Finance, Employment and Sustainable Growth
Good afternoon, everyone. The first item of business this afternoon is portfolio question time. In order to get as many members in as possible, I would be grateful for short questions and answers.
Community Empowerment (Scotland) Bill (Community Ownership)
To ask the Scottish Government how the proposed community empowerment (Scotland) bill will provide opportunities for community ownership. (S4O-03086)
The community empowerment (Scotland) bill will extend the community right to buy to urban areas of Scotland as well as rural areas. That will help the Scottish Government to reach the target of a million acres of land under community control in Scotland by 2020. The bill will also give communities new rights to help them take on public sector land and buildings.
When St Stephen’s church in Edinburgh’s new town was recently put up for sale, local residents attempted to purchase it and place it in a charitable trust to retain its use as a community building. That attempt failed and the building has since been sold to a private buyer, whose representative I am meeting later. What scope is there in the proposed bill for consideration of community purchase rights for property that is not public but charitable and felt to be an important community asset?
I have good news and bad news for Mr Biagi. The bill will extend community right to buy across all areas of Scotland and enable communities to buy buildings in the ownership of churches and other private organisations, so its powers will be quite extensive. The bad news, though, is that that will not be retrospective.
Given the minister’s obvious enthusiasm for community ownership, will he have a chat with the Cabinet Secretary for Finance, Employment and Sustainable Growth and ask him to divert some of the grants for the commercial development of wind farms into substantial grants for community ownership of renewables?
It would be far better if we had control of these matters in this Parliament so that we could make such determinations. However, the Government supports community ownership and community benefit, and we are delighted that they are expanding in Scotland. Of course, we could make a contribution mandatory if we had such powers in the Scottish Parliament.
Grid Charging Reforms
To ask the Scottish Government what its position is on the Office of Gas and Electricity Markets announcement that it will delay the implementation of grid charging reforms. (S4O-03087)
Ofgem’s recent decision to delay implementation of much-needed reforms to the system of charging for use of the high-voltage transmission system is bad news for the industry in Scotland and bad news for electricity consumers.
Scottish generators account for around 12 per cent of generation capacity connected to Britain’s high-voltage electricity network, but they pay around 35 per cent of the charges. Ofgem’s proposals have the potential to lessen that discrimination by reducing Scotland’s share to 25 per cent. That would still be double our share of generation capacity installed across Great Britain, but it would be a welcome reduction nonetheless.
The changes would deliver significant long-term benefits to consumers, cutting bills by around £8.30 a year from 2020, according to figures used by Ofgem.
Does the minister agree that the current situation is not only placing significant costs and disproportionate charges on Scotland’s renewable energy generators but potentially delaying investment in the commercialisation of new wave and tidal projects, threatening Scotland’s 10-year lead in those technologies?
I do agree with that. The current situation is particularly unfortunate because I think that there is broad support across the political spectrum for the development of wave and tidal energy in Scotland and, indeed, in the south-west of England.
The delay in project transmit is extremely expensive. In fact, the estimate is that the delays will cost Scottish electricity generators £90 million, which adds to the uncertainties to which Mr MacKenzie referred. That is the case particularly if, as has been announced, the implementation of the “minded to” proposals by Ofgem will not take place until April 2016. That level of uncertainty helps no one.
Fair play to the minister: he has been nothing but assiduous in his pursuit of the issue over a number of years and his effort to reduce grid charges for energy companies generating in Scotland. We simply ask that he demonstrates the same enthusiasm for getting the companies to reduce their excessive profits and freeze energy bills for consumers, which would save consumers £120 per annum. Perhaps he might start by contacting his colleagues in Westminster and asking them to vote for Labour’s price freeze this afternoon.
Frankly, the less politics we have in these matters the better.
