Wellbeing Economy, Fair Work and Energy
Good afternoon. The first item of business is portfolio question time. The first portfolio is wellbeing economy, fair work and energy. Any member who wishes to ask a supplementary question should press their request-to-speak button during the relevant question.
I advise members that we are very pressed for time across the afternoon, so the usual plea for brevity in questions and responses has an extra significance today as I hope to get in as many questions as possible.
Economically Inactive People (NHS Waiting Lists and Long Covid)
To ask the Scottish Government what proportion of the reportedly rising number of people of working age who are economically inactive are inactive as a result of national health service waiting lists or long Covid. (S6O-02357)
Scotland’s labour market continues to perform well, with unemployment at just 3.1 per cent from January to March 2023. Economic inactivity due to illness is a challenge not just in Scotland but across all these islands, and analysis suggests that most people who are now inactive due to long-term sickness were already out of the labour market for another reason. Nonetheless, economic inactivity due to ill health is a key concern for the Scottish Government, and “Scotland’s National Strategy for Economic Transformation” makes a commitment to address Scotland’s labour market inactivity challenges.
A recent report from the Resolution Foundation has revealed that a greater proportion of Scottish economic inactivity is attributable to health problems than is the case for the rest of the United Kingdom. We know that long Covid has left many key workers, including public sector workers, carers, nurses, doctors and teachers, debilitated and unable to work. Although we can debate the absence of clear clinical pathways and long Covid clinics, will the cabinet secretary agree to investigate why so many public sector workers are losing their jobs, with the consequent loss of their expertise, simply because their employers lack understanding about their condition?
The member raises an important issue, and I would not want anyone to lose their job as a result of their employer not understanding their condition.
I should point out that Salus and working health services Scotland provide return-to-work and occupational health services for people who have health conditions or injuries that are impacting on their work, including long Covid, in order to help them to stay in work. I would hope that all employers, in the private sector or the public sector, are taking advantage of those services to help their employees.
The member has asked me to look into a specific issue, which I am willing to do because I am interested in the point that she makes. I will certainly do that.
When the COVID-19 Recovery Committee took some evidence on long Covid from sufferers of the condition, one of the issues that they identified was the difficulty that sufferers faced in getting back into the workplace, because of the time that it takes them to get a diagnosis and then a treatment path. They tied that to the absence of long Covid clinics in Scotland.
The First Minister, when he was Cabinet Secretary for Health and Social Care, said that he was open to the notion of long Covid clinics in Scotland. Can the minister give any indication of whether there is going to be any progress from the Government on introducing those vital clinics?
Again, the member raises an important issue. He may wish to ask health ministers about progress on the clinics, because it is up to local health boards to determine how to deliver those kinds of services in their localities. As he will be aware, the Scottish Government made available around £10 million for long Covid-related issues, so there is some resource being dedicated to the condition.
Again, I note that the member raises a powerful point. I urge him to raise with health ministers the issue regarding progress on long Covid clinics, as it is an important one.
Infrastructure (Impact on Business)
To ask the Scottish Government what its position is on what impact poor infrastructure has on the ability of Scottish businesses to succeed. (S6O-02358)
Continuing to deliver high-quality public infrastructure is a priority for the Scottish Government, which is why our policy prospectus committed to targeting capital spend on achieving net zero and maintaining high-quality public infrastructure and services across the country.
Our capital budget for 2023-24 is just over £6 billion. The UK Government’s planned real-terms cuts in our capital funding over the next five years will significantly impact on our capital plans; however, we will do what we can to maximise the funding that is available to support employment, Scottish businesses and the economy through Scotland’s infrastructure investments.
A new poll has revealed that nine out of 10 people want a full or partial upgrade of the A75 and A77, with 80 per cent of those citing safety fears as their major concern. Nearly half insist that the lack of investment is not only putting tourists off visiting but putting people off moving to the south-west of Scotland.
That comes on the back of an economic investment assessment that highlighted the £5 billion-worth of positive benefit to the economy if proper transport infrastructure was in place. Does the Scottish National Party accept that rural businesses and rural communities are being disproportionately let down through the dire management of Scottish infrastructure?
The member raises the importance of the A75, which I hope is recognised across the chamber; it certainly is by the Scottish Government. The A75 not only is important to Scotland’s economy but provides a critical link between Northern Ireland and the wider markets of the rest of the UK and Europe by connecting the ports to the wider trunk road network.
The member would face the same challenges—if, heaven forbid, his party was ever to be in government—of the financial storms that the Scottish Government has had to cope with in its budgets over the past decade or so, ranging from the banking crisis, the Tory party’s austerity agenda, the impact of the pandemic, Brexit, the cost of living and cost of business crises, the war in Ukraine and so on. The Scottish Government has also had to cope with their impacts on infrastructure projects and the speed at which those can be delivered, and on the budgets that can be made available for those very expensive infrastructure projects. A little bit of realism would benefit the member when he approaches these subjects.
