The next item of business is a statement by John Swinney on public sector pay and emergency budget review updates. The cabinet secretary will take questions at the end of his statement so that there should be no interventions or interruptions. I call John Swinney. Cabinet secretary, around 10 minutes please. The cost of living crisis represents an unprecedented challenge. Families face a winter where Cymru yn fawr i ddechrau'r newid, cymorthомau cynnwysau, ryw fawr i ddechrau, ryw pawr i ddechrau, cymorth am symlfaedd y fawr, ryw nyaeth ar gyfer y cyfrifeministau. Felly mae ddim yn drwy gweithio ar fy nwau cyfle i ffynuol, yma y Bank oersiwl y byw yn rhan Darling a lot o'ch cyfrifeministau a chael gwaith o gyd yn y 1990 mae'n rhad oherwydd y 2008 cyfeirio. That is the context in which the First Minister set out the programme for government yesterday. She confirmed that we will extend and increase the child payment in November and protect the roof over people's heads with a rent freeze and a moratorium on evictions. Free school meals will be rolled out further, the fuel and security fund will be doubled, rail fares will be frozen until at least March and the warmer homes fuel poverty programme is being widened. This all comes on top of the almost £3 billion in support already budgeted for and an existing £800 million of release for business in this financial year. The UK Government holds reserved powers over energy, over tax, over the bulk of benefits, over business support and over regulation that could help address this crisis. They have borrowing powers and the ability to deploy financial instruments that can transform household and business budgets. They have all of this yet as the crisis has worsened there has been no substantive action taken to help people in business. Urgent action is overdue and I urge the Prime Minister and the Chancellor not to waste another day before setting out their plans. Presiding Officer, today I will update Parliament on the impact of the cost crisis on the public finances and the steps that we will take to keep them in balance while funding the support that it is in our power to provide. This is not just a cost of living crisis as some characterise it, the cost of doing business, the cost of third sector support and the cost of public services are all rising as well. Indeed, in all of my experience now and during my previous tenure as finance secretary there has never been a time of greater pressure on the public finances. Our budget was based on a UK spending review that simply did not foresee the levels of inflation that are now a reality. Last summer inflation was just 2 per cent. In December when the budget was agreed, CPI stood at just 5.4 per cent. Now it is more than 10 per cent and predicted to go higher still. The result is simple, almost every cost Government in Curse has risen. At the same time, our budget is now worth around £1.7 billion less than it was in December. That alone would require the budget to be revisited. But in times of crisis the job of the finance secretary is not simply to balance the books, it is to find the money to help families, to back business and to fund the priority projects that improve lives for the long term. The emergency budget review must identify funding to cope with inflation-driven cost increases and aim to support those who most need our help during this crisis. It must do so using only the fixed powers of this Parliament. Our total budget is fixed, we cannot vary income tax in year, our reserve funding is fully allocated, we have no legal ability to borrow to fund day-to-day spending such as pay increases. Our capital borrowing is allocated for projects such as new schools and housing, projects that support employment and invest in our recovery. In short, the Scottish budget is at the absolute limits of affordability. Today I will set out to Parliament the initial steps that the Scottish Government has taken and will take to manage the nation's finances, while maximising the support that we make available to help those in need. First, let me quantify the demand arising from public sector pay. As the First Minister set out to Parliament yesterday, in the midst of a cost crisis, our role in paying negotiations is to maximise the support to the lowest paid as a crucial part of our response to the cost crisis. My job is not to fight low-paid workers' pay claims, my job is to fund low-paid workers' pay claims. Accordingly, we have seen police officers agree a 5 per cent deal, while on ScotRail ASLEF has similarly settled at 5 per cent. Negotiations with some of the largest workforces, the NHS agenda for change, for example, are on-going, but the enhanced pay offers that have been made excluding direct local government contributions total approximately £700 million. Last week, we also reached a proposed local government pay settlement. As a result of our intervention and the hard work of the unions and their members, the pay rise proposed for the lowest paid was significantly increased, with awards in excess of 10 per cent, whereas the increases for the most well-off were capped at £3,000. More money for the lowest paid was funded by the Scottish Government. The proposed settlement means, however, that we must find additional savings. We said that there was no more money and there is not. Funding this agreement means taking money from elsewhere. Pay is not the only cost pressure that we face. We have rightly given a warm Scottish welcome to people displaced from Ukraine as a result of the illegal and on-going Russian invasion. Almost 18 per cent of all displaced Ukrainians coming to the United Kingdom are coming to Scotland. That requires us to find around £200 million, not planned for at the time of the budget, just as the invasion began. I hope that no one in the chamber begrudges that support. Public sector pay and the cost of supporting displaced Ukrainians, along with the rising costs due to inflation, are therefore placing enormous strain on our budget. In addition to those factors, there is our clear determination to support those who will find themselves in difficulty this winter. We have already provided almost £3 billion of support to people, and as the First Minister set out yesterday, we will go further. I have heard and am listening to proposals for further action, doubling bridging payments, freezing rail fares beyond March, more help for energy efficiency, greater businesses and third sector support, and managing the impact of rising energy and food bills on hospitals and schools. None of that can be done without reducing planned spend in other areas and on other programmes. Presiding Officer, difficult choices must be made. There is no unallocated cash, there is no reserve that has not been utilised. Every penny more on one policy is a penny less on another policy. I have therefore today written to the finance committee setting out around £500 million in reductions in planned spending and forecasting that we have made in recent weeks. Those include a reduction of £53 million in the budget for employability schemes, utilising funding of £56 million generated by the Scotland clearing process, funding that will be reinstated in future years and used as planned to invest in the just transition, £33 million deferl of ring-fenced agricultural funds to be returned in future years, and whilst not impacting eligibility, taking a risk-based forecasting approach based on demand of a reduction of £37 million in the budget for concessionary fares. Throughout this process, we have taken those savings that we consider have the least impact on public services and on individuals. Still, those decisions have not been easy and they will not be without consequence. In particular, the reduction in employability funding, but given the circumstances that we face, they are unavoidable. At a time of acute labour shortages, historically low unemployment and soaring inflation, we have taken the view that we must prioritise wage increases