As I thought Mr Gray heard earlier, the changes that project transmit would implement would have benefits for all consumers in Scotland and would cut bills by £8.30 a year. Of course, the Deputy First Minister has demonstrated that the Scottish Government is extremely concerned about fuel poverty in Scotland, which is at scandalous levels. That is why the Deputy First Minister—[Interruption.] I know that Labour members do not like hearing this, but it is nonetheless the truth, and the truth is sometimes a painful commodity to listen to. In this case, the truth is that the Deputy First Minister led the way by calling for certain elements of electricity costs to be removed—namely, the energy company obligation. Frankly, that is the most practical and sensible way of proceeding.
We will continue to encourage the development of new generation capacity, which is necessary to keep the lights on down south and to prevent blackouts, which are becoming an ever more real prospect, by exporting Scottish electricity south of the border. We will also continue to seek to provide even more measures to help the consumer, on top of the enormous sums of money that we rightly invest in tackling fuel poverty.
I know that the minister is in self-congratulatory mode, but can he explain why fuel poverty is at its highest level ever, with 900,000 households affected, and why the Scottish Government’s budget on fuel poverty is underspent?
That has absolutely nothing to do with the original question.
He introduced it.
You may answer it if you wish to, minister, but, if you choose not to, we will move on.
I am never one to miss an opportunity, Presiding Officer.
As Jackie Baillie and most other members will recognise, we have invested substantially in a wide range of measures to improve insulation in housing and energy efficiency. We spend an awful lot more than is spent down south on those matters, and we have done so for a considerable time, especially in parts of Scotland such as the Highlands and Islands where many people are off the gas grid and face real fuel poverty. With all respect, we will not accept lectures on that topic from the Labour Party.
Of course, fuel poverty is exacerbated by some of the measures that Westminster is intent on delivering, such as the bedroom tax. If only the Labour Party would agree that we need the powers of independence to end such measures, we could thereby further address fuel poverty.
Zero-hours Contracts
To ask the Scottish Government how widely it estimates zero-hours contracts are used. (S4O-03088)
Estimates for the number of people on zero-hours contracts in Scotland are not currently available due to the relatively small size of the sample in the labour force survey. Employment law is currently a reserved matter, with the United Kingdom Office for National Statistics responsible for data relating to zero-hours contracts.
Until recently, my younger brother was employed on a zero-hours contract, and I know from speaking to him the pressures and difficulties that such contracts can place on people who are trying to pay the bills from one week to the next.
The minister will be aware that Labour is calling for the use of procurement to crack down on the abuse of zero-hours contracts. Can the minister tell us how many people are employed on such contracts by companies that get money from the Scottish Government for contracts? If she cannot tell us that today, will she commit to collating the information and putting it in the Scottish Parliament information centre?
As Mr Bibby will know from speaking to his younger brother and from the recent analysis by the Chartered Institute of Personnel and Development, there are certainly issues with shifts being cancelled with no notice. The study found that a high percentage—20 per cent—of people on zero-hours contracts have been penalised because they were unavailable for work and that nearly 40 per cent wish to work more.
The member may be interested to know that, while the labour force survey produced by the ONS has limitations, the ONS is doing a follow-up survey of businesses, which should be published this April. That is quite an important piece of work, following on from the information that is available in the labour force survey. It will collate information from businesses, which will be better able to comment on their contractual arrangements with employees. One of the concerns—again in the CIPD research—is that employees and employers are not always aware of employment law or rights.
On the Scottish Government’s position, Mr Bibby will be aware that we deprecate and condemn the inappropriate use of zero-hours contracts. The purpose of the Procurement Reform (Scotland) Bill is very much to look at what we can do together, as a Parliament, and to use statutory guidance to encourage good employment practice on a range of issues such as recruitment, engagement and remuneration. The Deputy First Minister has indicated that she will continue that dialogue with all members in advance of stage 3 proceedings.
I remind members that short questions and answers would be appreciated.
Question 4 has not been lodged and a less-than-satisfactory explanation has been provided by Alex Johnstone, particularly as this is the fifth time that this has happened this session.