The bottom line is that we agree that the A75 requires work and is a very important trunk road for Scotland.
Briefly, Daniel Johnson.
First I welcome the new tourism minister to his place. Tight labour markets have consequences for infrastructure. I speak to businesses who can identify potential workers, but they cannot travel from where they live to where they need to work. Has the Scottish Government undertaken a critical analysis of key missing transport links and infrastructure that are inhibiting current labour markets?
Of course the Scottish Government has transport plans and policies that take into account the need for people to travel to work and the importance of routes around Scotland to allow that to happen. The member raises an important point, because labour shortages and skill shortages are very important; they are undermining some of the sectors in our economy that have demand for their products and services but cannot meet that demand because they cannot find the labour or the appropriate skills.
In some ways, that is a sign of success because they are doing so well, but to capitalise on that success, we need to make sure that people are available for those particular industries and sectors. That important point has to be taken into account by the Scottish Government in relation to transport plans and wider economic policies. However, Brexit is the issue that is most often cited to me as one of the key causes of why many sectors face labour shortages and of the hurdles that people overseas have to jump over to come and work in Scotland, even when they have an employer who is willing to employ them. A range of issues has to be addressed there.
Levelling Up Funding (Islands)
To ask the Scottish Government what discussions it has had with the United Kingdom Government regarding levelling up funding for Scotland’s islands. (S6O-02359)
The Scottish Government engages with the UK Government on a regular basis on the implications of its levelling-up policy for Scotland, especially with regard to its impact on devolution. However, the levelling-up fund is a UK Government scheme that circumvents the Scottish Government. Therefore, Scottish ministers have no say in how it is allocated or what projects are supported. Shetland is the only island to have received an award thus far in the Highlands and Islands, demonstrating how poorly the fund has provided support for Scotland’s islands and rural and remote places.
The people of Fair Isle, for whom levelling-up support has been allocated for a new ferry, would perhaps disagree with what the minister just said. They are very much looking forward to having their ageing interisland ferry replaced.
Short tunnels to the north isles could be a better long-term solution, so I wonder whether the minister would seek a meeting with his relevant UK counterpart to discuss levelling-up funding with a view to short tunnels between Shetland’s islands communities.
The member will be aware that my colleague Neil Gray intends to have much correspondence and many meetings with the UK Government over the future of the levelling-up funds. I will pick up on one point that the member made. My comments were not whatsoever intended to downplay the merits of the Fair Isle award. I was simply making the point that, in the most recent round of funding of a £4.8 billion project, that was the only award for all of the Highlands and Islands.
Apparently, my constituency does not deserve any levelling-up funding, even though, if you look at the economic and social stats, it should qualify for that kind of funding. Many parts of the Highlands would have done so under the European funding, which the levelling-up funding was partly introduced to replicate, but of course the Highlands and Islands were deemed low priority under the UK Government’s criteria, whereas when we were in Europe, they were deemed high priority.
The final point that I will make to the member is that the fund mostly—if not wholly—goes through local government in Scotland, so she might wish to speak to her local authority about its discussions with the UK Government about future rounds of the levelling-up fund. However, I will certainly pass on her point to my colleague Neil Gray to ensure that it is incorporated.
Despite previously benefiting enormously from European Union funding, does the minister share my view that the Western Isles received nothing in either round of the levelling up fund? Does he also share my views that the apparent determination of the UK Government to ignore the devolution settlement is unhelpful and that structural funds should be devolved to the Scottish Government as a priority?
The member makes a good point. Originally, the Scottish Government was led to believe that there would be a consequential of £400 million for it to allocate in tandem with Scottish priorities; then, at the last moment, the UK Government changed its mind and decided to allocate the whole of the fund across the UK according to its own criteria, with the Scottish Government and other devolved Administrations having no meaningful say in the process whatsoever.
Then, there is the idea that the Western Isles should not qualify for the funding—more than £4.8 billion-worth of funding—when I expect that later today members in the chamber will debate the fragility of the Western Isles economy. That fragility is recognised by the Scottish Government and it was recognised by the European Union, but it has not been recognised by the UK Government.
Solar Energy
To ask the Scottish Government whether it will provide an update on its vision for solar energy. (S6O-02360)
The Scottish Government published a draft vision for the future of solar energy in Scotland as part of our draft energy strategy and just transition plan. The consultation on the plan has now closed and we are reviewing the many responses and the evidence received. We expect to publish the final solar vision by the end of 2023.
