Official Report 258KB pdf
Our next item of business is a debate on motion S7M-01851, in the name of Angela Ross, on economic growth and prosperity.
15:03
I refer members to my entry in the register of members’ interests, in that I am a business owner and I built a closed artificial intelligence large language model system.
We are trapped in the trough of an economic long wave. History teaches us that capitalism moves in cycles, in which surges of innovation are followed by down cycles. Although a down cycle is a natural macroeconomic reality, remaining trapped at the bottom is a political choice. We need to remove the weight of our looming £5 billion black hole because it forces decisions to be made on the back foot, which we all know is not an effective place to start from. There is high public spending, together with a fiscal gap, flat growth and high inflation. To drive the next upward wave, our nation needs agility, vision and a fierce commitment to productivity.
Instead, here in Scotland we are being anchored to the ocean floor—which we sold off at a low fixed price—by a Government that is intent on managing decline rather than engineering growth. The Scottish Government is driving the economy towards ruin, and it is doing so with alarming speed. It has a strategy not of wealth creation but of short-term political survival, short cuts and debt accumulation. We see an obsession with expanding the state apparatus by layering quango upon quango—bodies that are distanced from decision making and accountability. Worse than that bureaucracy is the absolute failure to hold value in Scotland.
The member mentioned debt accumulation. How can Scotland accumulate debt when, under the fiscal framework, it is not allowed to?
We are subject to United Kingdom-wide debt, which influences everything that we do. [Interruption.] We are spending more than we are bringing in. We have a fiscal gap, which is a real problem.
Look at what happened to our seabed. In the ScotWind leasing round, the rights to our precious marine assets were sold off for £755 million. [Interruption.] The ministers on the front bench are laughing. I do not think that that is funny.
What did the Government do? [Interruption.]
The member must be heard.
According to Audit Scotland, the Government began tapping into that money to plug short-term day-to-day budget gaps instead of anchoring a permanent intergenerational wealth fund. Our future prosperity is being frittered away on immediate inefficiencies.
Does the member agree with the view of the Scottish National Party and the current UK Chancellor of the Exchequer that, if Scotland had been independent and set up its own wealth fund—indeed, even if any wealth fund had been set up—we could have had more than £1 trillion in a sovereign wealth fund just like Norway’s, which could have been reinvested? That would have meant that the tough decisions that we are going to have to take could have been avoided, as has happened in the Republic of Ireland.
Quite frankly, I would not trust the Scottish Government with anything at the moment, because it is not generating wealth. There is no wealth creation and there is no productivity. The economy is in dire straits.
We must pivot away from our deficits and move towards productivity. More than 98 per cent of Scotland’s private sector businesses are small businesses, which have reached the point of diminishing returns and are ripe for transformation. Productivity in Scotland is weak—it is the weakest among the UK countries. Productivity is the main driver of higher wages and better living standards, and we need to aggressively raise productivity across our small business ecosystem through adopting technology-enhanced processes, including AI. Rather than replacing people, we should automate the administrative grind to free up our people to focus on what humans do best: innovation, production, practical work, networking, sales and creative growth. We must transform low-growth enterprises into scalable, high-value generators and we must cause spin-outs to scale up.
We need to reward growth, not inhibit it. When an organisation expands, it is likely to pay more in non-domestic rates. That disincentivising aspect must change. Policy must incentivise growth. Property tax needs to be reworked.
However, tackling productivity is only half the battle; we must change how we benefit from that value. For too long, Scotland has excelled at aspects such as inward investment but failed at wealth retention.
Will the member take an intervention?
I want to make some progress.
Each year, billions in corporate profits flow directly abroad. Foreign ownership means foreign extraction. We need to support Scottish ownership so that wealth that is generated here stays here.
Look at our energy. We could produce a portfolio of cheaper energy—from nuclear, renewables, oil and gas—and harness that energy here, to power initiatives. Using our power locally saves transmission losses and gives our Scottish manufacturers a competitive advantage. We need to produce more here.
When Scotland produces high-quality raw materials, we should not just export them raw; instead, we must capture the high-value elements—the branding, packaging and processing—right here on Scottish soil and promote Scottish goods in a competitive market to build a more resilient local economy. Let us take the example of our fishing industry: in Peterhead, the raw product goes to France or Spain, which put a stamp on it with their flag—
The member should wind up.
Let us keep it here, do it ourselves and put our flag on it. Monetary handouts, runaway fiscal gaps and plugging structural deficits with sold-off national assets do not equal economic progress; they are an admission of failure. Let us stop drowning in the down cycle; let us choose growth and efficiency and catch the next wave.
I move,
That the Parliament notes Scotland’s weak economic growth, stagnant living standards and persistent fiscal deficit; believes that successive Scottish Government decisions to increase public spending and impose higher tax burdens have failed to deliver sufficient economic growth, productivity improvements or rising prosperity; recognises the need to support more young people into work, to improve business productivity, to help Scottish firms grow and scale up, and to strengthen food and energy security, and calls on the Scottish Government to present to Parliament detailed proposals to create more wealth, capture more value from Scotland’s economy and retain more of that wealth for the benefit of the people and businesses of Scotland.
I call Tom Arthur to speak to and move amendment S7M-01851.3, for up to seven minutes.
15:10
There is an important challenge at the heart of the motion before us. Scotland must create more wealth; raise productivity and living standards; help more of our businesses to start, grow and scale; and ensure that more of the value that Scotland’s people, businesses and natural resources create stays here and benefits the people who live here. I hope that there can be common ground on those ambitions across the Parliament.
However, the real question before us is not whether Scotland needs stronger economic growth—it does—but how we can achieve it. The Government is focused on delivering such growth through attracting investment, backing home-grown businesses, embedding fair work, removing barriers and delivering growth across Scotland.
[Made a request to intervene.]
I will make a bit of progress before I come to Mr Hoy.
The Reform Party argues that public spending and taxes are too high, that Government is too big, and that if we simply reduce all three, economic growth will follow. However, economies do not necessarily become more productive because the Government lowers tax, spends less and reduces in size. Businesses need skilled and committed people who are paid fairly for the work that they do. We need functioning infrastructure, good transport links and homes for the workforce; world-class universities and colleges that produce skills, innovation and new ideas; access to capital and to affordable and secure energy; a Government that is prepared to remove barriers to investment; and access to markets in which we can compete and grow.
[Made a request to intervene.]
[Made a request to intervene.]
I will take Mr Hoy’s intervention, then Mr Johnson’s.
I thank the minister for giving way. Perhaps he could take this opportunity to provide clarity on where the Scottish Government stands—for example, on defence manufacturing, which is developing into a home-grown industry. What message does it send out to potential defence investors to say that Scottish Enterprise cannot invest in munitions development?
We have set out our proposal for a responsible defence industrial growth programme. I want to recognise how vital the defence sector is in Scotland. We have a world-class defence sector, which creates skilled jobs and supports supply chains, and we should be proud of it. The Scottish Government is committed to working with the sector and to supporting the opportunities that are before us.
[Made a request to intervene.]
[Made a request to intervene.].
I give way to Daniel Johnson.
I am very grateful. Does the minister agree that the formal definition of gross domestic product is that it is the totality of private and public sector expenditure? Cutting along the lines, which was suggested, might actually prevent the growth that Reform seeks.
The member makes an important point. We talk about private sector investment, net exports and consumption, but the important point about Government expenditure is often absent. The Government plays an essential role in ensuring that we have a dynamic market economy, whether it be through regulation, addressing externalities and asymmetries or by providing the critical infrastructure that facilitates growth. The Government has a vital role to play, and that should be recognised by all.
I will give way to David Linden.
