Chamber and committees

I will check where we are with the information that the committee should have had about that and will get that the committee as soon as possible.

The context cited in the IMF report will have an impact on the budget; if the IMF is correct, it would be a mighty achievement for us not to be affected. Rising interest rates are a particular challenge because that affects several points in relation to investment in the economy at individual and corporate level. We need that investment to drive growth in the economy. For example, if a rise in interest rates leads to a reduction in house transaction activity, that will have an effect on land and buildings transaction tax revenue and subsequently on the Government’s budget.

I certainly think that we should be open to that, because, along with the other data that I was talking about, employment levels in Scotland are at their highest on record, and unemployment is very close to a historic low of 3.3 per cent. As Mr Fairlie will know from engagement in his constituency, which has a very similar profile to mine, we cannot speak to a local employer—in the public or private sector—without hearing that they are short of employees. Therefore, the need for us to be flexible about engaging people in the workforce is an absolutely central challenge, and the Government is doing some work on that in relation to the four-day working week pilot and various other measures of that type.

Of course, there will be some complicated interactions around pension provision, and that is particularly the case in some circumstances in relation to the health service. Some of those issues are not immediately under our control, because they are more about pensions rules than employment rules. The more that we have an open and constructive dialogue with the United Kingdom Government—which regulates many of those issues—the better, in order to address some of them.

I will try to deal with the number of issues that Jackie Baillie has raised. First, I observe that she has talked about her experience of antivirals. I also have some experience of antiviral distribution and I could not compliment the health service more for my family’s experience of the availability of antiviral drugs. The efficiency of the delivery and the impact of the antivirals, for which our household was profoundly grateful, stunned me, to be frank.

On the flex capacity, there is a careful judgment to be made. I assure the committee that the Government’s strategic approach and our budget provisions are designed to create an appropriate platform from which we could increase provision. It is a higher level of preparedness than there would have been prior to the intelligence on Covid—

On economic inactivity, the data that I put on the record is that the level of economic inactivity has fallen by 0.8 per cent in 12 months, which is a really significant fall. The number for economic inactivity was—if my memory serves me right—21.3 per cent; I may not have that decimal point right, but it was of that order.

The point that I am making is that, however hard we try, a sizeable proportion of that economic inactivity level will persist, because there are people who genuinely cannot be economically active—Jackie Baillie and I would agree on that point. If the lowest level of economic inactivity to which we could ever hope to get is 15 per cent—which still is a large number, because a lot of people genuinely cannot be economically active—a fall of 0.8 per cent in one year from 22.1 to 21.3 per cent is a very big one.

I understand exactly the point that is being made. The incentive in challenging existing spend is to ensure that spending is properly aligned with the Government’s objectives.

—I assure Jackie Baillie that the choices that were made in the budget were made cognisant of working to achieve the outcomes in the national performance framework. I am certainly prepared to consider—I am not setting out my last word on this—that there is a misalignment of budget priorities with the national performance framework.

I said, in response to Mr Fraser’s question about it, that I viewed the Covid recovery strategy as “being mainstreamed”. I take that view because the Covid recovery strategy and, likewise, the budget, sit comfortably with our aspirations in the NPF. I am very open to discussions about how there may be misalignments between the budget and the national performance framework, and I am happy to engage on those questions.

No—the maintenance of the 12-week stock, which, as NHS Scotland will have explained to the committee, is done on a rolling basis, is supported by budget provision. The stock is used, but we have 12 weeks’ worth of it. We are using the budget to enable that to be constantly replenished but, as it is replenished, at the other end of the warehouse—if I can put it that way—it is being used.

I look all the time, as do other finance ministers. I am here in a temporary capacity, but I have had to look very hard at commitments in this financial year and at how we are spending money, because I have had to find money.

As I announced to the Parliament, I have taken £1.2 billion out of predicted expenditure within Government. I have gone to different parts of the Government and said, “Those measures can’t go forward. I’m going to have to pull that money out. You’re going to have to do without this or do without that.”

That has been done in an abrupt sense because of the financial challenges of this year. However, we carry out periodic spending reviews in which we review provisions that we are making and things that we are funding.

Let us take, for example, a programme such as early learning and childcare. In the course of the 15 years of this Government, we have substantially expanded early learning and childcare. When we came to office, the level of early learning and childcare provision was about 425 hours a year, and we have put that up to 1,140 hours. We have done that on the basis of the early intervention advice—all the evidence shows that the earlier that we engage children in good, high-quality early learning and childcare, the better their educational, personal and health outcomes will be. We have made that choice and invested in it. If we had a spending review tomorrow, I am very sceptical that we would come to the conclusion that we would no longer do that. However, for other things that we do and are committed to, we might say that there is a time limit to what we can afford for those priorities, and we might change them.

The active purpose of a spending review is to determine what more we need to do. A spending review also has to take into account changes in the population. I am making a deadly serious point about the increased number of elderly people in our society. There are a lot of very fit, healthy and energetic older people in our society but, inevitably, there will be people who become frailer as they age. There will be more of those individuals, and they have to be supported by public services—ideally in their own homes but, on some occasions, that might have to be in an acute hospital setting that, by its nature, is very expensive to support.