?

While we rightly concentrate on service provision, we must not forget the staff who work at the branches. They are losing their jobs, because the distance that they would have to travel to an alternative branch will make relocation impossible. Neither do they have a hope of gaining a similar job, because such jobs are few and far between in rural communities.

The closures are being directed by the banks that we bailed out. The people who are making the decisions owe their own jobs to the communities that they are now riding roughshod over. It has to stop. The Westminster Government must intervene on behalf of us, the shareholders. These banks belong to the people and they must make the people their priority.

Gillian Martin (Scottish National Party, Aberdeenshire East)

In my constituency, RBS has announced plans to close branches in the towns of Ellon and Turriff, which is incredibly disappointing for local residents and businesses who will now have to travel further to do their banking.

Such closures affect elderly people most, but this morning I was contacted by 20-year-old Hannah Mackie—a student nurse and Turriff brownies leader who put the travel issue into context. She works 12-hour shifts and, on her days off, she does the banking for the brownie pack—mainly cheques and cash. If RBS closes, she will have to travel 16 miles to Maud. The only bus would get her there 15 minutes before the branch closes, and there is not another bus to take her back home for more than three hours. She is not hopeful that a visiting mobile van will be of any use to her, given her shift pattern.

Earlier this week I met representatives from the Turriff Business Association, which is made up of about 60 businesses from across all sectors. It has started a petition calling for the decision by RBS to be reversed. I have signed the petition and fully support the association, and I urge people in Turriff to give it their support—although I am cynical about whether it will be effective. I was in Mintlaw earlier this year with Councillor Jim Ingram, trying to get the Clydesdale Bank—the only bank in town—to reverse its decision to close its branch. We were unsuccessful and were able only to save an ATM.

The public bailed out RBS in the banking crisis, so it has a duty to support residents who benefit from a local service.

I urge the UK Government not to turn a blind eye and dismiss this as a commercial decision, as the MP for Gordon, Colin Clark, did when he replied to me about the Ellon RBS closure. It is always rural towns that suffer most when such decisions are made.

Maurice Corry (Conservative, West Scotland)

I thank Kate Forbes for bringing this important issue to members’ business today. Banks provide a vital service in our communities—most notably in the smaller towns and villages. The demographic of an area has a large part to play in whether local bank branches should be retained, with more elderly people and small businesses needing access to branches in rural areas and towns. People who visit branches do so regularly and need them for specific requirements.

Relatively recently, there have been a number of closures of various banks. In my region, those have included Clydesdale Bank branches in Bearsden and Helensburgh, Barclays in Dumbarton and the RBS in Alexandria. If residents cannot perform branch banking, it is a notable and avoidable inconvenience that potentially creates a dangerous or harmful situation for elderly and vulnerable people in our society, by endangering community safety: with bank branches continuing to close, people are forced to withdraw cash in a less secure environment.

I realise that internet banking is becoming much more popular, but many people—in fact, as many as 50 per cent—still do not use it. Branches form a very important part of our communities. I implore RBS’s directors to give the issue extremely serious consideration.

Tom Arthur (Scottish National Party, Renfrewshire South)

I, too, thank Kate Forbes for securing the debate.

We have heard much talk about the last bank in town, but in Renfrewshire South we are down to the last bank in the constituency. We lost the RBS in Lochwinnoch in 2014 and we lost the RBS in Barrhead last year. To add to that, we lost the Clydesdale Bank in Johnstone, so we now have one RBS serving the whole Renfrewshire South constituency.

This is not the first time that a member of the Scottish Parliament for Renfrewshire South has raised the issue. Three years ago, my predecessor, Hugh Henry, in a members’ business debate that had been secured by Neil Findlay, raised the very same issue. It was telling that Hugh opened his speech by quoting Ross McEwan, the chief executive of RBS, who said:

“We need to remember—and then never forget—that the customer is why we are in business.”

Mr McEwan, who the

Financial Times

reports received a payment of $7 million last week, is certainly in business.

There has been a great deal of talk from RBS about people moving to alternative platforms for banking, including mobile, digital and online banking, and the bank points to decreased footfall in branches. That is all very well, but who are the people who still use their local banks? That has not been captured. The policy and the decision seem to be predicated on the dead-eyed dogma of bean counters, with absolutely no cognisance whatever being taken of the needs of society. It is the wrong move. As Stewart Stevenson eloquently highlighted, banks have social responsibility: it is time that taxpayer-owned RBS remembered that.

Iain Gray (Labour, East Lothian)

I, too, thank Kate Forbes for securing the debate. I want to use it to add to the record my comments on the closure of RBS branches in Dunbar and North Berwick in my constituency, and to register the anger of my constituents in those towns about the bank—to which many have shown loyalty over many years and even decades—treating them so shabbily.

This is not the first time it has happened. Just over a year ago, RBS closed its branch in Prestonpans, leaving that town with no bank branch, and the Bank of Scotland has done the same to Gullane. The branches that are to be closed are busy. Only a few days ago, I was told of queues out the door in North Berwick. That was true of Prestonpans a year ago, but still the branch was closed. My constituents’ experience of those branches jars with the picture that RBS paints of deserted facilities that are shunned by switched-on online customers.

What also jars is the bank’s public relations and advertising image of a bank that serves customers in communities while it actually deserts many of them and responds to their protests with contempt.

However, what jars most of all is that the banks looked to the public to save them when their own greed almost consumed them, and now they treat us with contempt. The closures are nothing new, but they should be the straw that breaks the camel’s back. This time, we must find a way to stop them.

Bruce Crawford (Scottish National Party, Stirling)

I thank Kate Forbes and say “Well done” to her for bringing the debate before us.

The closure of RBS Bannockburn will create real challenges for that community—especially for elderly people. The branch covers Bannockburn, Hillpark, Plean, Cowie, Throsk and Fallin. It does not have to be this way. Yesterday, during Prime Minister’s question time, Theresa May brushed off calls to intervene in RBS closures and referred to them as “commercial decisions”. The UK Government owns 73 per cent of RBS and the Treasury has over 70 per cent voting rights. The influence exists and our communities need the UK Government to use it.

RBS customers are among the taxpayers who bailed out the bank with billions of pounds. They helped to save it, so is this how they are to be treated? I say to the Tory Government that it is not simply a commercial decision; it is a social travesty. The Tory Government has the power to take action. The bank was saved by taking money from the pockets of ordinary people, so the UK Government owes those people a debt. It is time to start paying it back and to stop the closures now.

Neil Findlay (Labour, Lothian)

I have been on RBS’s case for a long time. Now we have just two branches left in West Lothian and one in Midlothian, and several branches in Edinburgh have closed, leaving vacant buildings on high streets.

I have asked for meetings with the very well remunerated Ross McEwan. He has refused. I have asked the bank to stop closures. It has refused. I have asked the bank to hand over buildings to the community and to set up a legacy fund. It has refused. Let me tell members why the latter two requests were refused. RBS said—members should listen to this—

“We have to secure the best return for shareholders”.

This is the bank that was fined £3.1 billion for mortgage mis-selling, £14.5 million for having poor mortgage records, £5.6 million for reporting failures, £56 million for computer failures, £5.6 million for failure to screen customers, and £2.8 million for failing to handle complaints properly. This is the bank that had to put aside £391 million for London interbank offered rate—LIBOR—rigging, £1.3 billion to deal with payments for businesses that were mis-sold products, and £3.25 billion for payment protection insurance mis-selling. I have to ask Mr McEwan: how is that value for shareholders?

Let us not take any of RBS’s garbage about value for money for shareholders. It could hand every single building over to the community and give each community £100,000, £200,000 or £1 million, and that would still not reach the value of the fines that it has had to pay out on our behalf, as the shareholders. RBS is a disgrace.

Every member should ask Mr McEwan for a meeting. He does not want to get out of his bunker.

Alex Neil (Scottish National Party, Airdrie and Shotts)

I congratulate Kate Forbes on securing the debate and on her excellent speech.

It is very obvious already that, despite all our protestations, RBS has no intention of changing its mind on any proposed closure. That is a totally outrageous situation.

We have all sought meetings with Ross McEwan and other senior people in the bank. I have a suggestion to make. All the members who have taken part in the debate should seek a joint meeting with Ross McEwan, along with colleagues who want to join us, and let him say no to the Scottish Parliament as a corporate body, rather than picking off individual members.

It is high time that banks and big corporations accepted that they have a social responsibility. Corporations that are in the public sector have a special responsibility to communities and to their shareholders.

In my constituency, RBS shut its Shotts branch last year. The building is still sitting empty and RBS has refused to hand it over to the community. Now RBS is going to close the Airdrie branch. The bank does not care about those communities. Despite all the adverts and all the propaganda, it is doing nothing for us. Let us get together, cross-party and across the Parliament, as one delegation, and demand a meeting with McEwan.