over spending on employability, but this is not a decision that we have taken lightly. It is a decision that we would not have wanted to have taken. Any changes to budgets will be formally set out to Parliament in the budget revision process, but it is in the public interest that underlying savings are set out now so that the scale of the challenge that we face is clearly understood and no one in this Parliament or anyone negotiating pay deals can be unaware of it. Many of the individual savings are small amounts of money, but together they add up to a significant reduction in expenditure, enabling that money to be invested in addressing the financial challenges that we face. Last week's intervention by the Scottish Government in the local government pay dispute demonstrates what we are having to do in order to shift to full consolidation of the award further savings had to be made. I have committed, Presiding Officer, to publishing the outcome of the emergency budget review within two weeks of the UK fiscal event planned for later this month. Further savings will be required to balance the budget, particularly if inflation continues to rise, and the majority of our spend cannot be changed at this stage of the financial year. It is contractually committed or supports vital programmes. In short, what I have set out today is just the beginning of the hard choices. There is one further point that Parliament must reflect on, which is why I require time following a UK fiscal event before I can set out the results of the emergency budget review. For eight weeks, we have heard the new Prime Minister talk of unfunded tax cuts that will not help the lowest paid or those reliant on universal credit and of cutting public sector spending to deliver tax cuts for businesses. If in pursuing these policies, the United Kingdom Government reduces the budgets of any portfolios where we have devolved responsibility, then the challenge that we face becomes harder as our budget becomes smaller. This is the harsh reality of a fixed budget and limited powers. The Scottish Government simply does not have access to many of the levers that would provide the greatest support in this crisis—taxation of windfall profits, regulation of the energy market or borrowing. That is why the new Prime Minister and her new chancellor must take action immediately. They have reserved the powers over this crisis to themselves. So my appeal to the United Kingdom Government is to cancel the energy price rises and fund the targeted support that people desperately need, help families struggling to feed their children and heat their homes this winter, provide the additional funding necessary to meet the impact of higher public sector pay and inflation. We will do everything we can. We will make the hard choices, but only the UK Government can act to end this crisis. They should do so, and I encourage them to do so now. Thank you, Cabinet Secretary. The Cabinet Secretary will now take questions on the issues raised in his statement. I intend to allow around 40 minutes for this, after which we will need to move to the next item of business, and I would encourage any member wishing to ask a question to press the request-to-speak buttons now or as soon as possible. Thank you, Deputy Presiding Officer, and I thank the cabinet secretary for advance sight of his statement as I begin. However, there was one word missing from this statement, and it was sorry. Sorry to the people of Edinburgh and Scotland for the impact that these strikes have had on their lives, especially here in the capital where waste has piled up in the streets of our capital city for 12 days during our showcase Edinburgh festivals. Scottish Conservatives warned SNP ministers during the passage of the SNP green budget that councils across Scotland would be put in a position where they are unable to meet pay demands. Ministers did not listen, and after year-on-year cuts to councils budgets were limited in their ability to address local issues. Just this year, local councils have faced a cut of £251 million in real terms. The cabinet secretary has stated today that the Scottish Government is providing £3 billion. However, a report by the independent Scottish Parliament research and information centre shows that only £490 million of support has been put in place since October of 2021. I am sure that the cabinet secretary does not want to mislead Parliament, so I hope that he will correct the record today. However, I specifically asked two questions. It is clear that local government needs a new funding settlement, which, for 15 years, has failed to deliver. Will he look again at a new cross-party discussion over local government funding settlements in the future? The cabinet secretary has announced £53 million of cuts from employability fund schemes. That is such an important part if we are going to face a recession of getting people and saving jobs in Scotland. At the same time as the SNP Government is keeping £20 million aside for a referendum, will the cabinet secretary rethink that investing jobs is not a referendum? I deeply regret the inconvenience that was experienced by members of the public in Edinburgh over the disruption about refuse collection as I regret it in other parts of the country. I think that the ability to address the issue and to avoid industrial action would have been helped if Conservative leaders in COSLA, when the Government put more money on the table, had not voted to offer a 3.5 per cent increase to workers as opposed to the 5 per cent that the Government had made it possible to be funded. The playing of politics by Conservative leaders in COSLA directly caused the industrial action in the city of Edinburgh, and Conservative leaders would be ashamed of themselves. I am very on local government funding. The local government settlement for 2022-23, before the additional resources that the Government has put up, increased by 9.2 per cent in cash terms or 6.3 per cent in real terms. That is a very substantial funding increase for local authorities. In addition to the point that Mr Briggs should know me well enough to know that I would never put myself in the position of misleading Parliament and it is a disgraceful suggestion for him to make of that. I will happily put in Spice the substance of the list of support that the Government is putting in place to assist in the cost of living that has been wrestled with by members of the public. I have it in front of me. It totals £2.968 billion, and I will happily put it in Spice, and Mr Briggs should be careful about who he accuses of misleading Parliament. I am very happy to take forward discussions about the funding of local authorities. Indeed, the Cabinet has agreed to embark on discussions with local authorities about the questions of the funding and the achievement of outcomes, the role of ring fencing, so that we can engage with local authorities on the questions of flexibility. On the point about employability funding, I was explicit in my statement that I would rather not be making that reduction in public expenditure, but I have no other choice. We are operating in a fixed budget, and this is the point that I was trying to make in my summation to the debate yesterday that I make again today. We are in a fixed budget. There is no other pot of money that we can go to than to take money from existing commitments that we have just now. That is why we have taken the decision on employability. We think that it is a reason and rational judgment because we are experiencing historically low unemployment, we have significant inflationary pressures and it is likely that the requirement and demand for employability services will be low for the remainder of this financial year. That may not be the case in future financial years, as we look at the impacts of that. Of course, the United Kingdom Government could act to stabilise the situation in which I hope that it will. Lastly, on the question of the allocated resources for the