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Chamber and committees

Meeting of the Parliament

Meeting date: Wednesday, September 7, 2016

Agenda: Portfolio Question Time, Scotland’s Place in Europe, Programme for Government 2016-17, Scottish Parliamentary Corporate Body Motion, Business Motion, Parliamentary Bureau Motion, Decision Time, Cleft Lip and Palate Surgery (Centralisation)


Portfolio Question Time

Good afternoon. The first item of business today is portfolio questions.

Onshore Revenue

To ask the Scottish Government how Scotland’s onshore revenue compares with the rest of the United Kingdom. (S5O-00091)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

Scotland’s onshore revenue in 2015-16 is estimated to be £53.7 billion, which is £1.9 billion higher than in 2014-15. On a comparable basis, excluding revenue associated with English housing associations, that represents 8 per cent of the UK total.

Does the cabinet secretary agree that Scotland’s positive economic outlook is being unduly exposed to a threat, as Brexit could see us being withdrawn from the biggest single common market against our will?

Derek Mackay

Yes—I believe that leaving the European Union is a key risk to Scotland’s economy. Scotland’s £11.6 billion a year of exports to the EU represents 42 per cent of our total international exports. It is increasingly clear that the hard Brexit that is being described by some in relation to the UK Government’s approach has significant financial consequences for the UK and for Scotland.

Kezia Dugdale (Lothian) (Lab)

Given that the Cabinet Secretary for Finance and the Constitution is a conscientious and diligent soul, I assume that he will have read his Government’s own “Government Expenditure and Revenue Scotland” report from front to back. Can he confirm that it demonstrates that Scots benefit from £1,200 more public spending per head by being part of the United Kingdom?

Derek Mackay

Kezia Dugdale will be well aware that Scotland also generates more per head, generally, than the rest of the UK and that Scotland has strong economic foundations on which we can grow our country to share the prosperity and wealth for all our people.

Murdo Fraser (Mid Scotland and Fife) (Con)

The union dividend actually amounts to £1,600 for every man, woman and child in Scotland—£1,200 of higher spending and £400 per head because our economy underperforms the rest of the UK. Why does the cabinet secretary want to deprive the Scottish people of that sum of money?

Derek Mackay

Here we go again, with the Tories wanting to talk about the constitution. The Conservatives are obsessed with it.

We are embarking on a bold programme—through the programme for government and, in due course, the budget—to grow and build on the strong fundamentals of the Scottish economy. It is decades of Westminster rule that have left Scotland in the economic position that we have found ourselves in, which has been made worse by the threat to remove the United Kingdom and Scotland from the European Union.

Dean Lockhart (Mid Scotland and Fife) (Con)

How can the record budget deficit of £15 billion that the Government announced last week be reconciled with the First Minister’s statement yesterday that the Government will use the strength of its balance sheet to help Scottish business, bearing in mind that that budget deficit is the largest of any western economy in Europe and is even larger than the budget deficit in Greece?

Derek Mackay

I am very surprised that Dean Lockhart, as a Conservative spokesperson, does not understand the Scottish budget. The Scottish Government balances its books every year, and it is on the basis of that—the strength of our balance sheet—that we can deliver the Scottish growth scheme. I seriously hope that the Conservatives will be converts to our scheme to unlock £0.5 billion of support to grow our economy and support businesses through this difficult and turbulent time in the economy.

Further and Higher Education (Spending Review)

2. Iain Gray (East Lothian) (Lab)

To ask the Scottish Government what discussions the Cabinet Secretary for Finance and the Constitution has had with Colleges Scotland and Universities Scotland regarding the forthcoming spending review. (S5O-00092)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

As ministers with responsibility for engagement with both sectors, the Deputy First Minister and Cabinet Secretary for Education and Skills and the Minister for Further Education, Higher Education and Science regularly meet representatives of Scotland’s colleges and universities to discuss a wide range of issues of interest to the sectors, including resourcing issues.

The Minister for Further Education, Higher Education and Science last met Colleges Scotland and representatives of Universities Scotland on 31 August 2016.

Iain Gray

The recent reports from Audit Scotland into funding of further and higher education show that both sectors have seen cuts to their budgets year on year. In this spending review, will the cabinet secretary simply make the promise that their budgets will be protected?

