Wellbeing Economy, Fair Work and Energy
Living Wage (Support for Rural Businesses)
To ask the Scottish Government how it is supporting businesses in rural areas to become accredited living wage employers. (S6O-02749)
In the absence of legislative powers to mandate a living wage, which are reserved to Westminster, we fund the living wage Scotland team at the Poverty Alliance to deliver living wage employer accreditations and to promote the benefits of a real living wage to businesses, rural and urban, across Scotland. As a result of that effort, Scotland now has more than 3,400 living wage accredited employers situated across all 32 local authority areas and covering a range of industries and sectors.
Scotland leads the United Kingdom with 91 per cent of employees earning at least the real living wage and, proportionately, it has five times more accredited employers than the rest of the UK.
Rural and small businesses that I regularly visit across Dumfries and Galloway and the Scottish Borders report that they would like to become accredited living wage employers. However, it is often the case that, due to the nature of rural employment, such as seasonal working, small and changing workforces and the costs associated with becoming accredited, it can be difficult for small and medium-sized rural businesses to do so. Will the cabinet secretary provide any further information about the steps that can be taken, such as through enterprise agencies, to support rural businesses to deliver fair work practices such as the real living wage? I remind members that I am a living wage employer.
I thank Emma Harper not just for her question but for her work in this area. We appreciate the challenges that many employers have faced due to the pandemic, Brexit and the rising cost of doing business, and that some sectors and regions, particularly in rural areas, continue to face difficulties.
The Scottish Government’s fair work action plan commits to supporting employers
“to utilise the resources ... available to embed Fair Work in their organisations.”
We have made fair work first guidance available and have developed a fair work employer support tool with our enterprise and skills agencies. I pay tribute to the work of South of Scotland Enterprise and its partners to encourage the uptake of the real living wage in Emma Harper’s region.
We will continue to work with partners to join up provision of advice and support for employers through a central fair work resource, making it as simple and efficient as possible to use.
Does the Scottish Government know how many of Scotland’s 1,125 rural estates are accredited living wage employers? Will the cabinet secretary join me in calling on any estates that are not yet accredited to register today?
Yes, I think that anyone who has the ability to make that choice and move to being a real living wage employer will see the benefits in lower attrition rates and greater productivity in their business. Of course, regardless of the sector, I would encourage employers across Scotland to become real living wage employers.
Can the Scottish Government outline any assessment that it has made of the growing number of business that are accredited living wage employers, of the impact on the horticultural sector and of the future of the Scottish agricultural wages board?
This area is under active consideration across Government and different portfolios. We recognise that there are challenges in different elements of the economy, and the agricultural sector is one of those. We are looking to do all that we can to provide support to employers, regardless of sector, to ensure that the benefits of being a real living wage employer can be realised.
At the same time, we understand some of the challenges in those areas, and we would be happy to discuss them further with Beatrice Wishart.
Question 2 has not been lodged.
Economic Growth
To ask the Scottish Government what action it is taking to address the reportedly stagnant level of economic growth. (S6O-02751)
The cost of living crisis continues to impact the ability of households and businesses to spend, which, in turn, affects the wider economy. Despite those extremely challenging economic conditions, the Scottish economy remains resilient.
Our national strategy for economic transformation contains bold and ambitious actions that will deliver fairer, greener prosperity for Scotland, making our economy more sustainable and resilient in the longer term. Similarly, our new deal for business is about creating an environment that supports a wellbeing economy, maximises the opportunities of the green economy and helps businesses to thrive.
Although we remain tied to a failed United Kingdom economic model and do not hold all the financial levers that are needed, we continue to use all the powers that we have to grow a fair, green and growing wellbeing economy that meets the needs and aspirations of the people of Scotland.
The cabinet secretary spoke about resilience. The news from Grangemouth this morning is deeply concerning. It is a huge blow to those communities, as it affects not just the thousands of jobs at the site but also jobs in the supply chain.
There are significant issues in Scotland with stagnant growth, and less well-off areas are growing more slowly than better-off areas. The news will have a significant impact on not only the regional economy but our national economy.
When was the Government made aware of the announcement by Petroineos? What discussions has the Government had about it? Crucially, what action is the Government taking to protect and safeguard jobs, move to a just transition and keep the Parliament informed?
I will, of course, endeavour to keep Parliament informed of updates on discussions with Petroineos. The decision that has been taken by the company is a commercial one. We were informed last night that it intended to take that decision, and there was no timescale on it. We were given reassurances that Petroineos had fully consulted the workforce before going public.
