 The next item of business is a debate on motion 11546, in the name of Shona Robison, on Fiscal Framework review. I would ask those members who would wish to speak in the debate to please press the request-to-speak buttons. I call on Shona Robison, Cabinet Secretary, to speak to and to move the motion up to 13 minutes. Thank you, Presiding Officer. I'm pleased to open today's debate on the revised Fiscal Framework agreement, and I move the motion in my name. On 2 August, following a joint review, the Scottish and UK Governments published an updated version of the Scottish Fiscal Framework, fulfilling a key commitment in the First Minister's policy prospectus. The Government believes that Scotland's future, of course, lies as an independent country and that we've best served by the full range of fiscal powers and choices that independence would bring, but until such a time as the people of Scotland choose a different constitutional path, we are committed to working with the current framework and working to improve on it. The changes agreed with the UK Government are balanced and pragmatic. This new agreement strengthens the Scottish Government's financial management levers and provides the Scottish Parliament and Government with greater long-term funding certainty. We need to be clear that, despite improvements to the framework, the fiscal position facing the Scottish budget remains extremely difficult. A situation of course made worse by decisions imposed by the UK Government in last month's autumn statement. Once again, the UK Government has chosen to pursue an austerity budget that will have a profound consequence for Scotland's public services. As the Institute of Fiscal Studies has said of the autumn statement, the tax cuts are paid for by planned real cuts in public service spending. Even with the fiscal framework in place, levels of funding for the Scottish budget remain closely tied to spending decisions by the UK Government. Decisions to starve services in England hit our budget in Scotland as the UK Government's failure to invest in services in England means that the devolved Administrations in Scotland, Wales and Northern Ireland do not receive adequate consequentials. A cursory look at the UK Government's autumn statement for 2425 shows the devastating impact of Tory austerity being forced on services, even using lower estimates of inflation. UK front-line resource budgets are seeing real-terms cuts. For example, if planned UK day-to-day expenditure on services in 2024-25 had grown in real terms since 2022-23, then compared to Conservative plans in England, health and social care spending would be £8 billion higher. The UK Government's approach means that it has provided almost no funding to cover the costs of this year's pay deal in 2023-24, never mind the cost of a 2024-25 pay deal. The lack of provision for the cost of NHS pay deals amounts to treating pay increases as though they were one of costs, which, of course, they are not. Prior to tax and welfare block grant adjustments, Scotland's resource budget from the UK Government in 2024-25 will be over £700 million lower than if there had been funding in line with real terms over the two years. Changes to the fiscal framework cannot compensate for the scale of the UK Government's failure to act and invest in public services at this time. We are returning to the fiscal framework review. Although the revised agreement has delivered important improvements, I want to be clear that the Scottish Government's preference would have been for a review that was broader in scope and that, in some places, the agreement does not go as far as we would have wished. The scope of the review and its outcome was, of course, subject to agreement with the UK Government. I also want to address the timing of that agreement. Throughout discussions with the UK Government on arrangements for the review, my predecessors and I have sought to balance the need to keep Parliament informed with the need to maintain a confidential space for negotiations. In weighing whether to conclude an agreement during recess, I had to consider the benefits of securing improved borrowing powers in advance of the 2024-25 budget, and that we were negotiating with the UK Government that will probably go into election mode soon. Considering those circumstances, I concluded that it was appropriate and prudent to agree the revised agreement when the opportunity arose. The Scottish Fiscal Framework plays a central role in determining the funding for the Scottish budget and has been key to enabling the devolution of new tax and social security powers provided for in the 2016 Scotland Act. The original fiscal framework was agreed in 2016 and was the product of negotiations between the Scottish and UK Governments. Those negotiations were guided by the principles and recommendations articulated by the Cross Party-Smith Commission, which published its findings in 2014. That remains the case for the revised agreement. The Barnett formula continues as the basis for calculating the block grant, and the framework continues to be bounded by the principles outlined by the Smith Commission. Those include principles of economic responsibility, sustainability and no detriment as a result of devolution. Since 2016, the Scottish Government has used the tax and social security powers underpinned by the framework to pursue policies that are better tailored to Scotland's needs. For example, the Scottish Government has delivered the fairest and most progressive income tax system in the UK, while raising extra revenue to invest in public services and Scotland's economy. With devolved social security powers, the Scottish Government has ensured additional support to the most vulnerable in our society. I am grateful to her for giving way. In light of the point that she has just made, does she believe that there is a case for the principles of the Smith Commission to be looked at again in light of the time that has elapsed since? Or does she think that those are the correct principles to underpin future fiscal frameworks? I am open to having that discussion. Liz Smith made this point at committee, and I said that a lot of time has elapsed, a lot of changes have been made. If we are talking about under the current constitutional arrangements, clearly those would need to be agreed on a cross-party basis, but I think that it is a discussion that we should have. Since the unanimous passing of the Social Security Act in 2018, we have introduced 13 benefits, seven of which are brand new and only available in Scotland. This year, we will invest £405 million in the Scottish child payment, improving the lives of over 300,000 children across Scotland. As a result of the Scottish child payment and Scottish Government policies, 90,000 fewer children will live in relative and absolute poverty this year. However, it is also the case that the fiscal framework has been stress-tested since 2016. The agreement preceded the EU referendum and subsequent chaos and uncertainty that accompanied the UK Government's hard Brexit. Of course, we have seen extraordinary fiscal upheaval as a result of the pandemic, the on-going cost of living crisis and the UK Government's economic mismanagement. Given this political and fiscal upheaval, the review provided an opportunity to take stock and consider elements of the fiscal framework that required change. The centrepiece of the agreement in 2016 was the block grant adjustment arrangements that account for the devolution of new tax powers and social expenditure to Scotland. Under those arrangements, a total of £16.1 billion was deducted from the Scottish block grant in the 2023-24 budget to reflect the devolution of various tax powers and the corresponding revenues now retained by the Scottish Government. Similarly, £4.4 billion was added to the block grant for 2023-24 to reflect the transfer of responsibility for a suite of social security benefits to the Scottish Parliament. The methodology used to calculate those block grant adjustments therefore had a material impact on the funding available for the Scottish budget. Securing the index per capita block grant adjustment methodology on a permanent basis is a significant win for Scotland. The Scottish Government pressed hard for the index per capita methodology as part of the original fiscal framework. The 2016 fiscal framework said that the index per capita methodology would apply on an interim basis with a permanent arrangement to be reviewed and agreed at a later date. Having now completed that review, the agreement to apply the index per capita methodology on a permanent basis is a positive step because it removes uncertainty and protects the Scottish budget from the impact of slower population growth in Scotland, which has been the historic trend over the past 50 years. An independent report jointly commissioned by the Scottish and UK Governments ahead of the fiscal framework review estimated that the on-going use of the index per capita methodology for calculating income tax block grant adjustments alone could be worth around £500 million a year by 2026-27 when compared with other methodologies that were considered such as the treasuries-preferred comparable model. In my view, it is right to protect the Scottish budget in this way. The Scottish budget should not be penalised for lower population growth, which is outwith Scotland's control because we do not have the key levers over things such as migration and other levers that would be required. The agreement also provides a substantial increase in the Scottish Government's resource borrowing powers to manage funding volatility associated with the operation of the framework. It increases the Scottish Government's ability to borrow to address tax and social security forecast errors, doubling from £300 million to £600 million per year of borrowing capacity. Those forecast errors are a normal part of the way that the fiscal framework operates, but that change greatly improves the Scottish Government's ability to manage and smooth funding volatility driven by forecast error. That in turn will provide a more stable and predictable funding environment for the Scottish budget and the programmes and services that it supports. Those new borrowing powers will take effect from 2024-25. I will set out how we intend to use those powers at the forthcoming budget, but in principle, those new powers would allow us to borrow in full to cover next year's income tax and other reconciliations, which amount to £338 million. The ability to borrow in full effectively spreads the impact of the tax reconciliations across multiple years, rather than requiring that that cost is absorbed in a single budget. Another important development involves changes to the operation of the Scotland Reserve. Alongside borrowing powers, the Scotland Reserve provides the Scottish Government flexibility to manage its funding position across financial years and to respond to unforeseen circumstances. However, the Scottish Government's ability to draw funds from the reserve was previously constrained. It was limited to a maximum of £100 million for capital and £250 million for resource funding. That amounts to around 1.5 per cent of the total Scottish capital budget in 2023-24 and 0.5 per cent of the resource budget. I am pleased to report that the new agreement sees those drawdown limits removed altogether, significantly increasing reserve flexibility and the Scottish Government's ability to manage funding across financial years. As you would expect, specific decisions on the use and application of those bolstered powers will be outlined as part of the Scottish budget. More broadly, we have also agreed that in future all borrowing and reserve limits will grow with inflation each year. Previously, annual and cumulative limits for borrowing and reserve limits had been set in nominal terms, eroding their power and effectiveness over time with inflation, so securing uprating ensures that the powers continue to be viable and sustainable and that limits are protected in real terms. In keeping with our approach and recognising how circumstances have changed since the fiscal framework was introduced in 2016, we have agreed to increase the baseline adjustment to the block grant that accompanied the devolution of responsibility for managing Crown Estate assets. That adjustment will increase in increments reaching £40 million in 2018-29, where it will remain fixed in nominal terms. To avoid any further delays in the Scottish and UK Governments concluding of the revised agreement, it was jointly decided that arrangements for implementing that assignment would be further considered at a future meeting of the Joint Extractor Committee. I very much appreciate the work that the Finance Committee has put into looking at that matter. Viewed in the round, the agreement protects funding for the Scottish budget. Updates of framework to reflect changes since 2016 provides greater certainty on future funding and equips the Scottish Government with a set of strengthened fiscal levers. However, as I said, while the revised fiscal framework agreement represents good progress and puts in place arrangements that better reflect the scale and complexity of the Scottish budget, the changes are not on a scale required to offset the broader fiscal challenge. At the autumn statement, the Chancellor failed to provide the funding that devolved Governments need with little consideration of Scotland and the specific challenges that we face. That will be very challenging indeed, and I will set out the consequences of that at the budget on 19 December. Thank you, cabinet secretary. I now call on Liz Smith to speak to and to move amendment 11546.4. Up to nine minutes, please, Liz Smith. Thank you. Before I do so, I apologise on behalf of my colleague Myrdo Fraser, who is in disposed this afternoon, having fallen on the ice this morning. I understand that that is the case for other colleagues across the chamber. I both extend the apology and wish them well in their recovery. I am afraid that the chamber will have to listen to me twice today as I will step into the role of summing up. Mention the fiscal framework, and you can pretty much guarantee that a glazed look comes across the face of colleagues and journalists alike, such as its intense complexity and technical nature. However, it matters hugely for the reasons that the cabinet secretary has set out. That is not just because of the importance to Scotland's available finances, but also with regard for the need for Westminster and Holyrood to work together to get the best deal for Scotland, because I believe that that is exactly what the public wants, and I also believe that that is what they deserve. Although we can obviously see yet again from the Government's motion from what the cabinet secretary said in her speech, she does not really like the fiscal framework on the basis of the wish that it was not necessary, because it would prefer different constitutional arrangements to the rest of us. John Swinney in 2016 and Shona Robison in 2023 have rightly accepted that, under the current constitutional arrangements, they have a duty, and it is a duty to ensure that Scotland gets the best deal. That is because it is vitally important that both Governments do everything that they can to protect the Scottish finance, particularly in those tough economic times. I have to say that the new framework that was signed on 2 August will do exactly that in a way that is better than the 2016 model, which, despite the fact that most economists believed that it served Scotland pretty well, was clearly out of date, particularly as a result of inflationary pressures. The new model is better, because it is GDP deflator protected, because it has provided greater flexibility to the Scottish Government on existing borrowing power, and it has taken into account the damaging consequences of exogenous shocks to the system. That is all changes