The minister will be aware of the repeated calls that have been made for the setting of a stretching but achievable target for solar power, because that is seen as a sine qua non to unlocking the huge potential of solar power in Scotland and to secure the just transition that we all wish to see. Is the minister sympathetic to the calls for the setting of a stretching but achievable target?
Absolutely—I heard those calls and, as I said, solar was a key part of the energy strategy and just transition draft plan. Through the consultation for that, we invited stakeholders to provide their views on setting a solar deployment ambition and to submit evidence to support them. The consultation is now closed and we are reviewing the responses. By the end of 2023, we are going to provide an updated position on where we see the ambition, and the associated targets will also be set out. To date, 400MW is being generated through solar photovoltaic systems, with 375MW in the pipeline, but I agree that we can do much more.
We share the minister’s ambition for solar, but it is important that our energy mix and targets are based on evidence and data. At what temperature does the Government’s modelling show that a reduction in solar panel output begins, and as temperatures increase as a result of climate change, what source will provide continuous and constant power to compensate?
As Liam Kerr knows and as I have said, an energy mix is very important. That is why we invested so much in ScotWind. Wind and solar are compatible, because when the wind blows the sun tends not to shine; the member will know that from living in the north-east. Members will notice some developments happening in that area. For example, I spoke to representatives of the Scottish Power-owned Whitelee wind farm, which is combining solar panels with the capabilities of its wind farm in recognition of that fact. The member is right that we need to look at the energy mix in the round, but wind and solar are eminently compatible.
Given the huge opportunities for solar in our urban and rural communities, will the minister consider at least a 4GW target, given the very positive evidence that the cross-party group on energy efficiency and renewables got on that at last night’s meeting? We need support for existing and new homes, buildings and solar farms, given the biodiversity and rural impacts that they could have across the country.
I absolutely recognise the level of ambition that there is in the solar sector. Solar Energy Scotland has requested that the Scottish Government set a target of 4GW, with an upper target of 6GW, and of course we are looking at that. Scottish Renewables has also called for a target of 1GW on public sector buildings and I think that we have the potential to put solar on a lot of our public buildings. A lot of local authorities are making that decision right now. My own local authority, Aberdeenshire Council, is providing solar panels for those who live in local authority housing, so there is potential there, working in partnership across local government and the Scottish Government and with our partners in the sector.
Question 5 was not lodged.
Connectivity (Support for Island Businesses)
To ask the Scottish Government what support it is providing to tourism and other businesses within island communities to mitigate the impact of any connectivity issues affecting them. (S6O-02362)
We understand the critical interdependence between ferries, the tourism sector and businesses across our islands.
Any scheme for additional support for businesses along the lines suggested by the member needs to be carefully considered and would require stark choices to be made about funding priorities, set against efforts to provide resilience in the network. However, the Scottish Government has already given a commitment to look into this further.
The Scottish Government has had plenty time to look into this because the ferry fiasco that our islands now face is not a recent event—it has been happening for some years. Hotels, restaurants, shops, cafes, caravan sites and cycle hire businesses—you name it, even our amazing breweries—are all suffering. They are losing money and they are losing customers right now, so I would like to ask the minister what analysis the Scottish Government has done on what this ferry crisis is costing our island communities. Why will the Scottish Government not commit to the immediate launch of a compensation fund so that those businesses can get back on their feet right now?
Of course, Parliament has an opportunity to debate that topic later today. We do not underestimate in any shape or form the impact of the ferry disruptions on the economies of our islands—particularly, as the member says, the impact on tourism and local businesses. That is why the focus up to now has been on building a resilient ferries network to ensure that we can get to the root of the issue facing the islands and sort it out.
However, as I said, the Government is currently exploring other options to see whether we can offer support, where appropriate, and the First Minister commented on that last week in the chamber.
In the meantime, there are many other ways in which the Scottish Government is supporting the islands, with £26 million to support the national islands plan, including £4.1 million this year, rural rates relief, £50 million through the islands growth deals, and the rural delivery plan that we are committed to. Also, through the R100—reaching 100 per cent—programme, we installed 16 new subsea fibre cables, leading to 15 islands, which is crucial for tourism businesses and other businesses. We are doing a lot to help island economies, but we recognise that there are particular pressures just now.
Renewable Energy Projects (Rural Communities)
To ask the Scottish Government how it is ensuring that rural communities, including Dumfries and Galloway, benefit from current and future renewable energy projects. (S6O-02363)
Community benefits are a well-established, integral part of renewable energy developments in Scotland, enabling all communities to benefit from our vast natural energy resources. Our community and renewable energy scheme—CARES—provides grants and loans that help communities to benefit from the transition to net zero. CARES also provides impartial support and advice about community benefits and shared ownership schemes.