referendum, my statement is focused on this current financial year. The commitment to spend £20 million on an independence referendum, which for me is necessary to ensure that Scotland can decide our own future and get out of this unhealthy and unsatisfactory arrangements of the United Kingdom, is expenditure that will be spent next year. If Miles Briggs wants to exchange to engage substantively on the arguments about the challenges of this financial year, let us talk about this financial year, not next financial year. I know that we have allocated a little more time to reflect the wide interest and the number of members who want to participate in this session, but it is going to require shorter questions but also shorter answers, cabinet secretary. Daniel Johnson. Families and businesses across this country are already feeling the pain of rising energy bills, which is why the Scottish Labour has been calling for active measures and welcomed the fact that the Scottish Government has come to agree with many of those pledges. We appreciate that the Government itself is not immune to those pressures as we face what is an unprecedented economic crisis. However, of the £500 million worth of cuts specified today, the Deputy First Minister is also hinting at £1.7 billion larger figure. We need greater clarity, and just on the £3 billion figure of support, the Deputy First Minister does not need to place anything with SPICE, because SPICE has already done the analysis and said that only £500 million is since the rise in energy costs, and the rest predates those rises. If the Government does place difficult choices, but if that is to be anything other than euphemism, we need greater clarity, transparency and honesty. What is the total value of the funding shortfall that the Scottish Government is planning for? Given that its predecessor suggested that headcount would need to be reduced across the public sector by £30,000, can he confirm that that forms part of the plans? Given the scale of the cuts that the Deputy First Minister seems to be implying with the £1.7 billion figure, can he set out what plans he has asked civil servants to examine and when he will confirm when they will be put in place and the timelines for implementing them? I am not quite sure where Mr Johnson gets his £1.7 billion figure from, but I will happily engage with him on those questions. The substance of the challenge that we face is about the rising costs within budget lines. The £1.7 billion that I make was about the value of our budget because of the impact of inflation. Clearly, we are managing the challenges within that overall budget figure. The additional cost of public sector pay that I have cited to Parliament today on the basis of existing offers is about £700 million. That is a substantial sum of money that we have to reconcile within a fixed budget. What I have set out today takes us substantially towards addressing many of those challenges. Mr Johnson asked about some of the references in the resource spending review to Hetlin. None of my predictions of the years to come would affect the contents of the resource spending review at this stage, but we will have to turn the resource spending review into individual budgets. That will be determined by many of the decisions that are taken by the United Kingdom Government on the contents of their budget for the next financial year. If I reiterate a point that I made in my statement, for example, if the UK Government reshapes the balance of their budget between what they expect to generate in tax and what they intend to deploy in spending, that will have an effect on our budget without a doubt. That may then require us to revisit some of the assumptions in the spending review. The budget process will go through the normal process of parliamentary scrutiny. The autumn budget revisions will go to the finance committee in due course, and there will be the opportunity to scrutinise all the changes that I am making. That is why I am here today, to offer transparency around the changes that we are having to make. That would not be a statement that would ordinarily be made at this stage in the parliamentary year, but I am here because we are having to take operational decisions of such magnitude that we have never taken before. I have come to Parliament to make the statement and to address the questions from members. Thank you. We have now taken 10 minutes to do two questions. We have 18 members who want to ask questions in half an hour in which to ask them. We are going to have to pick up the pace a bit with that call, Willie Rennie. Although £82 million of what the Deputy First Minister calls savings is actually Barnett consequentials from the UK Government, can he provide more detail on precisely the impact of the other cuts to the budget? He has given us broad outlines, but I think that people deserve to know what the real impacts will be on rural communities, on training funds, and, of course, on employability schemes. Can he give the people who are going to be facing those cuts a little bit more detail about what those impacts are? I understand the aspiration that Mr Rennie sets out, and, of course, we will engage in parliamentary scrutiny on those points and answer and address any questions that members have on those points. We are obviously taking—the one point of reassurance that I would give at the outset is that the Government is trying to take a set of decisions that minimise the impact on individuals. That will not be possible in all circumstances, but we are trying to take decisions to minimise the impact on individuals and to make judgments about when we think that it is appropriate for us to reduce funding with the objective of minimising the impact on individuals. Kenneth Gibson, to be followed by Liz Smith. Thank you, Presiding Officer. I believe that all MSPs are keen to see everyone on employment paid more, given rocket and inflation. However, given the financial straitjacket of devolution and real-terms cuts to Scotland's budget of 5.2 per cent this year, even before inflation spiked, what are the implications for the sustainability of Scotland's public finances going forward? Is the Scottish Government looking at whether or not it can continue to mitigate UK cuts in reserved areas? The impact of the higher—the expectations of public sector pay in the budget were 2 per cent. We are obviously at an increased level to that. If it is consolidated salary increases, that will flow through into future years. That will place increasing pressure on future years budgets, which is why we have to restate on an annual basis the contents of the resource spending review to take account of those factors. That puts increasing pressure within the Scottish Government's budget. As Mr Gibson highlights in his contribution, we do not have the range of flexibilities to expand the size of that cake. Obviously, those decisions will be reflected on by the Government as we look at the contents of the budget, but we believe that it is vital that the type of support that we mitigate the actions of the United Kingdom Government, particularly for people who are vulnerable in our society, that we sustain that expenditure to protect our citizens in their time of need. With tomorrow's announcement from the UK Government, there is the possibility that the Scottish Government will receive additional funding as a result of the tax cuts down south. Can the Deputy First Minister confirm that the Scottish Government would use that money should it happen to fund tax cuts for hard-working Scots to avoid us being the highest tax part of the UK? I will perhaps wait until I see all the detail before I decide what the tax stance of the Scottish Government and the proposals are going to be. We will see what the contents of tomorrow's announcement are, but I reiterate my point to Parliament that, if there is an approach that rebalances between tax and spending within the United Kingdom, I would imagine that there will