Kate Forbes defends cuts in heated finance debate

The four-year plan hopes to see off a projected £3.5 billion spending shortfall by 2026/27, by a “reshape and refocus” of the public sector, including a shrinking of the workforce down to pre-Brexit, pre-pandemic levels. 

The biggest loser in the review was local government, with its funding frozen for the rest of the parliament.

Budgets for the police, prisons, justice, universities and rural affairs are all set to fall by around 8 per cent, while spending on enterprise, tourism and trade promotion is set to fall by 16% in real terms over the next four years.

Tory shadow finance minister, Liz Smith said the public would “find it very difficult to understand” why the SNP-Green government were cutting the budget for policing, local government, trade, enterprise and universities.

“And this is exactly the same public who will see the profligacy of the SNP government wasting vast sums of public money on ferries that don't sail, BiFab, Prestwick airport, the malicious Rangers prosecution, the list goes on. And of course, there is the £20 million preparing for a second referendum.”

The Tory MSP said tax was “central to the problems currently facing the Scottish Government, both in terms of the disincentives and in terms of the weaknesses of the tax take.” 

Ms Smith said: “The Cabinet Secretary has been saying that Scotland has a very progressive income tax policy, but she should heed the warnings of the Scottish Fiscal Commission who state that within the next five years, Kate Forbes will have 700,000 middle earners in a higher tax bracket. 

“Neither should the Cabinet Secretary forget that in December, the Scottish Fiscal Commission dismissed her claims that the majority of Scots will be paying less tax. 

“That is simply not borne out by the evidence. And of course, the disincentives which come from this are likely to be significant. And most importantly, Scotland's divergence from the UK income tax rate threatens to damage Scotland's competitiveness, which is why we want to see a return to parity as soon as resources allow.”

The Tory also called for more policies to enhance economic growth. 

Ms Forbes said it was “more than a little ironic” that the Tories organised Wednesday's debate when “their Westminster leaders are presiding over the sharpest fall in living standards and the fastest rise in inflation for a generation.” 

She added: “They are the very symbol right now across the world of economic mismanagement.

"Because the true cost of Tory economic mismanagement is laid bare by external commentators. Research by the LSE Centre for Economic Performance revealed that Tory Brexit has caused food prices to rise by 6%, deepening the cost of living crisis for households across the UK.

"And just today, the OECD has warned that next year the UK will have the worst economic growth of any G20 country bar Russia."

Ms Forbes said the UK Government has “the macro-economic levers to fully address the cost of living crisis. And they have spectacularly failed to manage our economy in a way that works for businesses and works for households.

"Poverty is rising. Costs are rising. The energy price cap is rising. Living standards are falling, growth rates are dropping and competitiveness is sliding under the Conservatives.”

Ms Forbes said there was work to do on growth and “in terms of productivity, in terms of new markets, in terms of entrepreneurship.” 

But, she added, “there is no way around the fact that the macro-economic levers sit with the UK Government”, 

She said the Scottish Government had “one hand tied behind our back.” 

“This year alone, whatever the Conservatives say, I tend to believe independent commentators, this year alone, Scotland's budget has been reduced in real terms by 5.2%. 

“And if we look across the whole four year period of the Resource Spending Review, our real terms funding is to grow by only 2%. after accounting for the devolution of Social Security benefits. 

“The current fiscal settlement denies us even the most modest of borrowing powers that most governments across the world would have access to. Powers that Scotland would have as an independent state.”

Labour MSP Paul Sweeney accused Ms Forbes of “burying your head in the sand” by choosing to deflect the issues on to the UK Government.

He said: “Rather than address the failures that you have presided over, the Scottish Government have done the usual.

“Pointing the finger at Whitehall, highlighting the failings of the Tories – rightly in that case – but it also attempts to distract from the myriad of failings that they themselves as a government have presided over.”

He described the proposed cuts to public sector jobs as the “most scathing” consequence of the spending review.

Scottish Liberal Democrats leader Alex Cole-Hamilton said the Government’s “fiscal incompetence is plain for all to see”, adding that it “has its priorities all wrong”.

The Tory motion, which called on Holyrood to agree that it was “deeply concerned" by the cuts, and by "recent analysis of the Scottish economy undertaken by the Scottish Fiscal Commission”,  was rejected by MSPs.

Holyrood backed a Scottish Government amendment to the motion by 67 votes to 55, deleting it in its entirety and instead endorsing “the priorities set out in the Scottish Government’s spending review”.