We have commissioned independent research that will help us to ensure that our policies, advice and funding continue to deliver benefits to communities across Scotland. That research is due to report this summer.
Many areas across Scotland benefit from renewable energy projects and some of those projects can lead to the regeneration of derelict areas as well as bringing training opportunities in highly skilled and highly paid jobs to the area for local people.
There is the potential for an offshore development near Luce Bay in the Solway Firth, called SW1. However, one of the challenges in attracting investment in the project is in engaging people regarding the potential benefits for Stranraer and Wigtownshire. Can the minister indicate whether the Scottish Government is doing any work to inform communities about how they could benefit from such energy projects?
The Scottish Government works closely with partners, including Local Energy Scotland, to increase communities’ awareness and understanding of the opportunities that are presented by renewable energy projects, including the potential for shared ownership and community benefits. Our long-standing community and renewable energy scheme provides impartial support and advice as well as funding to communities to help them to make the most of the opportunities and to realise some of the ambitions that they may have. Our good-practice principles clearly set out the need for developers to engage with local communities early and extensively on renewable energy proposals. I have been having positive conversations with various developers about how they can improve their engagement and be inventive with the type of community benefits that they offer, which will have a positive impact on people’s lives. Emma Harper will know that, to date, Dumfries and Galloway has benefited from around £4.6 million in community benefits.
R100 Scottish Broadband Voucher Scheme
To ask the Scottish Government whether it will provide an update on the uptake in the Western Isles of R100 Scottish broadband voucher scheme vouchers, worth up to £5,000, for properties for which there is no roll-out of superfast broadband planned. (S6O-02364)
The R100 plan involves rolling out superfast broadband to as many properties in the Western Isles as possible. Currently, superfast broadband coverage on the Western Isles stands at 80.5 per cent, up from just 1.3 per cent in 2014. That is largely due to publicly funded investment through Digital Scotland’s superfast broadband programme. The R100 Scottish broadband voucher scheme is demand led and, as yet, no vouchers have been claimed in the Western Isles. However, the R100 team is in advanced talks with commercial operators with a view to them becoming registered suppliers for the Western Isles.
A number of my constituents have recently expressed concern that some of the companies that are listed on the R100 website as being active in the Western Isles and, as such, able to utilise the R100 vouchers are declining to undertake the work when approached by interested residents. What more could be done to make it clearer which companies will do the work in the islands so that people can use the vouchers that they are entitled to?
Alasdair Allan is correct that the situation needs to improve, and quickly. I assure him that advanced talks are under way with a number of suppliers with a view to them becoming registered on R100 schemes. I am confident that those talks will, ultimately, yield a positive outcome for the Western Isles. I assure him that I will keep a close eye on the matter and, at any point, I am happy to discuss with the member the specific obstacles that his constituents are facing to taking advantage of the vouchers. As a Government, we are exploring many other options because, as we all know, technology is moving on quickly. As a relatively new minister for the portfolio, I am keen to understand quickly how we can take advantage of those new technologies for our island communities in Scotland.
That concludes portfolio questions on wellbeing economy, fair work and energy.
There will be a brief pause before we move to the next portfolio, to allow front-bench teams to change position.
Finance and Parliamentary Business
The next portfolio is finance and parliamentary business. If a member wishes to ask a supplementary question, they should press their request-to-speak button during the relevant question. There is quite a lot of interest in this portfolio, so I appeal for succinct questions and answers.
Budget 2023-24 (Sport and Leisure Facilities)
To ask the Scottish Government what assessment it has made of the impact of the 2023-24 budget on the ability of local authorities to keep sport and leisure facilities open to the public. (S6O-02365)
The Scottish Government places great importance on sport and leisure facilities and believes that everyone should have access to those services. We have increased the resources that are available to local government in 2023-24 by more than £793 million, which is a real-terms increase of £376 million or 3 per cent compared with the 2022-23 budget figures. That does not take away from the challenges that are being faced by all public services in the light of years of austerity, the cost of living crisis and sky-high energy prices. However, it is for local authorities to manage their own budgets and to allocate the total financial resources that are available to them on the basis of local needs and priorities.
The reduction in local government budgets has forced pools and leisure centres to pass on the increases in their running costs to the clubs and customers who use them. We cannot allow swimming pools to become unaffordable and let involvement in and enthusiasm for Scotland’s highest-participation sports decline.
Recently, the United Kingdom Government announced a £63 million fund specifically to support swimming pools in England. Does the minister recognise the value of swimming pools, and can he tell us what Barnett consequentials are to be made available to local authorities as a result of the UK Government’s spending?