Aberdeen City Council (Meetings)
To ask the Scottish Government when ministers last met representatives of Aberdeen City Council and what issues were discussed. (S4O-03090)
Ministers and officials frequently have discussions with all Scottish local authorities, including Aberdeen City Council, about a wide range of issues of importance to local communities and the people of Scotland.
A recent report by Audit Scotland found that a fundamental principle of good governance is councillors and officers operating in clearly defined and understood roles—an understanding that is not the case in Aberdeen City Council. What steps can be taken to ensure that the people of Aberdeen are properly governed?
There are a number of live issues that the Labour leadership of Aberdeen City Council should consider very carefully.
On the issue of auditors and governance, a number of bodies could be involved, including external auditors to the council, the Accounts Commission, the Standards Commission for Scotland and the Scottish Public Services Ombudsman. However, I think that all of us would expect that if we just got back to business as normal in terms of the city council’s Labour leadership and let public servants do their job, and if the Labour Party just got a grip, those agencies may not need to get involved in what is a ridiculous situation in the city.
Has the minister seen the research on central Government funding commissioned by the city council from Aberdeen and Grampian Chamber of Commerce, published in February, which confirmed that Aberdeen is the lowest funded local authority in almost every service area? If so, will he undertake to discuss with the council the constructive suggestions made in that report for new ways in which central Government could choose to support the continued exceptional economic growth of the Aberdeen city region?
The Scottish Government would of course be happy to engage in any measure that would leverage in extra finance to Scotland or indeed to the city of Aberdeen. However, it is the Labour leadership at Aberdeen City Council that has rejected new finance that would flow to the city, has threatened to walk away from the Convention of Scottish Local Authorities and is not engaging constructively. It is the same administration that voted against the city garden project, which was bringing in new finance to regenerate the city.
We need a far more constructive administration in the city chambers. Of course the Scottish Government will engage, but it is helpful if the council does not reject finance that we are trying to send to the city.
Minimum Wage (Increase)
To ask the Scottish Government what assessment it has made of the impact of the planned minimum wage rise recently announced by the United Kingdom Government. (S4O-03091)
The first above-inflation increase in the UK national minimum wage since 2008 is welcome. “Scotland’s Future” makes clear that, if we are the first Government of an independent Scotland, we will set up a fair work commission and guarantee that the minimum wage will rise at least in line with inflation.
We are coming to the end of fair pay fortnight, and the Trades Union Congress has estimated that the average worker is £2,000 a year worse off than they were in 2010 as a result of wages not keeping in line with the rising cost of living. Given that this year’s rise is the first since 2009, does the minister agree that the only way to ensure that low-paid workers are guaranteed to see the minimum wage rise year on year, as outlined in “Scotland’s Future”, is to vote yes in September?
The position of this Government is clear. We very much favour annual increases of the national minimum wage at least in line with inflation. We believe that the UK Government has a poor track record on supporting low-paid workers, and we believe that our commitment, as outlined in the white paper, is the best way in which to support the almost 70,000 people—two thirds of whom are women—in Scotland who are currently earning the minimum wage. Over the past five years, a rise in line with inflation would have improved the annual earnings of some of the lowest-paid Scots by more than £600.
The minister said that, in an independent Scotland, the minimum wage would rise in line with inflation. Is her commitment to the retail prices index or the consumer prices index?
I would like to correct Mr Brown. Our commitment is for the national minimum wage to rise at least in line with the rate of inflation. Our prospectus is set out in “Scotland’s Future”, but I wonder why Mr Brown does not come here and explain why, over the past decade—
RPI or CPI?
—the Westminster Government, aided and abetted by Mr Brown’s Westminster party colleagues—
She does not know.
Allow the minister to be heard, please.
—has not enabled the minimum wage to keep pace with the cost of living, which is an absolute tragedy.