I am grateful to the minister for giving way. He referred to the part of the Reform motion that mentions “higher tax burdens”. Would it surprise him to know that Reform-led Worcestershire County Council recently passed on a 9 per cent council tax rise? It might be the case that rhetoric and reality are often different things when it comes to the crypto party over there.
I do not think that I can add anything to Mr Linden’s comments, which are now on the record. They rather show the dissonance between Reform’s rhetoric and the reality of its actions when it is in a position to govern.
The serious question is not simply about how much Government spends but about how every pound that we spend, every institution that we support and every intervention that we make help Scotland to become more productive and prosperous. We should be challenging ourselves relentlessly on that.
First, we need investment. Scotland has enormous economic strengths, including our renewable energy resources, our highly skilled workforce, our world-class universities and colleges, our innovative businesses and our globally recognised sectors. Our job is to translate those strengths into productive investment, good jobs and rising wages. For example, this summer’s Commonwealth games in Glasgow illustrated the economic value of what Scotland has to offer, with an independent evaluation estimating £223 million in economic activity across Scotland. Our major projects office, which is forthcoming, will unlock private investment by tackling barriers that are holding back nationally significant projects and help them to move more quickly towards delivery.
Secondly, we need more Scottish businesses with the confidence and capacity to scale. Scotland has entrepreneurs, ideas and innovation. The challenge lies in helping successful companies to grow, employ more people, export and build lasting economic value here in Scotland. That means addressing access to finance, skills, infrastructure, regulation and planning. Our high-growth unit will support our programme for government’s scale-up ambitions through co-ordinated wraparound support, building on the work of the enterprise agencies and the Scottish National Investment Bank to help ambitious businesses to grow and remain in Scotland. Last month, we announced £2.92 million through our university proof of concept fund to help promising research projects to develop into new companies.
Thirdly, we need more people from all backgrounds to participate in that prosperity. On one part of Reform’s motion, I am very clear: I agree that we should all want more young Scots to have a route into good, productive and well-paid work. That means having world-class education, but it also means having apprenticeships, technical and vocational learning, and stronger links between our skills system and the jobs that our economy needs. That is why our programme for government contains commitments to expand apprenticeships and develop a new apprenticeship accelerator grant to strengthen routes into skilled, well-paid work for young people and support their participation in Scotland’s economy. The prize is not simply higher employment levels; it includes higher productivity, higher wages and more young people seeing a prosperous future for themselves here in Scotland.
The minister talks about young people. Yesterday, during our debate on the not in education, employment or training—NEET—figures, I said that the minister’s figures were not comparable with those in England, but I managed to dig and find a comparable figure, which is 27 per cent. What is the minister’s reaction to the fact that 27 per cent of young people are locked out of work?
Our recognition that, collectively across the UK, we face a challenge on youth employment and on young people who are not in education, employment or training is exactly why the Government proposed yesterday’s debate. I was grateful to members from across the chamber for their contributions. That is also exactly why we are engaged closely with Alan Milburn in his review work and why we are committed to working constructively with the UK Government, where that is in the interests of people in Scotland. On the forthcoming publication of the review’s findings, we will be happy to continue to engage with members on that work.
The fourth point that I want to make, which has already been touched on, is that Scotland must retain more of the economic value that we create. That point is particularly important when we consider energy. Scotland possesses extraordinary renewable energy resources. However, simply possessing those resources is not enough; we need the investment supply chains and high-value jobs that come with them. Scotland’s vast energy wealth must ultimately deliver a direct benefit to the people who live here, including through lower energy bills. That is why our programme for government commits to securing economic and community benefits for the energy transition. The test of our economic strategy should not be simply what Scotland produces but rather how much of the value that is generated by those assets is captured in Scotland.
That brings me to highlight the greatest contradiction in Reform’s argument today. Reform tells us that it wants Scottish firms to “grow and scale” and that it wants stronger food security. It also says that it wants higher productivity and investment, yet it remains wedded to Brexit—the most calamitous, self-inflicted act of economic harm in recent UK history.
Will the minister take an intervention?
I am going to make some progress.
The economic damage caused by Brexit is not an incidental question in this debate. For this Government, rejoining the European Union is therefore not simply a constitutional position, it is an economic one. It is about access to markets, talent and investment.
[Made a request to intervene.]
The minister should be winding up, so he will not be able to take any interventions.
It is about giving Scottish businesses the best possible platform on which to compete.
We want faster growth and higher productivity. We want more successful Scottish companies scaling right here in Scotland. We want more young people entering well-paid work, and we want the immense economic value that is generated by Scotland’s people, ideas and natural resources to benefit the people who live here.
Let us capture more value, retain more of that value in Scotland and ensure that the prosperity that Scotland generates is reflected in higher wages, stronger businesses, lower bills and better living standards. That is a serious agenda for economic growth, for which this Government has a clear plan.
I move amendment S7M-01851.3, to leave out from “notes” to end and insert:
“recognises the importance of improving living standards, creating opportunities for young people, supporting fair work and higher wages, and strengthening public services, to Scotland’s economy; agrees that Scotland must make full use of its economic strengths, including its renewable energy resources, highly-skilled workforce, world-class universities and colleges and thriving business sectors; believes that Scotland’s vast energy potential must deliver economic benefits directly to people who live in Scotland by bringing down bills; condemns the economic damage caused by Brexit, and agrees that rejoining the EU is the best way to deliver lasting benefits for Scotland’s economy.”
I call Daniel Johnson to speak to and move amendment S7M-01851.5.
15:20
I am someone who is unapologetically pro-growth. I have a firm belief in the good that business can do and in the critical role that business plays in generating growth and, indeed, tax receipts. I am also someone who hates public waste. However, I also believe that we need strong public services and a strong public sector, and that we must focus on where public sector waste gets in the way of public sector delivery.
There is a contradiction right at the very heart of Reform’s motion for debate, because it completely ignores the vital role that the public sector plays in the economy and in creating growth. To put it quite simply, how can we have skilled, knowledgeable workers if we do not have a good education system? How can we have a well-functioning economy if people cannot rely on the health service to get the right treatment when they get ill? How on earth can we expect the economy to work if we do not have investment in our roads, rail and public infrastructure?
I put on the record that we appreciate the role that the public sector provides. We appreciate schools, the health service and all of that. We simply see so many quangos building up and so many processes that get in the way and that cause so much inefficiency and bloat. That is our problem.
The fact that Reform needs to put that on the record says something. It is clearly not in its motion.
More importantly, Reform presents the false dichotomy of private sector and public sector. Indeed, many of the things that it sets out as being important require public policy interventions. I absolutely agree that young people need to be given routes to work and opportunities for advancement. However, how do we do that? We do that through public policy interventions and public expenditure.
I see that Mr Massey wants to agree with that point.
Will Daniel Johnson acknowledge that Scotland has a £5 billion black hole, that the UK as a whole is borrowing about £150 billion a year, and that our annual interest costs are now up to £100 billion, making it the third biggest expense category in the country? Will he acknowledge that that is simply not sustainable and that we massively need growth and public sector reform?
Not only are Reform members having to compensate for their own motion, they clearly did not read any of ours. We absolutely need reform. However, there was not one suggestion from Reform in the whole of the opening speech. What would Reform members do? What are their alternatives? What are their interventions to do these things?
Ensuring that public policy works in tandem with industry and the private sector is one of our missed opportunities. It is about ensuring that we have industrial policy, which is what devolution is meant to be about: namely, decision making close to the point of delivery, so that those things can be aligned. However, there was not one suggestion from the Reform speaker in her opening remarks.
I would like to address the amendments that have been lodged by the other parties. I agree with the minister’s contribution, in that Brexit has been a disaster. The Prime Minister was right to set that out.
Will the member take an intervention?
I have already taken one intervention from the member opposite. I will continue to address these points.