that the Scottish Government, in my opinion, was rightly calling for, so it is good to see that those changes have been made. I am grateful to Liz Smith for giving way. I wonder if she could perhaps develop the argument about whether the revised fiscal framework adequately provides for the scale of financial shocks that we are experiencing, because the finance secretary is having to wrestle with very significant levels of inflation that we have not experienced for about 45-50 years. However, the crucial lack of response in the autumn statement demonstrates that the fiscal framework can provide all the rules that it wants. If the underlying financial position as demonstrated by the autumn statement is not sufficient to support public expenditure, public services in Scotland will feel the pressure as a consequence of Westminster decision making. Liz Smith is making a constitutional point, and we disagree on the constitutional arrangements. When it comes to exogenous shocks, it is not just questions about the current economic circumstances. It is the conditions of the Covid pandemic, which other countries have obviously suffered on exactly the same basis as us. We will have our constitutional debates, but I do not think that there was a case to be made in this particular debate that should have been a committee debate, because it is about the fiscal framework that the member signed in 2016, and now his colleague has signed it in 2023. Those are very important aspects of how we try to ensure, under the current constitutional arrangements, how we move forward together. I am very grateful to Liz Smith for giving me, because I am not actually making a constitutional point. I am making a point about the substance of the autumn statement, because the substance of the autumn statement fuels in general the size of the public finances available to the Scottish Government to deploy. I am making the point that the failure of the Conservative Government to take adequate account in the autumn statement of the enormous effects of inflation will have a profound and unavoidable effect on the pressures on public finances and public services here in Scotland. That is nothing to do with the constitution. That is the existing arrangements just now. It is the policy choices of the Conservative Government. Mr Swinney has made exactly those points when he was Finance Secretary himself. It is not just talking about the current autumn statement. Mr Swinney would have been making those statements about previous budgets. It is a constitutional point, because he fundamentally disagrees with the arrangements about how Scotland receives its money. That is the constitutional difference. It is not just this autumn statement that he has objected to. There are previous ones in the past where he has made his point very strongly known in this chamber. I think that the Deputy First Minister was right when she said that any fiscal framework requires serious negotiation and an understanding from both Governments that compromise will be necessary. I think that that is very much what we actually have. I am sure that what local Government would like to see is that same process of mutual engagement and understanding when it comes to the Verity House agreement, which took such a knock two months ago when the council tax freeze was announced without any consultation. That is a point that is very well made by the Liberal amendment. As well as that, what really matters is this debate about the principles of the Smith commission, particularly when it comes to the no detriment clause. That is a very technical argument, but I think that it really does matter. I am glad to hear the cabinet secretary say that she thinks that that might be worthy of debate. It is very difficult, as was evidenced by the three Davids, the Iser, Philips and Bell independent report, who make it very clear that, although all those principles have very good intentions, it is exceptionally difficult, if not impossible, to ensure that they can be followed all at the same time. Given the time that has elapsed, we should be thinking about whether we have to update that Smith commission. I think that the finance committee is quite interested in that as well. Thank you, Liz Smith, for taking the intervention. Is she suggesting that section 18 of the Smith commission should also be offered review? No, I am talking very specifically about the four principles. Given the difficulty that has been identified by independent analysis, not by politicians, whether it is possible to go along with all those four principles at the same time is the difficulty. I think that that is something that the finance committee has to review. Of course, that raises the issue that the cabinet secretary referred to about the BGA methodology, because that matters too. If we get a glazed look about mentioning the fiscal framework, we get a sense of intelligibility when it comes to talking about BGAs, but they matter as well. I think that the dilemma that is at the heart of any fiscal framework negotiation is exactly that. How do you measure the change in equivalent UK spending and revenues in terms of adjustments that need to be made for different fiscal and demographic structures in Scotland? Is it nine minutes? Yes, I can give you perhaps another minute in light of the generosity of your interventions, but no longer than that. I just want to say something about the fact that we owe the officials both in the Scottish Government and the UK Government our praise and congratulations for the way that they went about this renegotiation. I think that they worked extraordinarily hard on what are immensely difficult technical changes. I know that the cabinet secretary was commending the officials when she came to the committee. I also give her her dues. She was commending her UK colleague John Glenn at the time. I know that that was reciprocated by him. I will come back to a few other comments in my summing up, but those are the points that are most important when it comes to assessing the fiscal framework. I think that we have a big debate ahead of us on exactly how we take that forward. I will move the amendment in my name. Thank you, Ms Smith. I now call on Michael Marra to speak to and to move amendment 11546.3 up to seven minutes, please, Mr Marra. Thank you, Presiding Officer. I move the amendment in my name. I begin by adding my own thanks to those of Scottish Labour, to those given by Liz Smith, to officials and the experts involved in what is a complex piece of work that has developed over a very long period of time, longer than many of us might have expected. I would have hoped that this afternoon's debate could have been an opportunity for a full exploration for a substantive debate in reality of the structure and detail of the outcome of that fiscal framework review, but what the Government sought to achieve in those negotiations and why what compromises were reached the upsides and the limitations, why index per capita was preferable to the comparable method and other options that were on the table, and what, crucially, the Government and the Parliament might seek in future developments and the timeframes for future review. Instead, the motion that we have before us quickly dispatches with co-operation and negotiation in urgent search of further division. Although some of those concerns are certainly merited, the tone so far from parts of the Deputy First Minister's speech of blame-shifting are of the type that has come to typify her administration, desperately trying to distract and deflect from its own sorry mess. Nowhere was that more apparent, I am afraid to say, than the Government's reality-denying post-truth response to the damning pieza figures released yesterday. Scotland's once mighty education system continuing a 16-year trend of SNP-led decline. The Government's response is nothing to see here. Meanwhile, a generation of Scots are betrayed by what is a shambolic Government that has failed to deliver the education system that they deserve or even to preserve the one that they once had, and it is utterly shameful. If the Government is keen to discuss the real context of the fiscal framework review rather than the content of the review itself, so be it, because that context is certainly illuminating after all. That projected £1 billion funding gap for the upcoming budget between the Government's spending pledges and the funds that it has available, that figure rising to £1.9 billion by £27.28. A large portion of that budget is determined by income tax receipts raised right here in Scotland. The utter failure of the Government to grow the Scottish economy results in the stagnant low-wage investment economy—low investment economy—that the SNP is holding in Scotland back within. Such a performance means that our fiscal position suffers year on year, and for that they must accept responsibility. Faced with the budget black hole, we have a finance secretary who has embraced the Treasury on those limited borrowing powers that she describes, desperate to conclude an agreement and happy to sacrifice the long-term good for the short-term good of the party. John Mason I thank the member for giving way. Will he be committing the Labour Party to renegotiating the fiscal framework if Labour were to win the next election? Mike Marra We are all committed to a continual development in the fiscal framework. There will be reviews in future terms. Of course, just as over since 1997, the devolution settlement has evolved significantly with ever more powers arriving in this Parliament. I certainly anticipate that the settlement will continue to evolve in future years. We will look at the fiscal framework as those issues develop. I would only be right to do so, and we have heard in the finance committee that that is part of the process through which we are all committed. John Mason No, thank you. Not on that point. The hasty agreement that was struck by the finance secretary was, frankly, one of a Government that is rushing from one part of crisis to the next. The rushed process has shut down any real opportunity for genuine debate or robust scrutiny of the substance of this. Professor David Bell, one of the three authors of the independent report, told the finance committee on 19 September that he was surprised that his report was held back for five months, before being published on the same day as the finalised fiscal framework and effect of complete was arrived at. That should have been a genuine opportunity for broad discussion, and then it was all rushed out the door during the summer recess. The Government tried to schedule this debate in September before the finance and public administration committee had even had the opportunity to take evidence on the updated agreement. Today's debate is a little over two hours, but back in September we did have a longer than that, debating the many merits of football. I think that our nation's finances deserve perhaps a little longer. The Parliament exists to spend more time, to be frank, on these matters that will impact every single citizen and those citizens as yet unborn. Why is this Government so desperate to avoid the genuine scrutiny that Labour would like to see? Deleting WhatsApps, forgetting meetings, refusing to reform FOI, even today suing the information commissioner? The Deputy First Minister told the Finance and Public Administration committee that she did not think that there would be a public debate over the fiscal framework because it is, I quote, quite technical. I find that quite astonishing. Like so much in the SNP's tenure, SNP's NHS waiting list, the school attainment, this has been filed in a little bit too difficult pile. Granted, it is not an instant vote winner, tax freezes, free bikes and laptops, but good government, in the best interests of the people of Scotland, rests on getting the quite technical issues right. No, thank you. This updated fiscal framework gives Scotland more boring powers and the SNP frequently claimed that they are powerless in this Parliament to deal with the situation that they find themselves in. Let's be clear, the Tories have wreaked economic havoc on this country for which we all pay the price every day in higher bills and following living standards, but the SNP has a very strong hand in making much of the fiscal mess that they find themselves in at the moment, and they do have tools at their disposal to do something about it. I'm just giving you that litany of accusations, what he would say to his Welsh Labour Government colleagues who are facing exactly the same challenges. Would he make the same accusations of them when they sit in the same room, making the same points as I do to the Treasury, that the problems emanate from the UK Government, the lack of fiscal powers and an autumn statement that is going to lead to really difficult decisions with public services? I do not have any doubt, and I have said very clearly, as the Labour Party has, that there are significant problems with the autumn statement, the situation that the Tory Government has left this country in, the state that they have made of our economy, the fact that they are not funding sufficiently our public services. Labour, if we have the great joy and the opportunity to serve in years to come, will have to deal with the situation that we find when we are to take government. We know that there are difficult times ahead in that regard, and we know that the finance secretary has a difficult job on her hands to deal with the budget that's in front of her, but she also knows that the situation that this country finds itself in is because of its failure to grow the economy, to grow that median tax income, to grow the tax receipts that fund our public services. That is the only way that we can substantively deal with the situation that faces us. Those are not the actions of a competent Government that we are hearing about today. It is thinking strategically about how to best serve the people of Scotland. Rather, they are, Presiding Officer, the actions of a Government that is in crisis, it's out of its debt, it's making it up as it goes along. It's caught in a milestone of its own scandals, gaffes and controversies, and Scotland deserves far better than that. Thank you very much indeed, Presiding Officer. I'm pleased to rise for the Liberal Democrats in this debate, and I move the amendment in my name. Presiding Officer, the fiscal framework is, of course, key to the pooling and sharing of resources across our islands, ensuring that Scotland benefits from the decisions that we make while being protected by a framework of support from the UK Government in the good times and at the times of national crisis. What we are talking about today is more flexibility than ever, more power than ever, but that won't stop the SNP, as we've already heard, blaming Westminster more than ever. Listening to ministers, you wouldn't know that we've seen income tax devolved, the way that opened to a £4 billion social security system, or any of the other positive changes that make this fiscal framework a necessity. I'm glad that agreement could be reached on changes such as increasing the resource and capital borrowing capacity, but Scotland deserves two Governments that have a genuine interest in working together to make devolution work as it should, as it can. Resolving differences maturely should be the known, not a rarity. There should be a shared interest in its success. There is little spirit of co-operation and partnership on show in either the SNP or Conservative contributions to this debate. The Scottish Government would rather debate powers that it doesn't have than make best use of the powers that we already do have. Don't get me wrong, I am happy to agree with the Deputy First Minister that there was little worth welcoming in the UK Government's autumn statement. An NHS budget squeezed a giveaway to big banks that will cost billions of pounds to the Treasury, prioritising