The Steamie - Scottish Budget Special
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00:00Hello, and welcome to a special episode of the steamy The Scotsman's Politics podcast.
00:06Today in audio and video form, we're recording this in the Scottish Parliament on the day
00:10of the Scottish Budget, just moments after Shona Robison, the Finance Secretary, delivered
00:15her budget to MSPs in Holyrood. I'm Alistair Brown, The Scotsman's Political Editor, and
00:19I'm joined to discuss the budget by David Ball, The Scotsman's Deputy Political Editor,
00:24and by Rachel Leary, The Scotsman's Political Correspondent. Now there are a number of different
00:28strands to pick over here, but we're just going to pick some of the main ones to talk
00:33about. One of the big announcements from the budget was around the two-child benefit cap.
00:37Shona Robison pledging to mitigate the two-child benefit cap with the aim of starting payments
00:42to families in 2026. She said, be in no doubt, the tax will be scrapped. So effectively pledging
00:49to abolish the two-child benefit cap in Scotland. It's obviously been a hugely controversial
00:54political issue. This is a cap that prevents parents from claiming universal credit or
00:59child tax credit for a third child, with some exceptions. Here, Starmer, the UK Labour leader
01:06and Prime Minister, has faced huge pressure from within his own party to scrap the cap
01:11down south, but he said the money is just not there to do so. Shona Robison effectively
01:16saying today that the Scottish Government will have to work with the UK Government to
01:20figure out a way forward in this, but she said that fully mitigating the cap will lift
01:2415,000 Scottish children out of poverty. Rachel, this is very much a political move, is it?
01:31Aimed at Labour and with Path and I on the Holyrood relations in 2026.
01:35Oh, absolutely, yes. This two-child benefit cap was brought in by the Conservative UK
01:40Government, I think, back in 2017. And ever since then, the Scottish Government has been
01:45very critical of it and used it as a way to attack the Conservative government in Westminster.
01:50So, if they could have done this before, they could have put this funding in place
01:54back in 2017, so back before the pandemic and before high inflation and all of those
01:59issues as well. But as you said, there's a lot of expectation that the Labour government
02:05would abolish this. Obviously, Keir Starmer has come into the government in July and that
02:10has not happened. Scottish Labour up here in Holyrood have been very critical of that
02:14themselves. Certain individuals in the party here in Holyrood have been very upset about
02:18this move. And of course, there is now this loop towards the 2026 election. It seems
02:23like a long time away, but it really is and it will come around very, very quickly. And
02:27they can now say, well, the SFP can now say, well, we've now had to mitigate the Labour
02:32government as well. They're also not doing what we wanted them to.
02:35So, you're in Scotland.
02:36So, yeah, there's definitely politics going on in the background. There's definitely
02:39an eye on the 2026 election. The SFP can see Labour chasing them in the polls. Off-late
02:46Labour have fallen back a little bit in the polls, but they're still closer than the
02:49SNP would probably want them to be. And this is definitely aimed at that, isn't it?
02:54David is always going to fire at the starting dom on the Holyrood election. I know people
02:58always say that kind of thing. But we were actually sitting in Marlborough's bar in
03:02Holyrood and on the way here, we bumped into a Labour figure who was effectively saying
03:06that there's nothing in this announcement. There's no money attached to it as such.
03:10It's kind of the Scottish government saying that they're going to do this. It will come
03:14into play in 2026. They'll spend next year working out the details. They need to get
03:18the data from the UK government. But this figure was effectively saying it's just vibes.
03:23There's nothing concrete to it.
03:25Yeah. And they acknowledge that this is quite damaging to Labour. It's a good move from
03:29the SNP, essentially. You're right. This is the start of this campaign. This is just going
03:34to ramp up ahead of 2026. It's a very smart move from the SNP, basically, because now
03:39all the focus is on Labour. All the pressure is on Anas Sarwar, who is in a really difficult
03:45position, as you mentioned, Rachel. Down south, this isn't just a Scotland-wide issue for
03:49Labour. This is a UK kind of problem that they've had to deal with and had to try and
03:53ignore, basically, going into the budget. So again, it's quite ironic that that extra
04:00cash that's come from Westminster, 3.4 billion for the next financial year, it's kind of
04:04been turned around and fired back at Labour. It was this and the winter fuel payments as
04:09well. So big priorities basically attacking Labour electorally. And yeah, I mean, this
04:14is a very political budget in lots of ways, but particularly that SNP just trying to get
04:19one over Labour and optics anyway, doing a very good job of it.