The Deputy Presiding Officer

To allow the minister to respond to the debate, I am minded to accept a motion without notice under rule 8.14.3 to extend the debate by a short time.

Motion moved,

That, under Rule 8.14.3, the debate be extended by up to 30 minutes.—[

Kate Forbes

]

Motion agreed to.

I am sure that the minister is quite relieved at that.

Paul Wheelhouse (Scottish National Party, South Scotland)

I declare an interest as a customer of the Royal Bank of Scotland and a user of one of the branches that are being closed.

I thank Kate Forbes for lodging today’s motion. I greatly appreciate that Ms Forbes and many other members have genuine and sincerely felt concerns—as was demonstrated in the debate—about the Royal Bank of Scotland’s announcement that 62 branches are to close, not only in Ms Forbes’s constituency but across the whole of Scotland. In my patch, six of the eight branches in the Scottish Borders are to close, as Rachael Hamilton said.

Kate Forbes is correct to identify that the UK Government retains legislative and regulatory responsibility for banking and financial services and is the majority shareholder in RBS—Kenny Gibson also made that point strongly, as did Alex Neil in his powerful speech.

However, the Scottish Government stands ready to work with UK ministers, the bank and other stakeholders to support and reassure customers in light of the planned closures. That is not to say that we are happy with the closures. My first preference—the Government’s first preference—is for the branches to stay open. I very much hear the comments that have been made today.

Concerns have been raised about the impact of branch closures on our communities. These closures will be a body blow to many communities across Scotland, leaving many areas with significantly reduced branch coverage and availability of banking services.

Mike Rumbles (Liberal Democrat, North East Scotland)

I have a genuine question. Will the minister get together with all the banks that serve us in Scotland to get their heads together? Decisions are being taken by each bank in isolation, but they need to work together.

Paul Wheelhouse (Scottish National Party, South Scotland)

I planned to address that issue later, but I will take it head on now, because Mr Rumbles has fairly raised it. I reassure Mr Rumbles and all members in the chamber—indeed, Mr Whittle made a similar point about trying to find practical solutions—that we are engaging with RBS; we are not just accepting that the bank will pull out and leave nothing behind. We are trying to liaise with the bank about what it can provide as a legacy and, if branches are to close—

I repeat that I would rather that they did not close—about what practical solution can be found. Mr Rumbles made a point about having a community hub. We have already raised that with RBS in discussing how to use the estate.

Neil Findlay (Labour, Lothian)

Will the minister help members by agreeing that no minister or member will facilitate any corporate functions in this building for RBS until it comes to the table and has discussions with members about what it is up to?

Paul Wheelhouse (Scottish National Party, South Scotland)

I hear the point that Mr Findlay makes and I am aware of his long-standing interest in the issue. I do not govern what happens in the Scottish Parliament—I am sure that the Presiding Officer would be the first to say that—but I take Mr Findlay’s point entirely. We are trying to make the point to RBS that there is a reputational issue. Its reputation is clearly suffering in the court of public opinion and in the court of this chamber’s opinion. I am sure that the strength of feeling that we have heard today is not lost on it.

In our view, the UK Government should not be a passive bystander. We believe that it should take immediate action to defend customers and ensure that communities, particularly the most vulnerable members of those communities—Mairi Gougeon made a powerful point about people with learning disabilities—are protected and have access to day-to-day banking services.

Of course we understand that many customers now choose to access banks and banking services in different ways, but, as many members said, that is not true of all customers. There are many customers for whom it is quite frightening to go online, because they hear stories of online fraud and other issues and they need reassurance. We know that services do not yet meet the needs of all customers and that, for some time to come, banks must continue to offer services to all customers in a way that meets their needs. There are often sensitive issues that need to be discussed with a bank, such as issues around bereavement, redundancy and other matters. A customer would not want to stand in a post office talking over the counter about something sensitive while someone behind them was waiting to buy stamps. Face-to-face contact in a private space is still a core part of what banking services need to provide.

Last week I spoke to Stephen Barclay, the Economic Secretary to the Treasury, to press the case for a guaranteed level of access to essential banking services. We recognise that commercial decisions have to be taken, but, where regulation is in place, that creates a level playing field and provides the context in which those commercial decisions are made. We believe that there is a role for regulation to ensure that a minimum standard of banking services is left when banks close branches.

The UK Government has made it clear that, despite its having a majority stake in RBS, it will unfortunately not exercise its influence at this time. It might need to be pressurised to do more on that front, but I recognise the support of the Conservative members in the chamber for taking action on this. I appreciate that RBS operates on a commercial basis, and that it must do so, but we believe that there is a role for regulation.

We believe that the UK Government should work to ensure that robust alternative options are in place before it allows closures to take place. We are prepared to play our part in that; we do not expect it to fall entirely to others.

I acknowledge the work that the banks are doing with the Post Office to expand the services that are available to their customers through that network. However, as a number of members said, although the Post Office is able to offer a basic banking service, businesses in particular have concerns about cash deposits. A current barrier is that most post offices can accept only up to £2,000 in cash being deposited at any one time. That is a real barrier for tourism businesses located in rural areas such as Kate Forbes’s constituency; they will face real challenges as the majority of their trade is conducted in cash.

I spoke to senior RBS staff on Friday 1 December immediately following the bank’s announcement and I spoke yesterday to Simon Watson, the head of retail banking, when I asked the bank to consider further the support that it provides to customers affected by these closures. I welcome the commitment to provide training and support to customers in setting up and using digital services—there is more that I can say on that, but I am not yet at liberty to do so. However, in some areas there will continue to be challenges around digital access, which a number of members mentioned. I have urged RBS to take that into account, because I do not believe that it has been taken into account sufficiently to date—I refer not least to the difficulties in accessing a reliable wi-fi or 4G service in large parts of both rural and urban Scotland.

RBS maintains that it has made changes to its mobile banking fleet to allow it to serve a greater range of locations. Jenny Gilruth and others raised legitimate concerns about the availability of mobile banking services at a time that is convenient for customers. We urge RBS to take those concerns on board. I agree very much with the points that members made about that issue today.

As I said to Mike Rumbles, I have asked the bank to give further thought to the future of the branches that are to close. We believe that there is room for collaboration between RBS and other banks, independent financial advisers, tax advisers and others to potentially provide a hub that could represent a step-change in the availability of financial advice to members of the community. There could be a good opportunity coming out of this.

I do not want to finish the debate without saying something about the staff. As a number of members said, the planned closures affect the bank’s customers but also its staff. I had a very constructive meeting this week with representatives of Unite to discuss the impact of these closures on its members. I agree whole-heartedly with Kate Forbes’s praise of the staff and how they are handling the situation and supporting customers at a difficult time.

The bank has indicated that up to 160 jobs are at risk as a result of the announcements, but that is the figure for full-time equivalents. Given the nature of part-time employment in the banks, Unite estimates that up to 350 people could be affected by the redundancy programme and the potential voluntary redundancy options. As Rhoda Grant said, there are practical difficulties for staff in remote and rural locations, because they will have no alternative RBS site that it is practical for them to access, given their caring responsibilities or geographical barriers.

Unite has made it clear that it is concerned about the impact of the closures on communities. We will work closely with the unions on that.

As members have done, I urge RBS to listen to and reflect on what has been said today and work with us where it can to try to provide a long-term solution for the communities affected by the closure of the last branch in town. I put on record our appetite to do that and to help the communities and the staff affected, and indeed to help RBS come out of this with a better reputation than it risks having at this moment in time.

The Deputy Presiding Officer

That concludes the debate. I ask members to clear the chamber quickly to allow it to be prepared for this afternoon’s business.

13:37 Meeting suspended.

14:00 On resuming—

Draft Spending and Tax Plans 2018-19

Kenneth Macintosh (Labour, West Scotland)

Good afternoon. The first item of business this afternoon is a statement by Derek Mackay on the Scottish Government’s draft spending and tax plans for 2018-19. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions.

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I am delighted to set out the Scottish Government’s comprehensive budget proposals

for 2018-19, which will use the powers of the Parliament to build a fairer Scotland and put the progressive values of the Government into action. The budget will invest in our public services and support businesses to develop and thrive.

The budget is, of course, being delivered in the most challenging of circumstances. We must support our economy to keep pace with changing technology, access new markets and deal with United Kingdom Government austerity and the damaging uncertainty caused by Brexit. Austerity and uncertainty are damaging the UK economy, and there is a knock-on effect on public finances. The pound has fallen, inflation has risen, and growth forecasts have been downgraded. As a result, we face the most challenging economic and fiscal environment for any budget in the devolution era.

Neil Findlay (Labour, Lothian)

On a point of order, Presiding Officer.

The Presiding Officer

Will Mr Findlay wait until the end of the statement to make his point of order?

Neil Findlay (Labour, Lothian)

It cannot wait.

The Presiding Officer

Mr Findlay can make a genuine point of order. If I find that it is a political interruption, I will not be happy.