be an impact on the spending power of the Scottish Government, and that is an issue that Parliament will have to wrestle with and wrestle with very carefully. First Minister, in your statement, we were reminded that the bulk of benefits that are reserved to Westminster, in particular state pensions incidentally—I do not think that it is a benefit, but an entitlement. Forty per cent of those entitled to pension credit do not claim that it has been like this for over a decade, and that is a gateway to other benefits. It saves the treasury billions. As the UK Government is not pushing those claims, it may be deliberate, can I ask what the Scottish Government can do despite those being reserved to help Scottish pensioners claim their entitlement, which makes such a difference to so many? That is a very important issue. It is one of the areas of work that is taken forward by the financial advisory services that the Government funds around the country. There is advice available to members of the public. There is obviously a question about awareness and the degree to which people are aware of those opportunities to supplement their income entirely appropriately. I will take forward the point that Christine Grahame makes to ensure that our advice agencies are aware of the importance of encouraging awareness about those opportunities. It is local government that usually takes the hit when it comes to government cuts in the country, seeing the impact of six billion cuts over the past decade. Can the Deputy First Minister say what the impact is going to be on local councils and local communities of this review? As I indicated earlier on in the local government France settlement for this year, there was a 9.2 per cent cash terms increase for local government and a 6.3 per cent real terms increase. That is before we got to the additional money that I have put into local government as a consequence of the pay deals. Local government, in a very tight financial settlement, is being well supported. As I indicated in my answer to Mr Rennie, we are trying to minimise the impact of any judgments on individuals and communities, and that will be the approach that the Government continues to take as we look for ways to ensure that we are able to support those who are facing the greatest challenge from the cost crisis. Bob Doris, to be followed by Pam Gautherl. Presiding Officer, the workforce in the third and voluntary sector play an important role in delivering key services across Scotland, often in partnership with government and local authorities. Today's announcement will have an impact directly on them, I am sure. Can I ask the Cabinet Secretary for assessment the Scottish Government has made of the pay and other financial pressures on the sector? What can the Scottish Government do to support the sector at this hugely challenging time? I acknowledge the significance of the third sector and its importance in providing the support to individuals that we saw during the Covid pandemic and which is ever more necessary just now during the cost crisis. The sector will be under the same financial pressures that the Government is under. Our ability to support the sector to a greater extent is an issue that we will keep under constant review as we look for ways to try to ensure that we can maximise the support that is available to provide resilience and capability within communities to meet the effects of the financial crisis that we face. Does the Deputy First Minister agree that if the Scottish Government hadn't wasted hundreds of millions on ferries that don't float, on the malicious prosecution of rangers and the delays with the Sick Kids hospital, of course, and other botched SNP projects, he would not be announcing the £560 million cuts that he is announcing today? Bluntly, no, because most of what Pam Gosser talked about was capital expenditure, and you cannot use capital expenditure to pay folk salaries. It is just not possible. I am very happy to answer questions in Parliament, but it would be helpful if they were slightly more relevant to the realities of life. The Deputy First Minister has outlined hundreds of millions of savings that have to be made for the Scottish Government to offer that enhanced pay offer to public sector workers. Nobody wants to see those savings made, but we have heard how the Scottish Government's fixed budget is falling in real terms under Westminster, so we do not have a choice, and Mr Briggs might want to think on that. Does the Deputy First Minister agree with me that not only do we need Westminster to urgently provide additional funding, but we also need independence to put future decisions firmly in the hands of the Scottish Parliament, not the Tories at Westminster? The cost crisis illustrates the limitations of this Parliament's ability to deal with changing and dynamic circumstances. We saw during Covid when the United Kingdom Government extended its financial interventions to an extraordinary level, and they did that, and that was welcome. However, that was necessary in that moment, and it is necessary now. However, it would be better if we were able to take the decisions in this Parliament as an independent Parliament about the choices that our people need to face, and to be able to have those controls at our disposal and not wait for the UK Government to hopefully take decisions that will assist us in our endeavours. Paul Swinney, to be followed by Ross Greer. Thank you, Deputy Presiding Officer. At this very moment, as the Cabinet Secretary outlines £500 million of cuts, Public Corporation Scottish Waterhouse reserves have almost £500 million following their price hike earlier this year, a rise that looks set to happen again next year. Can I ask the Cabinet Secretary whether he has demanded that public corporations with vast reserves play their part in easing the financial pressures that are faced by millions of Scottish households, by holding down utility bills and investing in capital projects such as public district heat networks to get houses, public buildings and businesses off the gas grid? I certainly expect all public bodies, including public corporations, to play their part in assisting the Government in wrestling with the unprecedented situation that we face. Ross Greer, to be followed by Jackie Dunbar. There have been a number of claims made in recent weeks about the status of the Scottish reserve. The Deputy First Minister referenced the reserve in his statement, but could he expand on that and clarify exactly what the status of the reserve is at present and what has been allocated from it? At the statement that Mr Arthur gave to Parliament for the provisional Scotland reserve position at the end of the financial year, the expectation was that the reserve would hold £650 million. The budget bill envisaged that £511 million of that would be provided for £511 million of that to be inserted into the budget, and we expect to deploy the remaining £139 million at the autumn budget revisions to support announcements that have already been made to provide assistance to different aspects of public policy in the course of the work of the Government. Jackie Dunbar, to be followed by Russell Findlay. I welcome that tackling the cost of living crisis is front and centre of the Scottish Government's programme for government. However, in comparison, the UK Government has been missing in action, causing anxiety for families and businesses, not only in my Aberdeen-Donsea constituency but across the country. Can the Deputy First Minister advise whether the new UK Government has contacted the Scottish Government to outline needed emergency plans to help tackle the cost of living crisis? I have to say that nothing has reached me yet. That is not to say that there has not been approaches about some dialogue, but nothing has reached me at this stage. As I indicated to Parliament yesterday, the First Minister asked the previous Prime Minister to arrange four nations discussions on the cost of