Finance Secretary Derek Mackay’s speech to the SNP conference

Below is the speech given by Derek Mackay MSP, the Cabinet Secretary for Finance and the Constitution to the SNP conference. Check against delivery. 


As you know, this year marked ten years since this party formed the Scottish Government. A decade of government is a remarkable achievement for any political party, winning the support of the population in three successive Scottish elections, increasing our vote each time.

And since our last conference we can also celebrate our successes in the local elections, with the election of 431 SNP councillors. Right across the country we have new and returning SNP councillors engaged in the very heart of our communities.

As a former council leader I know all too well the hugely important role this is.

So to all our councillors we say congratulations, you are a fundamental part of this SNP team and I look forward to working with each and every one of you.

This year also marked the twentieth year of devolution – something that once seemed a distant dream to many of those who went before us, now a real and lasting part of our nation’s story.

I don’t want to give my age away – I had a big birthday this year, but there has now been a Scottish Parliament for half of my life.

For many in our party, and indeed the country, they have no memory of the days before the Scottish Parliament was reconvened.

The debates and discussions of the past have no relevance.

The existence of the Scottish Parliament is taken for granted, the question they ask is how much further we should go on this journey of self-government

And for those who have never known anything other than a Scottish Parliament that question isn’t an academic one about powers and legislation it’s about who listens to our communities, who works with people in Scotland, and who shares Scotland’s ambitions.

Throughout our history we have always sought to protect Scotland’s interests that is the very core of our purpose as a party and as a government.

We live in a time of dramatic economic change and that presents us with a choice. We can sit back and allow that change to come, or we can seek to lead that change.

Conference, in this government we chose to lead.

On our economy –

From food and drink, to life sciences.

From energy to financial services.

We are at the forefront of exciting technological change. This is a nation, bursting with talent and enthusiasm.

And there can be no doubting that as we look ahead, the fundamentals of our economy are strong.

In the last two years we have faced major economic challenges brought upon us by external factors.

The global collapse in the price of oil, and the harsh headwinds of Brexit that we did not vote for. But in that time, our economy has demonstrated remarkable resilience and despite these challenges it continues to grow.

The latest figures show Scotland’s economy continuing to grow steadily in September.

Business confidence has strengthened – our manufacturers are more optimistic now than at any time over the last two years.

Unemployment is at record low levels and employment is at a record high

Our oil and gas industry is beginning to stabilise, to recover and to invest and explore again

Resilience and innovation in the North Sea industries is clear as they have risen to the challenges they faced.

Such resilience in face of substantial external pressure should give us confidence. We have a tremendous platform to build upon, and build upon it we will.

A key focus of our Government is to support the rich and diverse economy of Scotland, and to make sure that everyone can benefit from it.

That is why over the last ten years we have invested in transforming the infrastructure of our country, why we have reformed the business rates system to make it fairer and geared towards growth, and why, unlike some we do not see public services as a break on the economy, but a vital component of a modern, dynamic, thriving country.

Since we came to power we have invested over £7.7 billion in our rail network. We are investing over £3 billion to dual the A9 between Perth and Inverness- soon to be our first electrified highway, £745 million for the Aberdeen Western Peripheral Route and £500 million in motorway improvements to the M8, M73 and M74.

And of course there is the small matter of the Queensferry Crossing, a new landmark for the nation, a symbol of what this country can achieve we.

And a message to the world, we are Scotland, we build bridges, not walls.

Our efforts have addressed decades of underinvestment in our transport infrastructure, delivering real and lasting improvements.

And when UK politicians try to claim they scrapped the tolls on the Forth bridge, or paid for the Queensferry Crossing…Aye right you did…

When UK ministers refused to back the bridge – John Swinney found every penny in Scotland’s budget, putting Scotland’s economy first.

And what we have done for physical connectivity, we are now repeating in digital connectivity.

The future of our economy and of our public services will be increasingly digital. We have achieved our initial target of delivering access to fibre broadband to 85 per cent of premises in Scotland by March 2016 and are on track to make this 95 per cent by the end of this year.

Over 780,000 homes and businesses across Scotland now have access to fibre broadband in Scotland because of the actions of this government.

So by the end of this parliament we will roll out Superfast broadband to 100 per cent of properties in Scotland.

We will continue our efforts to boost exports and the internationalisation of our economy through the opening of investment and innovation hubs in Paris and Brussels to add to those already opened in London, Dublin and very shortly in Berlin.

We will ensure our development agencies are fully equipped to support the entrepreneurs of tomorrow.