Local sport leisure facilities including swimming pools play a vital part in supporting the physical and mental health of the nation, and we have repeatedly called on the UK Government to use all the powers at its disposal to tackle the cost of living crisis and provide appropriate energy bill relief to leisure facilities, particularly to indoor water and ice facilities, whose energy costs are absolutely crippling. Therefore, following the UK Government’s announcement of the financial package to support swimming pools in England, we are considering what support can be provided to the sport and leisure sector in Scotland and many local authorities to ensure the longer-term sustainability and energy efficiency of those facilities.
Many leisure facilities and local authorities have taken action to reduce energy costs, but the situation is really challenging, so I call on the UK Government to step up and support leisure facilities, particularly indoor water and ice facilities.
This morning, the Citizen Participation and Public Petitions Committee heard evidence about swimming pools closing right across Scotland. Vibrant, packed community hubs such as Bucksburn in Aberdeen have shut because the Scottish National Party administration slashed the sports budget.
As we heard, there is money from the UK Government to fund swimming pools, so, as some of that needs to be used to get Bucksburn swimming pool back open again, can the minister tell us today when that money will be allocated?
The member is again trying to make the Scottish Government take decisions for local authorities.
No—you’ve got the money for it.
Local authorities are elected on their own democratic merit—[Interruption.]
Mr Lumsden, I invited you to ask a supplementary question; I did not invite you to then provide the answer. Let the minister be heard.
Thank you, Presiding Officer.
Local authorities have their own democratic mandate to determine how they dispose of the funding that comes to them. Obviously, any money that comes to the Scottish Government in relation to Barnett consequentials will be disbursed in the usual way as part of the budgeting process, and I think that that is absolutely appropriate.
I have already said that we are considering whether there is further financial support that the Scottish Government wants to put in place in relation to those facilities.
Swimming pools and ice facilities are two particular areas where the energy costs are absolutely crippling. The UK Government has the powers and can take action to support those facilities now.
Taxation Proposal (Scottish Green Party)
To ask the Scottish Government whether it has conducted any modelling on the potential behavioural impact of the Scottish Green Party's proposal to introduce a new increased tax rate for those earning between £75,000 and £125,000. (S6O-02366)
The Scottish Government is aware of the risks and benefits arising from behavioural responses to policy proposals and actively works with stakeholders such as His Majesty’s Revenue and Customs to monitor and continually improve the evidence base to help inform policy development.
As is standard practice, any planned changes to Scottish income tax will be announced during the regular annual budget process. Our approach to taxation will continue to be guided by the strategic objectives and principles that are set out in the framework for tax that underpins our fair and proportionate approach.
Under the Scottish National Party, Scotland is already the highest-taxed part of the UK. Hundreds of thousands of Scottish workers pay more tax for doing the same job as people south of the border. That impacts teachers, police officers and national health service staff. If the SNP plans to increase taxes even more—especially if they listen to the extreme Green Party—it could drive people away. Does the cabinet secretary agree that it would be reckless to increase tax so much that it ends up raising less money to support public services?
First, based on the latest forecast that was published by the Scottish Fiscal Commission, which is an independent organisation, we calculate that 52 per cent of taxpayers in Scotland will pay less income tax than they would in the rest of the UK.
With regard to the money that is raised, we estimate that the income tax policy changes that have been announced for 2023-24 alone will add £590 million to the Scottish budget. That is additional money to spend on public services, some of which we heard calls for earlier on, and it also supports individuals, households and the economy. If the Tories are saying that they want lower personal and business taxation but higher spending on public services, they are suggesting a financial model that exists nowhere in the world. They need to come clean and tell us what their position is. If it is lower tax and higher spending, how does that work?
There are a number of supplementary questions, which will need to be brief, as will the responses.
The Greens and the SNP first worked together to make progressive changes to income tax in 2018. The Tories claimed then that it would result in a flight south of the border by high-income taxpayers. Is there any evidence that that actually happened? How much money has been raised for our essential public services as a result of those progressive tax changes?
In December 2021, we published a policy evaluation of the income tax reforms that were implemented in 2018-19, which showed limited evidence of Scottish taxpayers lowering their taxable income in response to increasing tax rates. Our analysis also suggests that the policy raised between £230 million and £245 million that year, compared with the amount that we would have raised if we had implemented the rates and bands that were applicable elsewhere in the UK. In December 2023, the Scottish Fiscal Commission estimated that our income tax policy will raise £1 billion of additional revenue in 2023-24, compared with what we would have raised if we had matched the UK Government rates. Tory policy puts that money at risk.
Finally, Scotland continues to seek consistent, positive, net inward migration from the rest of the UK, and the latest available figures show that that was around 10,000 people, which we welcome.
Can the Deputy First Minister tell us how much tax revenue would have been lost from the budgets that pay for the national health service, schools and all the other public services if the Scottish Government had copied the UK Government, as the Tories demanded, and cut tax for the wealthiest?