I agree with the Prime Minister that Brexit has meant that we have lost control: we have lost control of the ability to work with our partners across the European Union and we have lost control of our economy. We absolutely need to explore the options as to how we can address that.
Will Daniel Johnson give way?
I probably need to close very shortly.
We on the Labour benches are convinced that we must set out what the options are and what the process is. Although I personally believe in rejoining the EU, that cannot be done overnight, so the Prime Minister is right to explore the options and to win those arguments with the British people. That is very important.
On the Green amendment, I note that the distribution of wealth is fundamentally why we on the Labour benches—
Will Daniel Johnson take an intervention?
The member cannot take any interventions.
I am closing. Mark Simpson should be able to read the clock and not just his own motion. I will close there.
I move amendment S7M-01851.5, to leave out from “notes” to end and insert:
“believes that a growing and innovative Scottish economy depends on the strength of both its public and private sectors, working in partnership to create prosperity and opportunity for all; recognises that investment in health, housing, education, skills, transport infrastructure, roads and local government provides the foundations for thriving businesses, successful industries and productive workplaces, and calls on the Scottish Government to tackle waste, to prioritise outcome-focused public service reform and delivery over bureaucracy and to ensure that decisions about public spending are taken locally wherever possible.”
15:25
It seems to me that some of what we have heard in the debate rests on the rather bizarre assumption that protecting public spending is somehow bad for the country, for people’s wellbeing or for their lives. It is an assumption that protecting and investing in public services, in a strong social security safety net and in the country’s shared priorities is somehow a drag on the economy. Even those who share Daniel Johnson’s view that the private sector is the backbone of the economy surely accept—I think that Daniel Johnson does—that the private sector itself depends on the foundation that is provided by public investment, public services and decent communities. Investing in those things builds a society that is worth living in.
It is a matter of factual statement that the decision that Scotland has made to raise enough revenue to invest in those things to a greater extent than would otherwise have been possible over recent years is one of the things that have successfully made Scotland an attractive place where people want to be or to move to and where people value the social contract that is provided. Funding the investment in social security, public services and public infrastructure through fairer taxation on high earners is entirely justified.
Will Patrick Harvie give way?
No, thank you.
I want to go back to the 2016 election, when it was the Greens who developed and put forward a proposition—not just a broad principle, but a detailed proposition—for a five-band income tax system.
Will Patrick Harvie give way?
No.
At that point, no other political party was proposing to do anything other than tinker at the edges of the income tax system.
Will Patrick Harvie take an intervention?
The member has made it clear that he is not taking interventions.
The Greens were the ones who set out in detail how we could have a change to the income tax system that would protect all low and middle earners. Under the proposition, no one would pay a penny more unless they were earning more than the average full-time wage. Even if they were beginning to earn more than the average full-time wage, they would pay only a very tiny amount more. It was only the very high earners who would pay significantly more. That is more or less the approach that the Scottish Government adopted two years later, and, since then, it has put billions of pounds into public services and investment. Our proposition in 2016 was the basis of what became Government policy.
I acknowledge that there are different visions of what progress looks like in a society. The Greens question the assumption that growth is an unquestioned good. We do not suggest that growth provides no benefit to society or the economy, but we say that it often comes with unintended consequences, and it often comes with unfair distribution of the material benefits that are generated. I am sure that there are those who think that growth is welcome even if all that it buys is a seventh or eighth house or yacht for Malcolm Offord, or if the only effect that it generates is to have more millionaires and billionaires in our society while others go without food, heating or homes. I do not think that that is progress. To the Greens, that kind of wealth hoarding is simply indefensible.
I wish that we could have gone further in the past decade or so than we have, but we still can go further. Full-scale wealth taxes might be reserved, but a replacement of council tax could mean that property wealth was fairly taxed.
Finally, I welcome what is in the Government’s amendment about recognising that EU membership is not only for a stronger economy but for a more decent society and restoring to young people the rights and freedoms that were stolen from them by people who enjoyed those freedoms in their own youth yet stole them from the next generation. That is a critically important argument and I am pleased that it has been brought into the debate.
The member may wish to move his amendment.
I move amendment S7M-01851.2, to leave out from “Scotland’s” to end and insert:
“that economic growth alone does not guarantee improved living standards for all people or shared prosperity, and is of the view that it often comes with unintended consequences such as social and environmental harm; believes that Scottish Government decisions to increase public spending and set more progressive tax rates have been, and remain, necessary to achieve a more equal society and to protect public services and investment; recognises the need to build a sustainable, fair and ethical economy that prioritises the essential needs of all people instead of the greed of the wealthiest, and calls on the Scottish Government to present to Parliament detailed proposals to ensure that the wealth generated in Scotland’s economy is fairly shared for the benefit of current and future generations.”
15:30
There is so much to talk about in the economic difficulties that we face in Scotland, including of course the £5 billion black hole that has already been mentioned. The Scottish Fiscal Commission has identified an £888 million gap in income tax performance. That reflects on Scotland’s weaker growth in earnings and employment compared with the rest of the United Kingdom.
The figures tell their own stories. In 2025-26, 1,219 Scottish companies entered insolvency. There were 4,000 fewer employees on payrolls in September 2026 than there were a year earlier. The 42p higher rate of income tax now kicks in at just £43,663. That applies to a classroom teacher with five years of experience, who now earns, on average, just over £54,000. Since when did an ordinary classroom teacher grow the broad shoulders to bear the brunt of the SNP’s tax and spend decisions? Scotland cannot tax its way to growth.
In Scotland, as a result of our progressive taxation system, that same person will be able to send their children to university for free and benefit from free prescriptions. Thanks to the progressive taxation system, the Government offers the people who live here a whole host of wraparound care from cradle to grave. That is a good trade-off.
Alex—I cannot remember his surname. Alex Kerr has just made a statement that is not backed by evidence. That shows his inexperience in the Parliament.
Members: Oh!
While the SNP lectures us on all the freebies, as Alex Kerr has just tried to do, it has to be responsible about public spending. This week, we have learned that 800 public sector ghost employees await deployment. That involves an estimated cost to the taxpayer of at least £27 million a year. That is a failure of public sector workforce management, not of those individual employees, who probably want to work.
Meanwhile, ministers have found £2.7 million for a school bag scheme, with the backpacks being manufactured in China. How good is that for the Scottish economy?
Even the First Minister admits that Scotland’s economic growth has been
“too low for too long.”—[Official Report, 1 September 2026; c 30.]
After 20 years of the First Minister being at the heart of the Government, he has certainly had long enough to notice the decline in economic growth in Scotland.
I had to read Reform’s motion a few times, as other members have suggested they had to do. First, I thought, Reform members agree with Scottish Conservative policies—because they are aping us—about higher taxes and weak economic growth. Of course, I agree. However, Reform then calls for the Scottish Government to produce detailed proposals to create more wealth and capture value from Scotland’s economy. Reform’s grand economic plan is to ask the SNP to interpret its asks.
The member will need to start winding up.
After nearly two decades of SNP failure on economic growth, the only thing that it knows how to do is tax and spend. I therefore advise Reform to go back to the drawing board and create a more succinct and clear motion that other parties could support.
I move amendment S7M-01851.4, to leave out from “, and calls” to end and insert:
“; believes that the 2027-28 Budget must break the cycle of higher taxes, weaker growth and increasing pressure on the public finances, and calls on the Scottish Government to cut taxes on workers and businesses and curb unsustainable welfare spending to create the conditions for growth.”
15:34
I think that there is a general consensus around the fact that not just Scotland but the wider UK has experienced weak economic growth over a number of years. To be fair, the minister seemed to accept that. There are many factors involved, and I will touch on some of those, but I think that that is a fairly unarguable fact.