Derek Mackay

In the manifesto on which we were elected, we outlined our commitments to the sector. That includes free education, and for colleges we will maintain full-time equivalent college places. The report that Iain Gray mentioned also says that Scotland’s college sector is financially stable overall and that colleges continue to exceed their targets for student learning opportunities.

In answer to the specific question, of course I and other ministers will engage closely with the Scottish Further and Higher Education Funding Council to consider the financial issues and take forward opportunities for Scotland.

In the past few months, I had one particularly enjoyable visit to the Riverside campus of City of Glasgow College. It is a fantastic building and evidence of the Government’s commitment to invest capital in the sector, which is transformational for the education sector in Scotland.

Treasury (Meetings)

To ask the Scottish Government when the Cabinet Secretary for Finance and the Constitution last met the Treasury and what was discussed. (S5O-00093)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

I spoke with the new Chancellor of the Exchequer on 21 July to discuss areas of common interest, including the need to ensure active engagement between HM Treasury and the Scottish Government on the financial implications of work that will be undertaken in response to the European Union referendum outcome.

Since then, I have written to the Chief Secretary to the Treasury, welcoming the guarantees so far provided on EU funding but making it abundantly clear that the areas that have not been addressed must be revisited as a matter of urgency.

I have offered to meet the chancellor in London on 21 September to discuss matters of shared interest around the economy and public finances, the impact of the EU referendum, and the need to continue to make progress in implementing the detail of the Scotland Act 2016.

Jenny Marra

The Scottish taxpayer will pick up 60 per cent of the cost of decommissioning the oil and gas industry through tax relief. As the Scottish people are funding the jobs, does the cabinet secretary think that it is fair that we are paying for the work to be done in Norwegian yards rather than in ports such as Dundee?

Given the huge opportunities for our economy, I am disappointed that the cabinet secretary did not discuss with the Treasury any fiscal incentives for decommissioning when he met them. Has the Scottish Government had any discussions with the Treasury about decommissioning tax relief? Will he make it a priority to speak to the Treasury at the next opportunity about how they can work together to keep those taxpayer-funded jobs in Scotland?

Derek Mackay

The member asks a fair question and gives a fair analysis of how we could take advantage of the decommissioning work that could be delivered to Scotland.

The member’s question was specifically about the discussions that I have had with HM Treasury and I answered it accurately, but my business and economy colleagues have had discussions with United Kingdom ministers on the subject. The Scottish Government has been proactive in raising those questions and, through Scottish Enterprise, we are working on the decommissioning action plan to ensure that jobs and development comes to Scotland.

I will be 100 per cent supportive of that work, and I will make specific interventions with the UK Government by adding to my very long list of things that it could do to stimulate the UK’s and Scotland’s economies.

Public Services (Preventative Spend and Outcomes Focus)

4. Ivan McKee (Glasgow Provan) (SNP)

To ask the Scottish Government what progress it is making in implementing the recommendations of the commission on the future delivery of public services, which was chaired by Campbell Christie, calling for the prioritisation of preventative spend and an outcomes focus in delivering more effective and efficient public services. (S5O-00094)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

Our approach continues to be rooted in the four pillars of reform laid down by the Christie agenda. We have made substantial progress across a broad range of public services including early years, justice, and health and social care.

Ivan McKee

The cabinet secretary will be aware that the Christie report estimates that as much as 40 per cent of all spending on public services is accounted for by interventions that could have been avoided by prioritising a preventative approach. To realise such savings, the report recommends integration of service provision, the empowerment of individuals and communities receiving services, the removal of duplication and the sharing of services where possible. What steps is the Scottish Government taking to make progress on those recommendations?

Derek Mackay

That work will feature as we move forward with the programme for government and our efforts on public service reform. The Government’s approach to early years, education and health reform has been clear. Those are key parts of the preventative agenda, and they are certainly part of the next phase of reform. There are truly transformational opportunities and we can build on the successes of the previous session of Parliament, such as integration joint boards and the Community Empowerment (Scotland) Act 2015, which was partly about people being given the tools to unlock the potential in their own communities.

There is a great deal of work to be done around public service reform. That is why I am delighted to be a member of the cabinet sub-committee on public service reform, which will consider this very issue.

