Daniel Johnson
Scottish Labour · Scotland
“When people feel threatened, they resort to violence. That is why I absolutely associate myself with the minister’s words. We must all take responsibility for our words and reflect on the current circumstances and situations.”
“We could forgive the Reform members for being inexperienced, but they have made this debate about them, so let us talk about them. I do not think that they do themselves any favours whatsoever.”
“Daniel Johnson: Were it only about the terminology that Reform is using, it would be one thing, but it is not. Let us look at some of the words used by Reform politicians, both here and in other places: calling for “cold rage”, describing our justice system as being “two tier” and describing recent migrants as being of “fighting age”.”
“Malcolm Offord opened the debate by saying that, through its motion, Reform rejects the SNP’s version of mediocrity. What was clear from the rest of his speech was that that is because he has his own very special version of mediocrity. The whole of Reform’s approach to the debate is summed up by the motion.”
“Likewise, on energy—we need to talk about what a sensible mix looks like, but, if you wrap yourself up in climate denialism, you absolutely delegitimise your argument. We do need to talk about migration. Did my party get it right when we opened up so quickly to accession countries? That should be debated.”
“Are these the politics that you want to enable and represent? [Interruption.] Thomas Kerr is laughing. If he thinks that violence in this city is funny, I am outraged— deeply outraged. He should think very carefully, because people in this city were injured.”
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“Why did they ask for nothing? I simply do not understand. Daniel Johnson: We will not stand in the way of the much-needed additional funding, but we cannot simply carry on as this Government has done over the past 18 years. [Interruption.] We have had 18 years of decline in public services and 18 years of seeing our waiting lists get worse. One in six Scots is on a waiting list. We have also seen education sliding down the rankings. My colleague Pam Duncan-Glancy set that out very clearly. Just today, we have seen that attainment is down, that the number of children leaving school with highers is down and that the number of young people going to positive destinations is down. Those are the consequences of 18 years of SNP Government. Will we support that? No, we will not.”
“The cabinet secretary says that to will the ends, we must will the means. However, what did her colleagues do? Did they vote to end those 14 years of decline? Did they vote for the record increase in funding? Did they vote for those things? Did any of them vote for it? It was not nine of them that voted for it—it was none. Frankly, that argument has absolutely no coherence whatsoever. Ross Greer: I accept the premise that Daniel Johnson is outlining: that the UK Government delivered a funding increase to the Scottish Government. However, although he challenged me to read Labour’s manifesto for the next election, what about Labour’s manifesto that elected every Labour member here today? Was there not a single policy in that manifesto that they could have gone to the Scottish Government with and asked for in this budget?”
“Further, that £5.2 billion is over two years, but you are talking as if it is gaun intae next year’s budget. The Deputy Presiding Officer: Through the chair, please, Mr Gibson. Daniel Johnson: If he wants to correct my numbers, they are right here. Resource funding is real: last year, it was £46.9 billion and this year it is £49.8 billion. I have done the maths. Maybe my calculator is wrong, Mr Gibson—feel free to come back, but those are the numbers that I am basing that on. Kenneth Gibson: It is on your numbers. The Deputy Presiding Officer: Mr Gibson, you have had an intervention. Please stop. Daniel Johnson: We had 14 years of Tory decline, 14 years of dismantling public services and 14 years of chaos and incompetence. That is what that budget set out to address.”
“I do not need any help—you are quite right. It is about not just the £5.2 billion. The budget has delivered the largest ever block grant; there is a 5.8 per cent increase in the block grant alone. There is a total funding envelope available to the Scottish Government of £56 billion. Resource spending alone is at £49.8 billion and there is a 6 per cent real-terms increase. Those are the figures that are laid out very clearly by the Scottish Fiscal Commission: there is a 6 per cent real-terms increase. [Daniel Johnson has corrected this contribution. See end of report.] That is the extra money that the Scottish Government has to spend. The SNP has a decision to make about how it spends it. Kenneth Gibson: The Scottish Fiscal Commission made it clear that the real-terms increase was 0.8 per cent—that is, less than 1 per cent.”
