Fears Scottish budget may fall, as businesses urge MSPs to do a deal

Business leaders have urged politicians to pass the Scottish budget to provide certainty for the economy, as fears are raised that a deal will not be done in time.
Kate Forbes has said a deal on the budget is unlikely this week.Kate Forbes has said a deal on the budget is unlikely this week.
Kate Forbes has said a deal on the budget is unlikely this week.

Negotiations between opposition parties and the Scottish Government are ongoing, however new Finance Secretary Kate Forces, has said a deal is unlikely this week, despite MSPs expected to vote on the budget bill this Thursday.

Business organisations have said that if MSPs don't pass a budget a "thick layer of uncertainty" would be added at an "already challenging time for many firms".

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Tories send ‘red lines’ to Forbes over tax differences between Scotland and UK
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Today Kate Forbes, who was made Finance Secretary last week after a reshuffle in the wake of the resignation of shamed Economy Secretary Derek Mackay, said the government was willing to work with other parties - as long as they identified where cuts would be made, if they wanted spending increased in other areas.

She said: "I think this year, we're in unprecedented circumstances. Not only is the budget delayed but there's also been a mini reshuffle as well. So, I'm optimistic that I will get the budget through but that doesn't mean it works to the same timetable as previous years.

"I'll believe it when it comes to the votes but I do believe in compromise and I believe that we will work hard to get a deal. Government is certainly willing to speak to any party that have reasonable suggestions to make and our challenge will always be finding the money to meet their demands."

Scottish Conservative MSPs have already said they would vote for the government's budget if it met their "red lines" of £95 million for councils, a minimum of £13m more for Police Scotland and £15.4m for drug rehabilitation beds – totalling around 0.3 per cent of the total Scottish budget. It has also said that Scotland should not diverge further on taxation from England and Wales.

Meanwhile Scottish Liberal Democrat leader Willie Rennie has said negotiations would only be successful if Ms Forbes took "the roadblock of independence out the way", while Scottish Labour has asked for free bus travel for young people and a fair settlement for local government. The Scottish Greens have made similar demands to Labour, as well as more investment in climate emergency measures like renewable heating and energy efficiency.

However, business organisations have called on all opposition MSPs to work with the government to get the budget passed to ensure economic stability. David Lonsdale, director of the Scottish Retail Consortium, said: “Whilst not perfect, there is much within the proposed budget that retailers can get behind, in particular those aspects aimed at keeping down the cost of doing business and cost of living, during what is a challenging time for the retail industry in Scotland.

“Robust debate and scrutiny over the coming days is both right and necessary, however any failure to pass a budget in good time would add a thick layer of uncertainty at an already challenging time for many firms.”

Colin Borland, director of devolved nations with the Federation of Small Businesses added: "With Scottish small business confidence down and profits being squeezed, these are tough trading conditions. Against this backdrop, giving businesses as much certainty as possible as early as possible makes a lot of sense.

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“When it was first unveiled, we described this as a ‘no-surprises’ budget. A swift deal similarly without any last minute nasty surprises would be most welcome.”

However Ms Forbes government colleague, Communities Secretary Aileen Campbell, warned MSPs that the "drive to eradicate child poverty in Scotland will be dealt a grave blow" if the budget fails to pass its first hurdle.

She said if passed, the budget would see around 2,500 low-income families with one child in the first year of life eligible to receive a total £1,572 in new benefits, including the new Scottish Child Payment, of £10 per week for every eligible child under six.

“We are working hard so the first tranche of Scottish Child Payments can start later this year and provide help to an estimated 170,000 children under six that those children are not getting now. This is an example of the scale of the very real impact any delay in the passing of the bill will have.”

Yesterday the Convention of Scottish Local Authorities said a £95m revenue cut and £117m reduction in capital funds puts the government's 2030 child poverty target at risk. Stephen McCabe, Cosla's children and young people spokesman, said: "Scottish and local government are supposed to have a joint priority to tackle child poverty in all forms.

"Councils lobbied the government hard to address our concerns over child poverty by investing in the essential services that councils deliver - from social work services that support families to work through complex, deep-rooted issues to holiday lunch clubs that provide food and vital links to other services such as employability, income maximisation and housing.

"As the budget stands, these services will be under threat and the central role that councils have in reaching the most vulnerable is once again not fully recognised."