Independence (Currency Union)
To ask the Scottish Government which aspects of national sovereignty the Cabinet Secretary for Finance, Employment and Sustainable Growth would be prepared to cede in order to achieve a currency union with the rest of the United Kingdom, if Scotland decided to separate from the rest of the UK. (S4O-03092)
The fiscal commission working group has set out a number of viable currency options for a country of Scotland’s size and economic strength and has concluded that retaining sterling as part of a formal monetary union with the rest of the UK would be in the economic interests of both an independent Scotland and the rest of the UK. As part of its proposals, the fiscal commission working group recommended a fiscal sustainability agreement to govern levels of debt and borrowing. Within a sterling area monetary union, an independent Scotland will have full control of tax policy and other economic policy levers to grow the economy.
It is quite clear that the other parties to any such agreement have ruled one out, but I do not think that the cabinet secretary has been so explicit about what he would rule out in the unlikely event of separation and a monetary union. Would he rule out any intervention on taxation, interest rates, borrowing or backing up the banking sector? Exactly what would be ruled out in terms of the control of Scotland’s economy in the unlikely event of any monetary union?
It is interesting that Hugh Henry is part of a joint campaign with the Conservatives to ensure that monetary union does not happen but then sustains a line of questioning—as he is quite entitled to do and which I welcome—concerning the details and specifics of the self-same monetary union that he believes will not take place. I will rest my argument on the contents of the ministerial contribution to The Guardian, which was:
“Of course there would be a currency union”.
I reiterate what I said to Mr Henry in my original answer, which is that a fiscal sustainability agreement would govern the levels of debt and borrowing that an independent Scotland would be prepared to accept. I think that I am correct in thinking that I heard Mr Henry say that I had not been explicit about that. I was explicit about it a couple of minutes ago and I have been explicit about it a hundred times before. The reason why I set out that position is that I accept that it is necessary for an independent Scotland to operate within a climate of fiscal responsibility. If only the United Kingdom had exercised a bit more fiscal responsibility in the past 15 years, the public finances would not be in the mess that they are in now..
In regard to monetary union, does the cabinet secretary recall that the no campaign’s adviser, Professor Gallagher, told the House of Lords Select Committee on Economic Affairs on 24 October 2012,
“having one currency makes a lot of sense”,
or that Alistair Darling on “Newsnight” called a currency union “desirable” and “logical” and that Alistair Carmichael said that it would be “sensible” for politicians not to rule out a currency union? Does the cabinet secretary agree that it therefore comes as no real surprise that a UK Government minister has now admitted that the no camp is bluffing and that a sterling zone will happen after Scotland votes yes in September?
The point that Mr Crawford makes is strong. UK politicians have made various remarks, not the least of which are the remarks made in The Guardian on Saturday, that clearly make the case for the establishment of a currency zone.
Only today, in the Financial Times, Professor Anton Muscatelli, who is a much-respected economist in Scotland, set out the argument that
“a successful currency union would actually be in the interests of both sides—and especially the rest of the UK.”
Dispassionate contributions to the debate such as that of Professor Muscatelli demonstrate the point that the Scottish Government has been making—that the arguments about economic and monetary union relate to the interests of the rest of the United Kingdom just as much as they do to the interests of Scotland—and make the arguments that Mr Crawford has advanced very strong indeed.
Does the cabinet secretary accept that his policy on a currency union is governed by a double fantasy? The first fantasy is that it would be in the economic interests of the rest of the UK when many leading economists, such as Martin Wolf, say that it would not be. The second is that he could achieve such a monetary union without giving strict control of taxation to the rest of the UK as, indeed, Professor Leslie Young, whom he quoted in his defence last week, argued in his well-known paper.
The point that we have reached in the debate is that different points of view are expressed on the merits or demerits of the proposal. Malcolm Chisholm can quote economists such as Martin Wolf; I can quote Professor Anton Muscatelli and the members of the fiscal commission working group, all of whom are distinguished economists. Armed with that information, the members of the public in Scotland have to come to a rational conclusion. Based on the information that has been put into the debate, a currency union would be in the interests of both sides of the border. That is the point that Professor Muscatelli makes today.