Neil Findlay (Labour, Lothian)

It is a genuine point of order.

We usually receive a copy of the statement when the cabinet secretary starts to read it. Apparently, this time, we will not get that until he finishes. Is that a change in procedure?

The Presiding Officer

I get the point, Mr Findlay, but that is not a point of order.

Derek Mackay (Scottish National Party, Renfrewshire North and West)

T

he fundamentals of the Scottish economy remain strong. Since 2007, Scotland has largely closed the productivity gap with the rest of the UK and, in 2017, our economy continued to grow, the number of people in work has reached a record high, and unemployment is close to its lowest-ever level.

Today, the Scottish Fiscal Commission has published its first comprehensive report on Scotland’s economic and fiscal forecasts. I thank the commission for its work. Its report underlines those fundamental strengths in our economy. It predicts continued growth and that employment will rise further and earnings growth will match that in the UK. However, the commission has also highlighted the negative impact that Brexit will have and the challenges that we will face from a declining working-age population. It forecasts that productivity growth will be subdued, that the labour market will tighten as a result of reduced migration and that that will impact on gross domestic product.

The commission’s forecasts for growth are more cautious than those of other forecasters, but it is clear that, to grow faster, we must boost productivity and grow our working-age population. That is why the budget sets out immediate measures to stimulate economic activity and improve productivity.

For Scotland’s future prosperity, the Parliament must reach a consensus on the powers that we need to increase the number of working-age people in Scotland, and we must continue to make the case for a commonsense solution to Brexit that keeps Scotland and the UK in the single market and the customs union. However, even as we do that, we will redouble our efforts to ensure that our economy will flourish, no matter the outcome of the negotiations.

Equally as important as the budget’s economic context is the fiscal context. Over the 10 years to 2019-20, Tory austerity will mean that the Scottish Government’s fiscal block grant allocation will have been reduced in real terms by £2.6 billion. Despite the chancellor’s claims,

“By 2019-20 the resource block grant will be around £500 million lower than in 17-18”,

as the independent Fraser of Allander institute recently stated.

We welcome the additional capital funding that will transfer to Scotland and we will make good use of the financial transactions that are available. However, we cannot spend financial transactions on teachers, nurses or the police. Instead, we will use Scotland’s own resources to invest in our public services, and we will provide the support and infrastructure that our economy needs to flourish in a low-carbon, high-technology world.

We believe that strong public services and a vibrant economy go hand in hand. Undoubtedly, our public services require a strong economy to generate investment; equally, the most successful economies in Europe are built on the firm foundation of strong public services.

At the heart of this budget is immediate action to support the economy, and there will be a series of key investments and programmes that deliver for business now and build the right environment for the future. The global economy is changing at an unprecedented rate, but Scotland already has competitive advantages in many industries of the future, such as life sciences and renewable energy. Therefore, the budget delivers an increase of £270 million, which is an increase of 64 per cent, in the economy, jobs and fair work portfolio. That additional funding contributes to investment of almost £2.4 billion in enterprise and skills through our enterprise agencies and our skills bodies. The increased investment includes a 70 per cent uplift in our funding for business research and investment, which takes our investment in the coming year from £22 million to £37 million. The budget also contains an initial £10 million to support the new south of Scotland enterprise agency, and it doubles, to £122 million, the funding that is allocated to city region deals.

Through the Scottish Further and Higher Education Funding Council, the budget invests around £1.8 billion in our colleges and universities, providing a real-terms increase in their funding. That investment funds the teaching, research and innovation that will provide opportunities for our young people, train the workforce of the future and drive our productivity. Further, the budget allocates an initial £18 million for the new national manufacturing institute that was announced by the First Minister on Monday. Construction of that new centre of excellence will begin next year.

Scotland has a world-leading reputation for our efforts to tackle climate change. To support our transition to a low-carbon economy, the budget allocates £60 million to a low-carbon innovation fund.

We will invest £1.2 billion in our transport infrastructure, including support for new and improved road and rail developments. We will not only dual the A9, but turn it into an electric highway, and we will deliver new railway investments like the electric trains that now run between Edinburgh and Glasgow. In addition, we will make a £20 million investment in the coming year to support the transition to electric vehicles and the delivery of more green buses and, as promised in the programme for government, the budget doubles investment in active and sustainable travel.

In total, the budget invests more than £4 billion in infrastructure, which is part of our £20 billion infrastructure investment plan over this parliamentary session.

I can confirm today that the budget also includes the first steps towards one of the most significant infrastructure projects of this parliamentary session: superfast broadband for the whole of Scotland. At the end of this year, we will achieve our target of delivering fibre internet access to at least 95 per cent of premises.

As a result of our actions to date, Scotland has experienced the fastest rate of progress of any part of the UK. However, we want that progress to continue. Our new reaching 100 per cent programme is an ambitious plan to make superfast broadband available to every home and to every business premise in every part of Scotland by 2021. That commitment, which will position Scotland at the forefront of the digital revolution, is unmatched anywhere in the UK. I am therefore delighted to confirm to Parliament that the initial procurement for the R100 programme begins today, and that over the next four financial years, it will be supported by investment of £600 million.

The investment in skills and innovation, new technologies, manufacturing, infrastructure and broadband is all part of a package of measures to improve our productivity, boost our trade and make Scotland the most attractive place in which to do business. We will support the internationalisation of our businesses and help boost exports through the work of Scottish Development International. We will also support our culture sector with a £10 million investment in a new screen unit and funding to protect the arts and culture.

On business rates, I confirmed following the Barclay review that I would go beyond what it recommended with a set of new reliefs to incentivise investment. Our growth accelerator means that no business rates increases will be payable for new or improved properties for a period of one year, and a separate, additional measure will ensure that no new-build property will enter the valuation roll until it is first occupied.

The budget also protects our small business bonus scheme, which lifts 100,000 properties out of business rates altogether. The scheme is part of the most competitive package of rates relief anywhere in the UK, and in the coming year, it will be worth around £720 million—a record high.

I can also confirm that we will accept the remaining Barclay recommendations almost entirely, except those on charity relief, which we do not intend to curtail for universities or council arm’s-length external organisations. An implementation plan providing fuller details on how and when the reforms will be implemented is being published today.

The Barclay review also favoured a switch from the retail prices index to the consumer prices index for the application of the inflationary uplift to the poundage rate, but it was unable to make that a recommendation, given its revenue-neutral remit. However, for many Scottish businesses, that was the number 1 ask of the budget, and I can therefore announce that the inflationary uplift for the poundage next year will be capped at CPI, not RPI. Our package of business rates measures provides a boost of almost £100 million and helps keep Scotland the most attractive place in the UK in which to do business.

Nowhere is the interaction between investment in public services and a successful economy more evident than in education. Raising the bar for all and closing the attainment gap is the key priority for this Government. Since my last budget, more than 2,300 schools have benefited from targeted investment and 506 extra teachers are teaching in Scotland’s schools because of our attainment Scotland fund.

I am therefore delighted to announce today that I am increasing the attainment Scotland fund to £179 million, which means that £120 million will again be allocated directly to headteachers through the pupil equity fund, and a further £59 million will provide targeted support for the children and young people in greatest need.

I am also allocating £10 million to provide support to children and young people with complex additional support needs.

We recognise that a strong education system relies on a strong teaching profession. That is why I am committing an overall funding package of £88 million in the local government finance settlement to maintain the national pupil to teacher ratio, and to ensure that places are provided for all probationer teachers. The budget also protects our continued commitment to university education that is free of tuition fees.

The Government is committed to getting it right for every child. We want Scotland to be the best place in the world to grow up. Since their introduction in August, more than 20,000 baby boxes have been delivered, and the budget funds that important part of our social contract.

A child’s early years are critical to determining outcomes in later life. Since 2014, we have increased high-quality early learning and childcare by almost 50 per cent, to 600 hours per year. By 2020, we will increase publicly funded entitlement to 1,140 hours per year, which will benefit thousands of children and parents across Scotland. That requires us to invest now for the long term. In 2017-18, we provided £60 million to support expansion. Now, for 2018-19, we are allocating £93 million in resource funding and £150 million of capital funding, which is a total investment of £243 million next year.

That will support expansion by upskilling the early years workforce, refurbishing and expanding existing premises, and constructing new settings. It will also provide funding for graduate-level early learning and childcare courses. That means that, in the coming year, we will invest almost a quarter of a billion pounds to build more nurseries, support childcare professionals, create jobs and graduate opportunities, and provide support for parents. Ours is the best publicly funded childcare package in the UK, and is an investment that will pay dividends throughout the lives of our young people.

Local authorities are our partners in delivering vital services, and I welcome the constructive engagement that I have had from the Convention of Scottish Local Authorities. Throughout our discussions, I have made clear my desire to treat local government fairly. I believe that the budget does that. I know that local authorities have been concerned about a possible cut of about £300 million to their budgets. However, as a result of decisions that underpin the budget, I have been able to avoid that. I can announce today that the local government resource budget will be protected in cash terms and that the capital budget will be increased in real terms, which will result in a total increase in local authority core funding of £94 million.