living emergency. That was turned down at that stage. I have been in touch with the former chancellor and I have written to the new chancellor overnight, requesting urgent intervention to address the very issues that Jackie Dunbar has raised. The cabinet secretary reveals that almost £10 million will be cut from the justice budget. At today's justice committee, Police Scotland voiced very real concerns about SNP cuts resulting in fewer officers on our streets. Without hearing the usual stock excuses of blaming the UK Government, can he tell people why jeopardising public safety is the right thing to do? I would not count on jeopardising public safety and I do not think that it helps the quality of debate for Mr Finlay to go chucking around accusations like that. I would remind Mr Finlay that crime in Scotland is at a 40-year low just now. We properly and effectively fund the police service. I am very pleased that the justice secretary has been able to secure a 5 per cent pay increase for the police officers. The whole purpose of my statement today is to indicate to members of Parliament that there are limitations on the resources that we have available to us and that we are going to have to make hard choices. As part of those hard choices, I am very pleased that our police service serves us so well and that we have such low levels of crime in Scotland today. It seems to me that some organisations, businesses and perhaps some individuals have been making huge profits during Covid and through the energy price challenges. Does the Deputy First Minister support the idea of a windfall tax? Is there anything that the Scottish Government can do in that, or will it be dependent again on Westminster? There are, as ministers have made clear, very strong arguments for windfall taxes and we have supported measures that have been taken forward in that respect. We believe that, out of the proceeds of a range of different activities, if there are windfall profits, there is an argument to consider whether those should be the subject of additional taxation. Mr Mason will appreciate, though, that issues of corporate taxation are reserved to the United Kingdom Parliament and that the Scottish Government has very limited scope to be able to take forward any issues of that type. We can, of course, explore any issues that may arise through the non-domestic rate system but that, I would stress, is very much a peripheral approach to the tackling of the scale of the issue that Mr Mason raises with me. I have listened carefully to what the cabinet secretary has said about operational decisions for this year, but Scotland's two richest families have as much wealth as the poorest 20 per cent of the whole population. What work is being done to look at how the Scottish Parliament's existing tax-raising powers, for example land-based taxis, could be used to target the super-rich whose wealth has increased substantially during the pandemic? There are ongoing discussions that the Government takes forward in looking at the exercise of the tax powers over which we have existing competence. The conclusions of those discussions will feature in the budget proposals that are brought forward later on in the year and, obviously, there will be the opportunity for members to scrutinise those. There are very limited opportunities for the Government to extend beyond those existing tax responsibilities, but we will look at all those questions as part of our efforts to ensure that public finances are sustainable. The Deputy First Minister touched on some of the steps that the Scottish Government is currently taking to mitigate the cost crisis. Can he provide any further detail as to how the Scottish Government will maximise the current direct financial assistance that is available to those who are most in need, taking into account, of course, the financial strait jacket that the Scottish Government is subject to in terms, sadly, of the current constitutional settlement? I think that answering Annabelle Ewing's question, I would cite, as probably the most recent and significant intervention in this matter, the Scottish Child Payment. The Scottish Child Payment represents a very welcome and highly focused intervention to support families facing financial challenge and difficulty. We set out yesterday that it will be extended in November and that the payment will be increased. That is one example, and there are others that I could list where the Government is taking action to support families who are facing challenge and to do that. In doing so, it forces us to make choices about how we use our resources, because if we fund the Scottish Child Payment, we are not able to fund other proposals and services that other people may wish us to fund. Can the Deputy First Minister confirm that no budget has been taken from this year's allocation to the Just Transition Fund for North East and Moray and that every penny of the £20 million from this year's budget will be allocated this year? There is no money that has been taken from the North East Transition Fund, whether all of it will be allocated this year is a matter that will be subject to ministerial decision making in the course of this year, but we would want to see that money allocated in full for the remainder of this financial year. Normal independent countries have and will be using extensive borrowing powers to ease the burden of the cost of the living crisis. Can I ask the Deputy First Minister what progress has been made in discussions with the UK Government in regards to more flexibility with an existing fiscal framework, particularly around additional borrowing powers, needed now more than ever? We are in what I would call the foothills of discussions about the fiscal framework, and there are some mountains yet to be climbed. We will be raising and discussing those issues. The response that we will get from the United Kingdom Government will be a matter for further consideration and explanation to Parliament. However, I think that this crisis and Covid illustrate the necessity for the Government and Parliament to have a wider range of financial powers and flexibilities to enable us to manage the challenges that we face. The Deputy First Minister will be aware that, before Covid, people with disability in employment were less than the rest of the United Kingdom. Covid has left many disabled people behind. Those cuts in employability training will affect the most vulnerable disabled people in our society. What message do you give to disabled people in Scotland that they are not important in order to get them back into employment, and what do you rethink, particularly around disability? I hear Mr Balfour's point and I understand it and I think that he makes a fair point. The challenge that I face is that I cannot spend money twice. That is the point that we are reaching because of the pressures that we are facing. I hear what he says and I will explore what opportunities there are to try to address the issues that he raises. However, we are under severe financial pressure and to meet the costs of public sector pay, we have to take the decisions that we are taking. I will try to minimise the impact on members of the public. That is the assurance that I have given Parliament today. However, the wider context for our financial pressures is set by the parameters in which we are operating from the United Kingdom Government. If those were to be relaxed, I would be in a position where I could allocate more money than I am able to allocate today. The response to my appeal to pick up the pace was absolutely exemplary and has set the standard for the rest of the session. With that, we conclude.