As Mr O’Kane would expect, I am endeavouring to have further conversations with Petroineos in short order, to understand how this will operate. We have been given assurances that the changes that Petroineos is looking to make at the Grangemouth site are about ensuring a sustainable future for industrial work at the site and ensuring that there is a long-term future for jobs and investment in the area. That is what we would expect, and I am incredibly exercised about ensuring that that can take place.
I will continue to liaise not only with Petroineos but with the UK Government, which has a locus here, and I will update Parliament in due course.
I have received requests for supplementaries from four members. Given the issues that could be raised in relation to this question, I will seek to take all four, but I hope to have brief questions and answers.
There is no denying the economic impact of Brexit. However, as the ever-increasing damage of leaving the European Union continues to mount, it seems that Labour and the Tories are keeping their heads in the sand.
Can the cabinet secretary provide any update regarding the latest assessment that the Scottish Government has made of the impacts of Brexit on economic growth? Will he join me in calling on Opposition members to wake up to the reality of those impacts and to join us in standing up for Scotland’s place in Europe?
Yes, I can. I appreciate that question from Colin Beattie.
Brexit has caused economic devastation to Scotland and the UK. The UK’s inflation rate in October 2023 is still higher than the rates in France and Germany. In a recent survey of small and medium-sized businesses in the UK, most respondents said that Brexit had affected them negatively. In March, the Office for Budget Responsibility repeated its expectation that the UK’s gross domestic product will be 4 per cent lower in the long run due to Brexit. It is clear that the costs of Brexit outweigh any costs of UK membership of the European Union.
Joining the European Union as an independent nation would offer Scotland the chance to regain what has been lost because of Brexit.
With 4 per cent of Scotland’s GDP dependent on the Grangemouth refinery, does the minister not see that the Government’s rhetoric towards the oil and gas sector—matched by the rhetoric from Keir Starmer’s Labour Party towards that sector—is not helping to support an essential part of the Scottish economy on which hundreds of jobs will depend?
The decision is a commercial one that has been taken by Petroineos. The age of the site causes a challenge in terms of what is required for the future. My understanding of conversations that have been had, and from the conversations that I have had with Petroineos, is that the decision is about ensuring that there is a long-term future for the site, which includes ensuring that it moves to more sustainable operations.
As I said in response to Mr O’Kane, I will look to engage in further discussions with Petroineos. We will ensure that Mr Fraser and other members are updated on discussions not just with Petroineos but with the United Kingdom Government, which has a locus in the issue as well.
What is the point of having an economy secretary if he does not know what is happening to one of the major employers in this country more than 24 hours in advance of a decision? Surely he should be integrated into the company and understanding what is going on. If a just transition is to mean anything, we should have had a plan ages ago. Does he have a just transition plan for the plant? What is he going to do about it?
Yes. Work has been on-going over a long period to engage with Petroineos and the Grangemouth site to ensure that there is a sustainable future for it, in exactly the ways that Mr Rennie describes. That is about ensuring that there can be a sustainable future to provide jobs and that there is continued industrial capacity at Grangemouth. We will continue to engage with Petroineos and the UK Government, which has a locus in the issue, and we will update Parliament in due course.
Can the cabinet secretary advise members which economic levers that are currently reserved to Westminster would help to boost economic growth the most if they were devolved to this Parliament and which of those, if any, the Labour and Conservative parties have committed to devolving and would help to save Grangemouth?
I appreciate that question from Kenny Gibson. The Scottish Government has consistently argued for the devolution of migration powers to the Scottish Parliament, which would help us to attract working-age people and their families, thereby ensuring that our businesses can access skills and people, and meeting the needs of the parts of Scotland that are most at risk of depopulation. The UK Government has blatantly ignored those calls on more than one occasion, despite the fact that the UK’s immigration system is not designed to meet the needs of Scotland and is having a damaging effect on our economy and communities, especially in rural areas.
We also continue to call on the UK Government to devolve employment powers to this Parliament so that we can introduce the real living wage and boost the rights of millions of workers across Scotland. I hope that the Labour Party supports those calls. However, with the full powers of an independent country, we would, of course, do much more.
Scottish National Investment Bank (Wellbeing Economy)
To ask the Scottish Government what assurances it has received that the Scottish National Investment Bank is supporting its ambition to create a wellbeing economy, in light of there not being an advisory board in place. (S6O-02752)
Now that the Scottish National Investment Bank is fully established, with a growing portfolio of investments, work is under way to establish the advisory group. We receive assurances on the bank’s support for a wellbeing economy through the fact that the missions that ministers set for the bank align closely with our wellbeing economy principles; the fact that the bank’s robust investment processes ensure that investments align to at least one mission; and the work of the bank to measure the benefits of its investments, information on which was published in the bank’s impact report. Senior officials and I also have regular meetings with the bank’s senior leadership team.
