 Clrlethe ar y dyfodol yn fawr. Gwез rywbeth panai y blwyddiadau yma yn hyfforddau SC. Rhyfoddau diwrnod o'r gweinidolfon yn rhywbeth diwrnod o'i gweinidolfon. A fyddwn yng Nghymru maen nhw'n gweld ei gweithio yn oed. Felly, mae'n gweld ei chynofiant o gwerthu. Rhyfoddau diwrnod o'r gweinidolfon yn y gweinidolfon yn y gweinidolfon yw mor 10 mennydd. Ar ddi fally, mae'n ddigredu'r rhedegau y myneddol yn beth. ddaf yn ei ddweudio i bwysigio'n gwneud hynny i'r strydyddiaethau siaradau i ddechrau항 galw caen nhw i weithio eich bydd nesaf o'r maen nhw'n rhaid iawn cymdeiantol sydd i gweithio'r asteru o'r croes a chy bleidiau i'n glendwysuol i'n meddwl i'ch gwleidio'r gwahanol. Ond nid o'n gweithio'r busau phin sy'n mynd i fflaesidio'r chael mynd i'r byd, iddo i gyfgareddau'r cysyllteidol, ond rwy'n ei'n gweithio'r give i'ch gwyffredebau skilled unlucky on individual communities and businesses, there are already 14 increases to interesting rates and stability in high inflation. Even with the recent reduction in inflation, prices are still around 15 per cent higher than did at the start of last year. Inflation remains more than double the bank of enghlin's target rate. The Resolution foundation expects the current UK parliamentary term to be the worst for living standards since— aslında, i chi gymryd i gyd, tome, the Chancellor needs to recognise this and change course. Presiding Officer, our public finances have continued to face significant challenges from inflation, Brexit, the war in Ukraine, the increased costs of public sector pay and a capital budget that does not come close to what is required. Despite those challenges, I am pleased that the Auditor General last week gave the Scottish Government's accounts for 2223 an unqualified audit opinion this for the 18th year running. This year, we have prioritised public services and delivered fair pay deals for our public sector workers, but these come at a cost and we must deliver a balanced budget. Pay deals added an estimated £1.26 billion to our recurring pay costs in 2023-24 and £1.75 billion across the public sector. This was around £800 million above the amount budgeted for 2023-24. We have worked to try and mitigate the impact of Westminster austerity, but without a change in course from Westminster, I fear that we are now at the limits of what is possible to mitigate within the powers of devolution. I have today written to the Finance and Public Administration Committee to outline the measures that I have taken to ensure that those costs can be met in this financial year. These have been exceptionally difficult decisions, but they have been necessary to protect services where they are needed the most. In total, savings and funding prioritisation of £680 million have been required in year, with £284 million already being expressed in the autumn budget revision and the remaining £396 million that will be set out in the spring budget revision. Of those, £391 million are resource and £289 million capital. Those reductions have included £10.5 million from the Future Transport Fund and £30 million from the Energy Industries Capital programme that is being delivered by the Scottish Funding Council, including £46 million from the withdrawal of the Strategic Change Transformation Fund as communicated in May, £3 million from the Efficiencies and Marine Scotland, £28 million from agricultural budgets with a commitment to return this funding in future years, and we will also redeploy £6 million held in reserves by Forestryland Scotland with that funding to also be returned in future years. Further details are included in the letter to the Finance and Public Administration Committee, which was provided to Opposition business managers prior to the statement. Furthermore, as inflationary pressures continue to exacerbate the cost of living crisis and pressures for households and businesses across Scotland, I have protected overall health spending and our investment in key programmes such as the Scottish child payment and in tripling the fuel insecurity fund for this financial year. This challenge is, as a result of prolonged Westminster austerity in the future, not unique to Scotland. Last month, the Welsh Government set out that they needed to find £600 million in savings before the end of the financial year. Accounting for differences in the size of our budgets, that would be the equivalent to over £1 billion for Scotland. The devolved Administrations have worked together to call on the UK Government for additional funding and in-year budget flexibilities to support the management of the pressures that we all face. The response so far to those calls has been at best insufficient. Presiding Officer, I am developing our budget for 2024-25, guided by our three missions of equality, community and opportunity and the Beat House agreement. In doing so, I will be reflecting on the feedback from committees following the pre-budget scrutiny process. When I presented the medium-term financial strategy to Parliament in May, I laid out the scale of the challenge that we face. I showed in May that our central resource spending outlook for 2024-25 was £1 billion higher than our central funding scenario, which was based on the Scottish Fiscal Commission's