Please answer briefly, cabinet secretary.
As I said earlier, the modelling that was done by the independent Scottish Fiscal Commission found that, had we done as the Tories asked and matched UK policy in 2023-24, Scotland would be £1 billion worse off. That is £1 billion that would have been stripped from the NHS, schools, social services and councils, to cover things such as swimming pools, in order to provide a tax cut to the better off. That is what the Tories wanted us to do but, thankfully, we did not do that.
Just a year ago, we were told that the resource spending review was absolutely critical to those questions of our public finances but, yesterday, Shona Robison came to the Finance and Public Administration Committee and told us that the plans for returning the size of the public sector to pre-Covid levels had been scrapped. Has the resource spending review been scrapped in its entirety? Does it form any part of Government policy any more? On 23 June last year, she said that it would “bring to life” her Government’s policy agenda. Has the review been killed off entirely?
No—but, like any other Government, we have to take account of key elements that change. For example, the negative tax reconciliation—which we now know we will have to deal with next year—was caused by the forecast, due to Covid 19 at that time. We also have to deal with inflation-led pay deals. We did not know that inflation was going to be at the height that it is at, but that has driven pay deals that go well beyond what was budgeted for. We have to deal with all the other inflationary pressures on the budget and we have to make room for spending on social security and health. The RSR remains important but, in the medium-term financial strategy, I set out a plan to deal with all those challenges. What we need to hear from Labour is whether it will back us on those plans.
Budget 2023-24 (Child Poverty)
To ask the Scottish Government what funding has been allocated in the Scottish budget 2023-24 to tackle child poverty. (S6O-02367)
The Scottish budget includes £405 million for our game-changing Scottish child payment and £83.7 million for discretionary housing payments to mitigate the United Kingdom Government’s policies, including the benefit cap.
We continue to invest around £1 billion in the provision of funded early learning and childcare and will make £108 million available for employability support, to enable an increase in services for parents who are out of work or in low-income employment.
Our latest progress report on tackling child poverty, which was published this week, estimates that
“£3 billion was invested across a range of programmes targeted at low income households, with £1.25 billion directly benefitting children.”
Last week, a report by End Child Poverty, entitled “Local indicators of child poverty after housing costs, 2021/22”, highlighted that the unacceptable levels of child poverty that remain across the UK are likely to worsen due to the devastating impact of the Tory-driven cost of living crisis.
Although investment within its fixed budget by the Scottish Government, and initiatives such as the Scottish child payment alongside the newly established cash-first approach to tackling food insecurity, are welcome, what fiscal levers would the Scottish Government require to enable it to truly alleviate the pressing issue of child poverty?
Stephanie Callaghan is quite right to point to the Tory-driven cost of living crisis that underpins the challenge that many families are facing with their household budgets at this time. Analysis published on Tuesday with our child poverty progress report estimates that 90,000 fewer children will live in relative and absolute poverty this year as a result of Scottish Government policies, with poverty levels 9 per cent lower than they would otherwise have been.
We are determined to do everything that we can to provide help to those who need it within the scope of our limited powers and fixed budget. As I have just outlined, that includes mitigating the UK Government’s actions. However, we want to do more than mitigate, and it is only by having the full powers that this country needs, and with the Government having all the levers over the economy, social security and employment, including the minimum wage, to tackle poverty and inequalities, that we can truly do that.
I know that the Tories do not like to hear about poverty, but those are the facts.
Scottish councils have been informed at short notice via the Convention of Scottish Local Authorities that the same level of funding provided for tackling holiday hunger programmes will not be offered this summer by this Scottish National Party Government. That simply confirms that it is willing to stretch local government budgets further and further.
Will the cabinet secretary commit to matching last year’s funding, to ensure that tackling child poverty and hunger programmes that local councils across Scotland had already planned can go ahead?
As briefly as possible, cabinet secretary.
The member will know, because the Cabinet Secretary for Social Justice said so in the chamber yesterday, that our funding package to local authorities includes targeted support for eligible families during the school holidays throughout the school year. We have provided local authorities with £21.75 million to support free school meals for eligible families during the school holidays during this academic year. That is available to families who are eligible for free school meals on the basis of low income, regardless of the age of their children. Councils have the flexibility to put in place any approach or approaches that meet local needs and circumstances.
Sewage
To ask the Scottish Government whether it plans to propose a parliamentary debate on sewage. (S6O-02368)
Any proposals for Government business in Parliament are agreed by the Scottish Cabinet, subject to consideration by the Parliamentary Bureau and, in turn, approval by the Parliament.