Jackie Baillie (Dumbarton) (Lab)

The cabinet secretary will be aware that change funds have been one of the principal means of prioritising preventative spending and encouraging innovation in public services. Does he therefore consider that allocating something in the order of 1 per cent of the Scottish budget to those change funds is adequate, given the task ahead? Will he reflect on that in the forthcoming budget process?

Derek Mackay

I understand why Jackie Baillie would be attracted to change funds, and I think that they were successful in part. However, as finance secretary, I would expect that we would use the totality of Scottish Government resources to transform our services and that we would rise to the challenge of the preventative approach in public service reform. Therefore, I am not immediately minded to create a new plethora of change funds. Instead, I expect public services and Government departments to focus on the preventative approach, realising how important it is to the Government and the Parliament.

“Government Expenditure and Revenue Scotland” Figures (Deficit)

To ask the Scottish Government what Scotland’s deficit is, both as a percentage of gross domestic product and in cash terms, according to the latest GERS figures. (S5O-00095)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

Mr Bibby will have heard me say to the Conservatives that of course the Scottish Government balances its books. GERS shows that North Sea revenues fell in 2015-16 as a result of the challenging conditions that were faced by oil and gas operators. However, that decline was more than offset by Scottish onshore revenue, which grew by £1.9 billion. Including a geographical share of the North Sea, according to GERS estimates, Scotland’s net fiscal deficit in 2015-16 was 9.5 per cent of GDP, or £14.8 billion.

Neil Bibby

The First Minister spoke yesterday of

“a real battle of ideas; a sense of solidarity versus the ideology of the small state”.—[Official Report, 6 September 2016; c 20.]

However, the GERS study confirmed that we have one of the biggest deficits in Europe. The size of the state in an independent Scotland would be a good deal smaller. Will the finance secretary therefore acknowledge the vital importance of United Kingdom fiscal transfers to Scotland, and can he confirm that, according to GERS, those transfers currently amount to £9 billion, which is money for jobs, services and communities right here in Scotland?

Derek Mackay

No—there is no such transfer. Neil Bibby has got it wrong again. Those are estimates of expenditure. The unionist parties do not seem to get that the figures do not show the balance sheet of an independent Scotland. UK economic policy has failed.

There are positives in the GERS report as well, including onshore revenue’s growth, improvements in gross domestic product growth, record rising employment and improved productivity. As I have said before, Scotland generally generates more revenue per head than the rest of the United Kingdom. Further, in terms of output per head, Scotland is higher than anywhere else in the United Kingdom, with the exception of London and the south-east.

Members should ask themselves this: why is it that a nation that is blessed with such assets and wealth cannot be allowed to share that prosperity—unlike Norway, which is a small independent nation that is comparable to Scotland but is in surplus, and not in deficit? What is the difference?

We have a choice as to what we do, as a Government and a Parliament. Do we agree to invest in the economy, to secure Scotland’s political position in terms of European Union membership, to grow our economy and to support businesses to help to deliver that growth? That is exactly what this Government is doing.

Spending Plans 2016-17 (Glasgow and Renfrewshire)

To ask the Scottish Government what impact its spending plans for 2016-17 will have on Glasgow and Renfrewshire. (S5O-00096)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

The Scottish Government will continue to support the Glasgow and Renfrewshire area through a wide range of programmes. The 2016-17 local government settlement funding package was firmly focused on the delivery of joint priorities to achieve sustainable economic growth, protect front-line services and support the most vulnerable people in our communities. Those shared priorities will improve outcomes for local people.

We are investing in local infrastructure—for example, three schools are under construction in the area as part of the national schools for the future programme, and are due to open next year. There is also investment in motorways, in the subway, and in hospitals and health centres.

Anas Sarwar

Yesterday, the First Minister said that her Government’s priority is to support jobs and economic growth. The cabinet secretary’s predecessor, John Swinney, scrapped the Glasgow airport rail link project. Renfrewshire Council’s leader, Glasgow City Council’s leader and local businesses have pressed the Scottish Government to get on and implement that project, which would create 15,000 construction jobs and 30,000 permanent jobs. The First Minister, the transport minister and the finance secretary all represent Glasgow and Renfrewshire. Why will they not stand up and deliver for the cities and communities in that area?