forecast at that time. Our funding for capital projects is facing a real-terms cut next year. We must meet those challenges in the 2024-25 budget. The decisions that we make must be underpinned by reform to ensure that people in Scotland get value from the taxes that they pay and secure a sustainable future for our public services. The Auditor General for Scotland raised the importance last week of reforming our public services to ensure that they remain financially sustainable in the long term. We are committed to public service reform that will help to deliver ffiscally sustainable public services that improve outcomes and reduce inequalities. The powers that this Parliament needs to deliver a better budget for Scotland are still retained in Westminster. The Chancellor needs to act tomorrow to deliver for investment in public services and infrastructure, to prioritise net zero and tackling fuel insecurity, and to supporting people with the on-going cost of living crisis. I have written to him to stress the importance of those areas. From briefing to the media in recent days, it appears that this may not be the course that he follows, with suggestions that tax cuts may be prioritised over investment in public services. Bluntly, when Westminster consistently under-invest in public services, it means that we have less funding to spend on our public services in Scotland. As I have set out, those concerns are shared by other devolved Governments. The Welsh Finance Minister and I raised the need for increased funding to address that with the UK Government directly. That is especially important for infrastructure investment. However, our budget for capital investment is constrained by the UK Government's spending decisions, with funding projected to fall in real terms by 6.7 per cent between 2023-24 and 20-27-28, and potentially more given sustained inflation. That, of course, limits our ability to deliver projects at the required pace. I have called on the Chancellor to rectify that. There must be new money and not funding that we have already allocated to other commitments. That happened with the UK Government's recent announcement in response to our request for additional funding to support flood recovery, which was disingenuous to say the least. A key part of that is ensuring that there is the necessary investment in the infrastructure that we need to meet our net zero targets and realise the opportunities for jobs and the economy. That should include confirming a decision on the Acorn carbon capture and storage project, where we have pressed the UK Government repeatedly on that and where we need to see action. I am providing an appropriate market mechanism for hydropower. The lack of action from the UK Government is preventing Scotland from fully realising its potential. It is also unacceptable in a country as energy rich as Scotland that around 830,000 households, 33 per cent of all households, are in fuel poverty. Although the energy price cap has dropped, many consumers are still paying significantly more than they were two years ago. With Gillian Martin, I have called for a social tariff for priority consumers, as well as reinstating the £400 energy bill support scheme. The UK Government must also take longer-term action to reform the electricity market so that everyone benefits from the net zero transition. We can all see the pain that the cost of living crisis is causing. We are using our social security powers to deliver a system built on dignity, fairness and respect. This year, we are investing £5.3 billion in the Scottish Government's benefits and payments that will reach around 1.2 million people, including our unique Scottish child payment. However, the majority of social security spend in Scotland remains reserved to the UK Government. I have called on the chancellor to increase working age benefits by inflation to ensure that they retain their real-terms value for struggling families across the UK. I also urge him to go further and legislate for an essential guarantee that would provide those who need it most, with the most basic of necessities and benefit of 8.8 million families. That would provide dignity and security for people who are reliant on universal credit. I have again called on the UK Government to remove the heinous rape clause, the two-child cap and the benefit cap, which disproportionately affect women and children. I have been frank with members about the challenges that we face and the difficult decisions that we have had to take to balance our budget and make best use of public money. We are doing all that we can within the limited powers that we have, but we need the UK Government to step up and use its powers for the benefit of Scotland. The priority for any fiscal headroom should be investment in public services. Tomorrow, the chancellor has the opportunity to make a real difference for people across Scotland, and I urge him to take it. The cabinet secretary will now take questions on the issues raised in her statement. I intend to allow up to 20 minutes, after which we will need to move on to the next item of business. I invite members who wish to ask a question who have not already done so, to press the request-and-speak buttons. I was going