Nicola Sturgeon: Latest draft budget most important in history of devolution

Even in normal times, the tax and spending decisions we make have an enormous impact on people’s lives.

But this year we are wrestling with the global Covid-19 pandemic – which has taken thousands of lives and continues to wreak havoc in our economy and our society. On top of that, we are dealing with the consequences of the UK’s rupture with the EU.

And, of course, there is still the need to tackle long-term challenges, such as the climate emergency, which existed pre-Covid and haven’t gone away simply because there is a pandemic.

So when Finance Secretary Kate Forbes presented our £44 billion spending plans to Parliament last week, it was with a laser-like focus on supporting public services, helping our economy recover and protecting family budgets.

Our health and social care services are obviously still on the front line of our battle with Covid-19. That’s why the Budget proposed that the health portfolio will receive more than £16bn next year – a significant increase – as well as £869 million earmarked specifically for measures to tackle the pandemic, like our testing and vaccination programmes.

Almost £900m is to be invested in social care and integration – including funding local councils to deliver the Living Wage and implementing the Carers Act.

And in recognition of the tough toll that the pandemic has taken on mental health, we’ll also be investing more than £1.1bn on improving mental health services for all, including children and adolescents.

I’ve spoken a lot recently about Scotland’s unacceptably high level of drug deaths, and readily accept that the government needs to do more. We’ll be providing almost £150m for alcohol and drug services this year, including an additional £50m dedicated to what is a national mission to reduce drug deaths.

Councils have played a key role in our Covid response, managing the vital business grants and welfare support and helping minimise disruption to young people’s education. Their £11.6bn funding settlement will help ensure this continues – as well as implementing our other shared priorities like completing the expansion of early learning and childcare to 1140 hours.

As well as the public health emergency, Covid has also caused an economic emergency. I’m sure every single one of us knows someone whose livelihood has been affected by Covid – and the empty high streets, closed pubs and shuttered restaurants all around us are a visual reminder that our economy needs significant government intervention.

So far, we’ve committed more than £3bn to help businesses. Our budget plans extend the 100% rates relief for some of the hardest-hit sectors of our economy – retail, hospitality, leisure and aviation – for another three months until the end of June, a move which has been warmly welcomed. We’ve also reduced the poundage for business-rate payers – which has never happened before outside of a normal rates revaluation.

Supporting young people has also been central to our Covid response – improving their employability prospects is not only important for them, but also for our economy. The £1.1bn investment in employability and skills support will help fund vital initiatives such as the National Transition Training Fund and the Young Person’s Guarantee – both of which will help achieve our ambition of ensuring every young person has the opportunity to study, take up an apprenticeship or work experience or participate in formal volunteering.

We’ll also be launching the first phase of our £100m Green Jobs Fund, and delivering on our commitment to establish a green jobs workforce academy.

Finally, our Budget will help family budgets at what is a very uncertain time.

As far as we can within the financial constraints we face, we want to boost the pay packets of those in the public sector. Those earning up to £25,000 will receive an increase of £750 – at least 3% – while those earning above that figure will receive 1%, capped at £800 for the highest earners.

More generally, we are raising all of the thresholds for income tax bands – except the very top one – so everyone except those on the highest incomes will not pay any more tax this year. We’re also making £90m available to local authorities to compensate them should they decide to freeze the council tax.

Last but definitely not least, this year’s Budget will be the first to fund our new Scottish Child Payment. Described as a game-changer in the fight against child poverty, I have no doubt that in years to come it will be seen as one of this parliament’s most significant policy initiatives.

We have all been through so much over the last year – individually and as a country. With the vaccination programme now rolling out at pace, we are beginning to see a road back to some kind of normality in our lives. It might not be an easy one, but it is there. With these budget plans, we’re trying to do everything we possibly can to help us along on that journey – and prepare for the major rebuilding exercise that lies ahead.