The Scottish National Investment Bank has been in operation for three years now and, recently, serious allegations have been made against it. One is that the bank lent £7.5 million to a company that is run by the brother of a bank employee—a company that was loss making and whose accounts were overdue. It has also been reported that there was political pressure to invest £9 million in Circularity Scotland, most of which has now been lost.
I do not know whether those accusations are true, but I know that, if the advisory board was in place, as is required in law, we would have the assurance that things were in order. Does the cabinet secretary accept that it is vital that the advisory board is put in place as soon as possible?
Yes, I do. We are looking to establish that, as I said in my answer to Mr Lumsden’s first question. In addition to bringing about the advisory group, as I also set out in that answer, I have regular meetings with the senior management. I most recently met the chair and chief executive on 2 November. My officials meet regularly to ensure that we have that oversight. The advisory group will be set up as soon as possible, now that the bank is fully operational.
In light of recent reports that the Scottish National Investment Bank is investing in firms that are linked to personnel at the bank, what work is the Scottish Government undertaking to improve transparency at the bank, avoid such conflicts of interest, and meet the high standards that are expected of a public entity?
As I set out to Mr Lumsden, on the bank’s support for a wellbeing economy, we receive assurances that its work links to at least one of its missions at our regular meetings with the bank, at official and ministerial levels. The bank also has to publish an impact report. All its investments are made in a transparent way so that people can see them clearly.
The failure of the recent United Kingdom Government auction for offshore wind subsidy contracts to attract any new projects has left investors with reduced confidence in UK renewables, according to the recent Ernst & Young renewable energy attractiveness report, with the UK dropping down its international rankings. Will the cabinet secretary provide an update on any strategic investment through the Scottish National Investment Bank that will accelerate Scotland’s offshore renewables capabilities and help to secure a just transition for our energy sector and a fairer and greener Scotland for everyone?
What does that have to do with my question?
Mr Lumsden, do you wish to make a point of order?
Yes. On a point of order, Deputy Presiding Officer.
Do supplementary questions not have to have some relevance to the initial question that was asked? The initial question was about an advisory board for the Scottish National Investment Bank, and Mr Stewart’s supplementary question seems to have no relevance to that whatsoever.
I thank Mr Lumsden for his point of order. I listened carefully to Mr Stewart’s supplementary question, and he sufficiently brought the issue back to Mr Lumsden’s initial question on the assurances that the Scottish Government has received from the Scottish National Investment Bank that it is
“supporting its ambition to create a wellbeing economy”.
As I understood it, that was the part of the question that Mr Stewart was getting at, and perhaps that is the part of Mr Stewart’s question on which the cabinet secretary could focus his reply.
I appreciate that direction, Deputy Presiding Officer.
Mr Stewart will appreciate that I cannot give details on active investments that the Scottish National Investment Bank is currently working on. However, the bank has a strong record on investments that contribute to the offshore renewable sector, including the £6.6 million investment in the clean-energy pioneer Verlume, whose technology uses intelligent energy management to deliver a constant output of power from renewable sources, supporting the company’s expansion plans. In addition, the bank’s £50 million investment in North Star Renewables is supporting the building of service operations vessels to assist the renewable energy sector and strengthening Scotland’s position as a global leader in the offshore wind supply chain. The bank will also be a key delivery partner in relation to the recent £500 million commitment to ScotWind and its supply chain.
Real Living Wage
To ask the Scottish Government, in light of the commitment set out in its programme for government 2023-24, whether it will provide more details of how it plans to increase the number of people earning the real living wage. (S6O-02753)
In line with our programme for government commitment to boost wages, we are providing grant funding to the Poverty Alliance to deliver living wage and living hours accreditation schemes across Scotland. Such schemes promote the business benefits of pay security for both workers and their employers. In July, we introduced a requirement on public sector grant recipients to pay at least the real living wage to all employees and to provide appropriate channels for effective voice.
Although minimum wage rates are reserved to the United Kingdom Government, we will continue to use the levers that are at our disposal to promote payment of the real living wage and enhance fair work in Scotland.
An effective real living wage policy represents a very welcome attack on poverty pay, and more must be done to assist people on low pay. Does the cabinet secretary agree with me and the Scottish Trades Union Congress that the full devolution of employment powers would allow Scotland to do much more, such as ending zero-hours contracts and fire-and-rehire practices?
The STUC and the Scottish Government have long shared the view that employment powers should be devolved to Holyrood. We continue to call for that to enable us to create fairer workplaces, enhance workers’ rights in Scotland, help to shift the curve on poverty, and deliver a fairer, greener and growing economy in a more prosperous Scotland.