to begin by complimenting the cabinet secretary who I thought was very gracious at the finance committee this morning when she acknowledged that through the fiscal framework discussions, relationships between the Scottish Government and the UK Government had been very convivial, and that is a good sign. However, this statement completely undermines that, because it is a category of negativity that is blaming the Scottish Government for everything that has gone wrong in the Scottish Government. The cabinet secretary was right when she said in her letter to the chancellor that businesses in Scotland have faced serious challenges in recent years. Why, in last year's budget, the Scottish Government refused to pass on the same rates relief that its counterparts in England and Wales received, something that was called for by virtually the entire business community in order to stimulate economic growth and protect their competitiveness. Secondly, she cites tourism and hospitality as facing particular challenges, but does she accept that one of the biggest challenges that they are facing is entirely one of the Scottish Government's own making when it comes to the unworkable policy on short-term lets? When she talks about public services, will she finally acknowledge that one of the biggest difficulties that they face is the result of the crippling SNP cuts to local government funding over a sustained period of time? I described the discussions that I had with the chief secretary of the treasury, John Glenn, as a bit of an oasis in a desert, just to be precise. The desert being the rest of the UK Government in terms of the difficult relationship that we have in making ourselves heard and getting them to take on board the needs of Scotland's public services. The negativity—I am sorry, but there is a lot to be negative about. Choices that are going to face us are going to be largely set by the choices of the UK Government tomorrow. What I said in my statement was that they should prioritise public services. Liz Smith, in her final remark, talked about local government funding and seemed to therefore agree with me that the chancellor should therefore prioritise public service funding. I hope that she will stand with me if the chancellor does not do that tomorrow and prioritises tax cuts for the better off over public sector funding, so that she will be equally criticising him for that choice. In terms of business support, we have, of course, agreed and supported for many years the number one ask of business, and that is to freeze the poundage. We will, of course, come to our conclusions about business support as we take forward the budget discussions over the next few weeks. Daniel Johnson I thank for advance sight of the statement. After 16 years of Conservative government, we have had 16 years of short-term thinking, poor transparency and poor sustainability, and it is little wonder, therefore, that the letter that the DFM wrote was such. But is the Scottish Government not making many of the same mistakes? On transparency, she rightly asked about how the mooted fiscal changes will be paid for, but how will the council tax freeze be paid for, or will local authorities be asked to fit the bill? On long-term planning, the Fiscal Commission is clear that there is a £2 billion whole, but where is the plan to address that? On growth, there are cuts being made to infrastructure, such as ports and motorways, so that it is not undermining the growth and the growth in incomes that we need to gain extra money through the fiscal framework that is so badly needed. As I set out in my statement, the same challenges that the Scottish Government is facing are exactly the same challenges that are being faced by the Welsh Labour Government, who say exactly the same thing that the issue is the UK Government's lack of financial flexibility, the quantum delivered for public services in Scotland and Wales. There is nothing exceptional about the Scottish Government's position here. It is exactly the same as the Welsh Government and, indeed, the Northern Irish public services are facing the same problem as well. On transparency, I do not think that anyone could criticise me for not laying out the scale of the problem in the letter to the finance committee. It lays out exactly what we have had, the difficult decisions that we have had to take to balance our budget in 2023-24, and indicates the even greater challenge next year should additional resources not be coming to the Scottish Government, given the impact of inflation and all the other impacts that I laid out in my statement. In terms of the fiscal sustainability, absolutely. I will lay out in the budget the steps that we are taking. The Auditor General has challenged us to do that as well. When I set out in the MTFS the scale of the problem for next year and beyond, I was very clear that there were measures that we had to take ourselves, not least in terms of public service reform. Let us not be about the bush here. The Chancellor tomorrow could solve the issues that both Wales and Scotland are facing by making sure that the priority is public services funding. I would hope that the Labour Party would support us in that, and if it does not, I think that that