Covid-19 Recovery and Parliamentary Business
Good afternoon. The first item of business is portfolio question time, and the first portfolio is Covid-19 recovery and parliamentary business. Members who wish to ask a supplementary question should press their request-to-speak buttons or indicate so in the chat function by typing “RTS” during the relevant question.
Coronavirus (Recovery and Reform) (Scotland) Act 2022
To ask the Scottish Government whether it has taken a decision regarding the extension of the temporary provisions in the Coronavirus (Recovery and Reform) (Scotland) Act 2022. (S6O-01676)
The temporary justice measures in the 2022 act can only be extended beyond November 2023 if the Parliament agrees. The act requires ministers to review the operation of the measures to decide whether they should be extended. That review must include consultation that ministers consider appropriate. If ministers decide that any measures should be extended, they will lay two documents before the Parliament: draft regulations to extend the measures by one year, and a statement summarising the review findings, the consultation undertaken and the reasons given for seeking an extension. Any regulations would be subject to the affirmative procedure.
The 2022 act gave the Scottish Government the power to release prisoners prematurely at the stroke of a ministerial pen. That power was used to disastrous effect during the pandemic, when at least 40 per cent of those who were released early by this Government went on to reoffend. Will the cabinet secretary at the very least rule out extending the power to release prisoners early, given how disastrously that power was used the first time?
I do not for a moment accept the characterisation of the difficult issues with which we wrestled during the Covid pandemic that Tess White offered in her supplementary question.
The issues that she raises must be considered carefully by ministers. As I said in my original answer, the measures are subject to consultation with relevant interested parties and, of course, on that particular power there would have to be very extensive consultation and dialogue with interested parties and in particular with victims. I give Parliament the assurance that the Government will carefully consider all those issues, as would be expected of us under statute.
Covid Recovery Strategy (Budget 2021-22)
To ask the Scottish Government what assessment it has made of the impact on the delivery of its Covid recovery strategy of the Auditor General’s comments that it underspent its budget by £2 billion in the financial year 2021-22. (S6O-01677)
The Covid recovery strategy is focused on reducing inequalities and tackling poverty, and the Scottish Government is using all available resources to support those in most need during the on-going cost crisis.
The Scottish Government annual accounts provide explanations of all significant variances in the portfolio outturn statements, and make it clear that the underspend that was reported does not represent a loss of spending power. The underspend includes more than £900 million of non-cash and ring-fenced budgets, it is before allowing for late funding adjustments of more than £500 million, and it makes use of the limited carry forward in the Scotland reserve. The Scottish Government has reported transparently at the provisional outturn and will confirm the final outturn position to Parliament shortly. All funding is fully utilised in supporting the 2022-23 budget.
The Deputy First Minister cannot claim that an enormous underspend of £2 billion made no difference to Scotland’s recovery from Covid.
However, let us now focus on making sure that this does not happen again. The Auditor General, Stephen Boyle, has called for greater transparency around the Government’s spending. He has said that the Government’s accounts
“do not tell us the full picture”,
and he wants to see a “single public sector account”.
Last week, the Deputy First Minister deflected and refused to give a straight answer. Can the public now have a clear decision? Will the Scottish National Party Government be more transparent with its spending or not?
The Government is immensely transparent about its expenditure. The Minister for Public Finance, Planning and Community Wealth gave a statement to Parliament on the provisional outturn figures, and I have come to Parliament on two occasions to set out the financial challenges that we face this year. I did not need to do that—Opposition parties did not ask for it—but I voluntarily gave two statements to set out significant adjustments to our budget for this year.
I return to the points that I made when I answered Murdo Fraser’s question on the matter last week. It is completely and utterly economically illiterate to suggest that there is money within that total figure that I could have spent, because there is not. There are ring-fenced budgets of about £900 million, and it is beyond my right to spend that money.
I ask the Conservatives to look at the Official Report from 6 December, when I went through all this with Murdo Fraser. If Sharon Dowey reads the Official Report, she will understand how ridiculous the question that she just asked me is and will perhaps, in due course, ask me a question that gets nearer to the substance of the issue.
Last month, the Deputy First Minister cut £400 million from health and social care budgets, including the primary care improvement fund, which supports general practitioners to increase capacity in local practices. Does he understand why staff and patients are concerned that ministers are picking their pockets by cutting funding and claiming that they have no other choice but to do so, despite the fact that they sat on an underspend of £2 billion last year? Will he take the opportunity to indicate that he will reverse the cuts in next year’s budget?