their profits over making working families better off. I sincerely hope that it will be the Conservatives' very last autumn statement, but there is no escaping the fact that the SNP Government has been writing checks that people simply can't cash. They have had their fingers in their ears, only to take them out to point at Westminster. Take the devolution of social security, a crucial component of why we need a fiscal framework. We have seen the latest independence paper published today. What is not in there is mention of the agency agreement that the Scottish ministers have with the Department for Work and Pensions. Powers that we all agreed should be devolved back in 2014 are still not there because the Scottish ministers are still not ready to receive them and are asking the DWP to run it for them. No ministers will say that some benefits have already been devolved, and that is certainly true. However, look at what is happening there. We have seen reports that waiting times for social security Scotland are in the region, in some cases, of four to seven months for a decision on adult disability payment. That compares to two or three months under the DUP in London. It is worse. Applicants have spoken about waiting on the phone for up to three hours and more before giving up. They were promised a better system. A system steeped in dignity is a system that we all rallied behind. The SNP wants us to believe that it could set up an independent Scotland welfare system in its totality pensions and all in just 18 months. It has taken more than a year to devolve 11 simple benefits. People were promised a better system in 2014. It is just not good enough. The Government would rather debate powers than make the best use of the ones that we already have. Behind the lazy cry for the break-up of the United Kingdom and the Scottish Government's motion, you will find years of warnings from experts that went unheeded. Take, for example, the Auditor General, who was warned at least as far back as 2018 that the NHS was not in a financially sustainable position. Now, Scotland's health boards are forecasting a deficit of £395 million this year. The problems have been allowed to stack up, and people will be worried that this dire outlook will mean cuts to services and even longer waits to patients waiting in pain. Of course, the words of Professor Paul Gray, the chief executive of NHS Scotland for six years under Nicola Sturgeon, said that, "...the current system was going to be overwhelmed, regardless of Covid. The virus simply brought the date of that event forward. Then, of course, there was the Christie commission back in 2011, warning about the need to increase preventative spending to stop demand swamping public service capacity. We have seen cuts from mental health and drugs budgets that fly in the face of that reform agenda. That Government would rather debate powers than make the best use of the ones that we already have." The amendment in my name speaks to the ever more precarious position that Scottish councils are in. We have just seen council leaders warning that local authorities are at risk of bankruptcy and that essential services in their words will cease. Game over, councils need a fiscal framework that respects and recognises the important work that they do, the freedoms that they need to innovate and their need for a fair share of Scottish Government resources. However, this Government, just in the recent months, drove a coach and horses through that very fiscal framework in the shape of the Verity House agreement. When councils are squeezed to the pips, education gets squeezed to the pips as well. You do not need to look very far, Presiding Officer, than yesterday's PISA figures, which Michael Marra rightly referred to in his remarks, as an insight into the impact of this Scottish Government's cuts. I will speak more of that in my closing remarks, but for now, Presiding Officer, I move the amendment in my name. Thank you, Mr Cole-Hamilton. I now call on Ash Regan to speak to and to move amendment 11546.1. Up to six minutes, please, Ms Regan. Thank you, Presiding Officer. I am pleased to move the Alba Party amendment to this motion today. The fiscal framework, as we have been discussing, is complicated, but I believe that it is deliberately complicated. It is the formula, obviously, for determining Scotland's funding as part of the UK via the block grant, the Barnett formula, minus the abatements or deductions. Scotland is rewarded if we can grow our economy faster than the UK and then punish it if we do not. However, no region of the UK, other than London and the south-east, ever ends up with higher GDP rises than the UK average. The additional clause was added to the Smith commission report. There is no detriment clause, which we have been discussing already this afternoon. That was meant to recognise the fact that, for the most part, Scotland's economic performance has a lot more to do with reserved UK economic policy than it does with anything that we do here at Holyrood. Of course, we recently witnessed first-hand during the time of the pandemic why we need that full fiscal autonomy, because much of the financial support that the Scottish Government could provide to back up the public health policy could only be delivered if the UK Government decided that those were also the priorities in England. In my opinion, the no detriment provisions do not deliver as perhaps they might do for Scotland. Rather than the Smith commission delivering greater fiscal control and responsibility for Scotland, it has, unfortunately, left us with the position of having greater accountability, but crucially without the fiscal levers to back it up. Greater responsibility without power—never a good position to be in. In recent years, the Scottish Government has chosen to increase tax slightly, and that should mean that more money has been raised to spend on investing in better public services. I am sure that the Scottish public would welcome that, but that is not what happened. The Scottish public paid £900 million in higher tax over a three-year period, but the Scottish budget only rose by £170 million over that same period. So £730 million was lost because of the fiscal settlement. That would be enough to raise the Scottish child payment to £40 a week several times over. Scotland is in the unfortunate position of raising tax in order to fill a black hole in the block grant created by the fiscal framework. I wonder whether the member could tell us when she was a minister in the Government whether she expressed any skepticism to her colleagues as to whether those tax positions were the right approach to take, given the consequences. The member may not remember that, but I was in the Justice Department. I certainly did have conversations with colleagues about funding settlements for justice. I was not obviously responsible for financial decisions that were made on a broader scale than that. My opinion is that this is not a good deal for Scotland, and the new fiscal framework is worse still. I believe that it is a trap, an economic trap and a political trap. That the Scottish Government has acceded to either knowingly or unknowingly. The fiscal framework is, of course, a means of forcing the Scottish Government to pursue a low-tax, small-state approach to government. That is against the values of the Scottish Government and, of course, the majority of Scots who elected that Government. It also has the real danger of relative economic decline built into it as well. Separating what economic impacts come from UK policy and what are actually from policy created in this Parliament is almost now an impossible task, which has been alluded to earlier in the debate. The new deal seems to have accepted that it is just too difficult. As a result, Scotland just accepts that it is going to be responsible for both. Disasterous economic choices that are made in London are heaping misery on to a Scotland that is in a position of just running to stand still against things like soaring inflation and Brexit carnage. Dr Jim Cuthbert, formally of the Scottish Office, explains that it is nigh on impossible for the Scottish Government to develop a successful fiscal policy under this arrangement. It is very easy to see why the Conservatives are happy with this settlement. I do not think that they should be, by the way. I think that it harms their constituents as much as it harms my constituents, but what is less easy to understand is why the Scottish Government has agreed to it. Is it really in the best interests of Scotland or is it in fact damaging? One reason that I believe that it is damaging is that it is forcing Scotland into sub-optimal decisions on capital spending. There is just one example. This would be the poor value PPP, which is a model of financing public sector infrastructure that the UK has now moved away from because it can, but Scotland cannot because our choices are very limited. I am concluding now, I am afraid. It is only clear that devolution can only deliver to us so much, and it is the powers of independence that will enable Scotland to create a thriving economy, a well-fair nation and higher living standards for all of us. Thank you, Presiding Officer, and I welcome the opportunity to speak in this debate on behalf of the Finance and Public Administration Committee, and we will focus on the fiscal framework review and air of interest to the committee since the start of session 6. We provided a consultation response to the independent report authors and were expected to be given an opportunity to contribute to the review as originally agreed by the UK and Scottish Governments in 2021. As we now know, the review was much narrower in scope when the outcome unexpectedly announced in August 2023. The speed with which the review was agreed came as a surprise to both the committee and those stakeholders would do evidence from last month. As a deputy First Minister explained, a narrow window of opportunity for the review emerged and the UK Government did not favour widening its scope. In addition, the possibility of an imminent change of Treasury Minister meant that the Scottish Government had to grab the opportunity to secure what improvements it could to the existing fiscal framework. Unfortunately, we have not been able to explore the UK Government's perspective on the negotiations. The chance of the Exchequer, like its three predecessors, admittedly two of them were very short-lived, has not responded to our invitations to engage or give evidence to the committee. The former chief secretary of the Treasury also declined those invitations despite his stated keenness to work with the devolved parliaments. The approach by Treasury is very unhelpful, and I know that committee colleagues are also keen to see greater engagement with. Turning to the outcome of the review, the updated framework confirms that the index per capita method will continue to be used to adjust the block grant, rather than a comparable method. That was a key gain for the Scottish Parliament in 2016 following tough negotiations conducted by then First Minister Nicola Sturgeon and Deputy First Minister John Swinney had dug the heels in after months of discussion. It meant that the Scottish budget will benefit by millions of pounds each year because the index per capita method takes account of the fact that Scotland had, at the point of income tax devolution, lower income tax capacity than the rest of the UK. It also takes account of the potential differential population growth between Scotland and the rest of the UK. The updated framework, boring for capital expenditure, will link to inflation so that the limits increase, but will increase according to the GDP deflator. That is very positive overall, given that the value of resource and capital boring has been fixed since it was first published alongside the Scotland Act 2016, despite inflation having risen by over 30 per cent since eroding the spending power constrained by those limits. However, the committee was surprised to see the Fraser Valand's estimate of boring growth over the next four years will only be a cumulative 5.5 per cent. As capital inflation is outstripping GDP deflator inflation, that is a wholly unrealistic measure. Looking at capital inflation specifically would be more accurate and helpful. Witnesses suggested to the committee that this may be one area where the Scottish Government had to compromise at each agreement. Of course, there was a negotiation between two parties who were not equal in terms of ultimately who could decide the outcome. As the Deputy First Minister explained to us, using the GDP deflator was the only option on the table. As my dear old late mum said, half a loaf is better than no bread, so this limited gain is important to Scotland. Resource boring limits remain at £1.75 billion, but will now rise with the GDP deflator. Capital boring limits are £450 million annually, with a total limit of £3 billion, both of which are now index linked to the GDP deflator. It is disappointing that the potential boring, which would provide greater flexibility and is available to Scotland's local authorities, is not available to the Scottish Government, which would provide it with better ways of being able to deal with and balance its budget. On annual boring powers, the updated fiscal framework increases limits from £300 million to £600 million a year, which is again welcome to meet forecast errors. That is also index linked from next year. That is particularly helpful, given that next year there will be a large negative reconciliation of £390 million to reflect income tax receipts in 2021-22. That said, as witnesses advised, modelling by the Scottish Fiscal Commission means that forecast error could still potentially exceed this limit once or twice every decade, so those challenges remain. With an increase in annual boring limits, the updated fiscal framework no longer provides any additional boring for a Scottish economic shock. As members would recall previously, the economic shock provisions were provided in order to respond to forecast error rather than managing changes in resource spending. The updated fiscal framework also differs the decision on VAT Assignment in Scotland to a future joint executive committee meeting. At the committee's round-table discussion on VAT Assignment last month, the clear and unanimous consensus is that there is no form of VAT Assignment from Westminster to olderhood that could address the significant uncertainty and volatility that it poses to the Scottish budget. That is despite the best efforts of officials over many years to explore how that methodology might work. The significant issues that remain include that there will never be any reconciliation to actual Scottish VAT receipts, and the income from VAT receipts in the UK can be significantly revised retrospectively over a number of years. It will not be possible to directly link the Scottish Government's actions on the economy to subsequent changes in VAT receipts. Without policy control over setting VAT, assignment would be at all risk and no reward. As such, we believe that the joint executive committee should stop exploring the current VAT assignment methodology, and we welcome the Deputy First Minister's commitment to keep informed as informed of those discussions. The updated fiscal framework states will be reviewed periodically on a five-year basis, but not more than once in any Scottish or UK electoral cycle. With the UK general election horizon, the Deputy First Minister advised the committee that the framework has a number of asks of any incoming UK Government, and we are mindful of the experience of the Barnett formula, which was a temporary measure first introduced in 1973. As such, we seek assurances from the Scottish Government that a key ask of the next UK Government will be that the next fiscal framework review is significantly more substantial when it will