In addition, local authorities have the option to increase the council tax by up to 3 per cent. If they choose to do so, they will raise an additional £77 million, which would secure a real-terms increase in local government funding. Local government will also be the beneficiary of the doubling of investment in the city deals.

Our police and fire services also make a huge contribution to our communities. We will deliver more than £20 million of additional investment to protect the police revenue budget and an additional £5.5 million for continued transformation of the fire service. Scotland’s police and fire services will also retain the full benefit of—at long last—having the ability to recover VAT, which will boost their spending power by £35 million in 2018-19. The budget also secures investment in key measures to make our communities safer, including tackling domestic abuse, reducing reoffending, protecting witnesses and modernising the justice system.

Ensuring that everyone in Scotland has access to good-quality secure affordable housing is a key part of making Scotland fairer. New figures out this week show that, since 2007, the Government has delivered nearly 71,000 affordable homes, and that we are building social rented housing at twice the rate of the Government in England. Our commitment to deliver 50,000 affordable homes over the five years of this session of Parliament is a significant challenge, but it is one that we are determined to meet. The benefits of the investment will be felt throughout our society for generations to come. I am therefore delighted to announce investment of £756 million in 2018-19, as part of our commitment to invest more than £3 billion in affordable housing over this session of Parliament.

We will also take steps to make home ownership a reality for more of our young people. To help to achieve that, I am introducing a new relief on land and buildings transaction tax for first-time buyers of houses up to £175,000. All first-time buyers will benefit from that and, as a result, 80 per cent of first-time buyers will be taken out of LBTT altogether.

Alongside that record investment in housing, we will invest £137 million in 2018-19 in energy efficiency and heat decarbonisation. Good-quality affordable housing is one way in which we can help to drive down poverty.

One of the most devastating results of Tory austerity has been a rise in rough sleeping and homelessness. Our programme for government set out a national commitment to eradicate rough sleeping and to transform the use of temporary accommodation. In 2018-19, we will invest £10 million in an ending homelessness together fund—a fund that will invest £50 million over the next five years. That will drive change and improvement in line with the recommendations of the homelessness and rough sleeping action group.

We will also tackle child poverty in all its forms. This budget supports the first investment in a new £50 million tackling child poverty fund, which will help to address the underlying social and economic causes of poverty.

We will continue to mitigate UK welfare reform by investing more than £100 million on interventions, including the Scottish welfare fund and reversal of the bedroom tax. Parliament is currently considering our Social Security (Scotland) Bill. Although I cannot allocate funding for specific benefits until the bill is passed, I can confirm that I will allocate additional in-year funding to support the landmark step of increasing the carers allowance. The increase will be delivered by summer 2018, and backdated to April.

The staff in our schools, hospitals and other public services do an outstanding job and we have always sought to offer a fair deal, particularly for those who are lowest paid, by ensuring that all public sector workers earn the living wage, and that those who are on low pay receive guaranteed increases. However, now is the time to lift the 1 per cent pay cap. We are determined to provide a pay package that is affordable and reflects the increasing cost of living. I am grateful for the constructive engagement of the trade unions on this matter, including the joint letter from me and the Scottish Trades Union Congress to the Chancellor of the Exchequer ahead of the autumn budget. Unfortunately, our calls were ignored by the chancellor, which limits how far we can go on pay. However, unlike other Governments across the UK, we committed to lifting the pay cap—so lift it we will.

Today, I have published a progressive pay policy. I confirm that we will deliver a guaranteed minimum pay increase of 3 per cent for all public sector workers who earn £30,000 or less. For those who earn above £30,000, we will limit the increase to 2 per cent and apply a cash cap of £1,600 to people who earn £80,000 or more. That demonstrates our commitment to closing the gap between the lowest paid and highest paid. That is the framework that will apply to public sector pay negotiations.

However, let me make clear three additional points. First, notwithstanding the policy that I am setting out today, we will respect the recommendations of independent pay review bodies. Secondly, we will be mindful of any developments for national health service staff elsewhere in the UK in order to ensure that our health service staff are treated at least as fairly as those in any of the other UK nations. Thirdly, we will retain flexibility to enable us to address particular recruitment challenges.

Once again, the Scottish Government is leading by example, delivering on our promises and putting fairness at the heart of what we do. Our decision to lift the pay cap will benefit thousands of nurses and other healthcare staff. I know that I speak for everyone in the chamber when I thank our NHS staff for the work that they do in caring for the people of Scotland.

Our approach to health and care is one of reform and investment. In the coming year, we will invest £110 million in reform of primary care, thereby supporting our general practitioners and health centres to meet the changing needs of our people. We will increase our direct investment in mental health services—child and adolescent mental health services, in particular—by a further £17 million. That is the third annual increase in a row, which will help to deliver an additional 800 mental health workers over this session of Parliament.

The budget will also deliver more than £550 million in 2018-19 in direct support of social care and integration through Scottish Government and NHS investment. We will also continue to support free personal care and the roll out of Frank’s law by April 2019.

Underpinning all that is increasing investment in the NHS. This year, an additional £200 million would be required to increase health resource spending in line with inflation. That is equal to the amount that is being cut from Scotland’s resource block grant in real terms this year by the UK Government. However, we have been clear that, over this session of Parliament, we will increase health resource spending by a total of £2 billion, which is considerably more than the rate of inflation.

Today, I confirm that our increase in health resource funding in 2018-19 will not be £200 million but will be more than £400 million, which will take our total front-line investment to more than £13 billion in the coming year.

In this budget, we are investing in the NHS, increasing social care investment, protecting local services, delivering a growth package for business and supporting the low-carbon transition. We are providing real-terms increases for our universities and colleges, expanding childcare, directing more resources to headteachers to close the attainment gap and protecting our police and fire services. We are safeguarding culture and the arts, taking action to alleviate poverty and lifting the public sector pay cap. However, in the face of real-terms cuts to our block grant, it has been possible to deliver for the NHS and to support those other investments only because of the decisions that I have taken on tax.

We do not take tax decisions lightly. In November, we set out four key tests that any change to income tax would have to meet. It must protect low earners, make tax fairer, generate additional revenues for public services and protect our economy.

We also commissioned advice, informed by the Council of Economic Advisers, on options for the additional rate of tax. Having carefully considered contributions from the public, civic society and the business community, I have decided to reform Scotland’s income tax system.

Using the limited powers available to us, the decisions that I have reached will make our income tax system fairer. They will safeguard those on low incomes and, overall, when coupled with our spending decisions, will protect and grow the economy. They will also provide essential revenue to enable us to invest in our NHS without imposing cuts on vital services such as social care, business support, police or education.

Our proposals have been modelled by the Scottish Fiscal Commission, and its revenue forecasts underpin this budget. Where forecasts suggest that a tax change would result in a significant behavioural impact, I do not have the luxury of simply ignoring it. As a result, I have set income tax policy at levels that the analysis says will generate additional revenue.

The changes that I am proposing are as follows. First, I will increase the higher and top rates of tax by 1 percentage point to 41p and 46p respectively. That sets the top rate of tax at a level that will generate the most income with the least risk of losing revenues next year and damaging the economy. Our modelling indicates that, had we gone further, once behavioural effects and forestalling are considered, a higher rate could reduce income tax revenues next year. That is not a decision that any sensible Government would take.

Secondly, I will freeze the basic rate at 20p, but to make the system more progressive, I will introduce a new intermediate rate of 21p. The intermediate rate will apply to income between £24,000 and the higher-rate threshold of £44,273, which will increase in line with inflation only. To make Scotland’s income tax system even fairer and more progressive, I have chosen to make one further change. I can announce today that I will introduce a new Scottish starter rate of income tax of 19p. That new rate will apply to the first £2,000 of taxable income between £11,850 and £13,850. That new starter rate, combined with the increase in the personal allowance, will ensure that no one earning less than £33,000, which is 70 per cent of all taxpayers, will pay any more in tax than they do now for given incomes; on the contrary, anyone earning less than £33,000 will pay slightly less in tax in the coming year than they do this year. The introduction of the new starter rate will also mean that those earning up to £26,000, which is 55 per cent of taxpayers in Scotland, will pay marginally less tax than they would if they lived elsewhere in the UK.

The specific tax reforms that I have announced today will raise an additional £164 million for investment in our public services and our economy. However, taken together with our tax decisions last year, the projected growth of our tax revenues relative to the UK as a whole and relative economic growth, our income tax receipts in 2018-19 are forecast to generate £366 million more than the corresponding block grant adjustment under the fiscal framework. Those decisions have therefore enabled me to reverse the real-terms cut that Westminster has imposed on our resource budget next year, while ensuring that Scotland is not just the fairest-taxed part of the UK but, for the majority of taxpayers, the lowest-taxed part of the UK.