I see that I will have to send Jackie Baillie a copy of last week’s Official Report, too. I would have thought that she would have known that the Government cannot redeploy for other purposes large parts of the total figures that were set out in the Government’s accounts. I reassure her, in case she is worried about this, that all available spending power that was not fully utilised last year will be utilised this year and in future years, so there is no loss of resources.
On the subject of picking pockets, the Government has reallocated and reprioritised resources within the health budget—nothing has been removed from the health budget—to ensure that we can afford a 7.5 per cent pay deal for agenda for change staff in the health service. We are, in fact, putting money into the pockets of staff.
I am delighted that members of the Unison and Unite trade unions have voted to accept the Government’s pay offer. The quality of dialogue between the Scottish Government and trade unions in Scotland is significantly better than the quality of discussions between the United Kingdom Government and trade unions in England and, I might add, between Mr Wes Streeting and the Labour Party in England and trade unions south of the border.
Does the Deputy First Minister agree that it would be good to know whether, ahead of tomorrow’s budget statement, Sharon Dowey or any of her Tory colleagues have made any representations to the UK Government about Scotland being granted borrowing powers to allow the Scottish Government to manage its budget effectively and respond to the repeated economic shocks that have been created by the ill-judged and damaging economic policies of the UK Government?
Deputy First Minister, I assume that you will use that question—which was not directed at you, per se—to cover areas within your remit.
I will certainly endeavour to do that, Presiding Officer.
Kaukab Stewart makes an important point about the management of the public finances and ensuring that we have sufficient resources at our disposal. Sharon Dowey asked whether I would avoid any underspend this year and asked for such underspends never to happen again. There has been an underspend every year since the establishment of the Scottish Parliament, so last year was not really any different in that regard. I will have more to say to Parliament tomorrow about the current financial position that we face. However, one of the advantages of the underspend last year is that I have been able to access resources to deal with the enormous financial strain that we face this year in the absence of resource borrowing powers, which would allow me to borrow to deal with the volatility in the public finances.
I remind members that they need to be here on time for portfolio questions, which start at 2 pm. Two members did not manage to be here on time. When I call those members, I expect them to apologise to the chair, the ministers and other members, and to explain why they were late.
Talent Attraction and Migration Service (Covid Recovery Strategy)
To ask the Scottish Government how the development of a talent attraction and migration service will impact on the delivery of its Covid recovery strategy. (S6O-01678)
The Scottish Government is developing a talent attraction and migration service, which will launch in 2023. That service will attract people to come and live in Scotland, help people who are moving to Scotland to settle into their communities, and support employers in navigating the United Kingdom Government’s complex immigration system.
The Covid recovery strategy, which aims to reduce inequalities and reform public services, includes a focus on creating good, green jobs across Scotland. The talent attraction and migration service will support our wider ambitions in that space by attracting and welcoming people with the necessary skills to contribute to a net zero economy.
As the cabinet secretary knows, the American space technology company Mangata Networks has announced Prestwick as the site of its new manufacturing, engineering and operations hub. That will bring a much-welcome boost to the local economy and the national economy. How will the Scottish Government’s proposed talent attraction and migration service assist with such projects?
I am absolutely delighted with the news that has come forward from Mangata Networks about the investment at Prestwick airport. The project has been a strong, collaborative one that has involved Scottish Enterprise, South Ayrshire Council, the Ayrshire growth deal and the Scottish Government. I am thrilled by the opportunities that it opens up for Prestwick, which is in Siobhian Brown’s constituency.
The talent attraction and migration service will assist us in supporting companies that are trying to attract individuals to work in particular ventures. I imagine that Mangata Networks will seek some support from that service to ensure that the particular skills that we need to contribute to the Scottish economy are attracted. The service will help us to overcome some of the significant obstacles as a consequence of the loss of the free movement of individuals, which followed the Brexit decisions.
Cost of Living (Public Services)
To ask the Scottish Government what assessment it has made of how any additional cost of living pressures will impact on the rebuilding of public services, as set out in its Covid recovery strategy, in particular public services in Edinburgh. (S6O-01679)
The Scottish Government is prioritising funding to support people in most need and to protect the delivery of public services. The emergency budget review confirmed a range of additional support for people in most need, including the expansion of, and increase in, the Scottish child payment. That prioritisation is guided by the principles of the Covid recovery strategy.