04:23Yeah. One of the other issues that always comes up in the budget is tax. It's always
04:28a really big deal every year. On income tax, Shirley Robinson was saying that tax rates
04:34will be frozen for the rest of this parliament, so frozen next year. The more of people's
04:38money will be taxed at the starter and basic rates. So the details here is that the basic
04:42rate and intermediate rate thresholds will increase by 3.5%, which is effectively twice
04:48the rate of inflation to roughly £15,000 and £20,000 respectively. But the higher
04:54advanced and top rates thresholds will be maintained, so will be frozen. This is kind
04:59of, you know, Shirley Robinson was pitching us all about stability, wasn't she? But I
05:03suppose the back end to this, Rachel, is that, you know, last year we had the introduction
05:07of a new tax band. We had 1p added to the top rate of tax. There was this narrative
05:13that, you know, the wealthy were going to shoulder more of the burden to create more
05:16money for public services, and that proved very controversial, didn't it?
05:20It did at the time, yeah, and I think there was a lot of discussion last year about will
05:25it, will it, will it disincentivise hires from living in Scotland? Will people move
05:29down to England? Will people be put off to find their own jobs in Scotland? So that was
05:34a big discussion last year. So this year, when she was making her statement, she was
05:39also saying thank you to the higher earners for having broader shoulders and paying more
05:44in to help those who are a little bit, who are less well off. So that was quite interesting
05:49as she sort of gained that acknowledgement, also reflecting on the criticism that they
05:53got last year as their budget. So that was a very interesting move there. I think she
05:58was saying, though, that she still thinks that a lot of people will pay less tax. She
06:02was calling, well, in down south, but of course, that's really for those on the lower
06:07end of the scale. I think if you're on the higher end of the scale, it is quite a bit
06:11more taxing you'll be paying in Scotland.
06:13Yeah, and obviously some business figures, I mean, I did use the City of London, a corporation
06:18that kind of governing body, the City of London, I think of one and a half years ago or so,
06:22and they were, they didn't just want this to be, you know, the tax rates to be maintained,
06:26they wanted some kind of rowing back, some kind of, you know, they're concerned about
06:30this tax gap, the breach that we're seeing between Scotland and England. So there'll
06:33be some business figures that don't think this has gone anywhere near far enough.
06:37Yeah, there were definite calls for the gap between Scotland and the rest of the UK to
06:42basically be, to squeeze that, be a level playing field. And that hasn't happened as
06:47far as some of the businesses are concerned for those higher owners. So there is, there
06:52is still a bit of an issue there for the SNP that they've used income tax as a lever to
06:57kind of generate more money, particularly when they've had less money coming from Westminster.
07:02And there is some analysis to show it's not been as effective as they would have liked.
07:06So, but this is another measure, you were talking about the sort of beta-kinned
07:12intermediate threshold increasing by three and a half, so more, more money is taxed at
07:16that sort of lower rate. This is about them showing they're putting more money in people's
07:19pockets. That was the big sort of pledge and the trail beforehand. And this is one of those
07:24methods that Sheldon Robson has used to, to kind of get that message across.
07:28Yeah. And get it better than he knows who, or anyone else I guess, which is one of the
07:32facial narratives the Scottish government's had in recent years. Following council tax,
07:37we had last year, the hugely controversial announcement at the SNP conference,
07:41they read a phrase, council tax, Humza Yousaf, to put a menthol adhesive to be first minister.
07:47That was one of his big announcements. And you know, perceived to be a crowd pleaser,
07:51people like it, goes down well with voters, councils hate it.
07:54It does. You know, it stops them raising the red and yellow to equalise the ratings.
07:59Obviously council services are thin and squeezed. This year,
08:02there's no council tax plans. And interestingly, Rachel, there's no
08:06cap either. So councils will in theory be free to raise council tax by as much as they want.
08:11But Shona Robison, her message today to councils was very much that, you know, funding, she says,
08:18local authority funding will increase by more than one billion pounds,
08:21taking the total funding to 15 billion pounds. So she says there's no reason for big increases
08:26in council tax. But effectively, councils can make their own decisions here.
08:30Yeah, there's a lot of speculation now that there will be some big council tax increases.