The second point that Mr Chisholm makes is debunked by what I said in my answer to Mr Henry. Yes, we accept that there would have to be some fiscal sustainability agreements. When the governor of the Bank of England came to Scotland to speak a few weeks ago, his comment that some degree of sovereignty would be ceded as part of a currency union was viewed as some revelation. It was not a revelation at all. The ground had been covered by the fiscal commission working group and accepted by the Scottish Government as part of the rational and considered preparations of our arguments. The proposal does not involve control over taxation. It respects our ability to exercise different approaches to taxation and economic policy, but we have to accept that we have to live within a sustainable public finance framework, which means agreements over debt and borrowing. It does not need to be any more complicated than that.
Oil and Gas Industry (Bareboat Tax)
To ask the Scottish Government what assessment it has made of the impact of the proposed bareboat tax on the oil and gas industry. (S4O-03093)
The industry has provided strong evidence to show that the new tax measure could prove to be very damaging to exploration and development activity in the North Sea by pushing up costs and reducing the availability of rigs. The oil and gas industry needs a stable and predictable fiscal regime. That is what the Scottish Government proposes. The industry has not had it from the United Kingdom Government.
Does the minister agree that the Wood report is right to suggest that the UK Government has failed to provide a suitable fiscal and regulatory framework for Scotland’s oil and gas sector and that that has undoubtedly prevented the industry from maximising recovery rates and the economic opportunity from this valuable resource?
It is factually correct to say that that is precisely what Sir Ian Wood’s report concluded—that the North Sea basin has a reputation for fiscal instability, which is extremely unfortunate. The introduction of the new bareboat charter tax will be extremely damaging, according to the industry. Colin Pearson, a tax partner at Ernst & Young, said:
“The loss of just one field would certainly outweigh the extra tax raised from this measure.”
The tax comes at a time when the industry in Aberdeen and elsewhere is extremely worried about the impact that rises in production costs might have on further activity. The situation could not be more serious. The Scottish Government proposes that the bareboat charter tax must be reversed.
Does the minister agree that it is somewhat ironic that Scottish National Party members, who are forever coming to the chamber to demand that the UK Government takes action on tax avoidance by large multinational companies, are now complaining when the chancellor takes exactly such action to close down a tax loophole?
I do not agree at all. The problem for Mr Fraser is that the industry in Aberdeen is expressing concern about the tax’s impact, which it estimates might cost the industry £1 billion at a time when many projects are under serious threat of reconsideration because of rising costs.
The situation could not be more serious. Malcolm Webb, Oil & Gas UK’s chief executive, said:
“It is perplexing”
that the UK
“government has chosen to proceed with the bareboat measure. This can only increase costs on the UKCS where operating costs have increased sharply in recent years ... In addition, we fear that this move will drive drilling rigs, already in short supply, out of the UKCS.”
Sadly, that is exactly what the oil and gas industry does not need. That is why companies are increasingly recognising that stability and predictability are best not only for the industry but for maximising recovery and tax revenues. That is what the industry says. It is a shame that Mr Fraser takes the opposite view.
Aberdeen City Council (Meetings)
To ask the Scottish Government when it last met members of the Aberdeen City Council administration and what issues were discussed. (S4O-03094)
Ministers and officials continue to have discussions with all Scottish local authorities, including Aberdeen City Council, about a wide range of issues of importance to local communities and the people of Scotland.
Is the minister aware of the report in The Press and Journal this morning that the PricewaterhouseCoopers “Northern Lights” report says that
“the city does not always inspire business confidence”
and cites the city council administration’s behaviour as a factor in that? The council’s finance convener claims that the Scottish Government does not support the city because of the colour of the political administration. What is the Scottish Government’s relationship with other local authorities that are not Scottish National Party led? Why does he feel that Aberdeen City Council’s administration is an exception to that rule?
The Scottish Government has a good relationship with local government through the Convention of Scottish Local Authorities and individually with administrations of all political parties across the country. As far as I am aware, never has any other council proposed a ban on ministers—although, on investigation, it seems that there is no such ban on ministers in Aberdeen. The ban was the desire of one convener—the finance convener.