The overarching ambition of the Covid recovery strategy is to reform public services to ensure that they are fiscally sustainable and delivered in line with the principles of the Christie commission. In the current context, we are considering all options for reform that will allow us to deliver that ambition and continue to deliver high-quality public services across Scotland, including in the city of Edinburgh.
The capital has some of the highest vacancy rates in our public services and some of the highest housing and childcare costs. I have previously raised with the Scottish Government the potential development of an Edinburgh pay weighting. Will the cabinet secretary agree to meet me to discuss that further and whether the Government will look to commission university research into the potential need for an Edinburgh weighting, such as that in London?
Mr Briggs raises serious issues, and I will happily meet him to discuss that concept. On that occasion, perhaps we can think further about any particular research that will be necessary in that respect. I suspect that some work must have been undertaken—it is a few years since I have been close to that question. Our dear late colleague Margo MacDonald was never backward in coming forward to me in budget processes to argue on the issues that Mr Briggs has raised. I will happily meet him to discuss that question.
With every week that passes, we see the impact of the disastrous mini-budget that Truss and her Chancellor of the Exchequer got carried away writing. It continues to affect Scotland’s recovery from the Covid pandemic. Does the Deputy First Minister agree that, given that the key policy levers to address the Tory-inflicted cost of living crisis are held by the United Kingdom Government, it is high time that our Tory colleagues called on the UK Government to get on with the job of supporting Scottish people through tough times rather than expecting the Scottish Government to continually clean up?
The implications of the mini-budget in September will be long lasting for people and for the public finances of Scotland and the United Kingdom. The irresponsibility of that event—I cannot call it a fiscal event, because there was nothing fiscal about it—will have far-reaching implications. We have already seen significant increases in interest rates as a consequence of those decisions, and householders and businesses will be put under pressure as a result. I will have more to say about this in the budget statement tomorrow, but the Scottish Government will do all that we can to help people through the cost of living crisis. However, we have to acknowledge the severity of the difficulties that have been created by the mistakes that were made in the mini-budget in September.
Question 5 is from Rachael Hamilton.
First, Presiding Officer, I apologise profusely to you and my colleagues in the chamber for being a couple of minutes late. I was in committee from 9.45 until 1 o’clock, and then I went to see Hawick high school pupils, who have made the precarious journey up to the Parliament to ask questions about what we do in this place.
I thank Ms Hamilton for the explanation. Obviously, it is not a matter for the chair what other engagements members seek to fit in to what is already a busy day—
Sorry, but you did ask me—
Please—
On a point of order, Presiding Officer. You asked me to apologise to my colleagues and to you, and to give a reason as to why I was late coming to the chamber.
To respond specifically to that point of order, I hear what Ms Hamilton has said by way of an explanation; I was just trying to be helpful, for future reference, and to point out that, obviously, it is not a matter for the chair to work around individual members’ busy schedules on a daily basis. I appreciate that schedules are busy but, equally, a start time of 2 pm remains a start time of 2 pm.
I ask Ms Hamilton to please ask her question.
Passage of Legislation through Parliament
To ask the Scottish Government what it considers to be reasonable grounds to postpone the passage of legislation through Parliament. (S6O-01680)
The Government keeps its primary and secondary legislation programmes under careful review and adapts them as necessary. For example, as members are aware, steps were taken to pause delivery of some legislation in the previous session at the height of the pandemic. However, once bills are in Parliament, the timing of the legislative process is for Parliament to agree.
This morning, the Rural Affairs, Islands and Natural Environment Committee, of which I am a member, considered the Hunting with Dogs (Scotland) Bill at stage 2 for a second week. The bill was delayed by two weeks as a result of the minister’s trip to COP27—the 27th United Nations climate change conference of the parties—in Egypt. We were also afforded the opportunity to hear further evidence on provisions of the bill that were causing confusion.
In stark contrast, despite the availability of a raft of extra evidence, such as the interim report of the Cass review, the comments of the UN special rapporteur on violence against women and girls, and two separate court rulings on the effect of obtaining a gender recognition certificate on the definition of “woman”—I could go on—the Gender Recognition Reform (Scotland) Bill has been railroaded through the Parliament with total disregard for the need to consider that additional evidence.
Why is it that we have one rule for one bill and another rule for the Gender Recognition Reform (Scotland) Bill? Does the minister recognise the need for us as legislators to be allowed to do our jobs and apply adequate scrutiny to legislation using all the evidence that is available to us?