In the meantime, the gap between public spending and tax revenue in Scotland has been wide and growing—again, as the Government acknowledges—yet, as the Finance and Public Administration Committee reported yesterday, there is still an alarming lack of clarity and transparency over how the Government proposes to close that £5 billion gap.
On living standards, growth has been sluggish over the past decades. The 10 per cent of households on the lowest incomes have seen their disposable income drop significantly and, as the Office for Budget Responsibility reported in conjunction with the UK budget last week, looking ahead, it is predicted that, over the course of the 2020s, we are going to see the lowest rate of growth in living standards since the 1950s. That presents a profound challenge not only for us all in the chamber, but for politicians across the continent and beyond, who are facing up to some of the shocks to the global economy. We are seeing that play out in the streets of towns and cities across France, Germany, Italy and elsewhere.
Although those global shocks are perhaps beyond the control of any single Government, I think that it is fair to argue that the Scottish Government has not necessarily made things easier and must take its share of responsibility for Scotland’s economic performance. Its relationship with business has been strained at times, and last month’s Scottish business monitor survey indicated that seven out of 10 firms believe that the Scottish Government does not necessarily understand the business environment.
The absence of a clear framework for and, importantly, limitations on the changes in tax policy have played their part in that. Indeed, the Institute for Fiscal Studies noted that, while some of the changes that have been made have been positive, the Scottish Government’s tax strategy is not really a strategy at all and does not answer many of the key questions. Again, that is something that the Finance and Public Administration has heard pretty consistently from witnesses over the past couple of months.
As well as calls for using tax reform to promote economic growth, the committee has heard a consistent message about the need to grow the tax base if we are to have any hope of plugging the £5 billion black hole. That will involve increasing participation in the labour market—a topic that we covered at length in the debate yesterday. Although that debate was focused on how to increase opportunities for young people, including those who are economically inactive as a result of ill health, the issue extends across the generations.
The Scottish Fiscal Commission has noted that
“long-term sickness has been increasingly dominant among people who are not working nor looking for a job.”
That will be caused by a range of factors, but addressing the long waiting lists for assessments and treatment has to be a large part of the solution. That speaks to the point that Patrick Harvie and, indeed, the minister made, that our investment in public services is important not just in terms of the outcomes for individuals but for increasing the productivity of the workforce across our economy.
As was suggested yesterday, it is about not just the impact on the economy but treating people with dignity, care and fairness. Nevertheless, the win-win is that we can also reap the benefits of a more healthy and sustainable fiscal position.
In closing, I note that, although the Reform motion is very wide ranging, there are some glaring omissions. There is no mention of the transition to net zero, which is not only essential to meeting our climate change commitments but a source of growth in our economy through the creation of jobs, wealth and opportunities across the country in supply chains made up of small businesses. The motion similarly ignores the vandalism that has been wrought on the economies of Scotland and the wider UK by a disastrous Brexit. Whether one accepts the OBR’s assessment of a 4 per cent hit to long-run productivity—
Will the member take an intervention?
No.
Whether one accepts the OBR’s view or the views of other economists who have estimated that the economy is between 6 and 8 per cent smaller thanks to Brexit, the verdict is clear: restoring our economic relationship with our neighbours and partners in the EU is the single most important step that the UK Government could take to improve our economic prospects. Recent moves to agree closer ties between the UK and the EU, including the proposed removal of checks on food and agricultural exports announced this week, are very welcome, and Daniel Johnson made an important point about the incremental nature of securing closer ties, but there is a need for greater ambition. Scottish Liberal Democrats support the establishment of a new customs union and rejoining the single market, but the direction of travel—
Will the member take an intervention?
The member cannot take an intervention.
Those omissions from the Reform motion are picked up in my amendment, which I take pleasure in moving. I hope that Parliament will support it.
I move amendment S7M-01851.1, to leave out from “believes” to end and insert:
“considers that the Scottish Government should focus on using its powers more effectively to support sustainable economic growth; believes that a closer economic relationship with the EU represents the single largest opportunity to increase Scotland and the UK’s economic growth and improve productivity; welcomes the reported progress made in negotiations between the UK Government and the EU to remove checks from food and agricultural exports, to link their emissions trading schemes and to agree a youth mobility scheme, and calls for greater ambition from the UK Government, including working towards a new customs union with the EU and rejoining the single market.”
We move to the open debate. Business is running late, so I ask members to respect the time limits that have been agreed with their business managers.
15:39
I am somewhat encouraged by today’s debate—not by the Reform motion or the Conservative amendment, but by the other amendments, including the one from the Scottish Government. If we look at those four amendments in the round, we can see that a considered, thoughtful and balanced position is starting to emerge in the Parliament.
I will consider the Labour amendment first. As the convener of the Public Service Reform Committee, I was interested to see that the amendment focused on that. There is much to like and agree with in the amendment. However, I want to focus on one bit of the wording. This is not intended to be critical, but I have an issue with its terminology when it talks about tackling “waste” through public service reform. I do not necessarily disagree with the intention. However, as we restructure our public services and, as the amendment says,
“prioritise outcome-focused public service reform and delivery over bureaucracy”,
we need to be slightly careful in the words that we use. Those workers who will see their roles change under public service reform, or who will perhaps be redeployed within the public sector or participate in a voluntary severance scheme, will have been playing valuable roles and have not been wasteful. There might be improved ways of structuring service provision that can deliver savings by tackling duplication and bureaucracy, but the employees themselves have made a valuable contribution to our public services, and we should thank them. It is important to put that on the record as we move forward with that process.
I reaffirm what Bob Doris is saying. Redeployment needs to be the central focus, and we should seek to find new work for public sector workers who may find their roles changing.
I look forward to a constructive discussion on that matter as public service reform progresses.
The Liberal Democrat amendment asks the Scottish Government to
“focus on using its powers more effectively to support sustainable economic growth”.
Any Government, including our own, should seek to do that.
Will the member give way?
One moment, please.
That is not incompatible with my desire to see all powers reside in Scotland with independence. On growth, I note that Scotland has the fastest-growing start-up rate of businesses anywhere in the United Kingdom; that we are the top location for foreign direct investment outside London; and that our productivity is twice that of the UK average. However, there are other areas in which we are weaker, as Liam McArthur noted. Of course, we have to use the powers that are available to us to maximise our economic performance. I think that we can do that on a cross-party and collegiate basis.
The Liberal Democrat amendment also calls for
“greater ambition from the UK Government, including working towards a new customs union with the EU and rejoining the single market.”
Again, that is to be welcomed. Importantly, that approach is an example of the increasing trend of parties in this place moving ever closer to the SNP position, as outlined in our amendment this afternoon, which
“condemns the economic damage caused by Brexit, and agrees that rejoining the EU is the best way to deliver lasting benefits for Scotland’s economy.”
That is my position, and I think that it is a very reasonable one to have. A report earlier this year said that the loss to Scotland’s economy due to Brexit comes to £30 billion a year, and the impact in Scotland has been greater than it has been in any other part of the UK.
I can understand the idea of independence, but I am really curious about the idea of Scottish independence in a big European conglomerate. Can Mr Doris explain to me how that is independence?
Let me do so briefly now and perhaps in more detail later, given the time constraints. All nations are interdependent. They reach treaties with other nations. The European Union is something that I believe in, and that interdependency is a natural course to take in the world today.
I want to focus on the Scottish Government’s amendment. It is clear that economic growth does not sit in isolation. The Scottish Government recognises the importance of improving living standards, creating opportunities for young people, supporting fair work and higher wages and strengthening public services and Scotland’s economy. Economic growth is not an end unto itself; it must go hand in hand with the kind of society that we all want to see—the Green amendment touches on much of that as well. I commend the Scottish Government for its promotion of the real living wage and its approach to public sector pay, which pushes public sector workers into higher tax bands because they are paid more generously in Scotland than they would be in other parts of the UK.