Derek Mackay

I have news for Anas Sarwar: I was a signatory to Glasgow’s city deal proposal. Following the discussion about releasing more than £1 billion for the city deal partnership, it was left to the local authorities to take forward their proposals. As members would expect, checks and balances are in place.

Does the cabinet secretary support the rail link?

Derek Mackay

I am coming to that.

It might surprise Anas Sarwar to know that, when I was Minister for Transport and Islands, I wrote on 3 February 2015 to Glasgow City Council’s leader to outline our support for the city deal package. On GARL, I said:

“We stand ready to work with you to deliver improved surface access to Glasgow Airport within the overall city deal, but I want to make it very clear that the Scottish Government will not be responsible for any additional costs resulting from decisions taken by or investments made by the ... Clyde Valley partners.”

Given that there is £1 billion to get on with the projects, I ask the Labour Party what is stopping it getting on with GARL. If it wants to deliver GARL, it can do so—we have given it the resources. I would hate to think that the Labour Party is indulging in a game of artificial grievance before the council elections when it knows fine well that it has been given the resources, with checks and balances in place. The only people who are stopping GARL are those in the Labour Party in the west of Scotland.

Jamie Greene (West Scotland) (Con)

What effect will the spiralling cost of the Edinburgh to Glasgow rail improvement programme have on the Scottish Government’s plans for Glasgow and Renfrewshire? Will the Government update Parliament on the programme’s total cost and say whether the cost is expected to rise further?

Derek Mackay

Those questions help to make a point that the Conservatives might want to understand. Network Rail is not directly responsible or accountable to the Scottish Government in the way that we would like. If we had devolution to Scotland of Network Rail’s responsibilities, perhaps it would deliver projects in the way that the Scottish Government delivers major infrastructure projects.

The proposals will make a transformative difference to the rail service in the area that we are discussing, and we expect them to be delivered to our specifications, but I am afraid that the issues with Network Rail suggest that we should have greater control over the operation, rather than leaving it to the United Kingdom Government, which has failed to contain Network Rail’s costs.

“Government Expenditure and Revenue Scotland” Figures (Deficit)

To ask the Scottish Government what steps it is taking, in light of recent GERS figures, to ensure that Scotland’s deficit does not increase further. (S5O-00097)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

The Scottish Government is focused on actions to support Scotland’s economic resilience and growth, in keeping with the priorities that are set out in our economic strategy. We are taking action to facilitate investment, improve innovation, support inclusive growth and encourage Scottish businesses to internationalise.

The biggest risk to Scotland’s economic prosperity comes from being taken out of the European Union. We are taking action to support Scotland’s economic resilience, which is why we announced a £100 million capital acceleration programme to provide immediate support to the economy. In line with the way people here voted, we will continue to explore all possible means to protect Scotland’s place in Europe, which is vital for jobs, investment and long-term prosperity.

Graham Simpson

I thank the cabinet secretary for that answer. The GERS figures show that Scotland’s public spending deficit stood at just under £15 billion in the past financial year. That is a 9.5 per cent share of gross domestic product, which is more than double the 4 per cent figure for the UK as a whole. If anything shows that independence should be off the table for a generation, that report is it, yet yesterday the SNP left the threat of another referendum hanging over a country that has already rejected it, with all the uncertainty that that brings.

The Government’s answer is to set up a growth commission—

Please get to the question, Mr Simpson.

The best thing that the cabinet secretary could do would be to take the independence referendum off the table. Will he do that? If not, why not?

Derek Mackay

Here we go again. We have the Conservatives obsessed with the constitution—obsessed with it. What is worse, we are back to the tired old argument that Scotland is too wee and too poor to be an independent nation. The reality is that the GERS report is not a verdict on independence; it is an indictment of Westminster control of this country’s economy.

However, let me turn—in the limited time that is left—to what we can do about growing our economy.

There is no time left, cabinet secretary.

Derek Mackay

Let us see whether the Conservatives will support these actions. Of course, primarily, we could try to secure Scotland’s place in the single market, but at Prime Minister’s questions today, the Prime Minister could not even say whether she supports being in or out.

We are investing in infrastructure, maximising exports, backing innovation, embarking on housebuilding, accelerating planning, increasing the small business bonus, boosting education and childcare, releasing our renewables potential—

Cabinet secretary, get to the point, please.