“There were issues that were known about. However, as the correspondence between the Office for Budget Responsibility and the Government made clear, the full extent of that £22 billion black hole was not clear. It had not been laid bare. It was a black hole that needed to be addressed. [Interruption.] For anyone to come to this place and talk credibly about the budget, they need to answer how that £22 billion black hole would be addressed. Let us be clear—[Interruption.] The Deputy Presiding Officer: Mr Johnson, please resume your seat. I will allow a bit of reaction to what is being said, but I will not have the front benches shouting at each other while Mr Johnson is trying to speak. Mr Johnson, please continue. Daniel Johnson: I can do more than enough shouting by myself, Deputy Presiding Officer.”
“John Mason: Will the member give way? Daniel Johnson: If he would not mind letting me finish this point. That required difficult decisions to be made, but there is no doubt about the overarching impact of the budget. There is a massive injection of funding to our public services, including £5.2 billion for Scotland alone. That is the very real difference that a Labour Government can make. That is a real start; it is not the end point, but a start on alleviating the damage that was caused by the past 14 years of UK Government. John Mason: Daniel Johnson goes on about the UK budget, but would he accept that the Labour Government knew what was coming in the UK budget—that it was not a surprise, that it was well warned, and that it should have been more honest with the constituencies? Daniel Johnson: No. Let us be clear.”
“It is always wonderful to hear from the Minister for Parliamentary Business, but maybe not while I am trying to speak. In July, the UK electorate made a critical decision to end 14 years of Conservative Government, but let us be clear that it was not until the budget in October that the serious step was taken to end the worst excesses wrought by the Conservative Government and the economic damage that it meted out. It was the budget that changed that. It was that budget that took the first steps towards delivering on the mandate that the UK Labour Government was given: to fix the foundations of the public finances following the disastrous economic legacy left by the Conservative Government, to halt the destruction of our public services, and to provide a Government that genuinely sought to focus on being in the service of working people.”
“I will begin by responding directly to Ross Greer. The case for electing Labour MSPs will be written in our manifesto, and I encourage him to read it. Maybe he should have been following what we have been saying. We do not aim to simply influence a budget; we want to set a budget as a Labour Government after the elections in 2026. I genuinely always try to sum up debates by listening to them, because I do not like reading out pre-scripted speeches, but perhaps I could have saved myself some time. [Interruption.] The Deputy Presiding Officer: I encourage members not to engage in chat across the chamber while someone is delivering their speech and responding to the debate. I can give you the time back for that, Mr Johnson. Daniel Johnson: Thank you, Presiding Officer.”
“They go from the ludicrous £700 million Rwanda scheme and the billions squandered on HS2 and personal protective equipment down south, to the profligacy of our very own Douglas Lumsden, the 987-question, £100,000 man, asking daft questions about honey jars and salt sachets. The Deputy Presiding Officer: Mr Gibson, you will need to conclude. Kenneth Gibson: Those questions are more for prepping for a Holyrood quiz night than holding ministers to account. The Deputy Presiding Officer: Mr Gibson, you will need to conclude. Kenneth Gibson: We have had the usual £1 billion tax cut mantra—a memorable number obviously plucked from nowhere. The Deputy Presiding Officer: Thank you, Mr Gibson. Kenneth Gibson: Back this budget. The Deputy Presiding Officer: Thank you. 16:17”
“For example, although average household water bills will rise by 26 per cent in England and Wales, Dame Jackie Baillie called for the 9.9 per cent increase in Scotland to be met by the Scottish Government, omitting to say from where in the Scottish budget she would find the £118 million that would be required. A one-year-only increase in the UK’s capital allocation is welcome but, with capital budgets flatlining at best thereafter, by 2029-30 Scotland’s capital allocation will be less in real terms than it was seven years earlier, only with less build for our buck. What of those paragons of fiscal rectitude, the Tories?”
“It will add £540 million to the cost of delivering public services in Scotland, while the Scottish Council for Voluntary Organisations estimates that third sector costs will be £75 million. All of that is at Labour’s door. Those in the Scotland branch office looked on as their London bosses met only 60 per cent of the public sector impact, despite previous assurances. The £96 million shortfall for local government alone is equivalent to a 3.3 per cent rise in council tax. Despite the huge national insurance burden that Labour has imposed, its MSPs continue to make a plethora of spending demands without any indication whatever as to how they should be funded.”