The full devolution of employment powers will allow us to legislate to support workers in precarious employment and ban fire-and-rehire practices. It is important that Scotland can legislate appropriately for its own workforce to ensure adequate protections and security of employment, and to fully implement policies that will best meet Scotland’s distinct needs.
Question 6 was not lodged.
Fair Work (Unpaid Overtime)
To ask the Scottish Government, in light of its fair work first policy, what its response is to reports that workers in Scotland lost nearly £1.9 million in wages in a year due to working unpaid overtime. (S6O-02755)
Far be it from me to correct Mr Whitfield, but I think that he meant “billion” as opposed to “million”.
We believe that workers should have good work and secure conditions, with a fair wage for a fair day’s work. We have called on the United Kingdom Government to devolve employment powers to the Scottish Parliament. However, while employment law remains a reserved matter, we will continue to use our fair work policy to promote fairer work practices across the labour market in Scotland.
Through our fair work policy, we ask employers to pay at least the real living wage and to consider the number and frequency of work hours, which are critical in tackling in-work poverty.
I am grateful for that response—and that assistance.
Through its emanations, the Scottish Government is responsible for the public sector workforce. What does the Government have to say about the estimated £15 million of unpaid overtime hours in that sector, including in relation to teachers, who work well above their 35-hour week? What is the Scottish Government doing to ensure that those workers are paid for their work during the cost of living crisis?
I feel that I must declare an interest as the husband of a hard-working teacher and the son of a recently retired hard-working teacher.
We look to ensure that, in our public sector pay settlements, we do everything that we can to ensure that our hard-working public service workers earn a fair pay and that their contracts include an assurance that they work the hours that are ascribed to them. There are always challenges to that, and we all look to do what we can to ensure that we contribute in our workplace, but that should be recognised in the fair work policies that we bring forward and the contracts and payments that people receive.
Does the cabinet secretary agree that, if Scottish Labour members are serious about protecting the rights of workers and going further to deliver fair work conditions in Scotland, they need to take proper action to press their London bosses to commit to devolving employment law to Holyrood as a priority?
Perhaps the cabinet secretary could focus on those matters that are within his purview.
With regard to my ability, as the cabinet secretary with responsibility for the wellbeing economy and fair work, to ensure that our commitments are being worked through in policy terms, it would be most helpful if Labour were able to give such a commitment and stand shoulder to shoulder with its Scottish colleagues, because we are in a very similar place; it is the divergence between here and London that is the challenge. Perhaps further conversations can be had around whether, if there is to be a future Labour Government, it would allow us the devolution of employment law in order to deliver on our commitments.
New Deal for Business Group Report
To ask the Scottish Government what policy changes it has implemented as a result of issues raised in the “New Deal for Business Group: Report on progress and recommendations”. (S6O-02756)
I thank Murdo Fraser for his question because it gives me the opportunity to set out that we have extended the deadline for lodging non-domestic rates proposals to 31 August 2023, which gives businesses an extra month to submit their 2023 revaluation proposals, following the introduction of the new two-stage appeals system on 1 April 2023.
We have re-established the regulatory review group, which met for the first time on 26 October 2023 and will provide advice on the pragmatic implementation of regulations. We have started activities to review and update the business and regulatory impact assessment toolkit and guidance, to ensure that it is accessible and purposeful. We are also establishing the new small business unit to work more closely with small businesses and ensure that their voices are heard during policy engagement.
In such short order, that is a good start, and there is more to come.
I welcome all the engagement that the cabinet secretary referred to, which is very necessary because, last week, a poll of business directors in Scotland showed that fewer than a quarter believe that the Scottish Government understands the business environment in Scotland, and more than two thirds disagree with the statement that the Government understands the business environment.
Business wants action and delivery, not just words. We have just heard from the Chancellor of the Exchequer that the 75 per cent rates relief for businesses in the retail, hospitality and leisure sector will be extended for a further year. That is the number 1 ask of this Government from businesses in those sectors, so will it follow suit?
On the final point that Mr Fraser raised on domestic rates, all of that is in the mix as we assess the impact on Scotland’s budget of what we have just heard in the autumn statement. It will take some time for the implications of what has been set out to come through in the wash, and some of the more positive elements might turn out to be more negative in relation to Scotland’s budget. We will look carefully at the implications of the autumn statement for our ability to look at non-domestic rates.
On Mr Fraser’s previous question about the attitudes of directors and the feeling about the sentiment of the Scottish Government, we continue to work on that. That is the whole reason why we have the new deal for business and why we are engaging in the way that we are. We understand that delivery will be critical. We published an implementation plan earlier this year to go alongside the recommendations of the new deal for business growth, so that we can be held accountable for the work that we have committed to doing.