A number of other matters have embarrassed the city administration, including bungling its finance requests and turning down resources for the city, which was utterly bizarre. There is a serious risk that the city’s reputation will be tarnished if that situation continues, so we encourage the Labour leadership of Aberdeen City Council to take stock and get back to business, and to let the good, hard-working public servants of the council continue with business. I am sure that Aberdeen will be a better place for it.
The council runs the risk of being something of a laughing stock in the political system. It has to move on from the current appalling situation, and the Labour Party’s parliamentarians should assist their colleagues in Aberdeen to do so.
One of the issues that faces both the private and public sectors in Aberdeen is difficulty in recruiting workers, because of the high cost of living. The minister spent much time attacking the council in his answer. Will he work constructively with the council to address the serious challenges that it and many public and private sector organisations face as a result of that issue?
Of course the Scottish Government would engage with the city council, but engagement would work far better if some elements of the council were not trying to ban ministers from doing so. That would be helpful in enabling the constructive dialogue that I am sure we could undertake to the benefit of all in the city of Aberdeen.
Small and Medium-sized Businesses (Access to Finance)
To ask the Scottish Government what discussions it has had with relevant stakeholders regarding access to finance for small and medium-sized businesses. (S4O-03095)
Access to finance for small and medium-sized enterprises is a regular discussion item in the many ministerial meetings that are held with the banks, business representative organisations and individual companies.
Although access to finance continues to be a challenge for some viable businesses with good prospects, we are providing advisory support through Scottish Enterprise, Highlands and Islands Enterprise and business gateway to help businesses to improve their chances of securing funding.
The minister will be aware of the Economy, Energy and Tourism Committee’s report on access to finance, which showed that, although the picture is improving slightly, many firms still face challenges. Evidence to the committee’s inquiry suggested that businesses in my South Scotland region had the lowest success rate in accessing finance. What can be done to ensure that lenders treat businesses throughout Scotland more fairly?
I am aware of the committee’s good work and recommendations, which we are considering and will respond to after the Easter recess.
The survey that Joan McAlpine mentioned relates specifically to companies that are account managed by Scottish Enterprise and therefore may not represent the wider SME business community. However, we share her concern that small businesses need access to finance. There is no automatic right to a loan and a business case must be demonstrated, but the banks need to demonstrate further that they are lending to SMEs. We continue to have constructive dialogue with the banks on that objective.
Tax Collection and Management (Costs)
To ask the Scottish Government what estimate it has made of the cost savings of using revenue Scotland rather than HM Revenue and Customs for collecting and managing landfill tax and land and buildings transaction tax. (S4O-03096)
We estimate that the basic set-up and collection costs for the land and buildings transaction tax and the Scottish landfill tax will be £16.7 million up to 2019-20. That is 25 per cent less than the estimate in June 2012 by HM Revenue and Customs of the cost of setting up and collecting taxes on a like-for-like basis with stamp duty, land tax and United Kingdom landfill tax over the same period.
In December 2013 I announced a further investment of £1.5 million in central information capacity for revenue Scotland to enhance its ability to tackle tax avoidance, and costs of £2 million for the collection of landfill tax from illegal waste sites, additional compliance activity and the creation of a Scottish tax tribunal. Those costs are not directly comparable with the original HMRC estimate. Overall, we will invest £20.2 million up to 2019-20 in setting up and running our own taxes, which is significantly less than HMRC’s estimate of £22.3 million for the collection of like-for-like equivalents of the current UK taxes.
Does the cabinet secretary agree that bigger is not always better and that small countries can carry out a range of activities less bureaucratically and at lower cost?
There is strong merit in John Mason’s points. The assessments under the national performance framework of the work of the Scottish Government and our public sector and local authority partners have generally been viewed as a strong foundation for assessing the performance and effectiveness of Government in the country. [Interruption.]