“Will the member give way? Kenneth Gibson: I am sorry, but I have taken an intervention, and the time for that is coming out of my six minutes; otherwise, I would have taken a second one. The reality is, Mr Marra, that your party promised no national insurance contributions increases. The Deputy Presiding Officer: Always speak through the chair, Mr Gibson. Kenneth Gibson: You should not have said that if you did not mean it, Mr Marra. According to the “Office for Budget Responsibility: Economic and fiscal outlook— October 2024”, the policy will cost 50,000 people their livelihoods. Only last week, car manufacturer Toyota said that it will lead to a rapid increase in the replacement of workers with robots. Labour’s tax on jobs will be keenly felt by the public, private and third sectors.”
“To ask the Scottish Government how it will work with the United Kingdom Government on the recently announced £200 million investment in Grangemouth, as part of the national wealth fund. (S6T-02380)”
“Unless we derisk the process and the investment, the transition will not happen and we will squander the legacy of the North Sea. When people talk to industry representatives, one thing is abundantly clear: our North Sea legacy gives us the ability to do engineering work offshore, at sea, in the harshest of conditions, which we will need to do if we are to reap the benefits of the energy transition.”
“I have signed Unite the union’s campaign pledge for no ban without a plan. I think that Jackie Dunbar has, too. Has Daniel Johnson signed it? Daniel Johnson: What does Douglas Lumsden think GB Energy is about? Douglas Lumsden: We do not know. Where is the plan? Daniel Johnson: It is central to the plan. If Douglas Lumsden wants a plan, he should back GB Energy. For goodness’ sake, we cannot, on the one hand, say that we need a plan and then oppose GB Energy. The Tories should not be ridiculous—seriously. The reality is that we need a transition. We also need GB Energy, for two critical reasons. First, the transition has to happen at such a pace that, if there were no state intervention, it could not occur. Secondly, it will rely on innovation, technology and engineering that we do not yet have in place.”
“He treats the issue as though it is binary—that we have the option of either using oil and gas or turning to renewables. However, that is a false choice. Whether we like it or not, there needs to be a transition. Whether we listen to the North Sea Transition Authority or the Wood Group, it is clear that more than 90 per cent of the extractable resource of the North Sea has been extracted. Peak oil was in 1999. We need to transition our North Sea energy sector regardless of the net zero imperative. When people talk to representatives of the oil and gas sector, as I do, they will not hear them asking whether we should have GB Energy; they want to get on with it, because they recognise the need to transition. Douglas Lumsden: I absolutely accept that there is a need for transition, but a plan needs to be in place.”
“It is somewhat ironic to hold a debate on energy at this point on a Thursday afternoon, so let me try that witticism to begin with. In some ways, Jackie Dunbar is absolutely right to articulate frustration. The burning imperative in front of us is that we have to make the just transition in energy work. However, there is some irony in being frustrated about what GB Energy should be delivering when we have not yet passed the bill. Notwithstanding the frustrations of the legislative process, what we are here to do is to agree to the LCM. Let us focus on the aim of the LCM. We need GB Energy to be up and running. Let me deal head on with the assertions and the, frankly, slightly wild accusations made by Douglas Lumsden. Let us be clear.”
“Will the member give way? Alasdair Allan: Yes, I will. Daniel Johnson: On that technical point, why is the Government not waiting until the final reading to wrap up the LCMs into a single decision for the Parliament? Alasdair Allan: This is a matter for the UK Government. The bill is proceeding at great pace and my understanding is that royal assent will be granted very soon—within the next few weeks. We must respond quickly to a bill that might quickly become law. I note that the most recent amendment, tabled on Monday, is not covered by the supplementary LCM that we are debating today, as the UK Government tabled it too late for inclusion in this LCM. That, I am afraid, is how last minute some of those changes have been made at the UK Parliament end.”
“The Presiding Officer: There will be a momentary pause before we move on to the next item of business. Independent Review of Sentencing and Penal Policy”
“Motion agreed to, That the Parliament agrees that, for the purposes of section 11A of the Income Tax Act 2007 (which provides for Income Tax to be charged at Scottish rates on certain non- savings and non-dividend income of a Scottish taxpayer to be charged above the personal allowance), the Scottish rates and limits for the tax year 2025-26 are as follows— (a) a starter rate of 19%, charged on income up to a limit of £2,827, (b) the Scottish basic rate is 20%, charged on income above £2,827 and up to a limit of £14,921, (c) an intermediate rate of 21%, charged on income above £14,921 and up to a limit of £31,092, (d) a higher rate of 42%, charged on income above £31,092 and up to a limit of £62,430, (e) an advanced rate of 45%, charged on income above £62,430 and up to a limit of £125,140, and (f) a top rate of 48%, charged on income above £125,140.”