We are investing capital stimulus and, of course, investing £0.5 billion in the Scottish growth scheme. That is what we are doing to support Scotland’s economy.

Moray Economy

To ask the Scottish Government what steps it is taking to support the Moray economy. (S5O-00101)

The Cabinet Secretary for Economy, Jobs and Fair Work (Keith Brown)

We are committed to supporting sustainable economic growth across Moray. We are investing substantial amounts in road and education infrastructure and we are ensuring that businesses continue to benefit from support from our enterprise agencies. That helps to create jobs and to stimulate growth in the area.

Richard Lochhead

The cabinet secretary will be aware that a threat hangs over the Moray economy as a result of the Ministry of Defence’s estates review, which has led to questions over the future of the Kinloss barracks. Indeed, yesterday’s meeting of the Moray economic partnership heard that more than 1,000 full-time-equivalent jobs in Moray are dependent on the barracks. Does the cabinet secretary agree that any threat to Kinloss barracks amounts to a breach of faith by the United Kingdom Government, especially after the closure of RAF Kinloss? Will he now support the community and demand that the UK Government holds a full consultation prior to any decision being taken over the barracks’ future? Such a consultation, of course, was originally promised, but then the UK Government changed its mind. Will he also call for the UK Government to deliver the utmost transparency as to what options are on the table and to share those with the local community?

Keith Brown

Richard Lochhead is right to describe this as a huge threat to the Moray economy. I spoke with Mark Lancaster, the responsible minister in the UK Government, some weeks ago and requested that, when the defence estates review impacts on Scotland—for example in relation to the Moray local economy or in relation to Fort George, Edinburgh castle and other premises that are shared with the Scottish Government—there should be discussion between the two Governments. Such a discussion has not taken place. In fact, that discussion has been refused by the UK Government, which has had discussions with local partners in Moray but not with the Scottish Government.

In addition, the First Minister has written to the Secretary of State for Defence asking him to meet me immediately to discuss these issues. In the case of Moray, 830 jobs at least are at risk. I will continue to take steps and to support the work of Richard Lochhead and others in the steps that they are taking. What I will not do is support the statement that I heard was made on social media by a Conservative MSP, who said, “The battle’s over, the base has been saved, lay down your arms”. The one step that we will not take in relation to Moray’s future is a step back. We will continue to support Richard Lochhead and those who wish to support him in defending those jobs.

Douglas Ross (Highlands and Islands) (Con)

I will focus my question on actual events rather than on speculation that has been generated by the Scottish National Party. No concern is more serious than the threat to the Kinloss base, but that speculation has come from a tweet by the local SNP member of Parliament, and there is nothing further to it.

The cabinet secretary discussed in his first response the roads policy and budget. Can he confirm that the Scottish Government fully supports the campaign by the Moray economic partnership and its chair, Councillor John Cowe, to have the A95 improved? Given the importance of that route to the vibrant whisky industry and the local economy, does he agree that opportunities for widening the carriageways should be considered as Transport Scotland develops its maintenance programme?

Keith Brown

In relation to roads in Moray, we have done what no previous Government—Conservative or otherwise—has done, which is to commit to the £3 billion upgrading of the A96. The A96 is the main arterial route from Inverness to Aberdeen and is hugely important for the area. We have also provided substantial support to the local economy, and to the local council in order to support its road-building and infrastructure programme.

Douglas Ross says that we should talk about actual events. If it is the case that he has not tweeted that the battle has been won and that in fact the Moray defence—

My question was about the A95.

Keith Brown

We are talking about Moray defence jobs here. The member said that the battle has been won. If that is not an actual event and he has not said that, perhaps he can tell members in the chamber. If he has said that, how does he think that representing the interests of Westminster and his colleagues down there is better than representing the interests of the people of Moray?

On a point of order, Presiding Officer. If Mr Brown would like to check my social media history, I am sure that he will come back to the chamber to correct the statement that he has now made twice.

Thank you, Mr Ross. I do not believe that that is a point of order, but you have made a point.