That concludes portfolio questions on wellbeing economy, fair work and energy. We will next turn to the finance and parliamentary business portfolio. I will allow the front-bench teams to change positions should they wish to do so.
Finance and Parliamentary Business
Again, if any member wishes to ask a supplementary question during finance and parliamentary business portfolio questions, they should press the request-to-speak button during the relevant question or enter RTS in the chat function during the relevant question.
Elective Care Waiting Times (Parliamentary Debate)
To ask the Scottish Government whether it plans to propose a parliamentary debate on waiting times for elective care for both out-patient and in-patient appointments. (S6O-02757)
Currently, there are no plans at this time. As Mr Mountain is aware, 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 Parliament.
As the minister will know, this party’s business is limited to nine debates per parliamentary year, so there is very stiff competition. Will the minister undertake to raise that specific issue with the Cabinet Secretary for NHS Recovery, Health and Social Care? Despite the national treatment centre opening earlier this year, waiting times are increasing in the Highlands, and constituents in the Highlands expect those matters to be debated in the Parliament.
This is the third time today that I have been asked a question that is outwith my portfolio. I take that as a compliment to my ministerial abilities.
I encourage Edward Mountain to continue to engage with health colleagues. I am happy to pass on his concerns to my health colleagues as well.
Long-term Financial Planning (Effect of Financial Settlements)
To ask the Scottish Government what impact United Kingdom Government annual financial settlements have on its ability to undertake long-term financial planning. (S6O-02758)
The United Kingdom Government’s financial settlements to Scotland significantly curtail the Scottish Government’s ability to undertake long-term planning. In recent years, there has been a significant alteration to assumed UK Government plans as a result of events such as the disastrous mini-budget a little over a year ago. In addition, we must also factor in potential changes to assumed capital programme spending by the UK Government in year to hold against the possibility of negative consequentials that would reduce our spending power in year.
This autumn’s statement simply does not go far enough in delivering the funding that we need. That makes the challenges on our budget even more severe. In order to bring as much clarity as it is within our gift to do, we published the medium-term financial strategy, which sets out the challenges to be addressed in our financial position.
Virtually every organisation that the Scottish Government funds seeks three to five-year financial settlements, yet we have seen chronic financial instability at UK level, with four Chancellors of the Exchequer in four months last year, for example. Has the cabinet secretary been given any indication that the current chancellor is considering longer-term settlements in order to help deliver the certainty, efficiency and effectiveness that longer-term financial planning would bring?
We have had no such clarity or certainty about longer-term financial planning from the UK Government. We will continue to face significant funding pressures in the year ahead, at a time when costs continue to rise and the need to support people through challenging times remains.
Prior to the autumn statement, I wrote to urge the Chancellor of the Exchequer to provide a funding settlement that will enable us to invest in public services, vital infrastructure and fair public sector pay increases. We have seen no such thing from the autumn statement today. What is emerging is a set of choices that will have a devastating impact on our public services next year.
Given the answer that the Deputy First Minister has just given to Mr Gibson, will the Government consider making further representations to the UK Government about the necessity of longer-term financial planning information so that Parliament can provide greater funding assurance to third sector organisations that are interested in providing transformational change in our society but need greater certainty about the funding horizon to enable them to do so?
I can say to John Swinney that we will continue to do so. Having met a range of organisations during the past few weeks, I can say that, for many organisations, particularly third sector organisations, funding certainty is almost more important than the quantum of the settlement, because it is about being able to keep staff and to plan.
I have to say, however, that what is emerging from the autumn statement today will make every single part of our public sector or third sector organisations’ funding extremely difficult. I will be keen to set out to Parliament at the earliest opportunity the full impact and how grave the situation is after what the Chancellor of the Exchequer announced today.
High Streets (Rejuvenation)
To ask the Scottish Government whether it will provide an update on any plans it has to provide financial support for high street rejuvenation. (S6O-02759)
The refreshed town centre action plan, which was published last year, is a call to action, both locally and nationally, to support the rejuvenation of our town centres, and it reaffirms our commitment to the town centre first principle.
In 2021, we established the place-based investment programme, which we deliver in partnership with local government to accelerate our ambitions for town centres, place, 20-minute neighbourhoods and community-led regeneration. We have invested £70 million this year to support projects across the country through that programme.