The two bills that the member has mentioned show the flexibilities that are available in the Parliament for bills to go through. As always, my role as Minister for Parliamentary Business is to work within parliamentary procedure. The timings of bills are dependent on their size and details. Once a bill is in the Scottish Parliament, it is for the Parliament to decide how it proceeds. On some occasions, a bill might take a faster route, depending on what it is about and what it is trying to achieve. Parliament itself decides the timings of all bills.
Covid Recovery Strategy (Rural Communities)
To ask the Scottish Government how its Covid recovery strategy considers the needs of rural communities. (S6O-01681)
The Covid recovery strategy sets out an ambitious vision for recovery that is focused on bringing about a fairer future for those most affected during the pandemic, including people living in rural communities. The Covid recovery programme board, which I co-chair alongside the president of the Convention of Scottish Local Authorities, oversees work to achieve that vision and recognises the need for local communities to inform on-going priorities for recovery.
Policies such as the place-based investment fund and the regeneration capital grant fund support investment and regeneration projects that are shaped by the needs and aspirations of local communities and deliver inclusive growth for remote communities.
As the Deputy First Minister knows, rural communities are often reliant on reliable bus routes to link them to shops, facilities and amenities in our larger towns and cities. The bus industry has an acute shortage of drivers. He will also be aware that, in October, more than 140 bus departures in Perth and Kinross were cancelled in one day.
As we recover from Covid, it is clear that Brexit is contributing to those driver shortages. When did the Scottish Government last engage with the United Kingdom Government on the issue? The powers to fix the matter reside with the UK Government. Has it given any indication of what it intends to do to improve the situation for our rural communities?
I acknowledge the significance of the issues that Mr Fairlie raises. We share constituency boundaries and I am aware that similar issues are being wrestled with in my constituency.
As coincidence would have it, the Minister for Transport hosted the second bus task force meeting earlier today, which the UK Government minister Richard Holden attended, to discuss the issue of driver shortages.
As Mr Fairlie will know, there are acute shortages of employees across a range of sectors. The shortage of bus drivers is particularly acute. The situation is being exacerbated by the loss of free movement of people and the pressures that that has put on our labour market.
Yesterday, it was announced that we have very high levels of employment and very low levels of unemployment, so we still have a very tight labour market.
We are continuing to work with operators and our partners across the public sector to promote the bus sector as a place to work, while recognising that many of the levers to address the issue of population migration rest with the UK Government.
Driver shortages is an issue that I have experienced in my constituency. We must make progress on the matter.
In my constituency, there have been cuts to services. Stagecoach has told me that that is because of the fall in bus usage since the pandemic. How will the Scottish Government drive up passenger numbers and improve usage levels? Will the community bus fund be used to do that?
Mr Rennie raises a number of legitimate points on the provision of bus services. We are supporting the industry to increase usage. For example, the extension of the concessionary travel scheme to young people has had a discernible effect. Obviously, the Government contributes on the basis of the number of concessionary fares that are given.
Measures such as that one are designed to increase usage of bus services. There will be various ways in which we can support the industry, and the Government looks to work with it to find the most effective ways in which we can do that. The member’s points about the community bus fund are ones that the Government will consider.
Murdo Fraser has a supplementary question.
Willie Rennie has raised a really important point in relation to bus services being withdrawn entirely. That is causing concern for many people who live in rural communities, such as the elderly, who rely on the bus to get to medical appointments or to avoid social isolation. What will the Scottish Government do in its budget tomorrow to support bus services?
Tempting as it is for me to disclose the details of the budget to the Parliament today, Mr Fraser will understand that I cannot do that.
I am mindful of those issues, because ensuring that we encourage people to use public transport—and for there to be credible bus services to allow people to choose to use that transport—is very much part of the Government’s agenda to decarbonise transport as part of our moves towards net zero.
Covid-19 Recovery (Support for Disabled People in the North-East)
To ask the Scottish Government how its policies across Government will support disabled people living in the north-east to recover from the Covid-19 pandemic. (S6O-01682)
The impacts of the pandemic were not felt evenly across Scotland and some people, including disabled people, were disproportionately affected. The Scottish Government recognises that, and our Covid recovery strategy focuses on delivering a fairer future and addressing the systemic inequalities that were exacerbated during the pandemic.
In September, the Scottish Government accepted the findings and recommendations of the report, “Review of Supported Employment within Scotland: Findings and Recommendations”. Its recommendations include the development of a national infrastructure programme; the development of supported employment quality standards and an assurance approach for Scotland; and the provision of funding for people with lived experience
“to deliver training to employers, myth bust and raise aspirations.”