We will deliver a new economic development agency for the South of Scotland so that we can repeat the successes that Highlands and Islands Enterprise has in delivering economic development in our more remote areas.

And we will address the issue of the lack of long term, patient capital with the delivery of a new National Investment Bank. A bank that will act, not with the short-term focus on bonuses and dividends, but one that will act purely in the national interest.

Conference, that is progressive government.

Our efforts and our support for the Scottish economy stand in stark contrast to the Tories.

Back in July, they were waiting in great anticipation for the release of latest economic data. They were champing at the bit at the prospect of a recession in Scotland, and their disappointment at Scottish growth could not have been clearer.

Conference, we’ve gone beyond the point of the Tories simply talking Scotland down. They’re now actively wishing Scotland to fail.

And their efforts are certainly making it harder for the economy.

Whether it is their deep and damaging obsession with austerity, or their impossible Brexit dreams of resurrecting a long dead empire, the Tories are a clear and present danger to our economy, our communities and our public services.

They are fond of saying that Scotland has two governments – aye, they are absolutely right.

An SNP one protecting Scotland’s interests and a Tory one that shows all the care and attention of an absentee landlord.

Over ten years we have used the powers of the parliament to chart a different, more progressive course. And we have done so in the face of continued and unprecedented austerity from Westminster.

And on top of austerity, we are now spending more and more of our budget on protecting people from Westminster policies.

Since 2013-14 we have spent £350 million in mitigating the impact of Tory welfare changes.

That has been money well spent – it has allowed us to reverse Tory cuts to council tax benefit and it is why nobody in Scotland pays the pernicious Bedroom Tax.

Conference, we will not simply stand by as the Tories wreak havoc on the most vulnerable.

And it isn’t just the Tories mess that we have had to clean up.

We are also paying £1 billion a year to pay for Labour’s toxic PFI legacy.

We should be proud of the progress that we have made, but we must also acknowledge that, if the Chancellor does not change his course on austerity that progress, and our economy will be put in peril.

Over the ten years to 2020 we are facing real terms cuts to our budget of 9 per cent – all at a time of growing demand in the public services.

That simply has to end.

In the age of austerity we are told that there is no money to invest in public services, there is no money to avoid draconian cuts to welfare, and there is no money to lift the public sector pay cap.

Yet when it is the Tories neck that is on the line, they have no hesitation in finding £1 billion of taxpayers’ money for their grubby deal with the DUP.

Conference, let me be clear, we have no objections to the people of Northern Ireland getting extra money, far from it. What we do object to is a Tory Government that throws money at one part of the country to keep themselves in office, while simultaneously lecturing everyone else that there is ‘no magic money tree.’

Remember the infamous vow, the Westminster Parties staked their credibility on preserving the Barnett Formula.

It is clear, despite their assurances, they’ve by-passed Barnett, short-changing Scotland to the tune of nearly £3 billion.

Conference, if they can find a billion pounds to save their own skin, they can’t insist on austerity for everyone else.

That is why the Chancellor must use his budget in November to end austerity, invest in public services and give public sector workers the pay rise they deserve.

In Scotland we know that high quality public services, rely on dedicated hard working public servants.

And we know that while limiting pay increases helped protect jobs, the impact of UK austerity on households budgets combined with the rise in inflation as a result of Brexit means for some people times are tight.

That’s why this party, this government, is committed to lifting the pay cap and ensuring fair wages for our public sector workers.

We will continue to work with Trades Unions, to deliver an affordable settlement, that recognises the cost of living.

But there is something I must make clear, if austerity is not lifted, our ability to offer the kind of deal we might want to will remain constrained, no matter what powers we use.

The majority of our budget is still determined by decisions in London. That is why the UK Government must lift the cap across the UK, and fund the pay rise that people deserve.

That is why today, along with the General Secretary of the STUC, I have written to the Chancellor, calling for him to do just that.

But let me repeat – come what may, we lift the pay cap.

And the Chancellor must take another step to right a wrong faced by Scotland’s public services.

He must end the ludicrous and unjust Treasury position of imposing VAT on Scotland’s police and fire service.

If this position doesn’t change, this could see a loss to the Scottish public purse of £280 million by the end of the current parliament.

Conference – austerity, pay and our police and fire services –  it all adds up to a budget triple whammy being inflicted on Scotland by the Tories, which is putting ever more pressure on our public services.

And so it’s not just the Chancellor who has a test to pass.