“I am always keen that every member has the opportunity to exercise that right. In this instance, I will accept Ms Gosal’s vote, but this will not happen again. For Adam, George (Paisley) (SNP) Adam, Karen (Banffshire and Buchan Coast) (SNP) Adamson, Clare (Motherwell and Wishaw) (SNP) Allan, Alasdair (Na h-Eileanan an Iar) (SNP) Arthur, Tom (Renfrewshire South) (SNP) Baker, Claire (Mid Scotland and Fife) (Lab) Bibby, Neil (West Scotland) (Lab) Boyack, Sarah (Lothian) (Lab) Brown, Keith (Clackmannanshire and Dunblane) (SNP) Brown, Siobhian (Ayr) (SNP) Burgess, Ariane (Highlands and Islands) (Green) Chapman, Maggie (North East Scotland) (Green) Choudhury, Foysol (Lothian) (Lab) Clark, Katy (West Scotland) (Lab) Cole-Hamilton, Alex (Edinburgh Western) (LD) Constance, Angela (Almond Valley) (SNP) Dey, Graeme (Angus South) (SNP) Don-Innes, Natalie (Renfrewshire North and West) (SNP) Doris, Bob (Glasgow Maryhill and Springburn) (SNP) Dornan, James (Glasgow Cathcart) (SNP) Dunbar, Jackie (Aberdeen Donside) (SNP) Ewing, Annabelle (Cowdenbeath) (SNP) Ewing, Fergus (Inverness and Nairn) (SNP) Fairlie, Jim (Perthshire South and Kinross-shire) (SNP) FitzPatrick, Joe (Dundee City West) (SNP) Forbes, Kate (Skye, Lochaber and Badenoch) (SNP) Gibson, Kenneth (Cunninghame North) (SNP) Gilruth, Jenny (Mid Fife and Glenrothes) (SNP) Gougeon, Mairi (Angus North and Mearns) (SNP) Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP) Grant, Rhoda (Highlands and Islands) (Lab) Gray, Neil (Airdrie and Shotts) (SNP) Greer, Ross (West Scotland) (Green) Griffin, Mark (Central Scotland) (Lab) Harper, Emma (South Scotland) (SNP) Harvie, Patrick (Glasgow) (Green) Haughey, Clare (Rutherglen) (SNP) Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP) Hyslop, Fiona (Linlithgow) (SNP) Johnson, Daniel (Edinburgh Southern) (Lab) Kidd, Bill (Glasgow Anniesland) (SNP) Leonard, Richard (Central Scotland) (Lab) Lochhead, Richard (Moray) (SNP) MacDonald, Gordon (Edinburgh Pentlands) (SNP) MacGregor, Fulton (Coatbridge and Chryston) (SNP) Mackay, Gillian (Central Scotland) (Green) Mackay, Rona (Strathkelvin and Bearsden) (SNP) Macpherson, Ben (Edinburgh Northern and Leith) (SNP) Maguire, Ruth (Cunninghame South) (SNP) [Proxy vote cast by Rona Mackay] Marra, Michael (North East Scotland) (Lab) Mason, John (Glasgow Shettleston) (Ind) Matheson, Michael (Falkirk West) (SNP) McAllan, Màiri (Clydesdale) (SNP) [Proxy vote cast by Jamie Hepburn] McArthur, Liam (Orkney Islands) (LD) McKee, Ivan (Glasgow Provan) (SNP) McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP) [Proxy vote cast by Jamie Hepburn] McLennan, Paul (East Lothian) (SNP) McMillan, Stuart (Greenock and Inverclyde) (SNP) McNair, Marie (Clydebank and Milngavie) (SNP) McNeill, Pauline (Glasgow) (Lab) Minto, Jenni (Argyll and Bute) (SNP) Mochan, Carol (South Scotland) (Lab) Nicoll, Audrey (Aberdeen South and North Kincardine) (SNP) Regan, Ash (Edinburgh Eastern) (Alba) Rennie, Willie (North East Fife) (LD) Robertson, Angus (Edinburgh Central) (SNP) Robison, Shona (Dundee City East) (SNP) Roddick, Emma (Highlands and Islands) (SNP) Ruskell, Mark (Mid Scotland and Fife) (Green) Slater, Lorna (Lothian) (Green) Smyth, Colin (South Scotland) (Lab) Somerville, Shirley-Anne (Dunfermline) (SNP) Stevenson, Collette (East Kilbride) (SNP) Stewart, Kaukab (Glasgow Kelvin) (SNP) Stewart, Kevin (Aberdeen Central) (SNP) Sturgeon, Nicola (Glasgow Southside) (SNP) Sweeney, Paul (Glasgow) (Lab) Swinney, John (Perthshire North) (SNP) Thomson, Michelle (Falkirk East) (SNP) Todd, Maree (Caithness, Sutherland and Ross) (SNP) Tweed, Evelyn (Stirling) (SNP) Villalba, Mercedes (North East Scotland) (Lab) Whitfield, Martin (South Scotland) (Lab) Whitham, Elena (Carrick, Cumnock and Doon Valley) (SNP) Wishart, Beatrice (Shetland Islands) (LD) Yousaf, Humza (Glasgow Pollok) (SNP) Against Balfour, Jeremy (Lothian) (Con) Briggs, Miles (Lothian) (Con) Carlaw, Jackson (Eastwood) (Con) Carson, Finlay (Galloway and West Dumfries) (Con) Dowey, Sharon (South Scotland) (Con) Eagle, Tim (Highlands and Islands) (Con) Findlay, Russell (West Scotland) (Con) Fraser, Murdo (Mid Scotland and Fife) (Con) Gallacher, Meghan (Central Scotland) (Con) Golden, Maurice (North East Scotland) (Con) Gosal, Pam (West Scotland) (Con) Greene, Jamie (West Scotland) (Con) Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con) Hoy, Craig (South Scotland) (Con) Halcro Johnston, Jamie (Highlands and Islands) (Con) Kerr, Liam (North East Scotland) (Con) Kerr, Stephen (Central Scotland) (Con) Lumsden, Douglas (North East Scotland) (Con) McCall, Roz (Mid Scotland and Fife) (Con) Mountain, Edward (Highlands and Islands) (Con) Mundell, Oliver (Dumfriesshire) (Con) Simpson, Graham (Central Scotland) (Con) Smith, Liz (Mid Scotland and Fife) (Con) Webber, Sue (Lothian) (Con) Wells, Annie (Glasgow) (Con) White, Tess (North East Scotland) (Con) Whittle, Brian (South Scotland) (Con) The Presiding Officer: The result of the division on motion S6M-16531, in the name of Shona Robison, on the Scottish income tax rate resolution 2025-26, is: For 86, Against 27, Abstentions 0.”
“On a point of order, Presiding Officer. Although I do not ask for an answer now, what has just happened sets a precedent that raises a great number of questions across the chamber. I politely observe that I do not think that any member can be in two places at once. While taking part virtually, members need to be present at their terminal. I query whether all members were in that position when the vote took place. Some consideration should be given to what has just occurred. The Presiding Officer: Mr Johnson, fortunately, this is an extremely rare occurrence. I would like to think that I have made it quite clear that this will not set a precedent. Never again will this happen. We who sit in the chamber have a great privilege in that we are able to represent our constituents and vote on their behalf.”
“That budget included a record-breaking settlement for Scotland, with an additional £5.2 billion both this year and next, which is the largest settlement for the Scottish Government in the history of devolution.”
“If we listen to Craig Hoy, it is as though the previous 14 years did not happen. Therefore, I will start where, I hope, there is some agreement with members on the Government benches. The fiscal inheritance that was left by the previous UK Conservative Government was nothing short of a disaster—debt at 100 per cent of gross domestic product, a £20 billion fiscal black hole and record low investment. After 14 years of chaos and division, the public realm was simply crumbling and public services were in urgent need of investment. It was in that fiscal climate that Labour had to make a series of difficult decisions in the autumn budget, in order to end the era of austerity and provide billions of pounds of investment in public services.”
“I move, That the Parliament recognises the significant adverse impacts of the UK Government’s intended changes to employer national insurance contributions (ENICs) on Scotland’s businesses, third sector, public services and wider economy; believes that the impacts are likely to result in higher costs, job losses, increased prices and cause some charities and businesses to close altogether; notes the potential disproportionate impact of the changes on consumer-facing sectors of Scotland’s economy, such as retail, tourism and hospitality businesses, organisations providing social care and third sector organisations commissioned to provide public services; agrees with the significant concerns expressed by 50 organisations in Scotland, including COSLA and the STUC, who, along with the Scottish Government, wrote to the UK Government describing the risk to the vital services that they provide due to these additional costs, and calls on the UK Government to reverse this decision and not raise ENICs as planned in April 2025.”