Hello and welcome back to Beyond Networks, the evolution of living systems. In last lecture I gave you a mantra, remember that mantra for the rest of the course. Structure does not determine function. Structure does not determine function. For two reasons. The first is that even simple, very simple sub-circuits in a network like the AC-DC circuit that we discussed last time can produce a wide range of qualitatively different behaviors depending on the exact details of how the interactions happen and the nature of the parts and their interactions in the network. Also, context matters if you put this little sub-circuit in a larger network. Its behavior would depend crucially on how it is integrated into that wider context of a complex large network. And so we cannot just dissect a complex network into its motives or sub-circuits, determine their behavior from their structure because they're simple, and then piece the whole network, the behavior of the whole network together again just as playing Lego with these little network motive, puzzle pieces, Lego pieces. So we need a different approach if we want to understand what a complex network is actually doing. What does this do? It's really hard to figure out. We can't just trace the interactions that have been through this. We can't just mentally rehearse or simulate the behavior of this network because it involves way too many factors, non-linear, unexpected behavior, and so on and so forth. So we need to figure out how to explain that and maybe we should also take a step back and think about what do these network models, these network graphs actually explain? Do they explain anything? And maybe we have to take one step even further back and ask ourselves, what on earth is a scientific explanation in the first place? Have you asked yourself this question? You should. I think it's a very non-obvious question. It's not clear what the answer is, and it's been the source of very long-standing philosophical debate. So in this lecture, we'll take a very quick excursion into the philosophy of what explanations are and what kind of explanations biologists especially use. The classic sort of account of scientific explanation was worked out by Carl Hempel in collaboration with Paul Oppenheim. The classic paper for this was published in 1948, and this account of explanation in science is called the Covering Law Model of Scientific Extension. It's what you probably intuitively would answer as scientific explanations. It's also called the Deductive Nomological Model, very complicated. Words will explain them in due time. And the best place to read up on Hempel's work is this little book, but it's sort of mysteriously awful cover drawing here. So this classical account is sort of making the following statement. It says explanations are arguments. That's very important. So an explanation is a logical and also a deductive argument. We'll come back to that in a second. Showing that the event to be explained, the explanandum is the phenomenon that we want to explain, like the rainbow that you see in the background. Was to have been expected on the basis of laws of nature. Okay, that's what nomological means. The deductive argument derived nomologically from a basic law. But also the antecedent and boundary conditions. And those laws of nature and the specific conditions that apply in a situation, they are called the explanance, sort of the tools, the arguments, the means by which you provide the explanation. So we use the explanance to explain the explanandum. What's important here is this fact about deriving explanations from law. So let's look at this beautiful picture of a double rainbow and think, how would Hempel explain a rainbow? What are the general laws he would derive a rainbow from? The laws of optics, the laws of refraction and diffraction. So that's not enough, right? You also need droplets in the air. You need sun rays coming in and you need an observer. Who is standing at exactly the right position to observe the rainbow. These are the specific conditions and antecedents in that previous quote. Together with the laws of optics, you get the sun coming in, being split up by the droplets like a prism, and if you're standing at exactly the right spot, you will see not only one, but two rainbows in the sky. Beautiful. And in this case, no problem. But remember, the pendulum model, Galileo, came up with this before Newton raised his laws. So basically, you can derive the pendulum model nowadays from the general laws of gravity. But Galileo, I mentioned that he didn't do that. He came up with the model without the laws of nature in the background. Keep that in mind. So let's simplify this complicated quote I gave you before. And the covering law model basically amounts to this. You have some general law, some particular facts. That's the exponents.  The explainer. OK, but there's three reasons why this model doesn't apply in general. But in biology and the social sciences in particular, it's not a good model for those sciences. First of all, there's a problem with symmetry. So think about this sort of situation here. It's not a rainbow, but the sun's shining. And there is a flag on a pole. And that pole casts a shadow, as shown here in the picture. And from measuring the length of the pole and the angle from here, from the end of the pole, you can estimate its height by doing trigonometry. So you're using, again, sort of general laws of optics. Also, you're using geometry here. And you derive sort of the height of the pole. OK, but if you think about explanation and causation. So what you've just done is you've derived the height of the pole from the shadow. But what's really happening in nature is the shadow is caused by the pole. So it is the pole that determines the length of the shadow. But you've determined the length of the pole from the shadow. So there's a symmetry here that is totally OK in terms of Hemphol's account of explanation. But which is definitely not OK if you want to come up with a causal explanation of the length of this shadow. The next problem is the problem of relevance. There are a lot of causal interactions in the universe that are not relevant. I mentioned already earlier when we were talking about near decomposability. I mentioned the pseudoscience of astrology.  They do. Everything is connected. The gravity of all the bodies in the solar system have some finite influence on what you experience. But obviously to everyone, apart from those people who believe in astrology, those influences are absolutely negligible compared to the immediate sort of influences on your life that come from other people, your surroundings, your immediate surroundings, et cetera, et cetera. But you're much larger than the influence of the stars and the planets. OK, so here you have an account that's perfectly sensible in some ways, but completely irrelevant. And Hemphol's account of explanation cannot explain what is actually relevant for some sort of phenomenon to be explained. And then, of course, we come back to Wimpsat's rainforest ontology. Where are these general laws in biology? Natural selection. Maybe we're not sure. But usually, you don't have any general laws to derive any models from if you're a biologist, even worse in the social sciences. Because we had this discussion already, we live in this part of the world that is very messy, where the levels of organization are no longer clearly separated, where you need multilevel explanations that only apply locally to specific systems. So while physicists can have generalized laws and theories in scare quotes, because they're also just very generalizable models. In biology and life sciences, the neurosciences, and the social sciences, we cannot have that. So we only have specific models and perspectives relative to specific problems. So basically, the covering law model absolutely won't do in our case. It's not a good explanation. And as logical empiricism, of which it was a part, started to decline, people came up with new ways of looking at scientific explanation. One way is to say biologists don't have any explanations. The ultra-reductionist philosopher of science, Alex Rosenberg, he has an article saying that. Nice, right? Biologists don't really explain anything because they're not physicists. Rosenberg is one of these