In all these decisions, the interests of our economy have been at the forefront of my mind. I have already outlined a range of economic investments and I want to briefly mention two more.

One of the touchstone pledges from our programme for government was the creation of a Scottish national investment bank to provide long-term, patient capital to support innovation and drive productivity growth. Today, we signal our ambition for the bank with a commitment to an initial £340 million capitalisation between 2019 and 2021. However, while the bank is being established, I intend to create a dedicated building Scotland fund. That fund will be worth £150 million over the next two financial years and its purpose will be to support innovation in house building, help deliver modern, low-carbon industrial and commercial facilities and provide further support for business-led research and development. We will set out further details shortly.

That new fund, together with an additional £96 million of investment in maintaining the most attractive system of business rates in the UK, a 70 per cent increase in funding for business R and D, £60 million of investment in delivering low-carbon technology, more than £4 billion of investment in new infrastructure, doubling our investment in city deals, a £600 million package to deliver 100 per cent superfast broadband to all and almost £2.4 billion of funding for enterprise and skills, demonstrates beyond doubt that this budget backs Scotland’s businesses and will help to grow Scotland’s economy.

This budget is a comprehensive package of measures designed to protect all that we hold dear. It provides the investments that we need to meet the challenges of today and seize the opportunities of tomorrow. It uses the powers of this Parliament sensibly and in the interests of the country as a whole. It overturns the Tory cuts to our block grant. It delivers an additional £400 million to the health service without damaging other vital services. It protects the vast majority of taxpayers. It is a budget for fairness and a budget for growth. It is a budget for all of Scotland and I commend it to the chamber.

The Presiding Officer

The cabinet secretary will now take questions for just under 60 minutes.

Murdo Fraser (Conservative, Mid Scotland and Fife)

I thank the cabinet secretary for advance sight of his statement. Heavily redacted as it was, it looks just like the Scottish National Party’s plans to grow the Scottish economy. [

Interruption

.]

The Presiding Officer

Order, please.

Murdo Fraser (Conservative, Mid Scotland and Fife)

One thing that is absolutely clear from the Scottish Government’s budget today is that we cannot trust a word that the First Minister or the Scottish Government says. The wording in last year’s Scottish National Party manifesto was perfectly clear. It promised:

“We will freeze the Basic Rate of Income Tax throughout the next Parliament to protect those on low and middle incomes.”

Lest there be any doubt about what that meant, it was helpfully clarified by the First Minister in the chamber as recently as May 2017, when she said:

“When inflation is rising and living standards are under a lot of pressure, it is not right to increase income tax for those who are on the basic rate.”—[

Official Report

, 3 May 2017; c 9.]

Today, the SNP and every member of the Cabinet have broken their promise to the Scottish people. Despite pledging not to increase taxes for those on the basic rate—a pledge that was repeated 53 times—and despite 65 per cent of the Scottish population voting in May last year to endorse that position, they are today proposing to do the opposite and increase taxes for those on the basic rate. No one will believe a word that they say ever again.

Can the finance secretary tell me exactly how many people who are currently paying tax at the basic rate will see an increase in the tax that they pay as a result of the new nat tax that has been announced today?

Let me be clear: there is absolutely no justification for the tax rises that are being proposed. According to the Scottish Parliament information centre, the Scottish Government’s block grant from Westminster is going up, in real terms, from this year to next year. Further, the analysis that was published on Tuesday by the Fraser of Allander institute says:

“the Scottish Government’s total block grant (resource and capital but excluding financial transactions) is on track to increase by around 1% between 2016-17 and 2019-20.”

If the finance secretary had done his homework properly before he came to the chamber this afternoon, he would know that financial transactions are not included in that figure.

There we have it—no hundreds of millions of pounds in cuts, no Westminster austerity and a budget that is increasing in real terms over the next three years. Therefore, the tax rises for basic-rate payers that have been announced today are the result of policy choices that have been made by the SNP and no one else.

When we see the Scottish Fiscal Commission’s projections for economic growth, we will know exactly where the problem lies. They will show that the Scottish economy is projected to rise at a fraction of the rate at which the United Kingdom economy as a whole will rise. It is that failure to grow the Scottish economy and expand the tax base that has led the SNP to put its hands into the pockets of hard-working Scottish families and businesses to bail it out of the mess that it is making of the Scottish public finances.

Not only will we see taxes rise; once again, we are seeing cuts to local government. The front-line services that millions of families depend on—not least in our schools—will be slashed back at the same time as taxes are going up. Under the SNP, we all pay more but get less in return. The message of this budget is: in the SNP’s Scotland, do not be ambitious, do not be hard working and do not be successful, because we will penalise you for our failure to grow the Scottish economy.

Will the finance secretary take this opportunity to apologise on behalf of the Scottish Government for breaking its manifesto promise?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I would have thought that, following First Minister’s questions, Murdo Fraser would have had two hours to change his script, but he has failed to do so.

The biggest threat to Scotland’s economy—and to the UK’s economy—is the Tory party, with its economic mismanagement and mishandling. If Murdo Fraser wants to talk about the philosophy and economics of the Tories, it remains the case that, once again, they want to raise less and spend more, and that is just not possible.

We have provided a balanced budget. Murdo Fraser asks whether I will apologise. I am very proud of the budget, because it invests in the things that we hold dear and speaks to the kind of Scotland that we want to build. Murdo Fraser spoke about basic-rate taxpayers, but he should check the document: the basic rate has been frozen. As a matter of fact, 80 per cent of our basic-rate taxpayers will pay less next year, not more, and 55 per cent of taxpayers earning up to £26,000 will pay less tax than they would elsewhere in the UK. Therefore, for the majority of taxpayers, Scotland is the lowest-taxed part of the UK. Even more important, our using the tax system in a progressive fashion makes Scotland the fairest part of the United Kingdom, which is something to be proud of.

Members have quoted the Fraser of Allander institute, and I will happily do that as well. Murdo Fraser has mentioned capital spending—particularly financial transactions. The FAI has said that Scottish ministers are constrained in how those financial transactions can be used, so it remains the case that resource spending next year and for the next two years will go down, just it has over the past period, which will amount to a £2.6 billion reduction in Scotland’s resource budget.

I have done my homework, and I have another figure for Mr Fraser. I have established what would have been taken from Scotland’s front-line public services if I had followed Tory tax policies. I costed what the Tories told me to do on income tax, LBTT, council tax reform and the large business supplement, and I discovered that, in addition to the block grant reduction, following Tory tax policies would have reduced the resources available to front-line services by a further £501 million. Raising less and spending more cannot be done.

In the next hour, if I hear any Conservative member ask for more money for anything, I will point to the £0.5 billion reduction there would have been if I had followed their tax policies. I will not follow their tax policies; I will follow our policies, which will deliver fairness, social justice and a stronger economy.

Richard Leonard (Labour, Central Scotland)

This Parliament was designed to be a power for change, to take Scotland to a better place and to bring decision making closer to the people. While the Tories force austerity on the UK, we in Scotland should be using the powers of our Parliament to deliver an alternative.

The truth is that Scotland needs real and radical change, not tinkering around the edges. That change should be based on the principle of “from each according to their means, to each according to their need”. A penny on the top rate just does not do it. This Tory-lite draft budget fails on all those tests.

As the cabinet secretary would know had he taken the time to speak with the councillors, the council workers and the trade unionists who lobbied this Parliament today, and with those in communities and workplaces across Scotland, there is a growing mood of frustration and discontent, which is increasingly directed towards an SNP Government that has simply presided over Tory austerity and has added to it.

We know that tens of thousands of local government jobs have been lost, that there are 3,500 fewer teachers, and that £1.5 billion has already been stripped from our councils since 2011. How many local jobs will be cut this year by this budget? When the cabinet secretary says that he knows that councils were worried about a potential £300 million cut, that is true, but what he is doing today is cutting day-to-day spending in real terms by £134 million. When councils have already told him that they need £545 million just to stand still, that is an effective cut of almost £700 million to our lifeline local services.

Why will the cabinet secretary not stand up for properly funded local services? Why will he not stand up for properly funded lifeline services? Why will he not stand up for the people and communities of Scotland?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I make a gentle point to Richard Leonard. The microphone amplifies what he is saying to the chamber.

I was told during the course of yesterday’s debate that James Kelly was the finance spokesperson. I know that the term of office for a Labour leader is pretty short these days, but one day for the finance spokesperson is setting a new timescale.

Seriously, though, I heard Richard Leonard talking about housing at First Minister’s questions and I listened closely to what he said, because what was being said about housing was important. That is exactly why we are putting more funds in to support house building in Scotland. As to the specific question why we do not use the powers of the Scottish Parliament—we are using the powers of the Scottish Parliament. We are using them to the full to protect the people of Scotland from Tory cuts. If only the Labour party had helped to give us more powers, we would have been able to do even more to protect the people of Scotland in the face of Tory austerity and Brexit mismanagement.