08:35There was a lot of talk beforehand for the budget statement that will there be a cap because of this
08:41this worry that hasn't happened. I think where I live, for example, I think we're looking at 10%
08:47council tax, but there's some local authorities are looking at 15, 16, 17% council tax rises,
08:54which will have a big impact. I think lower earners don't necessarily pay council tax
09:01and things like that. But it's potentially a lot of money here.
09:05But when you look at how many public services are really struggling right now,
09:09library closures, for example, and struggling to recruit teachers and things like that.
09:14The money is pen-needed, isn't it? And like I said, there's lots of funding going to councils.
09:19But I'm sure councils will want to be adding more council tax on top of that,
09:22as well as trying to top off their budget as much as they can.
09:25Yeah, just before we started recording, I saw there was a quote dropping from the
09:29local government information unit. I saw it there. A membership body, a think tank for councils.
09:34And it was saying that Shona Robison was being complacent when she says there'll be no reason
09:38for big increases. I think councils will still need to raise tax and make cuts, potentially,
09:44as well. Yeah, I mean,
09:45local government has been on their knees for years now. I mean, it's a tricky one,
09:51because obviously they're getting more money as a core grant from the Scottish Government.
09:54They welcome that. But because they would say in the last few years, they've had so much
09:59under-investment, they're still going to need to raise council tax, in all likeliness, especially
10:03given that freeze last year that you mentioned. Like the Scottish Government, they've got to
10:07balance their budget, and there's very few mechanisms for local government to do so.
10:12They've had promises about tourist tax and these new funding methods for local government,
10:20but they're not there yet. So the only real way in which they can make sure they can balance
10:26their books and still provide these services is to hide council tax. And if they've been given
10:30no capital on that, although they've got more core funding, it's very unlikely that councils will
10:37opt for a freeze. And we should touch on some of the other stuff, actually, as well. £2 billion
10:41for NHS. There's a loss of a substantial amount of money towards the NHS in this budget.
10:47I mean, the level of spend in health and social care is a huge part of the budget, isn't it,
10:53Rachel? And it's kind of problems with the NHS, waiting times, the failure to hit various targets
11:00have been such an ongoing issue. We get press releases almost every week about A&E waiting
11:05times towards our board. It's been such a critical hot topic and the hollywood chiever, hasn't it?
11:10Yeah, and we could do a whole podcast episode of all the problems facing the NHS at the moment.
11:16Before the budget statement, John Swinney said that the NHS was going to be his government's
11:20priority here, and we should expect to see more funding going towards the health boards.
11:26So I think it's £21 billion in total for the health and social care department,
11:30and £200 million that we spent on the student waiting times. I mean, that's a huge issue. I
11:34think one in six Scots are currently on a waiting list. Now, Shona Robinson says that she's going
11:39to try and work to see that by 2026, nobody will wait over 12 months for a new outpatient appointment.
11:47Now, that's still a long, long time to wait. But of course, that's this pledge of these
11:52ridiculously long waits that we are seeing will be eradicated. So that's a big pledge
11:57she's going to have for Kelly Juneau, especially the health secretary, Neil Gray, as well. He's
12:01going to have a lot to keep to his word there on this as well. But also as well, there's some new
12:07buildings getting funding as well. So the placement of the Edinburgh Eye Pavilion,
12:11and the Belford Hospital up in Macabre, and the Milken's Hospital at 6 in Ayr,
12:15Trinidad and Leed as well. So those three buildings will be getting some funding as
12:18well, which I'm sure will go down well with those communities.
12:21Yeah, the Edinburgh Eye Pavilion would be a big story for our sister paper there,
12:25the Edinburgh Evening News. I know Ian Swanson has read about this a lot,
12:28the political editor of the Evening News. David, I thought one of the other interesting
12:31announcements was this £4.9 billion to tackle the climate crisis, nature funding. This is more
12:38than the Greens had asked already to get at face value. Is that a pitch to get Green support? And
12:43if so, Ross Greer, the Scottish Green MSP, seemed sort of lukewarm. He was welcoming some aspects,
12:50but not others in the budget.