Will the Deputy First Minister provide timelines for the implementation of those recommendations through the no one left behind strategy and for the publication of the Government’s planned new policies on supported employment arising from the report’s recommendations?
I can confirm that the issues that Maggie Chapman raises will be fully addressed as part of the no one left behind work that the Government is undertaking. The next stage of development is expected to commence early in the new year and will involve the delivery of specialist support services, and I will be very happy to update Maggie Chapman on the progress that is made.
It is important that we continue to deliver services to meet the needs of individuals with disabilities and support their participation in our society and economy.
I can call question 8, but only if the questions and answers are brief. I call Paul Sweeney.
Thank you, Presiding Officer. I apologise for being two minutes late to this meeting of the Parliament, which was due to being at a meeting to do with racism in Scottish society.
Mr Sweeney, please take a seat. I need to be equal to everybody, so I remind you that it is not a matter for the chair to fit around a member’s schedule. The meeting started at 2 o’clock. You were three and a half minutes late, as a point of fact. Although I hear your explanation, that is not really a matter for the chair. I note that you have apologised, so please now ask your question, but reflect on that before future portfolio question times.
Covid Recovery Strategy (Impact of Industrial Action)
To ask the Scottish Government what impact industrial action by public sector workers will have on the delivery of its Covid recovery strategy. (S6O-01683)
The Scottish Government recognises the concerns of public service workers and the need for sustainable pay deals and fair working conditions. Indeed, the Scottish Government has supported public sector pay increases at an anticipated additional cost of £700 million.
The Government will continue to engage with workforces as part of our work to implement the principles of the Covid recovery strategy, which focuses on reforming public services and reducing systemic inequalities.
I commend the Government for finally stepping in on the industrial action that was proposed by nurses in Scotland. That could and should have been done sooner, but it is better late than never.
The cabinet secretary will know that nurses are not the only public sector workers who are set to take industrial action if their pay demands are not met. Will he today commit the Government to showing the same respect to other vital public sector workers, including hard-working teachers, who are in dire straits due to the cost of living crisis and desperately need a pay increase that is greater than what is currently on offer?
I point out to Mr Sweeney that the Government has been actively involved in trying to resolve pay disputes for some considerable time. I spent a large part of the summer working to resolve local government pay issues and I have spent a large part of the autumn trying to resolve civil service and health service issues, and I am delighted, as I said in my answer to Jackie Baillie, that Unison and Unite have accepted the offer that the Government has made.
I acknowledge the claim that members of the teaching profession have made, but I simply say that all claims must be affordable. Mr Sweeney knows very well that, in this financial year, the Government is significantly constrained by the availability of resources. I have explained all these issues to the leaders of all the teaching trade unions and have set out the very real challenges that exist in trying to deliver the pay increase that members of the teaching profession have proposed, which is, in the Government’s view, unaffordable. We are open for negotiation, but the propositions must be affordable, and the Government and our local authority partners must be able to find the resources to finance them.
That concludes portfolio questions on Covid-19 recovery and parliamentary business.
Finance and the Economy
The next portfolio is finance and the economy. I remind members that questions 1 and 2 are grouped together, so I will take any supplementaries on those questions once they have both been answered. If a member wishes to request a supplementary question, they should press their request-to-speak button or indicate that in the chat function by entering “RTS” during the relevant question.
Budget 2023-24 (Tax Increases)
To ask the Scottish Government whether it will incorporate the costed package of tax increases recommended in the Scottish Trades Union Congress-commissioned report, “Options for increasing taxes in Scotland to fund investment in public services”, into its 2023-24 budget. (S6O-01684)
The Scottish Government welcomes the report published by the Scottish Trades Union Congress and recognises the contribution that such publications make to public discourse on Government finance and tax policy. The Scottish Government will set out tomorrow its budget position for 2023-24, including proposals on tax policy, fully costed by the Scottish Fiscal Commission.
The Scottish Government is well aware of the indefensible wealth inequalities that blight Scotland, yet when I called on the First Minister to support even the principle of a wealth tax back in March, I was told that that is
“not something that this Government has the power to put in place.”—[Official Report, 24 March 2022; c 27.]
Last week, the STUC outlined exactly how a wealth tax could be implemented. Instead of pleading powerlessness, will the minister tell us what the Government has done, in 15 years in power, to develop a wealth tax?