City centre economies are facing significant challenges, and Glasgow is no different. Currently, a £5.7 million investment in redeveloping Sauchiehall Street, Buchanan Street and Argyle Street is under way, thanks to the city region deal funding. However, there has been a recent decline in the number of hospitality businesses operating in Glasgow. What additional investment similar to the funding that has been announced for Aberdeen’s Union Street is being considered by the Scottish Government to boost the hospitality sector and the night-time economy in Glasgow city centre?
I am aware of the challenges that some in the hospitality sector are facing, so we have established an industry leadership group with the tourism and hospitality sector to understand its unique needs. Glasgow City Council has benefited from a range of investments. For example, in addition to the investments that were made through the city deal, the council has already received a direct allocation of more than £9 million from the place-based investment programme, and the council has discretion on how it uses that money. We continue to work closely with Glasgow, holding quarterly leadership meetings with the Scottish Cities Alliance.
Last week, the First Minister and Mr Gray and I met all eight city leaders to further reinforce our aims to encourage investment and strengthen the prosperity and wellbeing of our cities.
I remind members of my entry in the register of members’ interests. Town centres act as vital commercial hubs, places for businesses to locate and places for the provision of employment. Although we must rebalance and rejuvenate town centres, does the minister agree that commercial purpose must remain at the heart of town centres?
The member is absolutely right. Across the piece, we are all looking at how town centres can have a new vision for the future, with potentially more people residing in them, increasing footfall and ensuring that they remain vibrant. However, I absolutely agree that a commercial basis for our town centres is crucial. That is at the heart of the town centre action plan.
A survey from Scotland’s Towns Partnership this summer showed that people want to shop locally for ease and for the sake of the planet. However, many retail properties in smaller towns and villages have poor insulation and high energy costs. What more can be done to support the rejuvenation of high streets in small towns and villages to enable more people to shop locally?
Many of the small properties that the member is talking about already benefit from substantial support from the Scottish Government, but we need to consider what more we—the Scottish Government and local government colleagues—can do working in partnership to ensure that our town centres remain vibrant and sustainable. Footfall is crucial to that, but the points that the member makes about sustainability, particularly given the incredible increases in energy costs, are an important factor to consider.
National Health Service (Additional Funding Source)
To ask the Scottish Government from which part of its budget the additional £300 million pledged for the national health service will be allocated. (S6O-02760)
The new funding of £300 million that the First Minister announced in October aims to help to reduce in-patient and day-case waiting lists by an estimated 100,000 patients over three years. That investment is subject to the outcome of the Scottish budget process for 2024-25 and future years, as well as associated approval by the Scottish Parliament.
It is deeply disappointing that the Chancellor of the Exchequer has failed to provide in the autumn statement the funding that devolved Governments need. That makes the challenges for our budget next year even more severe, including those for the NHS.
I declare an interest as a practising NHS general practitioner.
That was not an answer, cabinet secretary; it was just a rehashing of a statement. I ask again where the money will be allocated from. Will you not have to make substantial cuts to services such as mental health provision, from which you have already cut £30 million this year?
I remind all members that they need to speak through the chair.
Let us talk about substantial cuts. The Treasury documents that were published today show no noticeable investment in public services, including the NHS, which results in minimal consequentials for Scotland’s NHS. There will be less than £11 million for the NHS in 2024-25, compared with £367 million in last year’s autumn statement.
Those choices of Sandesh Gulhane’s Government will have devastating consequences for every part of our public services in Scotland. He should hang his head in shame for coming to the chamber and asking us about funding for the NHS when his chancellor has deprioritised it for all to see. Today of all days, I will take no lectures from the Tories on funding for the NHS.
Will the cabinet secretary confirm that all capital spending plans for the financing of the Scottish Government’s programme of national treatment centres will be delivered by the end of the parliamentary session, as committed to in its NHS recovery plan?
I have said that, when we set out the budget on 19 December, we will set out alongside that the revisions that will need to be made to the infrastructure investment plan. With the capital cuts that are coming from the UK Government, which were announced and confirmed today, there will be a 7 per cent reduction in our capital spending availability. The chancellor announced hardly anything for capital. That cannot have no impact on our capital spending and infrastructure investment, so we will have some challenging decisions to make when we present the choices that we are making and the priorities that we will take forward. I will set those out alongside the budget on 19 December.
The cabinet secretary will have seen that NHS Fife has already built up a £10.9 million deficit in the first few months of the financial year. The chair of that NHS board is pessimistic about whether costs can be recovered without damaging front-line services. What will the cabinet secretary do to stop the cuts to front-line services that could result from that?