Only yesterday, during a debate in the Parliament, I was encouraged by the Scottish Government, which has a strong record on providing apprenticeships for young people, saying that it is open to considering improvements in investment in apprenticeships, in order to support members of the workforce throughout their careers.
Deputy Presiding Officer, before I proceed, can I check whether I can get time back for the interventions that I have taken?
Yes—the member can get the time back for both interventions.
Thank you.
Will Bob Doris take an intervention?
The member cannot take any more interventions.
I apologise to Mark Simpson. I need to conclude.
We are all only too well aware of the impact that the cost of living is having on many of our constituents. Fuel bills and food prices contribute greatly to those pressures. Therefore, it is right that the Scottish Government has clearly stated in its amendment that Scotland’s vast potential must deliver economic benefits directly to people who live in Scotland by bringing down bills.
The member will need to wind up.
There is an ongoing debate in the Parliament about renewables, oil and gas, and nuclear. I would completely rule out nuclear.
The member will need to wind up.
Let me make this final point, Deputy Presiding Officer.
Sometimes, that debate happens in isolation—
Will the member wind up, please? We are short of time, so I will have to cut him off.
—but, irrespective of the energy mix, the energy wealth must come to Scotland, to protect our most vulnerable people and tackle fuel poverty.
Business is running late. We have used all the time that was allocated for interventions, so speakers will have to keep within their allocated times. We encourage interventions and allow additional time for them, but we ask members to stick to the agreed time limits.
15:46
Aberdeen was once the undisputed oil capital of Europe—the place that highly skilled workers from across the world flocked to for high-paid and high-skilled jobs. Today, it has been deliberately starved of investment, jobs and the prosperity that it should be generating for Scotland and the entire United Kingdom. Successive Governments have treated our oil and gas industry with contempt and as a problem to be wound down rather than as an asset to be maximised.
We must be clear on when the damage began. It was Tory Prime Minister Theresa May who, in 2019, put achieving net zero into law, and it was Tory Chancellor of the Exchequer Rishi Sunak who, in 2022, introduced the energy profits levy. The Green Party must have been looking on with delight at those radically harmful policies, which are wrecking the north-east.
Will Mark Simpson take an intervention?
Am I allowed to take an intervention, Deputy Presiding Officer?
Yes.
I will happily take an intervention, then.
Mark Simpson is placing responsibility for much of the trouble in the north-east of Scotland on the Conservative Party. Does he want to have a word with the person sitting right next to him about his responsibility for all of that, too?
I have a wild idea: instead of asking me to speak for someone else, perhaps Lloyd Melville could ask the person he wants to speak to himself. I will speak for myself, and I will let Malcolm speak for himself. [Interruption.] I am not here to speak for anyone else. I will speak for myself and for Reform. [Interruption.]
I am aware that we are short of time—
Mr Simpson, sit down for a moment. Mr Simpson must be heard. I also ask that members always refer to colleagues by their full name.
There is a reason why Malcolm Offord is no longer a member of the Conservatives, but I will let him speak for himself later.
It is very unfortunate that Labour has continued in the same vein as the Tories, with Rachel from accounts upping the energy profits levy and blocking new licences. However—credit where credit is due—Labour at least approved Jackdaw.
Sadly, the result is plain to see. In Aberdeen and across the north-east, we have cancelled projects, lost contracts, skilled folk leaving and supply chain companies shedding staff to the tune of about 1,000 jobs a month.
Reform UK’s economic plan is clear. We will unlock the North Sea and bring the boom days back to Aberdeen. First, we will immediately approve Rosebank and begin exploration for more sites. Secondly, we will restart oil and gas licensing, so that companies can, once again, plan and invest with confidence. Thirdly, we will abolish the energy profits levy—the tax that the Conservatives created and that Labour has clung to—so that the tax regime rewards production instead of punishing it. Fourthly, we will restore the maximum economic extraction as the objective of the regulator and return it to its proper name and purpose as the oil and gas authority. Reform UK will extract every last barrel and every last drop from the North Sea. Scotland must drill.
For the north-east, this is not some abstract thing; it is thousands of highly skilled, well-paid jobs—offshore workers, engineers, fabricators, logistics firms—and the businesses that depend on them.
The member must wind up.
It is tax revenue that should be flowing into the Scottish and UK public finances.
The member must wind up.
It is energy security at a time of global volatility.
I will cut the member off if he does not wind up now.
Scotland’s north-east is a wonderful place, but I am ambitious to make it even better. Reform UK—
I will have to cut members off if they do not wind up when they are asked to.
Alex Kerr, you have up to five minutes, and I ask you to respect the time limit that has been agreed.
15:51
I will start by addressing Angela Ross’s opening speech. If I heard correctly, she stated that Scotland has the worst productivity in the UK. Unfortunately for her, the most recent Office for National Statistics figures show that Scotland outperforms every English region except London and the south-east. Scotland is a leader in productivity across these islands, so will Ms Ross apologise for talking down Scotland on a false premise?
I do not think that you can stand there and say anything about that, because your performance during the past two decades means that GDP growth per person has been around 0.6 per cent on average. That is pathetic.
I remind members that they must speak through the chair.
I do not think that Angela Ross understood me. She might have inadvertently misled Parliament. The figures that I quoted are from the ONS’s most up-to-date report. What I said is a fact. She might not like it, but it is the truth. I urge her to go and have a look at the report.
Will the member take an intervention?
I am running behind time, so I have to get a move on.
I have put this on the record before, but given that the unionists find it impossible to avoid painting an apocalyptic picture of Scotland’s economy, it is important to highlight it again in today’s debate. The “EY UK Attractiveness Survey Scotland” shows that Scotland’s appeal to investors is at a record level. Despite a global slowdown in investment, Scotland remains the UK’s leading destination for foreign direct investment outside of London—securing 108 projects. We should be extremely proud of that—I know that I am.
Since 2007, Scotland’s GDP per person has grown by 10.2 per cent, compared with 7.8 per cent in the UK, which shows that Scotland’s economic growth is increasing. Those on the benches to my left—the Conservatives and Reform—might hate it, but those are the facts, which they should brush up on for an economy debate.
That sustained success is built on Scotland’s world-class workforce, strong infrastructure and leadership in key sectors such as digital technology, renewable energy and life sciences.
[Made a request to intervene.]
I will see whether I have room to take interventions later, but I need to make progress now.
High-quality jobs support communities across the country and drive regional economic growth. It is therefore vital that the Scottish Government continues to work closely with industry to maintain Scotland’s competitive edge on the global stage. The challenges that Scotland’s people and businesses have faced during recent years have been unprecedented. We have had Brexit, years of austerity from the UK Government, a global pandemic, soaring inflation, rising energy costs and a cost of living crisis, which have all had a profound impact. Those challenges have come in under successive UK Governments—first Conservative and now Labour—while Scotland continues to deal with the consequences of decisions that are not made here.
In my constituency, I am fortunate to have some fantastic businesses that have chosen Scotland as their home. Companies such as Probe Test Solutions, which is based in Hamilton, and DFDS, which has a large depot in Larkhall, make incredible contributions to the local economy, Scotland’s national economy and, indeed, the global economy They demonstrate confidence of the kind that I have in our businesses in Scotland. Probe Test Solutions has chosen Hamilton as its base while operating in markets across the world. I am incredibly proud to have such an innovative company at the heart of my constituency, creating opportunities locally and competing internationally.
The programme for government set out by the First Minister contains a range of measures that are designed to support economic growth and investment across Scotland. Those commitments include: increasing the number of apprenticeships to 150,000 during this session of Parliament, delivering an average of 5,000 additional apprenticeship opportunities each year; advancing the £1.5 billion Scottish Government bond programme to attract new investment; driving innovation in health and social care through stronger partnerships between industry and NHS Scotland; continuing to explore how a range of levers, including non-domestic rates, can be used to support regeneration and revitalise high streets across Scotland; and, crucially, our party leader’s expansive programme of public service reform.