The provisions to introduce new national taxes are contained in section 80B of the Scotland Act 1998; it requires an order in council to be made, which requires the agreement of the United Kingdom Government. I therefore suggest to the member that that is the barrier. If she thinks that the Prime Minister will be amenable to the introduction of a wealth tax and the devolution of that power to Scotland, and if she has any particular strategic insight into how that could be achieved, I will be most happy to hear from her.
Question 2 comes from Gillian Mackay, who joins us remotely.
Taxation Policy
To ask the Scottish Government what its response is to the papers on taxation policy recently published by the Scottish Trades Union Congress and the Institute for Public Policy Research Scotland. (S6O-01685)
As I outlined in my answer to the previous question, the Scottish Government welcomes the Scottish Trades Union Congress report and the report by the Institute for Public Policy Research Scotland. We recognise the value of such publications in promoting public discussion on Government finance and tax policy, and we will set out our budget position for 2023-24 tomorrow.
Does the minister agree that the reforms that were agreed by the Scottish Greens and the Scottish Government in the previous parliamentary session have resulted in Scotland having a more progressive version of income tax than that anywhere else in the United Kingdom, with people who earn less paying less and those who earn more paying a bit more, and additional funds being raised for public services? Does he also agree that the taking of a progressive and fair approach to tax in Scotland, in stark contrast to the UK Government’s chaotic mini-budget, tax giveaways to the rich and multiple U-turns, has ensured that Scotland is a more equal place and has helped to deliver major projects, such as free bus travel for under-22s and the topping up of the Scottish child payment?
I agree with Gillian Mackay. Since the devolution of income tax, we have created a fairer, more progressive income tax system in Scotland that raises vital revenue for the Scottish budget. That has involved asking people who are able to do so to contribute a little more, while protecting those who are not able to do so.
That approach has allowed us to maintain the most generous social contract in any part of the UK, with a range of social security payments and public services being available uniquely in Scotland, which ensures that Scotland remains a great place to live, work, study and do business in.
Our decisions on tax policy for 2023-24 will be set out tomorrow, and we will continue to be guided by the principles of fairness and progressivity that are set out in our framework for tax.
The Office for Budget Responsibility expects living standards to fall by 7 per cent over the next two years because of Tory economic incompetence, which means that it is inevitable that even low to middle-income earners will pay more tax. What discussions has the Scottish Government had with the UK Treasury regarding reducing tax avoidance—only yesterday, the OBR estimated that that costs £35 billion a year across the UK—to ensure that everyone pays their fair share? Does the minister believe that the Tories take the issue seriously, given that we have the Channel Islands and Isle of Man tax havens just off shore?
Mr Gibson is absolutely right to highlight the OBR’s conclusions, in that people in Scotland are, ultimately, paying the price for the UK Government’s mistakes. Although the majority of taxes are currently still reserved to Westminster, Scotland’s framework for tax specifically sets out that our taxes are designed to combat tax avoidance, and the UK Government should follow our lead.
Tax avoidance takes away money that should be used to support households and public services. Such funds are needed even more now, so I will continue to urge the UK Government to tackle tax avoidance of any kind.
Liberty Steel Dalzell
To ask the Scottish Government whether it will provide an update on support for Liberty Steel Dalzell. (S6O-01686)
Through its agency Scottish Enterprise, the Scottish Government continues to work closely with Dalzell site management, and the company is continuing to trade through a challenging economic climate. As the member has recently been advised, repayments of the loan provided to Dalzell by Scottish Enterprise have not been made on time, but debt forbearance is not uncommon in the current market.
When the minister reported to Parliament on the state aid issues last December, he said that Tata would
“need time to reflect on ... its position.”—[Official Report, 15 December 2021; c 25.]
However, our freedom of information release showed that Tata had already reflected. The night before the statement, Tata warned the Scottish Government that it would be prepared to take the Government to court. It did so in an official letter on the eve of the ministerial statement. Why did the minister choose not to tell Parliament, the very next day, about the risk of court action?
On 15 December 2021, we advised that Tata Steel had been informed of the matter and provided with prior notice of the statement that was delivered in the Scottish Parliament on that date, to allow it to consider any commercial implications for the business and ensure that it had time to notify its head office in Mumbai. When the statement was delivered, it was understandable that Tata Steel would need time to reflect on and consider its position. As previously stated, we will continue to have supportive dialogue with Tata, and the company has access to our officials as required.