Some members are still shouting about the powers. The Tories say that we should not use the powers that we do have and Richard Leonard wants us to use powers that we do not have. We are putting forward a credible budget with real investment in our social priorities, setting out the kind of country that we want to build and using our tax system in a way that is progressive and fairer.

I have set out priorities in education, economy, environment and health, but, if I stuck to what the Labour party is proposing today, I would give it all to local government—a view that Labour is entitled to have. What has the NHS done to upset the Labour party that means no new resources for the NHS or anyone else? When Labour members get up in the next 48 minutes, let us see whether they ask for resources elsewhere, when their proposition is to give only to local government.

In relation to local government, there was a projection of a 3 per cent reduction. That is about £300 million to the local government budget. That is not what I am proposing. I am proposing flat cash plus a capital increase, and what that means is that we are using our powers and that, if councils use their powers, they will have a real-terms increase for front-line services.

Richard Leonard is still shaking his head. I will make one final point to him. He explained recently why the eight Labour local authorities did not increase the council tax. He said that, because the Scottish Government did not give councils enough money, Labour councils would raise even less. What a ridiculous proposition from the Labour party. We have supported local government and a range of other priorities, and we will be very proud of the job creation and services that it supports, and the interventions that it will deliver to create a fairer society.

Patrick Harvie (Green, Glasgow)

For nearly two years, the Scottish Greens have been leading the argument for reform of our income tax, now that we have the power to do that. We showed that by adding new rates and bands we can raise additional revenue for our public services, while reducing tax at the bottom end of the income scale—not at the top end, as the Conservatives in the UK Government seem to continue to want to do.

I am delighted that the basic argument for a more progressive income tax structure appears to have won the day, and that we will be seeing changes. It is not as soon as I wished—we should have been here last year—and does not go as far as I would have wished, but the basic argument has won the day.

We have also made the case for an uplift in public sector pay. Given the rising level of inflation, it is unacceptable for people who have continued to see reductions in their real-terms pay to face even more cuts. I recognise that the UK Government budget does not make that easy, and the Scottish Government is now proposing a CPI inflation uplift for those earning less than £30,000, but not for everybody else. I will wait to hear the response of the unions who represent those workers before taking a final view, but those who are at the bottom end of the income scale absolutely deserve the pay increase that we have argued for and which the Scottish Government is today applying—at least to its own workers.

The downside of what we have heard today is that the cost of that pay increase in local government will not be met by the Scottish Government grant to local councils. The Scottish Government is right to use its powers to increase the total revenue budget in real terms, but it is not acceptable for it to pass on a real-terms cut to our local councils. If we include the additional costs that our councils will face if they are going to apply the same 3 per cent uplift for their public sector workers, who are delivering vital services that every one of us depends on, it is clear that the Scottish Government will have to make changes to its local government settlement.

What will the consequence be, other than real-terms pay cuts, service cuts or job losses in our councils, if the cabinet secretary does not change what he has proposed today for local government?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I remind members of what I have already said about the local government settlement, which is that what I am proposing is far better than they were forecasting or expecting. On the specific point about using powers, I say again that, if councils used their powers to increase council tax by up to 3 per cent, that would put local authorities into real-terms growth.

Patrick Harvie covered the point on tax structure. He is right to say that, being a minority Government, we had to engage, consult and listen. I have certainly been doing that, as is evidenced in our proposition; however, I also want to give stability to the country. We all have to compromise in a Parliament of minorities. I have embarked on engaging in an open and inclusive style, to ensure that we can come to some sort of consensus on tax—and that should continue.

We set out four key tests on what we would do with income tax, which were to raise revenues for public services; to use the tax system in a way that protects lower-income earners; to have a system that delivers progressivity; and to support our economy. That relates to how we choose to spend those resources, too. I specifically mentioned the top rate of tax earlier, and Richard Leonard and Patrick Harvie have both touched on it. The Government has decided to set the top rate of tax at the level that raises the greatest amount of money. That is a sensible and progressive thing to do, so that those resources can be invested without deterring investment to Scotland.

We do not set the pay policy for local government, but we have set out what I think is a very fair public sector pay policy for those areas under our control, which is using the pay policy in a progressive fashion, just as we have done with the tax policy. There are sufficient resources within the settlements proposed to support a fair pay settlement.

My final point is one that Patrick Harvie made. The chancellor gave us no extra money for pay and said very little on the subject in a UK context. There is the independent pay review specifically for health, which we will look at very closely; I have set out our position in that regard. Given that we have had no new resources—in fact, we have had a real-terms reduction in the resources that fund pay—we have had to make decisions that are necessary to support our public services and properly remunerate our public sector workers, and I have tried to do that in the fairest way possible.

Willie Rennie (Liberal Democrat, North East Fife)

We will scrutinise the tax announcement, because the devil is often in the detail. However, it seems that what the cabinet secretary has announced is a modest increase in taxation, which is an approach that we argued for at the election and one that he opposed at the election.

The budget does not do enough to meet the long-term needs of the economy. It does not include the transformational investment in education that we argued for. We are far behind—many years behind—England on the attainment funds, and the small increase that the cabinet secretary has announced will not close that gap.

Colleges have got only half the money that they asked for just to stand still. That will not reverse the cuts to college places, which have been reduced by 150,000 over the past few years, or fund the training of the mature students and women who desperately need extra support.

If Mr Mackay thinks that a paltry £17 million will solve the problems in our mental health services, he needs to think again.

The settlement for local government is harsh. It passes on the buck for cuts to councils. The pay increase is welcome, but can the finance secretary explain who will pay for it? Will councils and colleges be given extra funds to pay for it?

I think that the budget pays lip service to many of the challenges that this country faces. Does the cabinet secretary not accept that?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

On a wee point of accuracy, I am pretty sure that Willie Rennie said previously that the Liberal Democrats would ring fence all extra resources for education. As the Labour Party is, his party is entitled to take that position, but that would mean no new money for anything else, including the national health service and mental health.

When it comes to delivering a budget, the detail on such matters is really important.

Colleges have had a very fair and reasonable settlement—the budget provides a real-terms increase for higher and further education. In addition, we have come to a settlement on the pay award for college lecturers. Higher and further education are adequately resourced, and local government has received a fair settlement, too.

Mr Rennie cannot escape the fact that he wanted to ring fence all resources for one part of the public sector. That means that he cannot demand more in every other area. That is a basic principle in how Mr Rennie’s policies apply to this and future budgets.

The Presiding Officer

I have given the front-bench speakers a lot of latitude to make clear their parties’ positions and to ask questions at length. We have just over 30 minutes left and just under 30 members wish to ask questions, so I think that members can work it out for themselves: we need short questions and short answers.

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

I am the parliamentary liaison officer to the cabinet secretary.

Fast internet connectivity is vital to the economic and social wellbeing of our rural communities, so I welcome today’s announcement that an incredible £600 million is to be provided over the next four years to expand fast broadband. As digital connectivity is a reserved matter, has the UK Government made a financial contribution?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

To be fair, it has—and so it should have, because digital connectivity is a reserved matter, and it should have been getting on with the work. We are surpassing what the UK Government is delivering in terms of quality, speed and reach. Every part of the country will be covered. The UK Government is contributing £21 million to the £600 million.

Dean Lockhart (Conservative, Mid Scotland and Fife)

The Scottish Fiscal Commission forecasts for the next five years have just been released. They show that Scotland’s economy will grow at less than 1 per cent for the next five years and that it will continue to underperform the economy of the rest of the UK for the next five years. By then, we will have had 14 years of SNP underperformance.

Given that dire outlook, why has the finance secretary completely ignored the advice of large and small businesses throughout Scotland, which said that any increase in tax would cause long-term damage to the Scottish economy?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

The same organisations did not ask us to cut tax by £0.5 billion, which is what the Tories’ tax policies propose.

The number 1 request from many businesses was to base the poundage for business rates on CPI not RPI, and I have announced that the business rates poundage will be based on CPI not RPI.

On a range of investment, whether in higher education, innovation hubs, internationalising our produce, supporting business to grow or the most generous package of business rates relief in any part of the United Kingdom, this is also a good budget for business.

In relation to the forecast, does the UK Government take no responsibility for the economy, including the economy in Scotland? We know that the UK economic model does not work for Scotland. In the analysis that it published today, and in its forecast, the SFC said that the greatest threats to Scotland’s economy are Brexit, downward migration, inflation and all those other pressures that have been created by the economic geniuses in the Tory party.

Kenneth Gibson (Scottish National Party, Cunninghame North)

I welcome the finance secretary’s statement. Will he remind members how many people in Scotland will enjoy a reduction in their income tax from April? Will he confirm that many thousands more could have shared in that had the UK Tory Government not cut £500 million from Scotland’s resource budget over the next two years?