Living Wage and Secure Employment

To ask the Scottish Government what action it is taking to encourage employers to pay the living wage and provide secure employment. (S5O-00102)

The Cabinet Secretary for Economy, Jobs and Fair Work (Keith Brown)

As the member will be aware, the majority of powers over employment remain with the United Kingdom Parliament. However, with the powers that we have available, we have developed a distinctive approach to fair work that will, among other objectives, help to promote secure employment. Building on the publication of the fair work framework, our recently published labour market strategy sets out an approach in which fair work is central to improving the lives of individuals and their families. The strategy includes a range of actions, including the work that the Scottish Government continues to undertake with the Poverty Alliance to increase the number of living wage accredited employers in Scotland, which now stands at over 585.

Ben Macpherson

Would the cabinet secretary agree to work with me on these issues, specifically with regard to the Edinburgh festival—for example, by working with relevant parties to encourage more large venues to pay the living wage and to provide more secure employment?

Keith Brown

I certainly would commit to doing that. I also acknowledge the huge economic impact of the Edinburgh festival. It has once again been a very successful year for the festival and associated festivals and for the fringe. My officials and I are always happy to meet employers who are paying the living wage, especially larger employers through whom living wage accreditation would benefit a greater number of employees.

The member could usefully get in touch with the Scottish living wage accreditation initiative through the Poverty Alliance, which the Scottish Government is supporting to promote the living wage. It will be able to bring its valuable experience of working with a wide range of employers to those discussions.

Richard Leonard (Central Scotland) (Lab)

In light of that last answer, and given that there are more than 360,000 private sector employers in Scotland, does the cabinet secretary consider that a target of just 1,000 accredited living wage employers by this time next year is ambitious enough?

Keith Brown

I would never suggest that we are limited to that number, but it is right that we start somewhere, and we have made a start where the UK Government—and many other Governments—have not. I do not know whether Richard Leonard is describing a counsel of despair—“Don’t bother trying in the first place”—but we are trying and we are having major success. Together we are lifting the number of people in Scotland who are paid the living wage. That number is already one of the highest in the UK—I think that it is the second highest; I am happy to check that.

Of course, it is not only about the companies that sign up to the living wage but about the impact and influence that they have on other people. We will continue with our activity, and I hope that we will have the support of Richard Leonard and his colleagues in that regard.

Patrick Harvie (Glasgow) (Green)

I welcome the measures that have been taken to promote the living wage. Given yesterday’s announcement that the Scottish Government intends to provide a programme of loans and guarantees to businesses, can we have a guarantee that that facility will be available only to businesses that pay the real living wage?

Keith Brown

All—or the vast majority of—businesses in the Scottish economy are well aware of the Scottish Government’s approach to both the living wage and inclusive growth. Those companies with which we engage through—as Patrick Harvie mentioned—the Scottish growth scheme, which could be of substantial benefit to companies and employment in Scotland, will be well aware of our preference and our drive to increase the number of those employed in Scotland who receive the living wage. We are doing that not just because it is right that those companies should pay the living wage but because it helps the economy in general. People have more disposable income if they are paid the living wage as they do not have to spend all their income to survive.

Neil Findlay (Lothian) (Lab)

One way in which we can advance the living wage is by becoming living wage employers ourselves, and I commend the cabinet secretary for doing so. However, could he assist Mr Macpherson, who asked the question, and encourage him to become a living wage employer?

Keith Brown

I am sure that Neil Findlay can be encouraging in that regard as well. It is down to all of us who want to increase the number of people employed on the living wage to encourage others. I do not know the individual circumstances, but it is perfectly possible that all the employees of MSPs are paid the living wage although not all MSPs are accredited as living wage employers. Of course, like Neil Findlay, I encourage as many people as possible to pay the living wage and to go further and get accredited for doing so.

I am not going to let Mr Macpherson back in, although he wants to speak again.

Fair Work Framework

To ask the Scottish Government how the fair work framework fits into the recently published labour market strategy. (S5O-00103)

The Minister for Employability and Training (Jamie Hepburn)

The Scottish Government shares the vision that the fair work convention set out in its framework. Through the labour market strategy, we have been clear in our endorsement of the framework and we have set out our commitment to continue to work with the convention to build on the principles that it has established. Fair work is central to our ambitions and we believe that a strong labour market that is built on fairness will drive inclusive sustainable economic growth. To achieve that, it is essential that we continue to support the convention in promoting the framework and engaging employers in discussions on how we can work together to champion fairer and better workplaces.