people that takes the wrong premise, follows strictly logical, very clear argument, and then comes to the wrong conclusion. He's interesting to read, but I don't necessarily recommend him. So if we don't accept his radical conclusion that biologists don't really explain anything, how do we go about explaining stuff in biology? Let's take the rainbow again. So what we could do is we could look at the rainbow as a system and see, does it have parts that cause the phenomena? Okay, and of course, we immediately see the droplets that now act. They're in the air and they act as prisms to split the sunlight into the rainbow. There is no general law. We can look at the behavior, the activities of each of those droplets, and we can notice that it sort of splits the light. So we don't need the general laws of optics to come up with a perfectly causal explanation of the rainbow. Okay, there are droplets in the air and they cause the light to be diffracted, split up into its colored components. This is called the mechanistic explanation. Let's try and make this a bit more precise, and I really recommend a wonderful article by Craver and Tabry on the Stanford Encyclopedia of Philosophy that I've referenced below. The quotes are from that article. So Craver and Tabry say explanation in this mechanistic account is a matter of elucidating that causal structures that produce and rely or maintain the phenomenon of interest. That's also what Galileo did with the pendulum, by the way, without any general law of gravity. He just looked at the forces that act on a ball. So that seems to be much more promising as a sort of explanation, a form of explanation in biology. But we have to ask ourselves what is this question again? What is a mechanism? It's been sort of haunting us for the whole lecture already, but I've never actually gone into this specific context and I've never explained what does it actually mean, a mechanism. And the problem is, as many concepts that we use in biology, mechanisms has many different meanings, two meanings in particular that we have to look at. They're very different. So there are at least two very different meanings of the term mechanism. And one that, as you may have noticed already, and slightly allergic to, is this idea of mechanism as a machine. So all the computer metaphors in biology fall into that, but also the idea that you have to explain everything in terms of molecules, okay? If you submit your paper, a research paper in the future, or you have done so already and reviewer two says, I reject this because you don't have a mechanism. And you can go and ask, what is a mechanism? And when they tell you it's about molecules, you can tell them they're wrong. They don't understand what a mechanism is and what role it plays in explanation in biology. Because there is a second meaning of this term. And this is mechanism as in some sort of causal explanation of a phenomenon. I've shown you this cartoon already in the context of statistical network analysis. So if we want to explain the behavior of a system, we need more than the statistical approach. We need a causal explanation. So in this sense, mechanism is sort of a post to these sort of general network analysis. And we'll come back to that point. But let me first explain a bit more about this difference between machine mechanism and what philosophers of science call neo-mechanism. It's a branch of the philosophy of science that has come up, especially since the year 2000, a little bit before already, that takes a new look at how we explain stuff in biology opposed to the covering law model of Carla Hample and Paul Oppenheimer. So machine mechanisms, we've been through that. So they emphasize that organisms are sort of the same as the non-living work. We're not made out of magic stuff. Descartes was in some ways right when he said, organisms are just mechanisms. But then Delamite said an organism is a self-winding clock. I've never seen a self-winding clock that does this in a form of how the organism reproduces itself. So there is a lot that goes into the self-winding term, right? But what this sort of machine mechanism does is it emphasizes that the stuff we're made of, it's antivitalistic. There is no magic stuff in living systems. Biological holes are determined in this view entirely by activities of their molecular parts. So we sequence everything, we do all the proteomics, and we suddenly understand how the organism works. Sounds familiar? In this view, we focus on efficient material causes and not final causes. We'll come back to Aristotle one module ahead from now. I won't go into this, but remember this. And this approach, of course, is firmly committed to reductionism. So we want explanations in terms of the parts of the system. For example, molecular biology. The only valid explanations are at the molecular level. We need to bottom out, as Ramiro 2 tells us to do. Neo-mechanism is a very different view of mechanism. The emphasis here is an alternative to general laws, which are based on the covering law for biological explanation. These mechanisms normally, they span multiple levels of organization. There's no problem with that. They don't have to go down to the molecular either. We'll cover that in future lectures. And mechanisms explain biological functions as part of an organismic whole. So you have to see those mechanisms as partial. They don't explain the whole organism. We'll definitely come back to this problem. But they're very good at explaining parts of mechanisms, such as developmental processes. This type of explanation, mechanistic explanation is not necessarily committed to reductionism. And it's compatible with higher level and systemic explanation. So one of the main differences here is that machine mechanisms are ontological. Remember that word? So they say something about the existence, the reality of living beings, while this neomechanism is more a way, a kind of a different way of explaining what's going on in living systems. So Dan Nicholson, whose paper I've stolen this from, has suggested to call mechanistic only the sort of clockwork machine mechanism, classical type of mechanism. And he invented the word mechanismic for this new type of mechanism, which is about causal explanation. This is all very abstract. So let me give you a few precise definitions of what a mechanism is. And this typical philosophical debate is very confusing. There are a lot of different sort of definitions out there. But out of those definitions, we can maybe crystallize our idea of what it really means. The first and earliest quote I give you is, by Stuart Glennon, who is looking at mechanisms in an ontological sense as sort of causal structures and reality. He says, a mechanism underlying a behavior is a complex system, a real system in his case, which produces that behavior by the interactions of a number of parts according to direct causal laws. So there's the word law in there, which is a little problematic. And also causality will come back to where the cause is. It's also a complicated topic. You can shift the debate to the level of explanation. Two biologists, George Fundasso and Edmund Rowe, do this in this 1999 paper, highly recommended, very underrated paper. They say mechanism per se is an explanatory mode. It's a way of explaining in which we describe what are the parts, how they behave intrinsically, and how those intrinsic behaviors of parts are coupled to each other to produce the behavior of the whole. So basically there are parts, they do something. That causes them to interact and they produce some sort of behavior or phenomenon. This is a classical quote from the paper that started the whole neo-mechanistic movement, McHommer et al. 2000, and they say mechanisms are entities and activities, again, parts that do something organized such that they are productive of regular changes. They produce change from start or set up to finish determination condition. It's almost like an algorithmic idea. Stuart Glennon revises