enable this Parliament and stakeholders to actively participate in the review process. As that process this year concluded, I wish again to thank all the officials who have participated and helped ministers both north and south of the border in providing the updated fiscal framework review, which is beneficial to Scotland, although not as beneficial as we would like to see. Thank you, Mr Gibson. We will now move to the open debate. I would advise members that we have no time in hand and therefore any interventions taken, and the time must be absorbed within the member's own speaking allocation, which is up to six minutes. With that, I call Michelle Thomson to be followed by Brian Whittle, Ms Thomson. Thank you, Presiding Officer. Starting at the beginning, there is much commentary during the Covid crisis that some of the lending being made available was merely propping up zombie businesses. What do we mean by zombie businesses, Presiding Officer? Investopedia defines them as, and I quote, "...Zombies are countries that earn just enough money to continue operating and service debt, have no excess capital to invest to spur growth, are typically subject to higher borrowing costs and may be just one event away from a bail-out." Yes, I did say country rather than company deliberately, for that is the UK today, a zombie country. The UK that had the slowest recovery of all of the large advanced economies from the pandemic, the UK where growth lagged behind the average for both large and small advanced economies for the 40 years even before the pandemic, the UK that only today was ranked last in unicef's table of child poverty with the worst rise in child poverty between 2012 and 2019 out of the 39 world's richest countries. Thank goodness for the Scottish child payment. The UK, with Government debt equivalent to 97.8% of GDP at the end of October 2023. Economically, the UK is not okay, and anyone who says otherwise is either a fool or utterly disingenuous. I was personally wary about participating in this debate and shrinking my thinking to the tinkering with the fiscal framework, a framework designed to ensure heads the UK treasury wins and tails the UK treasury wins. I think the amendments to the motion are mostly ridiculous and show the posity of vision encapsulated in the zombie deniers seated opposite. The vast majority of monitoring fiscal policy resides with Westminster and it's this macroeconomic framing that we must not forget. I intend to focus my remarks today on the limitations for capital expenditure and the lack of prudential borrowing powers. Capital expenditure is a vital tool. Infrastructure development creates jobs, improves productivity, brings longer-term economic benefits, has a multiplier effect and is typically and normally used to encourage growth. Instead of looking down the barrel of a 7% cut over the next few years, the capital borrowing amounts have been retained with a mechanism to operate by inflation but tied to a GDP deflator, which is nowhere near inflation. The Deputy First Minister noted to the Finance Committee that, and I quote, the biggest challenge that we face comes from capital borrowing limits. We got as much as we could achieve but were just not able to expand the basket of measures that were being looked at. Interestingly, the comments of the DFM were followed by one of our officials who explained the Treasury view that as a zero-sum thing, as anything that it gave us would be a loss to its fiscal position. That is a working example of no detriment. The comment, more than anything, explains my opening remarks on why the UK is a zombie country and we are locked in to low growth. We cannot look forward to a change from the Labour Party either. Sir Keir Starmer has clearly indicated his intention to follow the exact same macroeconomic policies that have led us to this point. That leads us to alternatives. I am grateful for the report that Jim Cuthbert wrote for Commonwealth Incent to the Finance Committee. In it, he reminded us that PPP schemes and variants such as PPI were enthusiastically used by Tory and Labour alike. He also reminded us of the frankly staggering cost to the public purse, the lack of value and of the conclusion that was reached by the House of Commons Public Audits Committee in that it said that Treasury cannot provide evidence to support its claims that PFI is worthwhile for any reason, apart from the fact that it takes debt off the balance sheet. Of course, the UK Government is now retreated from the use of these schemes, but leaving both Scotland and Wales able to use more modern, yet still expensive variants such as a mutual investment model instead of proper capital borrowing powers. I conclude with a final remark. The convener of the Finance Committee noted how ridiculous it was that local councils can access prudential lending, but not the Scottish Government, despite that being part of the Smith commission's recommendations. I agree. Regrettably, that was not on the table, presumably because it might have brought some significant benefit to the people of Scotland. I am delighted to speak in this debate on behalf of the Scottish Conservatives. As people have said, there may be perhaps a rather dry topic but a hugely important one. The amendments to the fiscal framework adopted this August and agreed by Shona Robison are an adjustment from the original agreement signed by John Swinney in 2016. The updated arrangement will see the index per capital mechanism for calculating the grant adopted permanently, which protects the Scottish budget from the risk of slower population growth. The main impact, according to the independent report, is on the block grant adjustment for tax, which could be worth around £200 million a year after five years and circa £400 million after 10 years. A key element to Scotland's finances is the Parliament's ability to scrutinise public spending. Alongside the devolution of further powers to the Scottish Parliament, the Smith commission recommended that the Scottish Parliament should expand and strengthen independent financial scrutiny of Scotland's public finances. That is set against the worrying situation that was highlighted by my colleague Liz Smith around the increasing lack of transparency and scrutiny of the fiscal framework, as can be seen by the issues that the finance committee came up against when they sought to scrutinise said framework. That became so bad as to necessitate a letter from the convener to the committee to the Deputy First Minister, intimating that the level of scrutiny requested and agreed on by the Scottish Government was not delivered. Given that the committees of the Scottish Parliament are charmed with scrutinising Scottish Government policy, that is a worrying trend, mirrored with the on-going issues that Audit Scotland is having with financial transparency from the SNP Government. More especially because financial scrutiny of the fiscal framework impacts every aspect of public spend, and it is crucial to the future of Scotland's economy. That cannot be allowed to continue, I will give away. John Mason? We accept that this is also a problem at Westminster, because neither did their Parliament were able to scrutinise the agreement. I will not disagree with that. It is important for Governments to be transparent, and I will not argue with that one at all. Government is about choice and how those choices have been made. Increasingly, a veil of secrecy is descending on the SNP as the outcomes of their financial decisions are coming to the fore. The fiscal framework is about the devolution settlement, which in turn, as I said, funds our public services. It is about both Governments working together for the benefit of Scotland and the UK, which is exactly what the public want to see. The trouble is, Deputy Presiding Officer, that for the SNP Green Government to succeed on their ultimate objective, devolution has to fail. Let us face it that the Scottish Government funding and handling of our public services is hardly delivering the outcomes that we all want and the public need. We have a health service in crisis with record waiting times and consistent poor health outcomes, despite the Scottish Government consistently claiming that it has record investment. We have a housing emergency, and probably the most worrying of all, with the recent PISA results just published, we see the consequence of SNP mismanagement of the education system and letting down of our teachers and pupils, despite claims by the Scottish Government of increased numbers of teachers. I will give way to the cabinet secretary. I thank you for giving way to mention the issue of investment in public services. Does Brian Whittle believe that the autumn statement, which gave £10.8 million to the health service from consequentials, helps investment in the health service, or does he think that it hinders investment in the health service? When every commentating body has said the autumn statement, is it the expense of investment in public services? I thank the cabinet secretary for her intervention, because it allows me to highlight exactly how the SNP Government approached those questions, what they want to do here, they will say. On the one hand, they say that we have record investment, and on the other hand, they say that we do not have enough. It is outcomes that ultimately matter, and we have an increase in the waiting times in our health service, and we have increasingly poor health outcomes from our health service. How you spend the money matters. The fiscal framework is only one side of the coin. How the Scottish Government manages the budget is the other. Handily, of course, as we have just heard, they have a built-in excuse that everything bad is due to a lack of funding through the Barnett consequentials. It seems strange to me, we have a First Minister who at every First Minister's questions laments a lack of money through the Barnett formula, yet his and his party's solution is to be independent with the £10 billion black hole in finances that would ensue. It is a question that has dogged the SNP for years, and one that they have consistently refused to or been unable to answer, and it matters, Deputy Presiding Officer. I watched the Smith commission all those years ago, and I remember all the party's protagonists being interviewed about the process and the outcomes, and I remember John Swinney being very pragmatic, saying that he did not get all that he wanted, but got more than the other side had wanted to give, and that was the nature of negotiation. I thought to myself, what a very good way of summing up that process. However, the very next day, the very same Deputy First Minister and all of his parties every day since I was declaring to anyone who was holding a microphone that Scotland had been shortchanged, and I thought, if it was that bad, why did you sign the declaration? Deputy Presiding Officer, to an outsider, something as technical and complicated as the fiscal framework is pretty dry material for a speech. In fact, even to an insider is pretty dry material, but in closing I would like to quote from a speech by Charlie Munger, Vice-Chairman of Warran Bwphys Bertrae Hathaway, who died just a few days ago. In a speech to graduates at the University of South Carolina law school, he said this. The last idea that I want to give you is that you go out into a profession that frequently puts a lot of procedure and a lot of precaution and a lot of mum wajungo into what it does. This is not the highest form of civilisation that you can reach. The highest form that civilisation can reach is a seamless web of deserved trust. Not much procedure, just totally reliable people, correctly trusting one another. As I come to the end of the speech in Scotland's fiscal framework review, I'm going to ask, if more than anything, Scotland wouldn't benefit from a little more time spent by its government and politicians building trust and a little less procedural mum wajungo, Deputy Presiding Officer. Thank you, Mr Whittle. I call John Swinney to be followed by Alec Rowley. Mr Swinney. Having negotiated the inaugural fiscal framework in 2016, I know and appreciate how difficult a challenge it is for the Scottish Government to secure a broadly acceptable set of financial arrangements with the United Kingdom Treasury. I therefore warmly commend the Deputy First Minister for being able to secure the agreement that was announced some weeks ago and which is the subject of debate today. The agreement essentially represents a building upon the agreement that was put in place in 2016. Crucially, the agreement embeds on a permanent basis the use of the index per capita mechanism for calculating block grant adjustments. That was the key issue of negotiation in 2016. I can say to Brian Whittle that there would be no fiscal framework agreement, and there would have been no fiscal framework agreement in 2016 if that provision had not been in place. I made that expressly clear to committees of this Parliament on constant occasions. Indeed, I am reminded that in 2016, I am very sorry that Willie Rennie is not here for my speech today because I am going to mention him, that Willie Rennie said to the First Minister of the time in 2016 that the Scottish Government had made a fundamental error in accepting this model because we would never be able to protect it at the point of review. While the Deputy First Minister has just not only protected this model at review, she has embedded it permanently, which we were unable to secure in 2016, which is a formidable achievement. The model that underpins the fiscal framework is essential to protect the public finances of Scotland because we already carry population risk in the Barnett formula and the index per capita mechanism is almost necessary to provide the long-term stability. I am very glad to hear Mr Swinney making those comments. To give him credit in 2016, that was a difficult job. He did that job. The Deputy First Minister has done the job in 2023, so can I ask him if he disagrees with Ash Regan when she says that this particular fiscal framework is worse than the previous one? Yes, I do disagree with that point of view. I want to explain why I think that that is the case. Mr Marra has made a curious contribution. I cannot decide whether it was curious or churnlish. If Mr Marra speculated that he wanted more time to decide if the index per capita mechanism was preferable to the comparable method, the comparable method is the proposition of the Conservative treasury. Mr Rowley, over there on the Labour benches, had the good grace to recognise in 2016 the achievement that the Government had made by seeing off the comparable method. Here, Mr Marra is inviting the Conservative treasury to inflict it upon us. I have never heard such folly in my life. I can assure the member that he did not hear such folly here either. That is not what I said. I said that it would be good if the Parliament was able to scrutinise all the options and talk about them, to have them explained by the Deputy First Minister, the ups and downs, so that we can all get behind the conclusion that you have come to, if it is indeed the right one. If indeed it is the right one. I rest my case that Mr Marra speculates what is the right outcome. If he had gone back and looked at what Alex Rowley, Jackie Baillie and Crucially Malcolm Chisholm said in 2006, Malcolm Chisholm was my strongest ally in negotiating the outcome that I negotiated in 2016, because he could see the dangers of a rampant UK treasury on us with the comparable method that Mr Marra is now embracing. If Mr Marra is to be at the helm of negotiations in the future, Heaven help Scotland is all I can say. One of the reasons why the Scottish Government was able to negotiate in my view, and this is where I disagree with Ash Regan earlier on, a broadly acceptable fiscal framework in 2016 and to protect that at the point of review, was down to one word, and that word was