The Tories want simultaneously to cut tax and increase spending. Will the cabinet secretary tell us how much less we would have to spend on services such as the NHS under the Tories’ plans to cut taxes only for the better-off in society?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

To be fair, I do not think that the Tories understand their tax and economic policies at the moment. It seems to have come as a surprise to them that I have costed what their tax policies would mean for public services: a £501 million reduction in front-line public services, to be precise.

I remind members that more than 70 per cent of taxpayers will pay less tax next year. Those who are earning under £33,000 will pay less tax. The 55 per cent of taxpayers in Scotland who earn up to £26,000 will pay less tax than they would pay elsewhere in the United Kingdom. That is a good proposition. It also represents the best deal—in terms of what people pay and what people get—anywhere in the United Kingdom.

James Kelly (Labour, Glasgow)

However Derek Mackay spins it, this budget represents a cut of at least £134 million to local councils. Why are top-rate taxpayers earning more than £150,000 being asked to pay only an additional 1p in tax, while local people in local communities

face the prospect of job losses and the loss of vital public services?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I can see why James Kelly was reshuffled after 24 hours in the post of finance spokesperson. Kezia Dugdale might be back from the jungle, but I understand that James Kelly is auditioning for “Pointless”. [

Interruption.

] See what I mean, Presiding Officer?

In the proposition that I set out, income tax will be made more progressive. That is an important shift. The more money someone earns, the more they will pay towards public services in Scotland. Why did I not go further with the top rate of tax? All the advice that I was given by the Scottish Fiscal Commission, the Council of Economic Advisers and others was that that was the optimal point at which to raise the most money. Surely the objective of the exercise is to raise more money to invest in our public services in a fair and progressive way. The Labour Party is saying that we should set a higher rate for whatever reason, but that would raise less, which would mean less money for things such as local government.

I am trying to raise more money in a fair and progressive way. Do we get it yet? Are we there yet? To be helpful, I will share the workings of the SFC and the Council of Economic Advisers to show how the rate that I have set is absolutely meeting the commitment on raising the optimum amount of money for Scotland’s public services.

John Mason (Scottish National Party, Glasgow Shettleston)

The Barclay review recommended the removal of rates relief for independent schools. Can the cabinet secretary clarify the position on that?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

The member is right that that was a recommendation of the Barclay review. I am accepting it in part. I want to be clear about the issue. All the details are in the implementation plan that is published today, but I want to make an important distinction to do with special schools. I think that their support should be continued, as should the support for schools with exceptional circumstances. Full details are available in the chamber. As I said I would do, I have responded, having engaged with the sector, listened and looked at all the evidence to ensure that we make the right and balanced decision. In essence, independent schools, other than those that I have mentioned, should be treated in the same way as council schools.

Maurice Golden (Conservative, West Scotland)

How much extra tax will a primary school teacher earning £35,000 per year pay as a result of the nat tax?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

That is just pathetic. It depends on how much that teacher happens to earn. Of course, like others, teachers will welcome the public sector pay policy. I will say it again, because everybody will be interested, that those earning under £33,000 will pay less tax.

Alex Neil (Scottish National Party, Airdrie and Shotts)

I congratulate the finance secretary on the additional measures that he has taken in relation to child poverty. I fully understand that he cannot do anything on benefits until the Social Security (Scotland) Bill is enacted and the appropriate administrative arrangements are put in place. However, in the meantime, between now and the finalisation of the budget, if he can identify any additional spare cash, will he give priority to giving more money to projects such as the tackling child poverty fund? I know that he agrees that, given the increase in and scale of child poverty, it is clearly an urgent issue that requires further action by the Scottish Government.

Derek Mackay (Scottish National Party, Renfrewshire North and West)

Alex Neil raises a very fair point in looking at how the budget spend impacts on the most vulnerable people in our society. He will agree that many of the measures in the budget support the most vulnerable and protect people from the Conservatives’ so-called welfare reforms. I am talking about things such as reversing the bedroom tax, the Scottish welfare fund and our new measures to give children and young people the best start in life. Yesterday, the big idea from the Tories was that we should not go ahead with the baby box. I do not know what they have against giving children the best start in life. I will consider very closely what Alex Neil said about tackling child poverty and I will consider what other measures we might be able to take. That is why I will also appreciate the work of the poverty and inequality commission as it works with us to address that significant issue.

Jackie Baillie (Labour, Dumbarton)

I welcome the recognition that economic growth matters because, after all, it affects our future budget allocation under the terms of the fiscal framework. However, growth has been downgraded by the OBR, by the Fraser of Allander institute and now by the Scottish Fiscal Commission. It

predicts weak growth of less than 1 per cent over the next five years. We have not seen such a downward trend in decades. Given that the Scottish economy underperforms that of the rest of the UK and that the Scottish Fiscal Commission forecasts much slower growth in Scotland—it is predicted to be half that of the UK—has the cabinet secretary quantified the impact on the Scottish budget if we do not match growth in the rest of the UK?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I do not think that Jackie Baillie is properly representing the SFC report. The SFC suggests that it is the impact of Brexit uncertainty that is subduing the growth forecast on which we have to rely. I do not have the luxury of ignoring the SFC’s forecasts, but what the SFC says—[

Interruption

.] If Jackie Baillie wants to hear it, the SFC says that what our budget does will be favourable, given the decisions that this Government has taken. The good governance and tax decisions that this Government has taken have ensured that we will have more resources to spend on Scotland’s public services and will continue to have more resources through the commercial, business and enterprise interventions that we will make.

Jackie Baillie (Labour, Dumbarton)

You do not understand the report.

Derek Mackay (Scottish National Party, Renfrewshire North and West)

Jackie Baillie has missed every positive industrial, economic and tax intervention that has been announced in this budget. That is why she does not understand that we will grow the Scottish economy through the interventions that we will make. Either Jackie Baillie knows that to be the case and does not want to admit it or it is she who does not understand the SFC report. I have had the luxury of being briefed by the SFC and I am convinced that the policies that we are setting out today will deliver economic growth.

Ivan McKee (Scottish National Party, Glasgow Provan)

Will the cabinet secretary say how the Scottish Government will capitalise on the Scottish national investment bank to drive growth in the Scottish economy?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I have said that we will set aside resources to put into the Scottish national investment bank—I am sure that that will be warmly welcomed—as part of our massive infrastructure programme, which will support housing and the infrastructure of our country. I think that that will be warmly received by the business community.

Adam Tomkins (Conservative, Glasgow)

The nat tax budget, in effect, splits the basic rate of income tax into three. How much will the additional bureaucracy cost to administer? Who will pay for it, and what are its implications for pensions relief?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I thought that Adam Tomkins was pro-devolution. Now he is saying that we should not use our powers because it might cost money.

Let me tell him something. When we have delivered devolved taxes and used our powers, Revenue Scotland has performed far more efficiently than HM Revenue and Customs or any UK Government agency.

Of course, we engage with HMRC and give it sight of our tax policy. In turn, HMRC costs the delivery of our policies—but what that delivery costs is a fraction of what we will raise for Scotland’s public services. That is why an early decision on such matters is so important in giving stability to the people of Scotland.

Clare Adamson (Scottish National Party, Motherwell and Wishaw)

The provision for local government to vary council tax by up to 3 per cent will bring vital funding. Will the cabinet secretary explain to my constituents the long-term consequences of the continuing failure of the Labour administration in North Lanarkshire, which was put into power by Tory councillors, to maximise its revenue?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

As I said, if local authorities choose to use their powers to vary council tax by up to 3 per cent, that can raise £77 million for local government services.

Iain Gray (Labour, East Lothian)

The independent review of student support in Scotland reported last month. Among other things, the review group recommended parity of support for further and higher education students. Can the cabinet secretary explain how the £5 million that has been allocated in his budget will provide parity for FE students? Are they to be betrayed, just like the university students who were promised that their debt would be paid off?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

We have increased resources in real terms for higher and further education, and we are considering the report in full. We have taken steps to support people and will give the issue further consideration.

Ben Macpherson (Scottish National Party, Edinburgh Northern and Leith)

How will the cabinet secretary’s innovative and progressive budget proposals—[

Interruption

.] How will the cabinet secretary’s budget benefit Edinburgh, considering the capital’s needs, opportunities and population growth? [

Interruption

.]

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I must apologise to Ben Macpherson. I could not hear his question because the Tories were shouting at him, so it must have been good.

We will make Scotland an attractive place to live, work and invest in, and the package of support is the best for business, people and society compared with the support anywhere else in the United Kingdom. There are a range of interventions for the economy, education and the environment to ensure that Scotland is a very attractive place.

I am sure that Ben Macpherson—as opposed to the Tories, who wanted to shout him down—will sell Scotland positively. All that the Tories know is that they want to talk Scotland down. They are the total opposite of an economic development agency: they are the drag on Scotland’s economy.

Miles Briggs (Conservative, Lothian)

Meanwhile, back in the real world, Scotland faces a recruitment crisis in our NHS. There is a lack of nurses, general practitioners, radiologists and consultants—[

Interruption

.]