Budget 2023-24 (Discussions with Orkney Islands Council)
To ask the Scottish Government when it last met Orkney Islands Council regarding the Scottish budget 2023-24 and what issues were discussed. (S6O-01687)
Scottish ministers last met Orkney Islands Council on 30 November, when I met Councillor James Stockan, the leader of the council, to discuss revenue and capital funding in relation to the 2023-24 budget, the 2023-24 local government finance settlement and funding for the Orkney Islands Council ferry services.
I understand that Councillor Stockan wrote to Mr Swinney this week to outline proposals to uprate the special islands needs allowance, which has remained static since 2008-09, when it was cut by 24 per cent. Mr Swinney knows my long-standing and serious concerns about the large disparity in funding that disadvantages Orkney compared with other island authorities. The proposed change to SINA could help to narrow that gap while benefiting other local authorities through the redistributive floor mechanism. Will the Deputy First Minister take on board those reasonable and progressive proposals and look to include them in next year’s budget?
Mr McArthur puts to me the issues that Councillor Stockan put to me. There is a lot of complexity around the local government finance formula and there is a procedural question, because local government considers changes to the distribution formula through the work of the settlement and distribution group, which is an entirely local authority-led process.
I have heard the issues that Councillor Stockan raised. Some of those questions interact with the setting of the floor for the local government finance settlement, which is also relevant to the question. Those points will be reflected on as the Government formulates its budget and as we consider it in its passage through Parliament over the next few months.
Question 5 was not lodged.
Scottish Aggregates Levy (Consultation)
To ask the Scottish Government whether it will provide an update on its public consultation regarding the Scottish aggregates levy. (S6O-01689)
The public consultation on developing a Scottish tax to replace the United Kingdom aggregates levy closed on 5 December. Twenty-five responses were received. They are being analysed and a consultation analysis report will be published in due course.
I appreciate the diverse perspectives that have been provided by the range of organisations that responded to the consultation. Consistent with the Scottish approach to taxation as set out in Scotland’s framework for tax, we will continue to consult and engage with stakeholders to help to inform the development of the tax.
Given the concerns that many different organisations have raised regarding the short time that was provided for public consultation, how will the Scottish Government ensure that stakeholders are listened to and given a strong voice in the design of the tax?
As Alexander Stewart will be aware from our framework for tax, one of our principles is engagement. Although the consultation is an important part of the engagement, it does not represent the entirety of that. I remain committed to engaging with stakeholders—my officials recently met stakeholders regarding the tax—and I will continue to do so. I will be happy to meet any member who has any particular issues that they wish to raise with me on an aggregates tax.
Digital Economy (Support)
To ask the Scottish Government how it will support innovation and entrepreneurship in Scotland’s digital economy, including its games sector. (S6O-01690)
The Scottish Government recognises that innovation and entrepreneurship is the real engine of economic growth, and we are supporting Scotland’s founders, innovators and entrepreneurs in many different ways—by delivering on our national strategy for economic transformation, through our forthcoming national innovation strategy and through leading entrepreneur Ana Stewart’s review of women in enterprise.
Most recently, we launched our national tech scaler network, which is a £42 million investment that will widen access to entrepreneurial opportunities and support founders, including games company founders, by offering free commercial education and mentorship programmes while building a dynamic community of innovators and entrepreneurs.
Changing misconceptions about the games sector is vital to unlocking its enormous potential. I was pleased to host the inaugural Scottish Games Week reception here in the Parliament. The games sector’s message is clear: through joined-up policy support, it has the potential to be transformative for Scotland’s digital and creative futures.
Is the minister willing to engage with the Scottish Games Network and liaise with his counterpart in the culture portfolio to examine how we can support the industry and foster that potential for Scotland’s digital and creative futures?
I was delighted to attend the Scottish Games Week event in Parliament that Clare Adamson organised and to speak to the businesses and others who were present to show the Scottish Government’s support for and recognition of the importance of the sector and discuss how we can work together to build its future. I would be delighted to meet the member to discuss the matter further, and I have no doubt that my ministerial counterparts with responsibility for culture feel likewise on the issue.
As the member indicates, other countries have performed well in the area, and Scotland can learn from that to make sure that our games sector fulfils its global potential.
Does the minister welcome the announcement this morning by the University of St Andrews about the establishment of a new business school that will focus specifically on innovation, entrepreneurship and the dissemination of digital education?