“If we are to have a genuine partnership, it must be built on mutual respect and engagement. The tax increase has created avoidable uncertainty for businesses and service providers alike, but the UK Government has refused to engage with us in good faith. We will continue to press the UK Government to reverse the planned increase to employer national insurance contributions and to recognise its damaging implications. We will stand up for Scotland’s businesses, public services and communities, demanding the support that they deserve.”
“We called on the UK Government to ensure that our public services, voluntary organisations and communities do not suffer as a result of the change to reserved UK taxation. Despite the welcome elements of a reset in intergovernmental relations, on this occasion, the UK Government failed to engage with the Scottish Government before implementing the changes, denying us the opportunity to advocate for Scotland’s businesses, third sector and public services. The Cabinet Secretary for Finance and Local Government will raise the issue at the finance interministerial standing committee on 27 February, but we need urgent discussions now, not weeks or months down the line. That failure to engage continues a pattern of unilateral decision making by UK Governments that disregards the realities that are faced by devolved Administrations.”
“If the UK Government is serious about economic growth, it must reconsider the impact of those decisions before they cause lasting damage to Scotland’s economy. Scotland’s third sector organisations, which play a critical role in working across communities to tackle social issues, are also being impacted. The Scottish Council for Voluntary Organisations has estimated that the third sector in Scotland will face additional costs of £75 million per year because of the changes to employer national insurance contributions. The First Minister’s letter to the Chancellor of the Exchequer on 3 January, which was supported by a range of voluntary organisations, made clear our serious concern about the impact of the tax change.”
“With small businesses already grappling with high energy costs, supply chain disruptions and inflationary pressures, the tax increase is another blow at the very worst possible time. The success of our businesses—large and small—underpins our economy. Their ability to grow, create jobs and provide opportunities is what sustains our communities. We cannot and will not tolerate our efforts to support Scottish businesses being consistently undermined by short-sighted decisions that are taken in London. Our approach to economic growth is long-term investment, not short-term tax grabs. We remain committed to fostering a business environment that encourages investment, innovation and expansion. The national insurance changes create uncertainty, making it harder for businesses to plan, recruit and invest in their future.”
“The lowering of payment thresholds for employer national insurance contributions further compounds the problem, disproportionately affecting small and medium-sized enterprises. The Confederation of British Industry has been unequivocal about the damage that those changes will cause. It states that “the hike in National Insurance Contributions alongside other increases to the employer cost base will increase the burden on business and hit the ability to invest and ultimately make it more expensive to hire people or give pay rises.” Other business voices across Scotland are raising the alarm. The Federation of Small Businesses has also warned that the increases will inevitably have a chilling effect on jobs, wages and consumer prices.”
“The business insights and conditions survey shows that 15.4 per cent of businesses in Scotland reported taxation as a concern in January 2025—the highest rate in the time series. When business confidence is high and uncertainty is low, businesses are more likely to invest. The tax has changed business conditions, forced businesses to review their cost base and will, consequently, deter investment. We have heard directly from businesses about the challenges that are posed by the rising cost of doing business. We took proactive steps to mitigate those pressures wherever possible using the financial levers that are available to us. Those efforts are being undermined by the UK Government’s decision to increase national insurance contributions.”
“The tax hike will fundamentally change conditions for businesses and will force many of them to make impossible choices to deal with the higher tax burden. The choice will be to cut jobs, reduce working hours, cut wages or pass the higher costs on to consumers through higher prices. Many businesses will try to absorb the costs but, when they cannot, they will have to consider letting staff go. That is why the policy is a tax on jobs. The scale of the financial strain risks creating a drag on Scotland’s economic recovery at a time when businesses should be supported to be competitive. Since the UK budget, business optimism has weakened—the British Chambers of Commerce quarterly economic survey shows that business confidence has fallen since the UK budget.”
“A recent market insight survey by the Scottish Licensed Trade Association reported that 75 per cent of outlets expect new employer national insurance costs to impact their staffing levels, making it even more difficult for businesses to open for their full operating hours, remain competitive and get more people into venues. The tax hike will compound the challenges that businesses are already facing. Across the UK, employer national insurance contributions account for approximately 15 per cent of all business taxation. With the increase, the tax burden on businesses will reach its highest level in decades, which will undermine Scotland’s confidence and competitiveness in key industries.”