Elaine Smith

I am sure that the minister is aware that Scotland now has the worst gender pay gap in the United Kingdom. Given that the fair work convention was in part set up to tackle such issues, what will the Scottish Government do to ensure that employers close the gap, implement the framework and end what has been called a penalty on motherhood here in Scotland?

Jamie Hepburn

That is a reasonable question. We have seen improvements in the gender pay gap in Scotland, although I readily concede that they have not gone far enough. Through the labour market strategy, we are committing £0.5 million to support the convention in taking forward its work. I recognise that there is more that we can do through other commitments in the labour market strategy. One is to take forward a women returners project, which can help in that regard. It is incumbent on us to work as an Administration, through our agencies and with employers to reach out and ensure that we do better in that regard.

Apprenticeship Levy (Guidance)

4. Lewis Macdonald (North East Scotland) (Lab)

To ask the Scottish Government when it plans to publish guidance on the implementation of the apprenticeship levy. (S5O-00104)

The Minister for Employability and Training (Jamie Hepburn)

Since the announcement of the apprenticeship levy by the United Kingdom Government, the Scottish Government has been working with employers to develop a response that will support skills development and drive economic growth. Over the summer, we consulted employers and other interested parties to consider the impact of the levy and to explore opportunities for continuing to expand and enhance our successful modern apprenticeship programme in Scotland. The consultation closed on 26 August and we will bring forward plans as soon as possible based on that.

Lewis Macdonald

I am sure that, if the minister has read responses such as those from OPITO, which is the oil and gas skills body, and the Aberdeen and Grampian Chamber of Commerce, he will know that they believe that the apprenticeship levy should be fully committed to training and skills and that they are urgently looking for assurance to that effect. Does the minister accept that many employers have already started to plan their training programmes for the next financial year but cannot do that efficiently and effectively until they know what money will come back into their business from the apprenticeship levy?

Jamie Hepburn

I certainly accept that the levy has been an issue for business and employers. I hope that Mr Macdonald recognises that the implementation of the levy has not been in our hands but has been taken forward by the UK Government. We still seek clarity on the funding that we will secure as a result of the levy, as that has not yet been forthcoming from the UK Government. We have engaged in the consultation process. Mr Macdonald makes the fair point that employers are trying to make plans and are looking for a degree of reassurance. My clear commitment is to work on the basis of the consultation that we have undertaken and implement its findings as quickly as possible.

Tavish Scott (Shetland Islands) (LD)

I agree with Lewis Macdonald and ask the minister to reflect on the evidence that was given to the Education and Skills Committee this morning, in which Standard Life among others made clear that it believes that the principle should be that the apprenticeship levy moneys come back to Scotland and go back into schools and training. Does the minister agree with that principle and will he ensure that that happens?

Jamie Hepburn

I spent my summer engaging with a range of organisations, including private sector employers, local government and others, on how we respond to the introduction of the levy by the UK Government. I reiterate that we do not have final clarity on the funding that we will receive, that we have undertaken a consultation and that it is incumbent on me to drive forward the analysis of that consultation and put in place a framework arising from it.


5. Richard Lyle (Uddingston and Bellshill) (SNP)

To ask the Scottish Government what action it and its agencies are taking to promote Eurocentral at Newhouse as a place for business and innovation. (S5O-00105)

The Minister for Business, Innovation and Energy (Paul Wheelhouse)

We are committed to promoting Scotland as an attractive place for business and innovation. For example, our £500 million investment in the M8, M73 and M74 motorway improvement project will bring safer roads, less congestion and a better quality of life for road users. Such improvements will help promote sustainable economic growth by improving access to facilities and employment areas, such as at Eurocentral at Newhouse, for communities and businesses in central Scotland and beyond.

Richard Lyle

I note with interest that the Eurocentral site is at nearly 80 per cent capacity for occupation by business. What further action can the Scottish Government undertake to ensure continued economic growth in that part of my constituency?

Paul Wheelhouse

We certainly welcome the news of that success and want to support continued sustainable economic growth in the area. Businesses in the area continue to benefit from the support of Scottish Enterprise and regional selective assistance grants worth £1 million this financial year. Through our regeneration capital grant fund we are investing in enterprise work spaces at Newhouse, and on 1 April we designated BioCity Scotland as the sixth site of the life sciences enterprise area. We believe that that could boost employment by another 120 jobs by 2020, as the location develops as a more significant centre for life sciences.