agree. The Smith commission concluded that the Scottish Government and the UK Government must agree a fiscal framework. Not that the UK Government should consult with the Scottish Government, the usual weasel words. Not that there should be a discussion, but that the UK Government and the Scottish Government must agree a fiscal framework. I kept the Smith commission meeting late into the night to make sure that single word got into the agreement in the final wording, because my experience told me that if we did not have the ability to be treated as unequal in that conversation, we would be steamroled by the UK treasury. We now know that agreement mattered, because the independent report published around this agreement made clear that the fiscal framework arrangements and securing the index per capita mechanism, which I consider to have been a mighty achievement and essential for Scotland, have prevented the loss of approximately £500 million per annum from the public finances of Scotland. There is a deep lesson for Scotland in this respect, unless we are treated as equals, we are likely to lose out. Look at what has happened in other areas of intergovernmental relations. The passage of the internal market act without our consent has undermined devolution. The passage of the subsidy control act without our consent has undermined devolutions. Where we are not equals, we will lose out. That has been demonstrated in the autumn statement. We are losing out badly, because we are at the mercy of decisions taken to suit the political agenda of the United Kingdom Treasury, where it can use its power to overwhelm the interests of Scotland and where we are not treated as equals. I draw the simple lesson that Scotland will only prosper where we are treated as unequal, and I want us to be treated equally as an independent country. I now call Alex Rowley to be followed by John Mason. This debate is being held today with a background of financial instability, a sluggish performance Scottish and UK economy, and many of our public services are buckling under immense financial pressure. The fact that the Scottish and UK Governments have reached agreement on a fiscal framework, providing greater funding clarity for Scotland, is welcome, as is the news that some more flexibility on how the Scottish Government manages the public finances has been agreed. I have found that when asking people what is the fiscal framework, the most common answer is that it is very technical or it is very difficult to understand. Although complex, the fiscal framework sets out the rules for how devolution of tax and social security powers following the Scotland Act 2016 is supposed to work in terms of finances. It sets out the mechanisms by which the Scottish block grant is adjusted to reflect the fact that large amounts of tax and social security powers are now the responsibility of the Scottish Parliament. I note that the Scottish Government says that the agreement protects the Scottish budget from the risk of Scotland's population growing at a slower rate than the rest of the UK. That risk is a reality and is one of the many areas where the Government must use the powers that it has to address Scotland's population concerns by putting in place a coherent strategy to encourage people to come to Scotland, work in Scotland and make Scotland their home. I am sure that the Government will say that we need more powers over areas such as immigration, but that cannot be used as an excuse to do nothing to address the chronic lack of housing, poor skills and training opportunities, poor access to public services such as health and no industrial strategy for Scotland's future. Although welcome, the review has also come in for criticism in the way that it has been dealt with and the lack of wider inclusion in the discussions. Professor David Bell of Stirling University raised the issue by stating that the review is of substantial importance for the Scottish budget and therefore for the services that it delivers to the public during the cost of living crisis. He goes on to say why then has the review attracted so little interest from the public and the media other than the finance committee of the Scottish Parliament, especially when our report produced alongside colleagues from the Institute of Fiscal Studies and the University of Scrath Clyde show that different approaches to the fiscal framework could cause Scotland's budget to vary by hundreds of millions of pounds in the medium to long term. It is fair to ask the Scottish Government is this a short-term fix for a short-term budget pressures. Jim Cuthbert writing in common wheel argues that the review leaves Scotland exposed to the likelihood of being forced into a cycle of relative economic decline in comparison to the rest of the UK. He argues that because the review was conducted in secrecy we do not know how these dummies and outcomes came about. I think to answer the two fundamental points that Alex Rowley is making, we were absolutely keen to have transparency and openness, but the chief secretary of the Treasury wanted it to be conducted in a confidential space. Given that it had to be in agreement, I do not think that we would have made progress had that not been the case. In terms of the wider point of the narrowness of the review, we would have wanted it to be more expansive, but again if it is a negotiation you can only land on where there is negotiating space. Will Alex Rowley recognise the constraint that we were operating under? I think that a number of committees in this Parliament should have been engaged at an earlier stage in being involved in this. The last finance secretary, Kate Forbes, in June 2022, wrote to the Finance and Social Justice Committee informing them about the review and how it was planned. At that point she was definitely saying that there would be engagement and consultation with a number of parliamentary committees as the review progressed. The Government should have been pushing and should have been engaging with those committees. We have seen the experts in academia criticising the lack of that review. I would say that we need to stand up and be much firmer to defend the democratic rights of the committees of this Parliament and the wider consultation that should have taken place. The fair question for me is what changed—the cabinet secretary said that the UK Government changed its view. I do not think that we just have to cave in every time that the UK Government says that that is how it deals with those issues. However, I note that the Deputy First Minister welcomes the agreement and also says that we have a challenge in situation going forward. I would like to hear more from the Government about what it is going to do in terms of addressing our poorly performing economy here in Scotland. How will we use the budget? How will we address that? What is the plan? Does the agreement with the UK Government support or hinder economic growth and investment in public services? Likewise, there is no doubt that we are facing that challenge in situation. There is no doubt that we are facing that challenge in situation where many core services, as I have said, are buckling in central Government and local Government. In such circumstances, in conclusion, I believe that the question must be asked by the Government. Are we spending the money that we have in the most effective and efficient way? We know that it is going to be tough, but we must ensure that every penny, the taxpayer's money in Scotland, is being spent in the most effective and efficient way. I look forward to the budget. John Mason, to be followed by Ivan McKee up to six minutes. Thank you very much. I consider that the fiscal framework is an extremely important topic, although I accept that, for some people, it is a bit dry and technical, and they would prefer it to leave it to the finance committee and a few other anoracts to sort it out. We had expected that the initial report by David Bell, David Iser and David Phillips would be first published and then discussed to be followed by a wider-ranging review with at least some public input and debate around the options before the two Governments negotiated and reached an agreement. As it happened in 2016, the finance committee was probably willing to accept that at least some of the negotiations would be carried out in private between the two administrations. However, what we did not expect was the sudden announcement in August that the report was being published, the review had been greatly narrowed in scope and agreement had been reached all in one go. That meant that the opportunity for input and scrutiny by either Parliament or their committees was very limited indeed. Shora Robinson has told us that the Westminster Government made it clear that a wider review was not on the table, so that is the first problem. Even without Scotland being independent, if we had a federal system, as I think Gordon Brown suggested we might be close to, there would be a written constitution with certain checks and balances, but the severe downside of devolution is that ultimately Westminster is judge, jury and executioner. What they say goes, and if Wales, Scotland and Northern Ireland do not like it, well, tough luck. If Westminster says that a wider review is not on the table, then a wider review is not on the table. We are left in the position that there are some improvements over what was in place during the first five years, in particular some of the restrictions around borrowing are being eased, but even on borrowing it would have been good to see the introduction of a prudential framework. That is the system that local government has, that is that they can borrow what they can afford to service, rather than being limited by a fixed ceiling. That system has generally worked for local government, and I see no good reason why the Scottish Government could not have had that system as well. In fact, the Smith commission itself said that a prudential borrowing regime should be considered by both Governments. Of course, capital borrowing cannot just be spent on day-to-day expenditure, it is for the likes of building houses and electrifying the railways, which benefit Scotland's people and Scotland's economy in the longer term. However, perhaps the more serious implications of this second agreement is that we seem to be locked into a system that is weighted against Scotland. As economists Jim Cuthbert and Common Will point out, as others have referred to, the block grant system, even under the index per capita method, means that Scotland is engaged in a fiscal race with the rest of the UK. Generally speaking, we do match or outperform regions of England, Wales and Northern Ireland, for example on inward investment. However, the problem is London and the south-east of England, as Ash Regan pointed out. No other region of Europe has been able to match that region, so it should be little surprised that Scotland toils to do so, as well. If London and the south-east is such a huge cash cow for Scotland, why on earth do you want to sever ties with it? I am just going to quote somebody just in a two paragraph, so if you just wait—I shall get to that quote, which he may remember—for example, if you look at output per hour or output per job under London and the south-east, only London and the south-east are above the UK average. Scotland comes third but is still below the UK average while being ahead of every other part. I am reminded of the words of Vince Cable 10 years ago in December 2013, when he said, one of the big problems that we have at the moment is that London is becoming a kind of giant suction machine draining the life out of the rest of the country. He said, more balance in that respect would be helpful, will I agree with him? Although we have the per capita method, a lack of immigration to Scotland holds back our economy, I would argue that the fact that we do not get our fair share of immigration is outwith the Scottish Government's control. One reason, for example, would be that people already have family connections in London or the English Midlands, so they want to stay there. The independent report noted that the Smith commission did not say that the Scottish budget should bear the risk of all divergence in tax revenue growth, but only the divergence that is the result of policy decisions. However, because it is so difficult or even impossible to identify the causes of divergent revenue growth, we end up taking all of the risks, even those outwith our control. It is worth noting the Barnett formula 2 at this point. The other week I asked about the convergence and spending that the Barnett formula was intended to have. The answer from David Phillips of IFS was that this convergence had not really happened before 2020 but is happening now. In 2019, spend per capita in Scotland for devolved services was about 129 per cent of the average for England. It is now about 125 per cent. He expects that by the close of this decade it will be about 122 and will fall below 120 by the mid-2030s. In the longer term, given current population projections, he expects that to converge to around 115 per cent. All in all, we were promised a union dividend if we stayed in the UK, and some people probably voted no in the 2014 referendum, believing that we would be better off financially if London paid the bills. However, now we see that any union dividend is being increasingly eroded, any advantages of being in the UK are being lost year by year, day by day. While we are at it, there seems to be an increasingly arrogant and disparaging attitude from Westminster towards this Parliament. In the past, Treasury ministers appeared before the Finance Committee, as Kenny Gibson said a number of times, but they adamantly refuse to do so now, saying that they are only answerable to MPs and even ministers who agree to come keep postponing the date. As the motion says, we recognise the limited improvements, but there is something fundamentally flawed in the relationship between Scotland and Westminster, and one of those days it will have to be sorted. Ivan McKee to be followed by Richard Leonard up to six minutes, Mr McKee. Delighted to speak in this debate today, and one thing I will agree with Michael Marr. Probably the only thing I will agree with him in my speech today is that it would be good to have more economy and finance debates in this chamber. I recognise the progress in securing the deal on the fiscal framework and thanks to all those involved in those negotiations. Particularly, of course, the much-mentioned securing of index per capita methodology versus the comparable method for the long term. Of course, that is all based on Scotland's population growth or lack of it, which I will return to later in my remarks. Of course, we have secured the welcome increase in borrowing limits, not enough of course, and the use of reserves is welcome, as is inflation proofing. As I say, that is not enough because, given the scale of the fiscal shocks that have occurred and will occur potentially going forward, whether it breaks the Covid austerity and whatever else is around the corner, as Mr Swinney is referencing, it is hugely important that we have the ability to have as much flexibility around those fiscal measures as possible. Of course, the key point, as the DFM has highlighted, is that we are still at the mercy of UK policy decisions taking up Westminster very often, not with Scotland's interests at heart. The DFM has outlined the impact of Tory austerity on public service funding going forward with the recent autumn statement. Of course, that goes from Labour, I am not encouraging. We have now got Keir Starmer praising Margaret Thatcher, which is not boding well for any potential future UK Labour Government with regards to its approach to those policies. It is important to remember what leavers are not devolved. We talk about income tax, but much of income tax around dividends and savings is