The Carnegie UK Trust, which carried out the assessment, essentially said that a world-leading approach had been developed here in Scotland. There are strong arguments to illustrate that small countries are able to make a decisive contribution by exercising those functions most effectively having regard to the interests and needs of their populations.
Will members ensure that their phones are on silent, please?
Independence (Corporation Tax)
To ask the Scottish Government what considerations led it to propose a 3p cut in corporation tax below the prevailing rate in the remaining United Kingdom in the event of independence. (S4O-03097)
As part of an economic strategy using the full suite of levers of an independent nation, a responsible corporation tax policy can be an important tool for boosting Scotland’s economic performance, creating jobs and helping to offset the gravitational pull of London and the south-east.
The Scottish Government has published detailed economic analysis of the positive impact of reducing corporation tax in Scotland below the UK rate. The modelling showed that a policy equivalent to reducing the headline rate by 3 percentage points could increase output by 1.4 per cent and employment by around 27,000.
What is the evidence for such a proposition when at least three members of the cabinet secretary’s fiscal commission whom he likes to quote ad nauseam on other matters have said that it would make no significant difference to investment levels, and one of them has said that it would greatly increase inequality? Why does the cabinet secretary want to benefit the few at the expense of the many? In any case, does he seriously believe that the rest of the United Kingdom would allow him to reduce corporation tax in that way in the event of the currency union of which he dreams?
I have gone through the other points about the currency union with Malcolm Chisholm already this afternoon, but I feel the need to restate them, given the fact that he clearly was not consuming the points that I made earlier. The Government is perfectly prepared to accept the fiscal discipline of a sustainability agreement around levels of debt and levels of borrowing. That fiscal discipline will enable the Government to exercise freedom in a range of economic policies that are currently outwith our control to ensure that we can generate economic benefit.
If Mr Chisholm wants to understand what the evidence base is for reducing corporation tax, I suggest that he has a conversation with Gordon Brown and Alistair Darling, because those two individuals reduced corporation tax. I hear Mr Gray muttering that they were increasing public spending at the same time. I remind Mr Gray that the country went bust under the stewardship of the Labour Party. There is a strong argument for reducing corporation tax to improve the business attractiveness and competitiveness of Scotland, with the objective of creating jobs. Is the Labour Party now opposed to jobs being created in Scotland? Is its new careering zeal to prevent people from getting jobs in Scotland? If that is the case, Labour members will be remaining on that side of the chamber for a long time to come.
What loss of revenue from corporation tax will there be in each of the first five years under the minister’s policy? I am sure that he worked that out before he announced the policy.
The modelling information that we have prepared has been set out in the public domain. The details are there for members to scrutinise and they can see the effect of reducing corporation tax on improving economic performance, which, in my original answer to Mr Chisholm, I highlighted would increase output by 1.4 per cent and boost employment by 27,000.
Business Rates Incentivisation Scheme
To ask the Scottish Government what progress it has made in taking forward the business rates incentivisation scheme. (S4O-03098)
The Convention of Scottish Local Authorities leaders took a decision that they would not discuss the revised 2012-13 business rates incentivisation scheme targets until receipt of the audited 2012-13 non-domestic rates income returns. I can now confirm that all 32 audited returns have been received, and Scottish Government officials will be in discussion with COSLA officials to enable agreement to be reached on the final 2012-13 targets.
Having heard that, I think that my question could have been answered with a single word. Can the minister tell us when the 2012-13 payments will be made? When will the 2013-14 targets be set, especially as we are practically at the end of the financial year? When will the 2014-15 targets be set?
I am happy to return to the member on those questions, because we want to work through the figures, engage with COSLA, arrive at the final decision and work through the process. I can return to the member with a timescale at that point. The issue is not a lack of willingness to resolve the matter; it is the need to audit the figures prior to the assessment of targets. There will be a follow-through, which will incentivise economic development and growth in Scotland. That resource from non-domestic rates flows straight to local government.
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