must be for all of us. Deputy First Minister, Scotland's budget process, including scrutiny of the draft budget, is heavily constrained by a timetable, effectively imposed by the Chancellor of the Exchequer and the imposition of one-year settlements. Given that no detail of the Chancellor's autumn statement is provided in advance, what difficulties does that present in relation to preparing Scotland's draft budget, particularly during this costal learning crisis, when it is so crucial to protect Scotland's public services and invest in infrastructure to build a fairer, more equal and prosperous Scotland? Can you give some makes a very important point that the lateness of the autumn statement is a particularly difficult plan for Scotland's 2024-25 budget this year? The budget process is complex to develop, and it is reliant on forecasts from the OBR and the Scottish Fiscal Commission to finalise the tax and social security policies alongside portfolio spending plans. We will always endeavour to produce a Scottish budget at the earliest opportunity for the Parliament, but the complexity and risks that are now embedded in developing the Scottish budget and its forecasts mean that a late UK autumn statement represents a particular challenge to this. Does the Scottish Government support an on-going freeze of fuel duty? We have set out our priorities in the letter to the Chancellor in terms of our priorities, and what the priorities I have set out today very clearly is that the resources available to the Chancellor tomorrow should go on funding public services, not on tax cuts for the better off, such as inheritance tax and support for bankers' bonuses. Those are our priorities, and it is for the Tories in here to set out theirs. Let us listen to the questions and the answers. I call John Mason to be followed by Rhoda Grant. The cabinet secretary talks about tax cuts. Does she think that if there were to be tax cuts tomorrow from Westminster that it would be the poorer that would suffer most or the richer that would suffer most? We have had no engagement from the UK Government on their plans to cut taxes, all we have seen is the briefing to the media, so we do not know where those tax cuts will land, how they will be funded, who they are targeted at. At this stage, it is very difficult to say. The track record of this Tory Government suggests that the poorest in our society are unlikely to be the ones who benefit most from any of their policies. We will set out our tax plans in the budget on 19 December. Rhoda Grant to be followed by Stuart McMillan. The Scottish Government are reading budgets to compensate for their financial mismanagement, budgets that are essential to meeting our net zero targets. It is also kicking the can down the road as to when it will repay the farmers their missing millions. What impact those budget cuts are going to have on meeting our net zero targets and when will farmers get their missing millions? I wonder whether Rhoda Grant was sitting in the Welsh Assembly, whether she would have said the same to her Welsh Labour Government colleagues who have had to announce the same type of annual spending reductions because of the very same pressures on our budgets. There is no difference here. We have set out our priorities. None of those decisions have been easy. In terms of the agriculture reductions that I set out, I said in my statement that those will be returned to the budget. We will do that in a way that aligns with the spending profile of those budgets. I am very happy to set that out. I will be meeting with NFUS tomorrow to have further discussions about that, but I would hope that Labour, instead of blaming the Scottish Government, would join with us in pointing the finger, as the Welsh Assembly colleagues have done, where it should be pointed, and that is at the UK Tory Government. Our capital and revenue budgets have been cut from the Westminster Parliament, thus affecting what can be invested. Other adverse effects, including inflation and the cost of borrowing, are there. In addition to now, RAC has added on to that list. What confirmation from the UK Government has the Scottish Government received with regards to the capital and resource budgets? Will it at least increase with inflation to try to protect the investment that the Scottish Government is attempting to do? We have had no confirmation from the UK Government that the budgets will increase in line with inflation. The funding that we have received from the UK Government has not matched the scale of the challenge that we currently face, with inflation eroding our spending power. Although we are using the levers at our disposal, that hinders our response to the current economic turmoil that we face. The cut to capital is particularly difficult, because we want to make the investments that we want to make, but with the real terms cut to capital budgets for the foreseeable future, that will have a major impact. I will set out at the Scottish Budget our infrastructure investment plan going forward, but there is no doubt that that will have a huge impact on our infrastructure here in Scotland and, in turn, our ability to grow the Scottish economy, which is helped by that infrastructure investment.