not devolved and that limits the possibility and the options for Scottish policy to be able to mitigate against behavioural impact, something that impacts significantly on the tax measures that we have taken in this regard recently. Of course, the full range of business taxation, corporation tax, investment breaks and so on and so forth are not devolved, which limits the ability of the Scottish Government to direct support and taxation measures that will help to stimulate and support economic growth within our economy, tailored to the sectors and the opportunities that we have within the Scottish economy. It was interesting that Liz Smith, the straight of the blocks, was quite clear about where, as we are trying to get to, our ultimate goal is to have no need for the fiscal framework when Scotland has full control over economic policy. Certainly, on those benches, we are working very hard to secure as soon as possible. It is helpful to see the fiscal framework as a stepping stone to those full powers of economic independence and the complexities that are being referenced in that. Frankly, that will be glad to see the back of when we move beyond the need to have to negotiate the complex situation with the UK Government once we have those full powers. Of course, Scotland has full powers over borrowing. It will be interesting to see when we are independent, so it will be interesting to see in the meantime how the issue of Scottish bonds or cults will be taken forward over the next period. I look forward to seeing how that develops with interest. The Scottish Government needs to continue, of course, to negotiate with Westminster to get the best deal while we are under devolution, but also, at the same time, with a focus on the preparations that we need to do to deal with and use to best effect the full powers of independence when they come to this Parliament, hopefully in the not-too-distant future. On immigration powers and returning to the comments on population and the impact that that has had on potential funding solutions going forward. With full immigration powers, we can of course focus on growing Scotland's population in the way that it needs to. A very different approach from the UK Government's obsession with reducing immigration that we saw again this week and again Labour mirroring those policies and that approach again with their clarity from them on support for the misguided policy of Brexit. Of course, in the meantime, it is very important that we use the powers that we do have and that people tend to forget. I will make the point again, because it is very well worth making. More people move from the rest of the UK working age population to Scotland and move in the opposite direction, something that we need to encourage more of in the current context to maximise Scotland's population. With pulling all the right levers, I believe that we can secure Scottish population growth even under the current settlement that matches that of the rest of the UK. On economic powers, we can of course focus those on growing Scotland's economy. I would take some issue if I have understood them correctly. I apologise for having with Jim Cuthbert's very helpful paper, which seems to assume that tax cuts are the only way to grow an economy. I would argue that that is absolutely not the only way to grow the economy—an intelligent focus on business growth and stimulating businesses through that regard and supporting the sectors that are the future of the world economy. Indeed, Scotland has great potential as a way to do that. We should be doing of course as much of that as we can under the current settlement but continuing to focus and argue for more powers. In conclusion, I take issue with the comments that Brian Whittle made. I think that I have heard them right. He said that it is in our interests for devolution not to work, quite the contrary. At the end of the day, the people of Scotland will support and depend as it will become the settled will of the people of Scotland when they see excellent delivery from this Government with the powers that we have. We need to continue to move forward and deliver on that while at the same time arguing for more and more powers to come to this Parliament and in the meantime, thank you very much for saying that. Thank you, Mr McKee. I now call Richard Leonard to be followed by Stuart McMillan up to six minutes. Thank you, Deputy Presiding Officer. If devolution is a process not an event, the long-awaited outcome of this fiscal framework review is less like an advance and more like a stoppage. The Government motion before us this afternoon speaks of, and I quote, limited improvements and of limited progress. It is a quite deliberate, calculated selection of vocabulary intended to connors into talking of the limits of devolution, why devolution does not work, why devolution cannot work, why devolution should be scrapped, because, if we are honest, that is the Government's policy. That is what is in today's Government motion. The real limits, which the outcome of the fiscal framework lays bare, is the limited ambition and limited horizons of this Government on fiscal reform. It lays bare once again the limited acquaintance of this Government with transparency and openness, with engagement, with scrutiny, with meaningful consultation. I am bound to say that it lays bare the limited negotiating skills of the Deputy First Minister and the unlimited mediocrity and complacency of the Cabinet which surrounds it. Our starting point is that the fiscal framework which the Cabinet Secretary of State's predecessor signed up to in 2016 was both a rushed deal and a bad deal. Of course, it is good that Scotland benefits in full from tax revenues which are raised as a result of Scottish Parliament fiscal policy decisions, but what is not so good is that, if the Scottish economy performs poorly compared to the rest of the UK, including London and the south-east, if we have no economic plan, no industrial strategy, no jobs first, just transition plan but we leave it to market forces, if we experience a downturn in a sector like oil and gas, then the block grant is cut. What is also defective, what is also bad about this deal, is that, if more people are in receipt of social security payments in Scotland relative to the rest of the UK, then there is another cut in the block grant. We are told that this is applying, I quote, the economic responsibility principle, but I have to say that it is a so-called principle which is morally irresponsible, socially counterintuitive and economically counterproductive. Block grant adjustments on social security should not be downwards, they should be upwards on the principle of to each according to their need, from each according to their means. Let's be clear that what we have before us are what the Institute for Fiscal Studies describes as the modest changes to borrowing and revenue power. We have got to be more radical, bolder, we have got to be better than that. It is my view, and it may not be Labour Party policy anymore, but it remains my view, that the Scottish Government should be able to borrow and issue bonds prudentially for both revenue and capital spending without restriction. Why shouldn't this Parliament at least have parity with our local councils? It also remains my view that the treasuries cap on the amount of reserves that can be held by the Scottish Government should be completely removed, that those decisions should be entirely devolved. In its medium-term financial strategy, which it launched back in May, the Government set out its negotiation aims for the fiscal framework review, and let me quote them. The planned review of the fiscal framework is an important opportunity to address the limitations of borrowing and reserve powers, but those limitations have not been addressed at all. There has been limited engagement because this nationalist Government does not want it to be reformed, does not want it to be successful. The deputy First Minister would rather appear on national television and announce public service job cuts that the public sector workforce will have to shrink than come to this Parliament and hold a proper debate and find solutions. Those matters are not complicated, they are simple, they are not technical, they are political. This is no time for tinkering around the edges. The Government has negotiated a bad deal. The Deputy First Minister's depiction of the changes as balanced and pragmatic—that is what she told me when she wrote to me on 2 August—is selling the people a long way short. In the end, it is a review with an agreement between two Governments, which we, as a Parliament, are being asked to assent to. We should not, in all conscience, agree to these terms, to this limited vision or to this abject abandonment of any fighting spirit. We need a new deal, a new fiscal framework, a fresh start and this is not it. Stuart McMillan, who is the final speaker in the open debate, is up to six minutes. First of all, just a wee comment regarding Richard Leonard. Mr Leonard, devolution limits ambition, not independence. A comment to Mr Marra. Mr Marra spoke in his earlier comments regarding the fiscal framework. If Labour were to win the next UK election, there should be further discussions, but what Mr Marra did not say was that more money would actually come to Scotland with those future discussions. I have heard a lot today across the chamber and it will come as no surprise that I certainly will not be supporting some of the amendments, especially all the amendments that we have got in front of us. I know that the Lib Dem amendment speaks positively about the Smith commission report of 2014. That will be the same Smith commission that, in section 18, does not prevent, and I quote, Scotland becoming an independent country in the future should the people of Scotland so choose. It is a pity that the Lib Dems are on the same page as other pro-union parties want to prevent people in Scotland from having their say. First of all, I welcome the modest or limited improvements in the fiscal framework, such as the indexed per capita mechanism for calculating block grant adjustments to be adopted on a permanent basis. The amount that the Scottish Government can borrow may mitigate against the errors in forecasting to increase from £300 million to £600 million, with no limits to the amount that can be drawn from the Scotland reserve and also the borrowing and reserve limits to grow in line with inflation. However, the sad reality of the situation is that those changes will not be able to protect Scotland and our economy or social fabric in the years ahead. Only independence and access to the full range of powers will be able to do that, since the fiscal framework was agreed in early 2016. It has been thoroughly stress tested. Michael Marra Does Stuart McMillan recognise, along with any objective academic look at this, that there would be significant immediate fiscal costs to independence? We are having a fiscal debate here, with a little bit of honesty, between £10 billion and £14 billion immediately in terms of the amount of money that is available to Scotland. I look at the situation that we have actually had. It has certainly come back to the 1970s. The amount of money that Scotland—additional money that Scotland has put into the treasury in comparison to what we have received back. I know that independence is only a way forward for Scotland. It is the only way for Scotland to deal with many of the issues that we face as a society. It is not with the limited powers of devolution that it is certainly not the situation that we had pre-devolution when all the powers were reserved to Westminster. I generally do believe that it was right that the arrangements were reviewed. Taken together and within the context of the narrowly scoped review that was an offer, those are meaningful but limited improvements to the framework and the financial management tools that are available to the Scottish Government. We should not lose sight of the scale of the fiscal challenge in the aftermath of the Covid pandemic, the on-going costs of living crisis and the urgent need to tackle the climate change in addition to the fact that we have had such an economic shock because of Brexit brought on by the Tories. Although the changes to the framework are welcome, they are not the size needed to offset the broader fiscal challenge that we have actually faced. That requires action by the UK Government. The Scottish Government will still need to make tough choices in the context of a poorly performing UK economy and the constraints of devolution to ensure that finances remain sustainable. Sadly, Scotland is once again at the mercy of poor UK Government decisions that compound the pressures on our public finances and increase the misery that struggling households face. Neither Rishisunak nor Keir Starmer will change course from the damaging Westminster policies that got the UK into this mess in the first place. As a result of the UK Government's disastrous handling of the economy, projected growth is just not 0.7 per cent next year and inflation is still running at more than twice the UK Government's target. Living standards are forecast to be three and a half percent lower in 2024-25 than pre-pandemic, and that would be the largest reduction in real living standards since records began in the 1950s. Ultimately, Westminster is holding Scotland back. Brexit is making us poorer and continued Westminster control is making the situation worse. This week alone, we heard from Labour's Sir Keir Starmer, the newest member of the Margaret Thatcher fanclub, and he said, and I quote, anyone who expects an incoming Labour Government to quickly turn on the spending taps is going to be disappointed. He also said that this UK Parliament is on track to be the first in modern history where living standards in this country, i.e. the UK, have actually contracted. Household income growth is down by 3.1 per cent and Britain is worse off. I generally am sure that I will encourage many people in Scotland to pay attention to this particular point, and I know that this will actually change the minds of many people in Scotland when it comes to the issue of independence. Keir Starmer also said, this is Britain going backwards. This is worse than the 1970s, worse than the recessions of the 1980s and the 1990s and worse even than the great crash of 2008. With an economic record like this going back to the 1970s according to Labour, but to the 1950s according to the official records, why on earth would Scots want to continue living in a political environment where the only thing that is going to be guaranteed is for more poverty, desperation and misery that is so prevalent within this so-called union? Britain is bankrupt and it is also broken. It is also morally bankrupt. We have considered a lot of the policies that the Tories have actually brought on and not on many of our people in our country. One example in particular is the waspy women. They have been robbed of their pensions and that is absolutely shocking. I certainly mean that I could go on but I know that I do not have the time, so the fiscal framework may help a little but it still falls far short of what is needed and that is independence. In my opening remarks, I set out my conceptualisation of responsibility without power being a very dismal situation to find yourself in. My motion speaks about VAT, so I want to just take a little bit of time just to talk that over because I think that it also goes some way to reinforcing that conceptualisation. The Scotland Act of 2016 states that receipts from the first 10 pence of standard rate of VAT and the first 2.5 pence of reduced rate of VAT in Scotland would be assigned to the Scottish Government's budget. VAT would be the second largest source of tax revenue for the Scottish Government after income tax. Despite that, the new framework has not managed to navigate a path in order