12:52Yeah, I think it is a message to the Greens that they had two red lines, and one was to match the
12:58£4.7 billion we had this year under the Butte House Agreement. They were seeing that as the
13:02starting point. Another was increase in council funding, which again we've seen. But I think
13:10they'll have to have a quick look at it. I was talking to a Green source this morning, and I
13:14was asking, how are you going to quantify that £4.9 billion? And although Shona Robison has
13:19spelt out that that's what it is, they'll go through the detail and there'll be aspects that
13:24they will not agree with the SNP on, that they just do as the nature of being two different
13:28parties. But that certainly was a message to the Greens that if that is your big ask, we've kind
13:34of ticked that one off. But isn't it, I mean, that's another part of this budget. Again, it's
13:39who does it appeal to? They still need that support to get it through. Yeah, yeah. And we
13:44should mention as well, the £34 million extra for culture as well, which I know Brian Ferguson,
13:49our colleague, will be all over. It's something that he has written about repeatedly, but it's
13:54worth touching on the fact, mentioned the Greens there, that the SNP operates a minority administration
14:00at Holyrood. They need the support of another political party to get their budget plans
14:05through the Scottish Parliament. MSPs won't be voting until early next year. So there's still
14:11time for these negotiations. But just on the face of what people said today, you know, Tories,
14:17obviously critical, we're not expecting them to do it, but to deal with the SNP. Labour, who
14:23obviously were the target of some last days of this budget in terms of things like a two-child
14:28benefit cap, an attempt to embarrass Labour, effectively saying that there's no reform,
14:34no vision, no plan in this budget, quite literally more of the same, sending Scotland even further in
14:40the wrong direction. They certainly don't seem happy with it. But the Lib Dems, Rachel,
14:45Alex Cole-Hamilton, you know, to me, welcomed spending on social care, fennies, GPs, Edinburgh
14:51Eye pavilion, saying these were things the Liberal Democrats had asked for. You know, he said that,
14:56you know, doesn't guarantee their support. I think the crazy news was the devil will be in the detail,
15:01but on the face of it, pretty positive. Yeah, a lot more positive than some of the other parties
15:06were in their response to this budget. And of course, the Lib Dems might have to be relied on
15:12here to get this budget passed. Because as you said, the Conservatives are not going to support
15:16it. I mean, there was some announcements on the business front of things, which the Conservatives
15:21are welcoming, and Labour have kind of been a little bit embarrassed by some of what they've
15:26asked for, what's been put back in return. So you are looking at the Greens and the Lib Dems,
15:31and there was definitely something for both those parties in this budget. And that feels
15:35very deliberate, because they have to rely on one's parties to get the budget through. But as
15:40you said, I think it's the 25th of February, I think, before we actually have a vote on this,
15:45because there's multiple meetings of Hollywood's Finance Committee to go through details like this.
15:49There's the budget bill, which needs to be brought forward to Parliament, and there's a stage one
15:53debate, then a stage two debate at committee level, and then the stage three debate. So there's still
15:57a lot of steps to go before this gets finalised. So there could be lots of background conversations
16:04going on between now and then. I'm sure the Lib Dems will be right at the front of the queue
16:08wanting to get their points put across, don't you? David, what do you think? Was there a likelihood
16:12of a budget deal? I mean, the background to this is that, you know, there's all sorts of talk about
16:17if they can't get support for the budget, government could collapse, there could be a
16:20snab election. That seems very unlikely. It seems from today that, after all, you know, we only
16:26really need small position MSPs to abstain. They don't necessarily have to rubber stamp the budget.
16:32Yeah, so I thought the talk this week was moving more towards the Greens. It seemed like the Lib
16:36Dems were getting cold feet a little bit on sort of supporting the SNP. But this budget is very much
16:43kind of teed up for the Lib Dems to back, or like you said, all they need to do is abstain,
16:48and that'd be enough for it to pass. And they could still claim kind of victory for all these
16:52priorities. Thankfully, I don't think we're going to head for a snab election, you never know.
16:57But it does seem like John Swinney's trying to please quite a few different people,
17:01and Shadia Robertson, in this budget. And as you said, Alec Clampton was pretty
17:06beaming at some of the things that were included in this. Although he said he didn't guarantee
17:10support, there's definitely a starting point, and you can see them at least abstaining on this,
17:15as they stand, obviously, a long way to go. Yeah, well, I'm sure, as you say, there's a long way to
17:19go. I'm sure there'll be lots of talk going on in Holyrood over the coming weeks. But that was
17:24some of the main features of the Scottish budget. We're recording this just after the budget, so we
17:27can't touch on everything. But stay tuned to the Scotsman's website for all the latest news and
17:33analysis. We'll have stuff today, we'll have stuff tomorrow, picking over all the details. And if you
17:39are listening to this, you can watch it in video form on Scotsman's website as well.
17:43But until next week, thank you very much for listening slash watching.