I am very grateful for that reply, but I am not sure that it was an answer. There was a lack of urgency in the minister’s response, which characterises the Government’s whole approach to the issue. It is an urgent issue—it is urgent to our constituents. Every day, thousands upon thousands of gallons of sewage are purposely dumped in our rivers and our waterways, yet it has been 18 months since we had a meaningful Government statement on the matter, and the only debate held in parliamentary time was a members’ business debate in my name. It is about time that the Scottish Government got to grips with the importance of the issue to our constituents. Will the minister think again and schedule a debate on sewage?
I am aware of Mr Cole-Hamilton’s feelings on the matter, and I continue to try to be helpful to him by suggesting that he take it up with the Government minister, Màiri McAllan. Normally, I would say that Mr Cole-Hamilton should take it to his business manager, but, in his case, that might be quite difficult.
As the member mentioned, the topic was debated in October 2022, and the former Minister for Environment and Land Reform gave a ministerial statement in December 2021.
Revenue Reconciliation 2024-25 (Scottish Fiscal Commission)
To ask the Scottish Government what action it will take to address the negative revenue reconciliation of £687 million for 2024-25 that is currently forecast by the Scottish Fiscal Commission. (S6O-02369)
The forecast negative reconciliation of £687 million is driven by a large income tax reconciliation of £712 million, which is offset by other social security and devolved tax block grant adjustments.
To be clear, I note that the large variance to the initial forecast is a consequence of the Covid-19 pandemic having impacted on forecast income tax receipts and associated block grant adjustments in 2021-22.
As the reconciliation crystallises in 2024-25, that will contribute to an extremely challenging funding outlook next year. Of course, I do not have adequate tools under the current fiscal framework to manage that impact, as it exceeds our borrowing limits by almost £400 million.
As set out in “The Scottish Government’s Medium-Term Financial Strategy”, I am planning on the basis of maximising resource borrowing to address the negative reconciliation. The upcoming fiscal framework review must address the limited fiscal flexibility and provide the tools that are needed to manage volatility.
I will need shorter responses.
At the Finance and Public Administration Committee yesterday, the cabinet secretary admitted that, as a result of the negative reconciliation, combined with the projected increases in Scottish Government expenditure, especially in relation to social security, the outlook for the Scottish budget is particularly challenging. She also admitted that that would require the Scottish Government to make very difficult decisions. When I asked her about that, she said that the Government is reviewing 500 projects. Given the seriousness of the budget situation and the need for urgent action, when will the cabinet secretary be able to provide Parliament with the information that the Finance and Public Administration Committee is requesting in order that it can pursue its budget scrutiny?
First of all, I note that the position for 2024-25 is not helped by a real-terms cut to both revenue and capital funding from the United Kingdom Government. If Liz Smith could exert any influence in that regard, that would help.
On the review and targeting of projects, as I set out in some detail yesterday, we are working through a programme that looks at every area of Government and how far each goes towards meeting the core missions that were set out by the First Minister a few weeks ago. That process will lead directly to the budget process for 2024-25.
We will set all that out, engage with the Finance and Public Administration Committee in the normal manner and provide it with as much detail as we can, as it becomes available. However, Liz Smith will understand that that process will take some time to come to its conclusion.
Does the cabinet secretary agree that the negative reconciliation is yet another clear example of why it is so important that the revised fiscal framework provide the Scottish Government with the budget levers that are commensurate to addressing the volatility that the Scottish budget is exposed to?
Yes. Our current borrowing powers are limited in scope and, of course, are being eroded by inflation over time. As a result, we must manage a large reconciliation in a single financial year, at a time when our resource borrowing is capped at £300 million. The upcoming fiscal framework review must rectify that and ensure that the Scottish Parliament has sufficient levers to deal with challenges such as those.
Planning System (Retail)
To ask the Scottish Government how the planning system can help to create a strong, prosperous and vibrant retail sector, including through business support. (S6O-02370)
The planning system has a vital role to play in supporting the retail sector. National planning framework 4 encourages proposals that improve and enhance the vibrancy of city, town and local centres. That includes taking a town centre first approach to encourage retail in sustainable locations.
We have also introduced changes to permitted development rights and the use classes order to provide more flexibility for different uses, including retail, in city and town centres. Alongside that, we are working with partners to take forward actions in the town centre action plan and our retail strategy for Scotland.
The structure and nature of Scottish retail has changed over the decades. The prominence of physical retail stores in our towns and shopping centres is gradually declining, and that of social venues such as cafes and eateries is rising. Recently, I visited the Kingsgate shopping centre in Dunfermline, where the management highlighted the significant financial costs that Fife Council has imposed on those who wish to reflect the change by altering their business category from class 1 retail to category 3 hospitality. Will the minister outline what more the Scottish Government can do to lessen those costs for businesses, and how the planning system can better reflect the changing nature of retail?