to deliver it. Of course, the key word above there is assigned. I will give away. Is she aware of the fact that when the current finance committee took evidence about this VAT assignment and when our predecessor committee, the finance and constitution committee, took evidence, I am afraid that there was unanimity that it was far too difficult and complex to make that assignment. I understand that, but there is a metaphor for the physical framework as a whole. It is complicated and difficult to get it to work in Scotland's favour. We have heard that across the chamber today. VAT being assigned rather than devolved means that, even if the promises of the Smith commission were delivered, the Scottish Government would not have any direct policy control over VAT. If the framework allowed for VAT to come to the Scottish budget as it is supposed to do, VAT will continue to be collected by HMRC at the UK level. The amount of tax that is assigned to Scotland would require to be estimated using a model developed by HMRC, the Treasury and the Scottish Government, which makes the point that the member has just raised about the complexity of it. However, the VAT assignment, a further 15 per cent of the Scottish budget would be based on VAT revenues raised in Scotland, but we need to think about that. That would be 15 per cent of the entire Scottish budget, but no control—that is the key point here—for the Scottish Government as to what VAT should be set at. I think that that goes in some way to illustrating the difficulty for Scotland in the framework, whether it is the previous framework or the revised one. I remember that some time ago, when I was on the finance and constitution committee, as it used to be called back in 2016, I listened to presentations where they were setting out from experts, setting out the previous fiscal framework at that time. I understood that the way it was constructed made it extremely difficult, if not impossible, for Scotland to succeed under that framework. I am afraid that nothing that I have heard since then and nothing that I have heard today has convinced me otherwise on that point. I want to take a little bit of time now to talk about the debates that we have taken part in this afternoon. Michael Marra is generally a fairly dispiriting speech. However, he did make some interesting and important remarks around the issues of timing, secrecy and scrutiny on the review process. I know that we have said that this afternoon that this is probably quite a dry subject, but it is very important to Scotland that there should be potentially more involvement for the public, more involvement for parliamentary committees and experts. That was picked up as well by Kenny Gibson. He spoke particularly about more involvement for the Scottish Parliament, and I am sure for the committee that he is involved in. Michelle Thompson echoed my own comments when she spoke about PPP and the very, very poor value that it represents to the public purse, and how, although the UK has now been able to, it is in this privileged position where it can now move away from this model of funding public infrastructure, while the Scotland does not end such a privileged position and the Frisco framework is locking Scotland into its use, and I think that that should be of interest to everybody in this chamber. Ivan McKee spoke about Jim Cuthbert, and he used the quote that tax cuts are the only way to grow the economy. He admitted that he was not sure if that was the point that Mr Cuthbert was going for. I do not believe that that is what he was saying. I think that what Mr Cuthbert is reflecting there in that comment was, in fact, the Treasury view. The Treasury view, of course, being that the only way that Scotland could minimise economic harm to itself via the Frisco framework is to accept that economic straight jacket that the Conservatives would propose to Scotland. In my earlier remarks, I focused on what my view is that, in comparison to the full flexibility that we might have with the full fiscal autonomy that this new Frisco framework, this review is, in fact, a bad deal for Scotland. No amount of tinkering around the edges will suffice to change my view on that. I am sure that the Scottish Government benches will agree with me that only with the powers of independence can Scotland truly flourish and grow and only with economic separation from Westminster can we ensure that our policy priorities, those of the Scottish people, are matched by the fiscal levers of the Scottish Government. However, we can, of course, only have those levers and Scotland can only have that power by becoming an independent country. Thank you very much, Presiding Officer. I have welcomed this afternoon's robust debate. Broadly, I welcome the steps that the Government has taken to get the framework to where it is, particularly around embedding the per capita nature of it. The Deputy First Minister and I will agree on several aspects of the conduct of the UK Government and the decisions in particular taken by HM Treasury, which have held our economy back and cost our constituents dearly. The disastrous incompetence of the trust's quarteng plan will have ramifications for household budgets for years, particularly mortgages and the price people pay in the shops, but they are not alone in being held to blame. Much of that lies at the door of St Andrew's house, too. In terms of a stagnant growth outlook for our economy, the Scottish Government is principally to blame for that. The Deputy First Minister asks for the devolution in her motion of all fiscal levers to the Scottish Government but does not inspire confidence that they would know what to do with them if they were so offered. A decade and more to establish a welfare system that they said would only take 18 months. Liz Smith, I think that I was quite right to say that this debate really matters, this framework really matters, not just the mechanics of financial interplay but also in the co-operation that should always exist between our two Governments. We need grown-ups at the helm and we need those grown-ups in a room talking about the interests of the people we are all sent here to represent. It is the duty of Scottish ministers to therefore use that framework to get the best deal through the framework for all of our constituents. This fiscal framework is about respect. It is about respect across levels of Government, and here there is an irony that you could find it hard to escape. I come back to the Verity House agreement. That is not a fiscal framework, but that did point to a fiscal framework that it is hoped will be established between Central and Local Government in the coming months. It talked about a presumption against ring ffencing, about allowing authorities to take, create and control of the financial levers that can make decisions, robust decisions for the interests of their communities. As I say, it called for an establishment of its own localised fiscal framework, but that respect and that trust were shattered by this Government at the SNP conference with the announcement about council tax. Laying aside the merits or otherwise of that policy, it shows a level of contempt that this Government has shown for local authorities, not just in the policies that it enacts, but also in the way that it has asset stripped them over the years in the budget block grant. Michael Marra brought us back to the topic of growth, or the lack thereof, because much of that failure is entirely homegrown. The environment for business investment is hardly inviting at the moment. Indeed, green ministers who are manifestly disinterested in national growth are presiding over things like a deposit return scheme that, had it not been abandoned, would have seen Scottish products removed from Scottish shelves. I do not have time to go through every other speech, but I did want to thank Richard Leonard for injecting a little bit of life into an otherwise quite stuffy debate. Before I move on to the substance of my remarks, I welcome her to her place as the leader of the Alba party. I am interested in aspects of her motion. We will not be supporting it today, but I would be interested to hear more from the minister about the discussions that were had between the two Governments on VAT. I have to say that our approach is that we should not devolve just for show and changes to how we are governed should be underpinned by a clear framework and understanding of how it will make people better off, how it will grow our economy and how it will make a difference. I am not clear that the aspects of around VAT in Ashrygiens motion adequately explain that. John Swinney's microphone, please. I am grateful, Presiding Officer. If I can help Mr Cole-Hamilton on this particular point about VAT assignment, the drift of the conversation in the Smith commission was entirely about assigning VAT for the purposes of show, so that the proportion of revenues that could were supposedly under the control of the Scottish Government and the Scottish Parliament could be demonstrated to be over 50 per cent. It was a fig leaf. I am grateful to the former Deputy First Minister for his intervention and I bowed to his superior knowledge having sat on that commission. I think that he underscores my point that there is no point in devolving powers if it does not mean anything. To create opportunities to grow the tax base, we need to end the era of the meager growth that we have been living in. Scotland has all the ingredients needed to be at the forefront of industries, including things like life sciences, green energy and fintech, but in the SNP we have a chef that just cannot be trusted to bring those ingredients together. We need to start by investing in our people and nowhere does that more important than in education because Scotland needs the best skills and we are to compete with the world to make things, to imagine things again, to create opportunities for our young people, but we saw the worrying trend against that in the PISA statistics out yesterday. Michael Marra was quite right to bring her attention back to that, to hear yesterday on national television Stephen Flynn, the leader of the SNP at Westminster, to tell Sky News that it was not the SNP's fault, it was an insult. He sought to blame the decline in our international standards on a Liberal Democrat Labour Government that left power 16 years ago. Our teachers and our pupils deserve so much better than denial and deflection. Now we have seen the worst ever results across reading, science and maths with England performing better on every single measure. Performance has slipped under the SNP and if Stephen Flynn can't accept that then people will have no faith in the Government's ability to get us back to where we could be. I can see that you want me to conclude, Presiding Officer. I have a lot more to say, not least on health, because when we don't have a healthy workforce we cannot grow our economy but I will rest on my remarks and move the motion in my name. Thank you very much and I call Michael Marra up to six minutes, Mr Marra. Thank you, Presiding Officer, and thank you to all members who have contributed to the debate this afternoon. Starting in terms of a Stuart McMillan's contribution, I very much agree in terms of the huge challenge, I think, and the wake-up column, the level of falling living standards across the whole of the UK that we are seeing and what that should be telling us all about the direction that our economy has taken. We would entirely agree about just how poor the terrible Tory autumn statement was and it comes from a Government that thankfully is running out of time. They have left our economy in a parlous state, a stagnant state and there is nothing that Jeremy Hunt said or did in the autumn statement that will have changed that. They bear huge responsibility for our record fall in living standards and what is a woeful outlook for economic growth for this country. In Scotland we have been lumbered, I am afraid, with two incompetent Governments and they are each more interested in stoking division and blaming each other rather than facing the consequences of their 16 and 13 years of decision making respectively. It is on that basis that we will not be supporting the Tory amendment tonight, as we do not believe that either Government is delivering in the words of the amendment the best outcomes for the Scottish economy. Alex Cole-Hamilton made some very good play in terms of the importance of economic growth and how vital that is to the future of our citizens and to our country and, yes, to our public finances. If we are to change the situation of the finances that we described—I am just getting started, but thank you—we are to change the state of our public finances and we would want to see growth in our economy and make sure that we can raise the wages of Scots. Labour will also not be voting for the ALBA amendment tonight, which gets the party off to a flying start in the chamber. The finance committee has heard a considerable amount of evidence, as various members have said, on VAT assignment over the years. At the most recent round table of 14 November, witnesses and members were in a broad agreement that VAT assignment had significant practical barriers and with fairly limited benefits to Scotland. It is fair to say that, as my experience of ALBA on the internet is limited as that is, it seems to be unencumbered or troubled by evidence or reality. I am sorry that my address for Aasrigam is slightly disparating today. I have to say that I have enjoyed her contribution, both of them, particularly her reflections on our time in government and the poster, the record of our erstwhile colleagues. She talked about the trap of this fiscal framework, designed perhaps by Michelle Thompson-Zombies. I think that she had a common concern between the two of them about the nothing that she had to say about the £11 billion economic cost of independence and the £14 billion fiscal cost that would be immediate. Had he been in the Deputy First Minister's shoes, would the Labour Party have signed up to the fiscal framework? I think that it is a good question. Much of what was agreed, I think that we have supported and we are certainly supportive of it in those broad terms. I do not believe that we would have liked to have come from this original starting point, which the Deputy First Minister found herself in, which was in a rushed decision to try and grasp on to the borrowing requirements that were there. I think that that takes me to the points that were made by Kenneth Gibson, the convener of the Finance and Public Administration Committee. He shared his regrets, all of the committee's regrets about the process, and John Mason laid some of those out as well. However, he does not really necessarily share my analysis as to why the agreement was so hastily reached. I do not really understand, in part, the dynamics in a striking agreement, in which we have two signatories, and one of those signatures can be withheld in holding out, perhaps indefinitely, should the Deputy First Minister have chosen to do so for a better deal. There was something in the motivation of the Deputy First Minister to get that deal done and quickly. I believe in that respect that they have sacrificed the long-term prospects for their short-term political benefit. I would say that, within that, we continue—and I think that it has been a feature of the debate—to share those concerns by members across all parties about the lack of scrutiny, the public debate that would have actually assisted the Government, frankly, I believe, in their job. There is welcome news from the courts this afternoon that the Scottish Government defeated in their attempt to shut down freedom of information in this country. However, as the Labour amendment states, we regret the approach that it has taken in this manner around the fiscal framework. It is an approach that has become far too common for the