I am particularly excited about the potential for economic growth that we could see with the establishment of regional authorities. There is the potential to address so many of the barriers that I hear about from businesses in my constituency.
Will the member give way?
Yes, I will.
I apologise that I did not use Mr Kerr’s full name earlier. I genuinely was listening intently to his question—
On a point of order, Presiding Officer.
Rule 7.2.4 of the standing orders confirms that members are allowed time back. There seems to be some confusion in the chamber about that. Could we have some clarification? Is my understanding correct?
I presume that the member is asking whether there is time back for interventions. As I have confirmed a number of times this afternoon, there is time back for interventions.
I call Rachael Hamilton.
When the Scottish Conservatives speak to businesses, they tell us that they are confused about where the £750 million in business rates revenue that came to the Scottish Government has gone in the budget. Would Alex Kerr like to say whether he believes that that money should be spent directly to support businesses?
I thank the Deputy Presiding Officer for the clarification on interventions.
My focus on non-domestic rates revenue is on how it can be used at a regional level to stimulate economic growth, particularly by rebalancing the incentives for regional economic development and encouraging investment in regions across Scotland. Innovation is a huge opportunity for us, and I am lucky to have the Built Environment-Smarter Transformation organisation in my constituency.
The people of Scotland elected the SNP to serve a historic fifth term in government, because they know that our party is committed to building a fairer, greener and more prosperous nation. They know that the SNP is determined to make Scotland one of the most successful economies in the world among nations of our size.
The election of a pro-independence majority to the Scottish Parliament also demonstrated that many people in Scotland continue to believe that decisions about Scotland’s future are best made by those who live and work here. Independence is not an end in itself but an opportunity to build an economy that fully reflects our priorities, harnesses our immense potential, gets us back into the European single market and delivers prosperity for generations to come
Paul McLennan is the final speaker in the open debate.
15:58
Economic growth matters only if it improves living standards, creates genuine opportunities for young people and supports fair work and higher wages, and strengthens the public services that people rely on. That is in the Scottish Government’s motion.
Scotland has real strengths, as we have heard: our renewable energy resources, highly skilled workforce and, of course, our world-class universities. I see the potential for opportunities in the energy sector along the coast of East Lothian, as well as the agriculture and tourism strengths of the Lammermuirs and, of course, the talent coming through our local schools. We also have major housing and infrastructure projects under way.
The member mentions energy and East Lothian in the same sentence. Will he explain to members in the chamber and to his constituents why he is against the continued presence of the nuclear power plant at Torness? Why is he against young people in East Lothian having a career in a vibrant global sector that is unlike anything else on earth? Why is he—a so-called Scottish nationalist—against young Scots having such an opportunity?
There are a number of points in there. I mentioned renewable energy jobs. Research carried out by the Energy & Climate Intelligence Unit shows that there are between 1,500 and 2,000 jobs in the green energy sector in East Lothian already. There has been support and investment in East Lothian from the Scottish Government in relation to those green jobs. I am happy to discuss that further with Mr Kerr.
Potential is not enough. Scotland’s vast energy resources must deliver tangible benefits to the people who live here. That must mean lower energy bills. Households and businesses across Scotland are still paying the price of high energy costs. It is simply not right that a nation that is so rich in renewable energy should see its people struggle with bills while economic gains flow elsewhere.
Our energy potential must work for Scotland’s people. As I said, a number of people are employed in the sector in East Lothian, yet too often, the benefits do not reach the people who live there. Our vast energy potential has to deliver lower bills for households and businesses across Scotland, and we have heard about the benefits that independence would bring in terms of lowering energy bills.
Once the new energy cap comes in in January, energy bills will be nearly £1,000 higher than when Labour came to power in July 2024.
I am curious to hear the member’s thoughts about extraction at Rosebank and drilling in the North Sea.
The decision on that is to be made by the UK Government, which has to be respected.
We cannot ignore the damage that Brexit continues to cause: higher costs, barriers to trade and lost opportunities. I will take an intervention from anyone on the Reform benches who can tell me one economic benefit of Brexit.
We have seen benefits in our whisky industry. In the UK, we have seen VAT decreases, including on sanitary products—I mention those as a woman. Brexit gave us the right to do that. We could not have done that in the EU. I, for one, am grateful for that.
If that is the economic benefit of Brexit, God help us.
Rejoining the EU remains the clearest route to achieving lasting economic benefits for Scotland. We heard Daniel Johnson talk about Andy Burnham, who needs to provide more than warm words with regard to Brexit. All we have at the moment is virtue signalling—nothing more.
A successful economy also needs people, yet the current UK Government’s approach to migration is actively harming growth.
Will the member take an intervention?
Let me progress with the point first.
The Office for Budget Responsibility’s methodology points to a fiscal cost from reduced migration of between £5 billion and £7 billion a year. That is almost certainly an underestimate, and it does not even take account of the Home Secretary’s new plans on earned settlement. People with indefinite leave to remain—the very people who help staff our universities, national health service and other key sectors—are now questioning their future in this country.
I want to go back to Paul McLennan’s point on Brexit. Is it not slightly hypocritical that he is pontificating about access to markets when he and his party’s guiding mission in politics is to remove us from the single market that accounts for 60 per cent of our exports?
The UK removed us from the EU. The member’s point offers no benefit.
The relentless demonisation of migrants is damaging Scotland’s economy and our growth industries. For refugees, the situation is even more damaging. Subjecting people to repeated reviews every two and a half years for 20 or 30 years creates permanent uncertainty, which deters employers from investing in training and skills. Scotland already faces sharper demographic pressures and deeper shortages in health, social care and hospitality than the rest of the UK. That is lost potential for individuals and our economy.
Come to a conclusion, please.
That is why the Scottish Refugee Council is right to call for the right to work for people seeking asylum in Scotland.
I will conclude by referencing the Scottish Government’s amendment, because
“improving living standards … supporting fair work … strengthening public services”
and making
“full use of its economic strengths”
requires taking a serious approach to the workforce that Scotland needs. Our amendment is clear about the economy that we need: one that works for the people of Scotland. Supporting fair migration policies that allow people to contribute is part of delivering that. I urge members to back the SNP amendment.
That concludes the open debate and we move to closing speeches. I inform members that there is no time in hand, so any interventions must be absorbed within the speaker’s allocated time.
16:05
I wanted to get up and say that this has been an important debate, but I do not think that it has been. That was evident from the fact that one in three Reform members could not even be bothered to turn up for the opening speech. At the end of the day, the motion before the Parliament says absolutely nothing. If Reform’s big idea is to outsource finding big ideas for growth to the SNP, we are in a pretty weak position in Scotland.
When I came back after the recess, I wondered what all those eager beaver Reform researchers were doing standing along the corridor staring at blinking screens. It looks like a cryptocurrency trading floor, and it might as well be one, because they are clearly not coming up with the big solutions to answer the problems that we face in Scotland. If the big idea is to ask John Swinney to come up with the solutions, we are in serious trouble.
It was John Swinney who said that Scotland’s growth has been too slow for too long.
[Made a request to intervene.]
I will go into why it has been too slow for too long, but I will take Daniel Johnson’s intervention first.
Does the member agree that Reform members seem to have more cut-outs in their offices than they have ideas?
I have not yet seen one of Malcolm Offord in there, but maybe it is on order.
Why has Scotland’s economy grown too slowly for too long? It is because the SNP has been running Scotland for 19 years. Our taxes are too high and our earnings growth is too low. I question the Green Party’s commitment to growth—I do not think that I heard anything to change that today—but, fundamentally, I question the SNP’s commitment to a coherent industrial strategy.