I absolutely do, and that will be part of the very strong and ever-expanding innovation and entrepreneurship ecosystem. Our recent investments in the National Manufacturing Institute Scotland, the medicines manufacturing innovation centre and much else that is happening in Scotland’s universities and elsewhere are a testament to the strength of Scotland’s economy now and in the future.
Yesterday, the BBC reported a slowdown in recruitment in the games sector in Scotland as it responds to the cost of living crisis and economic uncertainty. Given Scotland’s historic place in the industry, has the minister had discussions with the sector about the support that it needs to continue growing and realise its full economic potential?
We continue to work closely with the games sector and others across the digital economy and, indeed, the rest of the economy. Like many businesses across the economy, those businesses continue to suffer from a shortage of the skills, talent and labour that they need to fuel their growth potential. We continue to work to ensure that those skills are provided as necessary.
Despite the comments that the member makes on that specific issue, the sector will continue to go from strength to strength. Demand is strong and the skills here are great. The businesses are very well founded and we work with them to transmit that and find them opportunities globally.
Audit of the Scottish Government Consolidated Accounts 2021-22
To ask the Scottish Government what its response is to the comments from the Auditor General in his “2021/22 audit of the Scottish Government Consolidated Accounts” that financial support for Burntisland Fabrications Limited, Ferguson Marine Engineering Limited, Prestwick Airport and the Lochaber Aluminium Smelter “has not delivered expected outcomes and is unlikely to achieve value for money”. (S6O-01691)
The Scottish Government’s financial support of those businesses is on-going, so it is not possible to make a full assessment of the final outcomes or value for money at this point. When a business faces difficulties that cannot be addressed by a market response and the business is critical to the economy or is a long-term strategic asset, we will rightly consider options for support. The Scottish Government will continue to work with those businesses to deliver value for money for the public purse.
Well, that was really not any kind of answer. The Auditor General said the following about Ferguson Marine:
“During 2021-22, the Scottish Government wrote off £52 million from the capital value. The value of vessels 801 and 802 in the Consolidated Accounts at 31 March 2022 was £78 million.”
So far, the cost of building the vessels has been well in excess of £200 million for vessels that are worth £78 million, and that gap is only going to get wider. Does the minister believe that that is value for money?
We have taken the steps to preserve commercial shipbuilding on the Clyde for this and future generations and to maintain that strategic asset in Scotland’s economy. We believe that doing so is hugely important. The communities and the workers that are employed at Ferguson’s would certainly think so, and those who value Scotland’s important commercial shipbuilding assets would think so, too.
My colleague the Deputy First Minister has reported back to Parliament on the specifics around the challenges that the yard faces and the Government support that has been put in place to ensure that it continues to operate and will deliver those ferries and future ferries.
The minister seems very casual in his response to the losses of hundreds of millions of pounds through those various industrial interventions. Has he learned anything from those episodes and losses? If so, can he tell the Parliament what?
Willie Rennie should have a look at the assets that are in place at Dalzell. It is still operating, employing a significant number of people, producing steel and keeping Scotland’s steel production in play. The smelter at Lochaber continues to operate very successfully, as does the hydro scheme that is part of that site, where hundreds of people continue to be employed. We are glad that we made those interventions back in 2016. We have now had six or more years of continuous production and employment as a consequence. That pays tax into the Scottish economy, supports local communities and keeps those strategic assets in play, so I do not think that we have anything to apologise for.
As I have indicated in previous answers on the subject, the Government will step in where there is a strategic asset to be kept in play or there is something of importance to the Scottish economy. By virtue of the fact that, by their nature, such situations are ones where the private sector has declined its support, the Scottish Government is of course taking itself into a situation where there is a risk that things will not work out as we would all hope. However, on balance, much of that work has been successful and continues to be so.
Does the minister agree that it is faintly ridiculous that, in order to avoid redundancies, Ferguson Marine, which is a publicly owned shipyard, is now almost entirely dependent on building sub-contract work for BAE Systems on a type 26 programme for the Ministry of Defence while the Scottish Government is handing a £100 million ferry contract to a Turkish shipyard and is likely to award another £100 million ferry contract to a Turkish shipyard? Is that not completely contradictory to any idea of a national ferry building or shipbuilding strategy?
No. We make decisions on where to place work based on criteria that are in place. We made decisions on supporting and working with strategic assets to ensure that they continue to operate. We work with and encourage other partners across the sector and beyond to co-operate where that makes sense in order to ensure that business flows into different operations and that it supports employment and the future of the sector as a consequence.
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