Government. It might be too technical, in the words of the Deputy First Minister, but I do not think that that should preclude proper public scrutiny. No matter what John Swinney might say or posture around my own contribution, luckily we have the official record that can show that perhaps his remarks have certainly not been curious, but they were certainly spurious in that regard. However, those are very serious matters, which we are speaking about today. They are very significant for the future of the country, very significant for our fiscal health in this country and the budget that we are going to see in a few weeks' time, where I am sure that the Deputy First Minister will be using those powers to their full extent. I thank the officials behind the scenes, who I think really did a very difficult and complex job. I know that there are issues about scrutiny, and I think that those will be well made. The Finance Committee has already said a lot about some concerns over that scrutiny, and perhaps we have to look to rectify that when we come to the next fiscal framework. However, I think that the officials were working incredibly hard for a long period of time in coming to an agreement. John Swinney is right to point to the word agreement, because that is what it has to be. Despite the fact that we have fundamental differences in our constitutional approaches, we obviously want different things. However, that fiscal framework is about the current constitutional setup. That is why it is important that it is in agreement and that both Governments do the best on behalf of Scotland, hence the reason why my amendment says what it does. I am grateful to Liz Smith for giving way. On the substantive point that she makes about the welcome nature of a process of agreement, does she reflect the experience that we have had since Brexit, where the Seoul convention, where the UK Government, up until 2019, indicated that it would not normally legislate against the consent of the Scottish Parliament, has now been breached on nine occasions since Brexit? Does she think that that is in the spirit of what we should reasonably expect in intergovernmental relations between the Scottish and the United Kingdom Government and Liz Smith? I think that intergovernmental relations could be improved. I think that there are messages on both sides of that agreement as to why they could be improved. That is an important message for this Parliament as well, just as much as it is for Westminster. I think that this debate was perhaps more interesting than some of us thought it was going to be. In some cases, in fact, it was quite entertaining. Mr Leonard likes to take the back seat at the top of the chamber there. Maybe a little bit of advice that perhaps if he moved a bit further to the front, he would be able to see the face of his front bench when he is making those points in his Arthur Scargal-esque terms, because I do not think that Mr Marrake was in agreement with what Mr Leonard was saying. I may be wrong, but I just get a hunch that there is no agreement there at all. Maybe a fiscal framework between the two of you might be a good thing. We have talked a little bit—my colleague Brian Whittle mentioned the word trust, and that is trust, not trust. Trust is important—very important. Alex Cole-Hamilton raised this issue about trust between the Scottish Government and local government. I think that this Parliament has got a duty and a responsibility to think about how that trust can be built upon and enhanced, because clearly there are issues within local government, just now, as Alex Cole-Hamilton quite rightly said, where that trust has been undermined. If we are going to have better relationships between the Scottish Government and the UK Government, then that has to be built on trust. I want to say a little bit about the three Davids who put together the independent report, because not enough has been said about them. It was an independent report, taking out the politics as much as was possible to do. That is a difficult issue when it comes to the fiscal framework, but their report was extremely important in getting behind the politics. In their executive summary, they said something very interesting that both Governments have a duty to set out transparently the reliability for the fiscal framework and the decisions that it has to make. I think that that is important, because they were doing their level best in very difficult circumstances and very complex formula to be able to do that. I think that they deserve a great praise for every attention given to detail when it came to the finance committee. I cannot thank them enough, and I am sure that I speak on behalf of my colleagues in the finance committee for just how much we owe a debt to them for making something that is more intelligible than many people think the fiscal framework is. Mr McKee made some interesting points in his speech. Mr McKee, when he was a minister, was listening to business. I am quite sure that when that business community is speaking to Mr McKee just now, he will be putting to Mr McKee quite a lot of points about taxation that he raised in his speech. I can put a lot of money on the fact that the business community is telling Mr McKee that the last thing that business wants is a high-tax Scottish economy, where people who are hopefully coming to work and live and invest here feel slightly aggrieved about that. That is the last thing that Scotland needs. That fiscal framework is so important for this Parliament and for the Scottish economy. I think that putting the constitutional politics aside, which is very difficult, but it really matters that we look at it from as objective an analysis that we can, and we take on board the advice that is given to us from independent economists and the academics on whom we rely so much for the information and on the Scottish Fiscal Commission. I say at the end that I think that the debate is very important. I think that it is definitely to be continued, but once again thank you to those who were involved in signing the agreement and all those who worked behind the scenes, because it really means an awful lot. Thank you very much. I begin by joining the Deputy First Minister and colleagues from around the chamber in paying tribute and expressing my thanks to both Scottish Government and UK Government officials for their work in ensuring that we have reached this agreement in this revised fiscal framework. I join Liz Smith, and I am sure that others would want to join me as well in thanking the offers of the independent report. I also pay tribute to the work of the Deputy First Minister in securing this deal and John Swinney in his work in progressing this deal and the original fiscal framework, along with my colleague Kate Forbes, when she had this particular responsibility. John Swinney's contribution served as a timely reminder for just how hard-fought and how hard-gamed these powers are that we now enjoy, and that is something that we should always bear in mind. Even when we are having a debate like this, which at times could perhaps be try and technical, it is of fundamental importance to the people of Scotland because it ultimately dictates the revenue that we have at our disposal to fund public services upon which we all depend, but those powers did not arise by themselves. They are the result of hard negotiation, and they are also the result of clear views that are expressed by the Scottish people. Just as constitutional change in previous decades, whether that be co-branding the Scotland Act of the 70s or indeed the constitutional convention of the 80s, followed on from our coincided with significant SNP advances, so the further devolution we have seen come to this Parliament followed on from the SNP's victory in 2007, and the powers that we are debating tribally today are a direct consequence of so many people choosing to vote for independence only 10 years ago in the independence referendum. We are, of course, taking forward the review of the fiscal framework that we are operating within a number of contexts. I have heard some colleagues ask why more could not have been achieved. It is a fair question to ask, but at times it ignores the reality that we are two partners within a negotiation, and we are ultimately limited by how much the UK Government wishes to concede, and we have sought to engage in these negotiations in a mature way to go and deliver the best outcome, and in doing so have not sought to make the perfect the enemy of the good. I am grateful to the minister for giving way. Does he accept, however, that the UK Government did listen to the requests of the Scottish Government when it came to inflation proofing the change and to ensuring that there was greater flexibility on the borrowing powers that you have, and to ensuring that it was more responsive to exogenous shocks? That was the difference between the 2016 and the 2023 fiscal framework. As we have recognised, we recognise us as significant progress. I pay tribute to the UK Government officials and, indeed, to the former chief secretary of the Treasury. It is, of course, not all that we would want, but it does respond to some of our concerns, and I know that it responds to some of the concerns that the Parliament has expressed as well. We are also operating within the context of the Smith commission principles. Those principles are cross-party in origin. I know the comments that Liz Smith made in her remarks, and, of course, the Government would listen with interest to any further considerations that members or, indeed, any committees of the Parliament may have with regard to the Smith principles going forward. The final point that I want to speak about in terms of context is the fiscal framework that we are operating in. While we may discuss the fiscal framework in abstract terms, in reality, that is about how resources are allocated. Ultimately, any framework in terms of its outputs is only going to be as good as its inputs. The situation that we find ourselves in, as the Scottish Government motion makes clear, is grave. We face the most profound set of fiscal challenges that any Government has experienced under devolution, and that is not unique to Scotland. We know that the situation in Wales is just as grave. In October, the Welsh Government set out that it needed to find £600 million in savings before the end of the financial year. Accounting for differences in size of our budget, that would be the equivalent of over £1 billion in Scotland. In terms of the context that we have moving into the next financial year, the UK Government has not inflation-proofed their capital budget, which is forecast to result in a 9.8 per cent real-terms cut in our UK capital funding over the medium term between 23, 24 and 27, 28. Finally, on resource, at the autumn statement, the UK Government delivered real-term cuts to NHS England and real-term cuts to justice as well. That presents us with a grave set of choices. That is the context in which we find ourselves as we sit less than two weeks out from the budget. I recognise that there has been a constructive tone to much of this debate, and Liz Smith touched on the need to be a sense of duty for Scotland to get the best deal, and I think collectively a duty on this Parliament. I commend the work of the Finance and Public Administration Committee in its scrutiny of the fiscal framework, and the work of its predecessor committee of which I was a member in the last session. It is incumbent on both the Scottish Government and the UK Government to reflect on very carefully the considerations that are put forward by the Finance Committee across a range of issues, particularly on the matter of the AT assignment, which I know a number of members have touched on. Of course, we will continue to engage constructively with the UK Government ahead of the next fiscal framework review. That has been set out. It would be estimated to take place in five years, not once in any particular session. However, I recognise that members will of course have an interest in how the agreements that we have reached in this new fiscal framework review are implemented. Further information will be provided as part of the budget process. John Mason. I thank the minister for giving way. Is it his understanding that, if there was a change of Government at Westminster, that could trigger another look at the fiscal framework? I would certainly hope so. I would certainly hope that any change of administration at Westminster would afford an opportunity for every fresh approach. I do not know if the Labour Party has updated its position. My understanding from Gordon Brown's commission, which I believe forms the basis for Labour's constitutional offering, paid 110 states that a consultation should be held over upgrading Scottish capital borrowing ceilings. That has now been superseded by the fiscal framework. I would hope that any incoming Labour Government, should that be the outcome of the election, would take a more ambitious approach, reflecting on many of the contributions that have been made today. Indeed, reflecting on perhaps some of the contributions from Labour member Richard Leonard, who I am sure Mr Marra in the front bench listened to very carefully and has been taking copious notes to inform Labour's constitutional position going forward. However, I would note on Labour's point—this was something that Stuart McMillan set out in some detail—that was highlighting the comments of Keir Starmer. We are facing austerity. It is austerity redux, but it is in the context now of some 13 years of austerity, economic mismanagement from the UK Government and general political and economic chaos. What the UK Government has put forward cannot stand. It must be revisited. However, what we have heard so far is not just obstinence from the UK Government, but an embrace of that fiscal approach from the Labour Party as well. So what the UK is facing and what Scotland is facing through, no choice of itself, is austerity for the rest of this decade. While that fiscal framework represents an improvement on our current fiscal arrangements, if we truly want to be able to unleash the potential of the Scottish people, if we want to have an economy that can compete with our competitors in Ireland, in Norway and in Denmark and other similarly small medium economies, when the only way we are going to do that is not through mitigation, not through a halfway house of the fiscal framework and devolution, but taking on the full powers of an independent nation. Thank you. That concludes the debate on fiscal framework review. It is now time to move on to the next item of business. The next item of business is consideration of business motion 1560, in the name of George Adam on behalf of the parliamentary bureau, sitting out our business programme. I invite George Adam to move such a motion. No member has asked to speak against the motion. The question is that motion 1560 be agreed or we all agreed. Parliament is agreed. The next item of business is consideration of five parliamentary bureau motions, and I ask George Adam on behalf of the parliamentary bureau to move motions 11561 to 11563 on approval of SSIs, and 11564 and 11565 on designation of a lead committee minister. All moves, Presiding Officer. Thank you. The question on these motions will be put at decision time, at which we now arrive, and there are six questions to be put as a result of today's business. I remind the chamber that the amendment in the name of Liz, if the amendment in the name of Liz Smith is agreed, the amendments in the name of Michael Marra and Ash Regan will fall. The first question is that amendment 1546.4, in the name of Liz Smith, which seeks to amend motion 1546, in the name of Shona Robison on a fiscal framework review, be agreed or we all agreed? Parliament is not agreed. There will be a division, and there will be a short suspension to allow members to access the voting system.