Commission for Developing Scotland’s Young Workforce (Recommendations)

6. Tavish Scott (Shetland Islands) (LD)

To ask the Scottish Government what progress it is making in implementing the recommendations in the commission for developing Scotland’s young workforce final report. (S5O-00106)

The Minister for Employability and Training (Jamie Hepburn)

In taking forward the developing the young workforce agenda, we are growing vocational provision for young people in the senior phase, including a significant expansion of modern and foundation apprenticeships. In addition, we have established 16 regional DYW employer groups across the country; we have created new national standards for work placements and careers education; we have invested in the earlier introduction of careers advice; we have seen more 300 businesses take up the new investors in young people accolade; and we have refocused activity across our youth employment and apprenticeship programmes on young people who need the most support.

Tavish Scott

I agree with the minister’s drive on the matter, but he will be aware that the budget for 2015-16 and for subsequent years has been—as people say—mainstreamed into other budgets. In other words, there is no specific budget for this year, as there was for the first couple of years. The minister has clear, demanding targets to expand activity in the remaining years of the programme. How will he meet them? Is he aware of the recent City and Guilds skills report, which shows that a lot of young people in Scotland are not aware of the available career paths, and does he agree that that is exactly the kind of issue that Sir Ian Wood’s report raised and which needs to be addressed?

Jamie Hepburn

I agree absolutely on the latter point. By driving forward this entire agenda, we are trying to achieve a culture shift in the education sector that allows for greater engagement, in an appropriate fashion, so that industry can be involved in opening up horizons for young people. From the evidence that I have seen, that work is on-going. It is beginning to bear fruit, which is why it is important that we mainstream it and make it a core part of the purpose of our school environment. That work continues and will continue to bear fruit.

Orkney (Energy Storage and Transformation)

7. Maree Todd (Highlands and Islands) (SNP)

To ask the Scottish Government what it is doing to support the establishment of Orkney as a centre for excellence or living laboratory in relation to energy storage and transformation. (S5O-00107)

The Minister for Business, Innovation and Energy (Paul Wheelhouse)

The Scottish Government welcomes and supports the wide range of activity that is under way to harness Orkney’s renewable energy resources and to help overcome some of the impact of grid constraints in advance of seeing a vital investment in connecting the islands to the grid.

A great example of our support is the surf ‘n’ turf project, which is being assisted by £1.175 million in funding under our local energy challenge fund. The project will produce hydrogen from onshore wind and marine energy from generation on the island of Eday. It will be stored, transported and converted back into electricity for use in buildings and berthed ferries at Kirkwall harbour.

As with the many other projects that we are supporting in Orkney, surf ‘n’ turf involves work with a range of partners and a significant level of local expertise, including the European Marine Energy Centre—EMEC—and Community Energy Scotland. The project has been the catalyst for further investment of €5 million in Orkney by the European Commission, in support of the building innovative green hydrogen systems in an isolated territory—BIG HIT—project.

In February 2014, the Scottish Government provided a £3 million grant to EMEC to address grid constraints at its tidal site. The investment enabled EMEC to carry out initial scoping work and purchase an electrolyser to convert power generated at the tidal site to hydrogen fuel.

Maree Todd

Scotland’s wave and tidal energy resource is almost unparalleled. It represents a quarter of Europe’s tidal stream and 10 per cent of its wave energy potential. A large part of Scotland’s wave and tidal energy is available in the northern and western isles and along the west coast, which are areas that present considerable challenges when it comes to feeding energy back into the main grid.

Programmes such as local energy Scotland enable communities that produce a large amount of renewable energy to use that energy locally. What progress has the Scottish Government made in helping communities to make the most of their renewable energy capabilities?

I must ask for a slightly briefer response, minister.

Paul Wheelhouse

I will try to be brief, Presiding Officer.

We are pleased with progress on community energy rollout. We achieved 508MW of community and locally owned renewable energy capacity by 2015, achieving our target five years early, and we are delighted by that.

Maree Todd is right to highlight some of the key constraints, including the grid. I was pleased to meet her and renewables operators in Orkney last week, where we heard clearly about the importance of investment in connecting the islands to the mainland, to enable local projects, such as those that are being delivered by communities in Orkney, to access the market and maximise the economic opportunity for the islands.