and extends his definition in 2002. A mechanism for behavior is a complex system still that produces the behavior by the interactions of a number of parts, still where the interactions between the parts can be characterized by direct invariant change relating generalizations instead of laws. Okay, so he's sort of tuned in to that discussion about how mechanistic explanations are exactly not like universal laws. And then here, okay, this is something we're going to come back to in the next lecture, Bechdel and Abrahamson's definition. The mechanism is a structure performing a function in virtue of its component parts, component operations in their organization. The orchestrated functioning of the mechanism manifested in patterns of change over time and properties of its parts and operations is responsible for one or more phenomena. Stuart Glennon again, third try. A mechanism for a phenomenon consists of entities or parts whose activities and interactions are organized so as to be responsible for the phenomena. This is called a minimal definition of a mechanism. So let's parse that last most simple quote in all of them. So just listening to me reading out those quotes, maybe you have crystallized a few basic features of mechanisms already. So one is a mechanism produces some sort of phenomena. And when we looked at actual real systems, a few lectures back, we said a system is something that produces a pattern, is a patterned process, okay? So the phenomenon is some sort of pattern or behavior that we can recognize as something we want to study. That's quite obvious. A mechanism has to be made of parts. So to understand the mechanism, we have to focus on those parts and we have to decompose it into parts. So mechanism in this sort of sense is still a reductionist sort of approach. So we're looking at a system in terms of its constitutive components. It has to have some sort of causings. That's a weird word that occur through the activities and interactions of parts. We're identifying a causal structure and that structure is embedded in those activities and interactions that arise from the parts. And then there has to be an overall organization that's responsible for the orchestrated generation of the phenomenon. So all these activities have to work together in some way to produce the behavior of the whole. And here is where a lot of disagreement comes from. How does this work? How does this work? How does this work? How does this work? How does this work? We're discussing this and how complicated this is. And we'll come back to this idea that the system is more than the sum of its parts, which is not sort of explicit in here. It's not clear if neomechanists believe that. So as has become hopefully quite clear by now, mechanisms are a kind of heuristic model. Let's get back to that in a second. So let me give you a slightly alternative, different definition of a mechanism from Dan Nicholson's work, his 2012 paper. He says mechanisms are heuristic models that enable the explanation of causal processes which realize some biological function or phenomenon of interest. Okay. So tools. Mechanisms are explanatory epistemic tools, just like models. And formal models. Mechanisms can be formulated in different ways. Okay. The idea is a little broader than the idea of a model that we have before. So here is the work of Linda Darden, one of the pioneers of this neomechanistic philosophy. And she has a beautiful paper in 2002 that, that looks at how mechanisms are presented in the literature. And she says very often in biology. Mechanisms are presented as sketches. She calls this mechanism sketches. An example is shown here from Jim Watson. It's very nice because it's an early sort of attempt at explaining how proteins are made out of DNA before they had deciphered the genetic code. And it says there's some sort of complement replication. 1954. So this is after the 53 paper. And I know DNA can, can replicate like this. Some sort of chemical transformation. And then you get a protein from the oxyribose to ribose. You get the RNA. That's also replicating maybe. No, that's wrong. Right. And then you get a pro protein based on gamma holes. Those are not very known. Things anymore. These holes are part of the structure of DNA that we're supposed to be involved in the mechanism of producing proteins by being complimentary to the shape of amino acids and gamma even. Derived the fact that there are only 20. Amino acids that DNA encodes for only 20 amino acids from these sort of structural features. Not important. What's important here is that this sketch is incomplete. It has some wrong information in it. That's what a sketch means. But over time, people have elaborated the view of how proteins are synthesized. And you can see here what Darwin calls a mechanism schema.  It's not a formal model. It's a drawing. But it is complete. And we know it is complete. It has no gaps. So you develop a mechanism you represent it first as a sketch. And then in biology, very often as a diagram like this, which is a type of a model, but not a formal model. But of course you can also represent mechanisms by formal models. Just like network graphs. Okay. Because they lent themselves very easily to this. Are the nodes in the network and the activities and interactions are represented by the edges of the graph Especially if it's a directed graph like this one very straightforward So we're tying things together again that we've been through already at this point But and here's the mantra again structure does not determine function repeat after me Structure does not determine function. So to understand the function of this network we need to understand what it does and I think I told you a couple of times already that you cannot do this by just looking at The network, but you can learn stuff from looking at the network alone So it's important to point out that you need a mechanistic explanation in this neomechanistic sense that I just introduced If you want to know what the network does But there are other types of explanation in biology as well We'll introduce some in the future, but I want to mention one at the end of this lecture right now And it's called the topological explanation It was first suggested in a paper by French philosopher Philippe Eumann and So what Philippe has done Is he thought about these networks and how common they are and How they actually do explain some features of a system So he defines a topological explanation as Follows he says network analysis rough theory abstracts away from causal interactions Okay, so we do statistics on degree distributions and stuff like that To pick up topological properties for example the scale-free structure of a network and Those properties they explain some features of the system such as a systems anti fragility its resilience its robustness Okay, we've been through that in the first lecture of this model So go back to that if you need a reminder basically these topological properties can be defined on a graph or other abstract mathematical spaces Keep that in mind. It doesn't have to be clear what that means. We'll come back to topological explanations in a little bit So basically here you you don't even try to explain what the system does But you want to explain other features such that it does what it does robustly That it learns from insults from perturbations other such things and That's completely Viable, so I have to take back my provocative statement a few lectures ago that this is not an explanation This is not a mechanism It is an explanation of some kind a topological explanation But how do we get from here to a causal mechanistic explanation of what the system does? We have gotten no further But by rephrasing the problem I think We can now approach it from a slightly different way. So in the next lecture, I'm going to talk about What is it? that makes a mechanism explanatory in Terms of explaining what the system does. I hope you'll tune in again Thanks for listening. Bye now