The Government has always tried to prioritise funding for the NHS. I will not deny or dismiss the pressures that have arisen for our NHS in trying to deal with the Covid backlog, pay pressures and the cost of medicines. All of that heaps pressure on our NHS boards. However, surely—today of all days—Willie Rennie will join me in condemning the chancellor and the UK Government for giving only £11 million of consequentials for the NHS next year. That is all that the NHS will get next year, compared with the £367 million that was announced for the NHS in last year’s autumn statement. That shows a hollowing out of funding for NHS England and, as a consequence, NHS Scotland.
I do not know why Willie Rennie is shaking his head. Those are the facts. I have the figures from the Treasury reports—
Cabinet secretary, I will need to move on to the next question.
Surely he should join us in condemning the chancellor and—
I call Clare Adamson.
Local Government Finance Support Schemes
To ask the Scottish Government how it is ensuring that local government finance support schemes are operating effectively. (S6O-02761)
Local authorities are accountable to their local communities and have the financial freedom to operate independently, taking account of local needs. The Scottish Government will continue to work in partnership with the Convention of Scottish Local Authorities to agree a more detailed programme of work, including a fiscal framework and an outcomes and accountability framework, to underpin the Verity house agreement in the coming months. We have also committed to inviting the Accounts Commission and Audit Scotland to be part of that work.
I have been helping a number of my constituents regarding the dual housing support scheme, which supports people to go into rehabilitation, and the discretionary housing payment, which mitigates the Tories’ bedroom tax. Those are excellent examples of the Scottish Government putting cash into the hands of the most vulnerable at the most difficult of times, in marked contrast to Westminster’s austerity.
However, it has become apparent that many constituents and third sector organisations are not aware of those support schemes, which are administered by the local authority. I urge the Scottish Government to work with local authorities to ensure that those initiatives are promoted locally and are passported to the people who are entitled to that vital support.
I thank Clare Adamson for her supplementary and for highlighting that Scottish Government investment. We have commissioned Healthcare Improvement Scotland to establish regional improvement hubs, which will bring together groups of alcohol and drug partnerships and other key parts of the local system to design and improve pathways into, through and from rehab. Part of that work is to ensure that local pathways promote routes into residential rehabilitation such as the dual housing support fund.
Local authorities are responsible for promoting the discretionary housing payment scheme in their areas. The Scottish Government has been working with third sector partners to raise awareness of the support that is available to households, particularly with the newly established fuller benefit cap mitigation.
United Kingdom Government Autumn Statement (Engagement)
To ask the Scottish Government what engagement it has had with the United Kingdom Government regarding any impact of the autumn statement on Scotland’s public finances. (S6O-02762)
As I outlined to Parliament yesterday, I wrote to the Chancellor of the Exchequer ahead of the autumn statement to set out the Scottish Government’s priorities for action. I also spoke to the new Chief Secretary to the Treasury this morning, when I again emphasised the need for investment in public services and net zero, and the need to support people with the cost of living. The Welsh finance minister and I previously discussed the need for additional investment in devolved Government budgets with the previous Chief Secretary to the Treasury at the most recent meeting of the finance interministerial standing committee.
It is very disappointing that, today, the chancellor has failed to provide the funding that devolved Governments need, which increases the challenges for our budget next year.
As we heard earlier, hospitality businesses particularly suffered throughout the pandemic and they have faced rising costs as a result of inflation and increased energy prices. Have any discussions taken place to ensure that specific support is provided for the hospitality sector?
My ministerial colleagues and I regularly meet representatives of the hospitality industry. The Minister for Community Wealth and Public Finance chairs the new deal for business non-domestic rates sub-group, which includes representatives of the hospitality industry.
We responded to business’s biggest ask on non-domestic rates and froze the poundage in 2023-24, thereby ensuring that Scotland had the lowest non-domestic rates poundage in the UK for the fifth year in a row. Our rates package is estimated to be worth £749 million. As a result of our providing the most generous small business bonus scheme relief in the UK, around half of properties in the retail, hospitality and leisure sectors in Scotland will pay no rates.
Going forward, we will set out our decisions on non-domestic rates in the budget that will be set out on 19 December.
According to the Office for Budget Responsibility, the outlook for the United Kingdom is pretty subdued, and inflation, as well as interest rates, will be higher for longer. Much has been made already of the impact of Tory decisions on the consequential funding that Scotland will receive, but does the cabinet secretary accept that it is a double whammy, because not only will we receive less, but our costs will remain higher due to Tory incompetence?
Kate Forbes’s summation—she describes it as “a double whammy”—is absolutely on the button. The question for us is how we reconcile a reduction in our budget and a real-terms cut in capital. In fact, the additional capital departmental expenditure limit is a total of £10 million for next year’s capital allocation from the UK Government. That puts in context some of the questions that we heard earlier about infrastructure investment priorities.