In a hung Parliament the Scottish Tories’ 13 MPs could hold the balance of power, and they will not be forgiven in Scotland if they vote for a billion pound bung to the DUP, while meekly rolling over and letting the Chancellor raid our budget yet again.

Conference, I want to share with you the principles that will guide me as I develop our Scottish budget.

We will continue to invest record sums in our National Health Service.

Since we came to office, spending on the NHS has increased by £3.6 billion, allowing us to increase health staff by 9.3 per cent.

We will continue our drive to close the attainment gap with £120 million of pupil equity funding, going directly to schools to support improved attainment.

We will also maintain our efforts to tackle youth unemployment.

Back in 2014 we set a target of reducing youth unemployment by 40 per cent by 2021.

Conference, I am delighted to tell you that we have achieved that ambitious target a full four years ahead of schedule, meaning that today our youth unemployment level is the lowest in the UK, and amongst the lowest in the EU.

We will continue to ensure that people in Scotland benefit from more high quality services, free at the point of use. That means there will be no tuition fees, no prescription charges, and the continuation of free personal care.

And finally, my budget will make available £1.7 billion pounds, over the next three years, to deliver our ambitious, transformational investment to build 50,000 affordable homes over the life time of this parliament.


Conference, we have always been a progressive government in terms of spending, and now as more tax powers come on stream, we are progressive on taxation also.

Our replacement for Stamp Duty, Land and Buildings Transaction Tax, has made the prospect of buying a home much more affordable for first time buyers,

By increasing the tax-free threshold to £145,000, we have taken nearly 26,000 houses out of tax altogether, while asking those buying expensive or additional properties to pay a little more.

As well as helping first time buyers it is also helping public finances, contributing £484 million to the Scottish budget in 2016-17, an increase of over 12 per cent on the previous year.

Similarly, we have reformed the Council Tax to make it fairer and on business rates, we have not only made the system more progressive by exempting 100,000 properties from rates, but we have also taken steps to ensure that it is the most competitive rates package in the UK giving Scottish business a significant advantage.

And at our conference we have debated land reform.  We have therefore commissioned the Scottish Land Commission to research the introduction of a Land Value Tax.

We will bring forward a discussion paper on income tax as we seek to lead an informed debate on how we best use the new powers to build a tax system that meets the needs of the country.

Conference – setting taxes isn’t easy. Taxation isn’t a toy – it has an impact on people’s lives and their choices and as a government we take that responsibility very seriously.

As part of this process, and recognising that Holyrood is a Parliament of minorities, I wrote to all the party leaders asking them to set out their tax proposals for inclusion in this paper.

To their credit both Patrick Harvie and Willie Rennie responded outlining the proposals of their respective parties. From Labour and the Tories we have heard nothing.

But that silence speaks volumes, on the big issues of the day.

Labour are pre-occupied fighting each other. But the Tories?

The real reason that they have been silent on tax is that their position simply does not add up.

Day after day, week after week, the Scottish Tories call on the Scottish Government to spend more money, yet at the same time call for tax cuts for the richest in the country.

Conference, they’re taking the Jackie Ballie.

While the Tories play their games, and the labour party tears itself apart, we will get on with the business of running the country.

Like we do with all taxes under our control, we will take a responsible approach to income tax.

Yes, we can set rates and bands, but Westminster remains responsible for the tax base, what is considered to be income, and how it is measured. It is also responsible for the personal allowance and for reliefs.

Like in so many other areas, when it comes to income tax, we have one hand tied behind our back.

Don’t just take my word for it, the Fraser of Allander institute said, that when it comes to income tax, we have “half the lego set.”

And here was me thinking we were the “most powerful devolved Parliament in the world.”

Our approach to tax stands in stark contrast to the Tory Government at Westminster. Where we choose progressivity, they choose tax cuts for the richest.

As Finance Secretary, I will never settle for the situation where the Scottish Parliament is only responsible for raising a third of our income.

The UK government is hell bent on a race to the bottom on tax and regulation, a race that Scotland doesn’t want to run. We’d rather a race to the top on public service, infrastructure and quality of life.

More of the same from the Tories with an added dose of hard Brexit simply won’t work. It will damage our economy and harm our communities.

But there is another way.

When even Ruth Davidson describes the UK as too “London-Centric” it is clear that the case against further devolution is unanswerable.

The UK economic model just doesn’t work.

We represent progress. On the economy, education, environment and equality.

We speak for progressive change for our country, and will make sure that your voice, a voice of unwavering passion, determination and ambition for Scotland is heard loud and clear.

This is a confident and ambitious Government, for a confident and ambitious nation.

Thank you.