“The Bank of England’s latest intelligence from this month is that businesses are reporting a material increase in total labour costs, owing to the planned increases in national insurance contributions. The Resolution Foundation has highlighted that lowering the threshold at which employer national insurance contributions are paid will disproportionately affect lower-paid jobs. That means that sectors such as hospitality, retail and social care—which are already grappling with significant financial pressures—and those with a large number of employees will bear the heaviest costs. The hospitality industry has warned that the changes are unsustainable and will lead to business closures and job losses.”
“The UK Government’s economic impact assessment confirms that the changes will result in lower employment and higher costs for businesses, with more than a million employers across the UK being affected. At the time of the UK budget, the Office for Budget Responsibility was clear on the economic effects. It said that the changes would not only increase prices in the economy but have “a persistent negative effect on work incentives and both labour demand and labour supply”. A recent Scottish business monitor survey found that three quarters of businesses expect the national insurance contribution changes to significantly impact their operations in 2025.”
“I apologise for making sedentary interventions, but I point out that pointing at members in a slightly confrontational manner is not necessarily entirely parliamentary either. I seek your guidance on that point. The Deputy Presiding Officer: I was not actually pointing— Daniel Johnson: I was not talking about you. The Deputy Presiding Officer: Oh, not my pointing—somebody else’s pointing. Well, each of us is required to treat others with courtesy and respect. Having said all that, I think that we can now, I hope, have a good debate. Please resume, minister. Tom Arthur: I will try to restrain myself to a stern look. As I was saying, the consequences of the policy for the economy are stark. It will create risk, jeopardise jobs, drive up prices and hamper economic growth.”
“We were told that Scottish Labour MPs would be at the heart of a UK Labour Government and that there would be no increases to national insurance. That is the simple reality, and Labour should not try to deflect from its own damaging decisions. The consequences of the policy for the economy are stark. [Interruption.] The Deputy Presiding Officer: Minister, please resume your seat for a second. It is always important for the tenor of a debate to set out from the beginning that we do not need sedentary commentary, if Mr Johnson does not mind. I am sure that the minister would be happy to take as many interventions— Daniel Johnson: On a point of order, Presiding Officer.”
“Given that the minister raised the point about options, if it is not going to be employer national insurance contributions that are raised, what is it to be? Is it personal income tax, personal national insurance contributions or value added tax, or will he reject the £5.2 billion block grant increase that has resulted from that tax measure? Tom Arthur: I appreciate that the halcyon days of 4 July might seem rather distant to the Scottish Labour Party now, given where it is standing in the polls. Let me refresh Mr Johnson’s memory and that of his colleagues. The Labour Party stood on a specific manifesto commitment not to raise national insurance. Daniel Johnson: Those are the choices. Tom Arthur: That is the platform it stood on.”
“However, I recognise that there is more that we can do, and we have an opportunity to consider that specifically through the work of the review of thresholds. More broadly, a lot of positive work is going on in our enterprise agencies to support community wealth building, whether that be the work of Co- operative Development Scotland—which is part of Scottish Enterprise—of Highlands and Islands Enterprise or of South of Scotland Enterprise. I would be more than happy to share with Daniel Johnson the excellent work that South of Scotland Enterprise is doing around community wealth building, which I think he would find quite interesting.”
“Tom Arthur: I agree that growing the number of successful microbusinesses is vital. Such businesses are exactly the type that we want to thrive in our local communities, because they tend to be rooted in their communities, procure goods and services from other businesses in their communities and recruit from within their communities. That is how public sector procurement can drive local growth and retention of local wealth. Local businesses result in local control being exercised over those things. In the context of public procurement, we have existing frameworks of support, whether through the supplier development programme, the regular engagement that takes place or the procurement centres of excellence. Those all contribute to facilitating participation by an ever-increasing range of suppliers in procurement.”
“I thank the minister for prior sight of the statement. Although I found the statement to be interesting in terms of context and examples, it is short of practical steps on how the Scottish Government will seek to implement community wealth building. I agree with him about public sector procurement and SMEs. However, the reality is that, since 2016-17, the proportion of Scottish public sector spending with micro-operators has fallen from 7 per cent to 4.7 per cent. What practical assistance will be provided to SMEs to bid for public contracts and ensure that they win them? Likewise, what capital will be made available to grow the sorts of organisations that the minister is talking about? Will that become a core mission of Scottish Enterprise and the Scottish National Investment Bank?”