The Presiding Officer

Order, please. Let us hear the question, please.

Miles Briggs (Conservative, Lothian)

Just 50 per cent of the students that our Scottish medical schools are attracting are domiciled in Scotland. What message does hiking taxes for vital NHS staff send to people who are deciding whether to come and work in our NHS?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

When I was looking at the Tory requests for more spending, I saw that one of the main culprits was Miles Briggs. That does not surprise me. His question is about more spending on health. The Government’s decisions on tax mean that we will be able to spend more—record sums—on the NHS. Just one difference between us and the UK Government is that we support our nurses with bursaries, whereas the Tories do not do so adequately.

Yet again, the Tories want to raise less and spend more. Only the SNP can be trusted to invest in our national health service.

Graeme Dey (Scottish National Party, Angus South)

The programme for government was lauded as the greenest ever. Can the cabinet secretary encapsulate for members how the budget facilitates the transition to a low-carbon economy?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

There are a range of interventions that relate to the transition to a low-carbon economy in transport, housing, innovation, digital services and energy efficiency. A range of measures will show that the budget proposals are true to the word of the programme for government, which many environmental campaigners have described as the greenest programme of any Government in Scotland under devolution. The budget puts our money where our mouth is.

Anas Sarwar (Labour, Glasgow)

After seven years of pay restraint imposed by the Government, which has meant a real-terms pay cut for nurses and teachers, a commitment to finally break the pay cap is welcome, but we still do not have a firm commitment on a real-terms pay increase for public sector staff. Following Patrick Harvie’s and Willie Rennie’s questions, which the finance secretary failed to answer, will he confirm whether he will provide specific and additional Scottish Government money to fully fund the pay increase or whether health boards, local authorities and others will have to find that money from their existing budgets, which will mean further cuts to services or job losses?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

We are increasing the budgets in all the budget settlements that I propose including those that Anas Sarwar mentions. There is an increase of over £400 million in the settlement just for the NHS.

Incidentally, we have said that, if the UK Government acts positively on the independent pay review of the NHS and that results in a more generous proposition than the one that I have put forward, we will at least match that proposition.

The resources that we have put into portfolio budgets have created the capacity to fund the public sector pay award that I have announced.

Whatever the Labour Party says in the chamber, it has not lifted the public sector pay cap where it is in power.

Richard Lochhead (Scottish National Party, Moray)

I thank the cabinet secretary for a transformational budget, which is extraordinary given the financial constraints that have been imposed by a Conservative UK Government that would rather blow £1 billion on bribing the Democratic Unionist Party or spend tens of billions of pounds on exiting the European Union than support Scotland’s public services. Will the cabinet secretary confirm that there is now no reason for the right-wing, Conservative-led Moray Council to propose cuts in the support for vulnerable children and their schools, given today’s announcements?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I appreciate Richard Lochhead’s comments, which touched on some other issues, such as that, if we got our share of the bung money that was provided to the DUP by the right-wing Tory UK Government, that would massively support our public services. Further, because of VAT for our police and fire services, we have given more resources to those services and, now that we have the ability to reclaim VAT, they will be better off. I am looking forward to the backdated money from the Tory Government of some £148 million.

Richard Lochhead is right that, in the face of a reduced budget resource in real terms and Brexit uncertainty, we have provided more support for schools around the country and a fair settlement for local government. There is targeted support through the attainment and pupil equity funds to address the attainment gap, which is a key and defining mission of this Government.

Elizabeth Smith (Conservative, Mid Scotland and Fife)

The cabinet secretary seems to be indicating that he will make exemptions for special schools and music schools when it comes to their retaining eligibility for charitable relief. What reaction has he had from the Office of the Scottish Charity Regulator about how those exemptions will meet the terms of current charity law?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

There has been no reaction because I have only just delivered the budget. I am busy engaging with members in the chamber, so I have not yet had the chance to engage with others on the consequences of the budget.

I know that Barclay did not say that we should make a special case for special independent schools. However, we are listening to the sector and we see the case for relief to continue for those special schools and for others, where that is appropriate. We have taken the right, sensitive decisions in that regard and, as I understand it, they will have no negative effect on the schools’ charitable status. What we choose to do with regard to non-domestic rates is absolutely fair and consistent.

Clare Haughey (Scottish National Party, Rutherglen)

I refer members to my entry in the register of interests, in that I am a registered mental health nurse with an honorary contract with NHS Greater Glasgow and Clyde.

How much money will be spent on innovation and reform of GP services and primary healthcare? Is primary healthcare receiving an increased share of NHS front-line investment in this budget?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

The amount is approximately £110 million.

Daniel Johnson (Labour, Edinburgh Southern)

Investment of £93 million for early years is welcome. However, is it not correct that that money is ring-fenced for local government and is contained in, not on top of, local government budget lines, which the cabinet secretary’s own level 2 figures show are declining in real terms this year? Surely new nursery places should be an addition to, not instead of, core council services?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I would have thought that Daniel Johnson would be happier about the budget settlement, as he has mentioned in the past that childcare and teaching is really important. Is some of the resource ring-fenced? Yes, it is, because that is working. It has allowed local authorities to employ hundreds more teachers in our schools to target the attainment gap. The formula and the resources are working and, as schools, education and childcare are being delivered in partnership with local government, it is fair that it is part of the local government settlement.

Tom Arthur (Scottish National Party, Renfrewshire South)

Will the cabinet secretary outline what action the Scottish Government is taking to protect our diverse, world-leading culture sector in the light of major cuts to UK lottery receipts?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

I know that many in the culture sector might have been worried about the budget, understanding that Scotland faces a resource reduction and that there is a downturn in lottery income. The UK Government has not lifted a finger to support the culture sector in these challenging times, which is why the Scottish Government not only has not cut the budget, but has increased resources for the sector. There are major events in Scotland next year and we have stepped in to provide an additional £6.6 million for Creative Scotland to ensure that it can maintain support for the regular funding programme, despite the cuts from the lottery.

Donald Cameron (Conservative, Highlands and Islands)

Will the cabinet secretary confirm whether he will be using some of the extra £1.1 billion of financial transactions funding from the UK to back the Scottish national investment bank?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

Yes, I will.

Fulton MacGregor (Scottish National Party, Coatbridge and Chryston)

I welcome today’s announcement that the Scottish police service and the Scottish Fire and Rescue Service will be keeping all of the funds that they would have been paying in VAT. Will the cabinet secretary confirm that the SNP Government will continue to pursue the UK Government to get it to pay back the £140 million of VAT that it has already taken?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

Yes; we will, of course, pursue the UK Government for that sum. However, in this budget, I propose to increase the police resource budget; we had a manifesto commitment to protect our front-line police budget, and we are absolutely doing that as well as supporting fire service transformation. There are extra resources for police and fire; they will have the ability to reclaim VAT, and we look forward to the UK Government giving us back the £140 million that it has taken from Scotland.

Neil Bibby (Labour, West Scotland)

Since 2011, Derek Mackay’s council in Renfrewshire has faced £172 million in cuts. This week, it was announced that funding for families first, a vital support service for vulnerable families in Johnstone, Foxbar and Gallowhill, is to be discontinued. He might not be the leader of Renfrewshire Council any more, but these are still Mr Mackay’s cuts. If local authorities such as Renfrewshire are being fully funded, how on earth is his own SNP council justified in making these and other cuts, and why has COSLA’s call for a truly fair settlement of at least £545 million been completely ignored?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

We should wait and see what Renfrewshire Council’s administration actually has in its budget instead of scaremongering in the way that the Labour Party usually does every year.

I say to Neil Bibby that the local government settlement is fair; it protects local government resource and provides more capital. If local authorities use their council tax powers to raise council tax by up to 3 per cent, they will raise an additional £77 million, putting local government resources into real-terms growth.

Given the context in which we are setting this budget, that feels pretty fair to me.

Emma Harper (Scottish National Party, South Scotland)

As the cabinet secretary has highlighted, the Tories want to cut tax and increase spending, but will he reiterate how much less we would have for services such as the NHS under Ruth Davidson’s plans to cut taxes for the richest?

Derek Mackay (Scottish National Party, Renfrewshire North and West)

Understanding the Tories’ tax plans better than they do, I can tell members that following Tory tax policy would mean a £501 million cut in front-line services.

Rachael Hamilton (Conservative, Ettrick, Roxburgh and Berwickshire)

I draw members’ attention to my entry in the register of members’ interests as a small hospitality business owner.

Given current concerns over forecast low economic growth in Scotland compared with the rest of the UK, does Derek Mackay not think that he should be doing more to stimulate business? Scottish firms operating from medium-sized and larger premises already pay more than they would in similar premises in England due to last year’s doubling of the large business rates supplement. Why does the Scottish Government continue to punish hard-working employers and family-owned businesses and make Scottish companies less competitive than their UK counterparts?