I thank Roz McCall for that really important question.
One of the challenges that we hear from business and from planning authorities across Scotland is how we will ensure that they have the resource to deal speedily with planning applications. That is partly about ensuring that planning is properly funded. Recently, we increased the fees that planning authorities can charge, which has allowed planning authorities up and down the country to potentially retain or employ new staff.
There is a balance to be struck. However, businesses often say that what is most important to them is that they get a speedy resolution to planning applications.
Fiscal Policy (Impact on Businesses)
To ask the Scottish Government what discussions the finance secretary has had with ministerial colleagues regarding any impact that its fiscal policy platform will have on Scottish businesses, including tourism and hospitality businesses. (S6O-02371)
The Cabinet Secretary for Finance and I regularly discuss fiscal policy with our ministerial colleagues. That includes the impacts on a range of sectors, including tourism and hospitality.
We are committed to supporting sustainable and inclusive economic growth and will focus on economic policies and actions that have the greatest potential to grow and strengthen Scotland’s economy.
The Scottish tourism sector has faced a catalogue of poorly thought through policies that threaten to seriously undermine the success of tourism and hospitality businesses. The short-term let scheme, the tourist tax and utter failure in respect of our infrastructure, including ferries and the A9, are Scottish National Party thorns in the side of Scottish tourism.
When the sector has asked for time to recover, why has the SNP ignored it and pushed ahead with a string of burdensome priorities that have caused distress and worry for businesses throughout Scotland?
We engage very closely with representatives of the tourism sector across a range of issues, including through our work on the new deal for business. We have delivered across a range of infrastructure projects over our time in government, including completion of the M74, the M8, the M80, the Aberdeen western peripheral road and the Queensferry crossing, as well as a range of other activities that are of benefit to the tourism sector and other businesses across Scotland. As we take forward our proposals for a visitor levy, we will continue to engage very closely with business.
Last week we debated tourism, and it was very clear then that energy costs, inflation and Brexit labour shortages require action by the London Government. Has the minister had any engagement with the United Kingdom Government on it either taking action or giving Scotland those powers?
I agree that the Scottish Government would have much greater freedom to support the tourism sector, which is vital to the Scottish economy, with the full powers of independence. The tourism sector is in need of more support, but we are constrained by the limited fiscal levers that we currently control. That is why we continually urge the UK Government to go further with its reserved tax powers, and why we specifically highlight that a reduced rate of VAT is a consistent ask from stakeholders. We will continue to urge the UK Government to do more to support Scottish businesses.
“Local government in Scotland: Overview 2023”
To ask the Scottish Government what its response is to the recent Accounts Commission report, “Local government in Scotland: Overview 2023”. (S6O-02372)
The Scottish Government welcomes the findings of the “Local government in Scotland: Overview 2023” report. The report rightly points to the pressures on the public finances, but it also confirms that, despite over a decade of United Kingdom Government austerity, local authority revenue funding has increased by 2.6 per cent in real terms between 2013-14 and 2023-24.
I thank the minister for that response, but he cannot ignore or wish away the evidence that is contained in the report. In adult social care,
“There are signs that the sector is in crisis, with growing backlogs, declining satisfaction and no clear picture of demand or unmet need”.
In housing, there are growing rent arrears, mounting voids and poorer maintenance performance, and homelessness is spiralling once again. In culture and leisure, there is a “high risk of closures”. In children’s services, the poverty-related attainment gap “remains larger than pre-pandemic” levels. The list goes on.
Does the minister agree that the Government must stop managing decline, stop inflicting cuts on the poorest communities, and must start by introducing a tax on wealth?
We look forward to hearing Richard Leonard’s contributions to the budget in the form of proposals. I know that the cabinet secretary will be happy to listen to and engage with Labour if it has serious proposals. That will be a first, as I have been in Parliament for 16 years, and I think that we have been given one serious proposal that would have given extra money to local government. That came from Alex Rowley of the Labour Party but I do not think—[Interruption.] I do not think that the Labour group supported it. The Scottish National Party could not support it at that time. [Interruption.]
We do not for a second underestimate the challenges that—[Interruption.]—local government and other public services are facing.
I ask members on the Opposition front benches to stop heckling the minister while he is providing the answer.
Minister, could you conclude?
Thanks, Presiding Officer. I could just hear chuntering, so I am not sure what the sedentary point being made was.
Richard Leonard made the good point that we need to address the challenges. That is why we are working with the Convention of Scottish Local Authorities on a new deal for local government. It is co-produced work that I hope all parties in Parliament will sign up to, in order to recognise the democratic mandate that local government has. It is time to allow local government its space as one of the spheres of government in Scotland. This Government is determined to do that: I hope that the Opposition will step up, too.
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