“I anticipate that its members will be heavily involved in the work that will be taken forward.”
“On the point about diluting the employers’ voice, I have been very clear in the Parliament and with employers that we are expanding that role, which is why I think employers will take confidence from what we are doing. We are trying to weave the employers’ voice into absolutely everything that we do, because that is vital. I met SAAB a few months ago. In our most recent conversation, when we talked about the future role for employers, it said that it was not precious about a structure or forum, but it wanted to be assured that the employers’ voice would continue to be heard—we intend to continue to ensure that. If the member was listening to the start of my speech, he will know that I made the point that SAAB has two committees that will continue through the process—certainly through the transition and perhaps beyond that.”
“Furthermore, it appears that the Scottish Government has taken inspiration from the Monty Python dead parrot sketch on its approach to SDS. It appears to be an ex-agency that no longer has a function. I am surprised that the minister did not describe it as being the Norwegian blue of agencies. A bit like Michael Palin’s pet shop owner, the minister is claiming that it still has a function—but what is its function if it is no longer even providing careers advice, which we understood would be its primary function? Graeme Dey: I will start with the end of Mr Johnson’s question. My speech made very clear what SDS will continue to do, including providing careers advice. Far from diminishing SDS’s role in that space, I talked about an expanded role for the careers collaborative and SDS’s continuing role in employer engagement and in skills.”
“Although I note the minister’s attempt to strike a collegiate tone, I will repeat what I said to him in private: my fear is that the Government is moving too slowly and putting structural change ahead of functional reform. It has been many months since he has met any members of the Labour front bench, and his statement falls short of what we understood the Government’s direction to be, and it begs some serious questions. Although it was imperfect, the previous system with the Scottish Apprenticeship Advisory Board and SDS had a very clear role for employers and trade unions in the governance structures. The proposals for an employers network have no such formal governance structure, so how can industry have confidence that it will be at the forefront in shaping the future skills landscape when it appears that its role is being diluted?”
“Is the issue not that our business schools are trying to compete with one another? As a result, none of them is in the top 50 of the QS World Rankings. Should we not ask our business schools to collaborate, particularly on areas of expertise such as renewables, food and drink, and financial services? Richard Lochhead: I have a lot of sympathy for the point that the member makes. We have seen a lot more collaboration among our universities in recent years. I promoted that as the minister responsible for universities a few years ago, and it has been paying dividends. If there is scope for further collaboration among our business schools to achieve greater international status, we should explore that, and I would be interested in finding out more about it. Night-time Economy (Glasgow) 8.”
“On-going discussions will be taking place between the University of Edinburgh and the UK Government on that issue, and we will lend our support to the University of Edinburgh in its efforts to secure that investment for Scotland as quickly as possible. It is really important that the UK Government recognises Scotland’s strengths and stops talking up only Oxford, Cambridge and London, which is what it is doing at the moment. [Interruption.] We have to face up to that reality, so let us pursue the issue. The Deputy Presiding Officer: I discourage members on the front benches from providing a running commentary. South of Scotland Enterprise 6.”
“That is ridiculous. Stop talking Scotland down. Richard Lochhead: The member raises some important issues, which I understand that members on the Labour benches, who are muttering away, do not like to be aired in the chamber. It is really important that an AI growth zone in Scotland is announced shortly. The first zone will not be in Scotland, but we want one in Scotland to be announced through the UK Government’s new AI action plan, as soon as possible, which is an issue that I have raised with Peter Kyle. I also raised the issue of the exascale supercomputer in Edinburgh, which has been cancelled or postponed, and that we now have a window of opportunity to revisit the issue through the AI action plan.”
“I also believe, however—to come back to the point that Liam McArthur made—that it is right that we do so in a way that recognises, and is honest about, the realities that we face, and honest, too, about finding genuine solutions for communities and the genuine issues that community voices wish to raise. 17:03”
“Our aim is to strike the right balance and, as Michael Matheson pointed out, the efforts to achieve that very end are not new. The proposed reforms are about modernising our consenting process for infrastructure, and that includes how we seek to listen to the views of affected communities. The strength of those views will be greater thanks to the proposals, and—in the Scottish Government’s opinion—that will always be a core part of the consenting process. It is right that we have this debate, and that we have heard some impassioned contributions during it.”