What message does it send if we turn our face against Scotland’s oil and gas sector and our energy security, as the SNP did for the majority of the previous session of Parliament? What message does it send when the Government tells our enterprise agency that it cannot invest in defence manufacturing, which is a fundamental part of the Scottish economy? What message does it send to the Scottish whisky industry that, during the previous session of Parliament, the Government wanted to shut down distillery tours because of alcohol marketing and sponsorship rules? What message does it send to Scotland’s farmers that we are going to turn our back on gene editing, which would enhance food security in Scotland? What message does it send that the SNP does not support the Trident base in Scotland, which brings tens of thousands of jobs and hundreds of millions of pounds to the Scottish economy?
If we hang a sign outside the door saying “Closed”, it is no wonder that we are not growing in the way that other parts of the country are. Fundamentally, it is within the Scottish Government’s grasp to deal with the issue and to do so quickly. We need to reduce tax. We need to be more agile in inviting inward investment into the country. We need to say that we are open for business with a growth-first policy, not a woke-first policy whereby we turn our back on productive industries that could be providing jobs, tax receipts and growth for the Scottish economy.
16:08
We have heard some familiar and legitimate differences of political vision during the debate. We have also heard some examples of misplaced confidence beyond a scale that would embarrass even Liz Truss. In the limited time that I have available, I will pick out a couple of arguments.
I have sympathy with one argument that we have heard from some advocates of the motion: that the Scottish Government has been too attracted by foreign direct investment and that the result has been corporate wealth extraction. I agree with that. Presumably, those who advocate that argument would also agree with me that we should be keen to pull the rug out from under the crypto billionaire class who fund the far right in this country.
As a side note, was it not delicious to see Elon Musk lose so much money last night in failing to buy himself a docile pet senator in Texas? I wish the crypto billionaires who fund the British far right every bit as much success in the years ahead as Elon Musk found in Texas.
Another serious argument that was made during the debate—perhaps the most serious one—came from Liam McArthur, who reflected on a point that was also made in yesterday’s debate. Liam McArthur repeated the argument that, if we want people who are currently economically inactive to move into paid work, that must be done through empowerment, enabling them to make choices in their lives that make sense and ensuring that working life is inclusive and supports people’s needs. That is the only serious way of achieving that effect, instead of bullying people into low-paid, insecure and demeaning work.
When I looked at the amendments once they were circulated last night, I thought that I clearly wanted to advocate for what is in the Green amendment. I, and the Greens, will continue to make the case that the vision of a sustainable economy is not optional, because it is the only vision of a viable economy that is available to us.
However, when I looked at the Scottish Government’s amendment, I recognised that it is far more likely to be agreed to than the Green amendment—I will be honest about that. The idea of a Reform debate resulting in a clear and decisive resolution by the Parliament in favour of joining the European Union is just a funnier outcome, is it not? I thought to myself, “I know that the Scottish Government amendment is going to pre-empt the others, and I’m relaxed about that.” If the Scottish Government amendment falls, I will happily press my own amendment, but the Greens will back the Scottish Government amendment and the proposition that our future lies as an independent member of the European Union.
16:11
Robin Cook, a fine member of Parliament and once a representative of Edinburgh, said:
“The right stands for the politics of me. The left stands for the politics of we.”
That observation was about the ethical perspectives that shape how we view society and the economy, and it resonates today, not because the left should reject the moral value of autonomy or efficiency, but because there is moral value in solidarity, and it is often such solidarity that empowers people.
Earlier, Daniel Johnson asked us, in effect, to step back from the idea that the strength of our public services and the strength of our economy are competing ambitions—they are not. A strong economy is the foundation upon which to build good public services that do more than just meet those needs that markets can or will not meet. They are services that underpin the social contract and can drive social and economic change.
The challenge for this parliamentary session, as we face a £5 billion fiscal gap, is to unlock the potential of the Scottish economy and good public services, and to do so through the practical and institutional reforms that will make that possible.
The premise of what Joe Fagan has just said is that businesses need to be supported in order to pay for public spending and support public sector services. However, Labour has hiked employer national insurance contributions, which are costing Scotland £2.2 billion. That has had a cost for jobs and livelihoods, and businesses are going to the wall. What does Joe Fagan say to that?
I remind the people who stand for the politics of me that those of us who stand for the politics of we had to restore some sanity to the public finances of this country. I know that not every decision that the Government has taken was popular, but I am concerned that there are some people in this Parliament who looked at how Liz Truss crashed the economy and did not think that she had gone too far—indeed, she had no gone far enough. We should reject those arguments today.
Will the member give way?
I am afraid that I do not have time.
I want to respond to some of the points that have been made throughout the debate. Bob Doris made a very constructive speech. He will know from our all-too-brief time together on the Public Service Reform Committee how determined I am to retain a focus on outcomes. Waste is not just about inefficiency; it is about the cost of inaction, a point that I will come on to address.
I thought that Liam McArthur made a very balanced contribution, and I especially agree with his point about labour market participation.
I even found areas of agreement in Angela Ross’s speech. For example, I agree with what she said about the need to reform property taxes. Scottish Labour has told the Scottish Government that we are willing to talk about council tax and business rates. I even agreed with Angela Ross, as Patrick Harvie did, on her point that there has been too much wealth extraction from our economy. As someone who has always advocated community wealth building, I have to wonder whether Reform is as concerned about foreign interests buying up our politics as it is about foreign interests buying up our economy.
Scotland’s economy has huge potential, but, as I will not have time to make all the points that I had intended to make about that potential, I will turn to our public services and the need to retain a focus on outcomes. Our trade unions, councils and public service leaders are all clear that genuine public service reform must be driven by outcomes, not structures. The reform process is about more than the administrative map of Scotland; it is about how we redesign public services to deliver better outcomes for people and address the structural drivers of demand. There is a profound danger that the Scottish Government’s proposals, which should be rooted in the Christie commission principles, are becoming increasingly divorced from them.
I make this point as an appeal to members across the chamber. Outwith periods of crisis, public spending as a share of our national economy is at its highest level since records began. What is driving up spending is not just energy prices or interest rates, but the long shadow of underinvestment, falling satisfaction and worsening inequalities that austerity casts. Austerity costs us all more in the long run. That has been compounded by a systemic failure to deliver the transformational change in our public services that Christie envisaged 15 years ago.
The member must conclude.
I appeal to the left and the right to focus on where we can find a consensus and where the push for efficiency meets the push for social justice.
16:16
I have certainly enjoyed listening to elements of the debate up until now, especially the contribution of Alex Kerr, who rightly highlighted the fact that, despite its coming to the chamber to talk about Scotland’s economy, the Reform party could only peddle mistruths. It had the opportunity to rejoice in the fact that Scotland’s productivity levels have outshone those of the UK, but it chose not to do that, because when the truth meets reality, it runs from it, just as it runs from all the other levers that are in front of us that could unlock economic growth.
Let us go through some of those issues—and I have some uncomfortable truths for my friends to my left. The first is our lack of membership of the European Union.
Will the cabinet secretary give way?
I will not, because I do not have the time.
The reality is that, as part of the United Kingdom, we were dragged from the European Union—the world’s largest single market—against our will. Who was the biggest cheerleader for that? It was the leader of Reform. Despite knowing the damage that leaving the EU would do to each and every business in this land, Reform chose to push through with that direction of travel. Reform members come to this chamber and blame all our people for the economic challenges that we face. How dare they?
The same applies to their position when it comes to migration. There is a common understanding that, if we are to have a productive and growing economy, it is necessary to have a workforce that is able to meet the challenges not just of today but of tomorrow. We know that Scotland has a declining working-age population, that we need more people to work in Scotland and that migration has a crucial role to play in that conversation, yet each and every Reform member vilifies every migrant in Scotland. They do not want freedom of movement or the positive contribution of the benefits that migrants can bring to Scotland’s economy.