I look forward to hearing what the Tories’ priorities are in the face of the chancellor’s decisions today. When each and every one of them comes here asking for more money, I will be reminding them of the chancellor’s priorities today—[Interruption.]
Members!
—which will have an impact on every single one of their constituencies and the public services in them.
Council Tax Freeze (Impact on Midlothian North and Musselburgh)
To ask the Scottish Government what assessment it has made of any impact that its council tax freeze policy will have on households in the Midlothian North and Musselburgh constituency. (S6O-02763)
The total funding for local government and the significant associated savings for taxpayers for 2024-25 will form part of the detail of the implementation of the council tax freeze, which will be agreed with the Convention of Scottish Local Authorities over the coming weeks.
The freeze will mean that every Scottish household will continue to benefit from cheaper council tax bills. If council tax in England increased by 3 per cent next year, for example, it would see the average band D property in England pay over £700 more on average than a band D property in Scotland, following our freeze.
It is very welcome that the Scottish National Party Scottish Government is helping households across Scotland save hundreds of pounds with the council tax freeze, putting money in people’s pockets when they need it most.
Meanwhile, apparently, East Lothian’s Labour council leader recently threatened to raise council tax by 32 per cent. That would hammer hard-pressed families across my constituency, right in the midst of a cost of living crisis. Will the minister join me in calling on the Labour Party to condemn those tax hike plans and to admit whether it has been planning similar council tax rises across Scotland?
We are absolutely committed to constructive engagement with our partners in local government to deliver a council tax freeze that will benefit every part of Scotland. It is for other parties to set out their position—I admit that I struggle to keep up with other parties’ positions, as they seem to change on a weekly basis—but we are absolutely committed to working with our local government partners to deliver a council tax freeze that will benefit every single household in Scotland.
The member is right to question how a council tax freeze will affect households in Midlothian North and Musselburgh, but is it not the case that it will also affect households across Scotland, including my West Scotland region, when it comes to the delivery of public services? Can the minister confirm the expected cost of the council tax freeze and, more crucially, where the money will come from?
As I set out in my earlier responses to Mr Beattie, we are committed to constructive engagement with COSLA to deliver a fully funded council tax freeze that will benefit households in the member’s constituency and, indeed, households across Scotland.
Does the minister recognise that a lot of local services are buckling under the financial pressure? Without getting into the party politics of the matter, is he intending to sit down with local government and look seriously at what can be done to protect services for the most vulnerable people in our communities?
I thank Mr Rowley for his question and for the tone of it. We are committed not only to delivering, through partnership and agreement with local government, a fully funded council tax freeze, but to ensuring, through our wider commitments and the Verity house agreement, that we can provide sustainable public services for all people in Scotland, and that we deliver the person-centred services that we all want to see.
Government Bonds (Plans)
To ask the Scottish Government whether it will provide an update on its plans to issue Government bonds. (S6O-02764)
The First Minister announced on 17 October that, subject to market testing and due diligence, the Scottish Government will go directly to the bond market in our own right for the first time.
The issue of bonds is part of a wide-ranging package of recommendations from an investor panel of senior figures from investment finance. The Scottish Government will issue bonds when the value-for-money case supports it from a fiscal and economic perspective.
It is deeply disappointing that the Chancellor of the Exchequer failed to provide the funding that devolved Governments need in the autumn statement. That makes the challenges for our budget next year even more severe, so it is right that the Scottish Government pursues all of its fiscal and economic levers to boost investment in Scotland, including the issuance of bonds.
The next steps will be set out in the 2024-25 Scottish budget on 19 December.
It is clear that bonds represent an important opportunity to use our powers to invest in infrastructure during a time that, judging by today’s autumn statement, will clearly be one of continued Westminster austerity. Can the cabinet secretary say any more about how the bonds could help to raise Scotland’s profile and engagement with international investors?
The investor panel provided its first-stage work to the Scottish Government in September, and it covers a wide range of findings and recommendations on how Scotland can attract mobile capital to support the just transition to net zero.
That piece of work also includes a recommendation that would involve additional costs but could result in Scotland’s profile being significantly raised in international capital markets through the use of existing devolved powers to issue debt. That would provide a motivation for regular engagement with investors and an opportunity to market Scotland’s investment story, and it would also allow the development of relationships with providers of debt, a track record and a credit rating. However, as I have stressed, the proposal has to meet the value-for-money test, which will be set out by the Scottish Government before we proceed.
The investor panel has produced a valuable piece of work, and I thank it for its efforts and the information that it has provided.
That concludes portfolio questions on finance and parliamentary business. There will be a short pause before we move on to the next item of business.
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