I will not stop at Brexit and migration. Let us look at net zero. I do not know whether the members to my left are aware of this, but the economic opportunity from net zero is huge. Earlier today, I was with SSE in Glasgow for the opening of its new offices. Its workforce has grown from 419 employees to in excess of 3,000 in just a few short years.
Will the cabinet secretary give way?
The cabinet secretary has already said that he is not taking interventions.
Each and every Reform member would stop that. They would immediately put a halt to that £29 billion-worth of investment in Scotland’s economy. [Interruption.]
Members! I have already ruled that time for interventions has to be absorbed by the speaker. The cabinet secretary has said that he is not taking interventions.
On a point of order, Presiding Officer. We are now wasting time because of that explanation. On 21 May 2026, the Presiding Officer ruled on measures to make the Scottish Parliament more efficient, including on
“time taken for interventions”,
which will be
“added to protect the time of speakers who most engage.”—[Official Report, 21 May 2026; c 30.]
It goes on to say—actually, I will not waste the Parliament’s time by going through it, because we all know the rules, and they are not the ones that the Deputy Presiding Officer has just stated.
I will not accept a challenge to the chair. We have a timescale for those interventions and the minutes were agreed with the business managers. We are significantly over time, so we will not take—
On a point of order, Presiding Officer. I rise to defend my colleague Rachael Hamilton. She is not challenging the chair; indeed, she is quoting the chair—the Presiding Officer—who has said that he wants there to be debate and that he will protect time for those speakers who accept interventions. I think it unfair, frankly, on the debater—the cabinet secretary—that he does not get to take interventions—
Mr Kerr, please sit down. Additional time has already been given to the issue. We are now running out of time. I, as the convener of these proceedings in the Parliament, have ruled that interventions must be taken in the allotted time that the business managers agreed. I hope that this is the end of the matter. Can you continue, cabinet secretary?
Thank you very much, Deputy Presiding Officer.
Where was I? Oh yes, net zero. Each and every single one of the Reform members would seek to withdraw that £29 billion of investment that SSE alone is seeking to make. Indeed, they would deny tens of thousands of Scottish people the opportunity to have a good, productive, positive career. They would deny not just climate reality but each and every single opportunity to Scottish people. How very dare they talk about economic growth when they turn their back on the European Union, on the benefits of migration and on the job opportunities that net zero offers?
Of course, in their opening remarks, they completely diminished the importance of the role of the public sector in Scotland, which drives skills through our schools, colleges, universities and apprenticeships—[Interruption.]
Members!
Every single one of their proposals would strip money away from all those services, yet they would continue to complain. The reality is that the members on the Reform benches are the antithesis of growth. They do not understand the basic fundamentals of it—[Interruption.]
Can you resume your seat, please, cabinet secretary?
Members, I have made a ruling about how the debate will be conducted. All you are doing is disrupting the chamber, not allowing it to hear from the cabinet secretary and preventing his ability to express debate and explore challenging views. He shall have courtesy and quiet from the chamber.
I suggest that they are being a bit lively, Presiding Officer, because they do not like to hear the truth when it comes to their particular positions.
I am conscious of time. Indeed, I think that I am now over my allocated time, so let me finish with this: we are incredibly proud of the work that we continue to do to drive growth in Scotland, and we are proud of the investment that we are making in our young people and our future. I look forward to building on that success through the budget process and to continuing to ignore the doom and gloom of the members to my left.
16:24
I must say that it feels like a parallel universe in the chamber today.
The sad reality is that there is no economic growth—not in Scotland, not in the UK and not even in Europe. In fact, in the purchasing managers’ index figures that came out this morning, France, Germany and the euro zone are all down while the UK is up. Rejoining the EU is not a silver bullet. To address the cabinet secretary’s point, any notional increase in GDP would immediately be taken away on a per capita basis anyway, because all the major economies are increasing their populations with low-skilled immigrants while losing high-skilled locals to retirement and emigration overseas.
What does this mean for Scotland? First, the experiment to increase the number of income tax bands to six bands in Scotland, versus three in the rest of the UK, and to push the rates up to 48 per cent has failed. The evidence lies in the £209 million less tax raised than the SNP forecast, leading to this year’s £722 million deficit, which in turn leads to the £5 billion black hole that has been mentioned a few times today. The black hole is entirely of the SNP’s own making, made in Scotland without girders.
Thank goodness for the UK Treasury, which underwrites Scotland’s structural deficit of £25 billion with a block grant sent up from London with no strings attached. There is no austerity there, then. Why should Scotland spend 55 per cent of GDP when the UK spends 45 per cent of GDP? There has been no answer to that either this afternoon.
After six months in the chamber, I have come to the sad conclusion that the Scottish Government does not actually know how to grow the economy. Minister after minister stands up—
Will the member take an intervention?
No, I am going to crack on.
Minister after minister stands up and says the words, but with no conviction and certainly no understanding.
So, what is to be done? This mess has been created by a succession of Labour, Conservative and SNP Governments in Westminster and Holyrood over 25 years. That is why Reform UK exists. The public know that they cannot trust the established parties any more. The public are demanding economic growth and prosperity, but instead, the uni-parties have consigned them to a nearly 10-year forecast of falling living standards and managed decline.
However, it does not need to be this way. The UK needs a 10-year turnaround plan. Fortunately, Reform UK is stuffed full of politicians who actually understand business and the economy. We need a Reform Government in Westminster that is working hand in hand with a Reform Government here in Holyrood.
Last week, the shadow chancellor, Robert Jenrick, set out more than 60 measures—
Will the member give way?
No, I am going to keep going.
Last week, the shadow chancellor, Robert Jenrick, set out more than 60 measures to set the UK on the road to recovery. The most prominent of those are increasing the tax-free personal allowance to £15,000; cutting energy bills by £250 and by a lot more for business; increasing the VAT threshold to £150,000; reversing Rachel Reeves’s jobs-killing national insurance increases; and scrapping tax on overtime. [Interruption.]
Mr Offord, could you pause for a minute, please?
I will not have conversations happening across the aisles. Please let the member who is speaking be heard.
Those are real measures, and what do they actually mean? They mean putting more money into the pockets of workers and small business owners, who are the bedrock of our economy.
Will the member take an intervention?
No, I am going to keep going. We have run out of time.
We know that those workers and small business owners will reinvest that money in their families and communities. It is a proven fact that reducing tax increases productivity and investment into businesses and people alike.
Will the member give way?
No, I am not taking any interventions, because we have had so much rudeness across the chamber today. I will just crack on. [Interruption.]
We need Westminster to pull the reserved levers of growth in London by getting energy costs down, reforming welfare to make work pay more, and incentivising workers and business owners to be more productive. That is where Reform Scotland can get involved.
We can then kick on with a radical package of measures to boost the Scottish economy by, for example, aligning Scottish income tax back to the three bands in parity with the UK, and going a stage further and cutting each band by 1p, with a target of 3p; redesigning Scottish welfare to give a hand up, not just a handout; working with schools and colleges to get our young people into jobs and to get our home-grown Scots into meaningful work; and working with the 32 local authorities to push devolution down to local people—all the while protecting front-line services in health, education and policing.
Reform Scotland has a comprehensive, 10-year recovery plan for Scotland, which will see employers incentivised to hire more workers, workers incentivised to get skilled up and earn higher wages, business owners incentivised to expand their firms, and local authorities incentivised to improve local services.
The member must conclude.
That will be real devolution in action, and Reform Scotland will fulfil our pledge to make Scotland the most prosperous part of the United Kingdom.
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Portfolio Question Time