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The next item of business is a debate on motion S7M-00290, in the name of Stephen Flynn, on growing Scotland’s economy. I call Stephen Flynn to speak to and move the motion.
15:51
When I made the decision to stand for election to this Parliament, I did so because I believe that our nation’s future is full of potential and that it is our job to ensure that that potential is not just spoken about in homes, parks and pubs across Scotland but is delivered by those of us fortunate enough to serve in this Parliament. That means having good jobs with good wages, having stronger businesses with the opportunity to grow, and ensuring that the generations that follow our own enjoy better living standards than we do.
Growing Scotland’s economy is the key to unlocking that opportunity and delivering that potential. Many of my generation on these isles and of the generations that have followed since—it feels as if there have been a fair few—have neither seen nor felt an economy that works.
Will the member accept an intervention?
They are the generations that entered the world of work during a global financial crisis and lived through the austerity years of Cameron and Clegg that followed. It is probably apt that, at that point, I give way to Rachael Hamilton.
I remind the member of the convention that interventions are not taken during a first speech and that this is Mr Flynn’s first speech.
I apologise, but I am grateful to Stephen Flynn for taking the intervention. Does Mr Flynn agree with the Institute of Chartered Accountants in Scotland, which has basically said that we cannot tax our way to growth?
There is an irony in Rachael Hamilton intervening when I was making a point about austerity when we consider the damage that was done by her party to the United Kingdom’s economy, to Scotland’s economy and to Scottish families, and in her choosing to blame others when she could have taken responsibility for the decisions of the Conservative Government.
We have had not only the austerity years of Cameron and Clegg; we are also the generation who watched hopelessly as Farage and Johnson dragged us from the European Union, who remained rooted to our homes during the pandemic and who grew angry as Vladimir Putin brought terror back to Europe and Liz Truss brought insanity to number 10.
Will Mr Flynn take another intervention?
I am sure that Mr Hoy is away to apologise for Liz Truss.
I thank our newbie for giving way during his maiden speech. Will he now take the opportunity to apologise to the tens of thousands of oil and gas workers in the north-east who have lost their jobs as a direct result of this Government’s failure to support our oil and gas sector?
Mr Hoy, I remind you that you must treat all members with courtesy at all times.
I gave Mr Hoy the opportunity to apologise for Liz Truss, but I notice that he chose not to do so, which is something that I have no doubt will sit heavily on the minds of voters across Scotland in the coming weeks. How dare a member of the Conservative Party—the party responsible for the energy profits levy and for the failed environmental risk assessment that blocked the Rosebank project from being taken forward—come to this chamber and blame anyone else for that party’s actions? The reality is that Scotland’s oil and gas industry has contributed nearly £400 billion to his UK Treasury, and people have lost their jobs despite that. That is on him and his party, and nobody else’s.
The people in the generation I have spoken of have been buffeted by events and they have been promised change from Westminster throughout their adult lives, but they have never seen it delivered. Let me be clear that, for as long as the great levers of any state that control trade, migration, energy, tax and employment law are held by others far removed from Scotland’s reach, we will always be held back from being able to deliver the full potential that a growing economy can deliver and that our nation deserves.
That becomes ever more frustrating when we consider just how strong our foundations are. Let us be in no doubt that Scotland starts from a position of strength. Our nation is awash with investment and innovation, from the SaxaVord spaceport sat atop the very tip of the Shetland isles in Unst to the Center Parcs development down south by Hawick, and from the world-leading subsea oil and gas and renewables engineering of Aberdeen in the east to the glory of Scotland’s malts in the Western Isles. Across Edinburgh and Glasgow lie financial institutions that are the envy of many, and that is before we spread our view out across our land in celebration of our food, farming and fishing. Indeed, all of us in the chamber—although perhaps not Mr Hoy—could rightly celebrate success stories from each of our constituencies time and time again. We all know them: the local businesses with the global connections and the global brands.
The task now is to use the powers that we have to build on those underlying strengths and channel them into growth that the Scottish public can feel. The next phase of this Government’s delivery must be about pace, outcomes and reforms. As I have said, Scotland does not lack assets or ambitions, but we know that progress is all too often slowed by the complexity of the state and fragmented support systems that act as a barrier. Our job now is to cut through that complexity, accelerate delivery and align the Government, public bodies and partners behind the shared goal of higher sustainable growth that is felt in people’s day-to-day lives.
First, we must continue to unlock investment. We all know that Scotland continues to have the highest levels of foreign direct investment outside London. We all know that Scotland is a high-confidence, stable and attractive environment for many investors. We all know that it was the Scottish Government that put those conditions in place. However, we can, and we must, go further to make Scotland the best place in the United Kingdom to do business, and to create an environment where we can make it easier to turn investor interest into real projects and real jobs. Our major projects office will help to make that vision a reality.
Secondly, we must boost productivity. If we are serious about attracting investment, about being the best place on these isles to do business and about competing internationally, we must continue to invest in making sure that the workforce of today is ready for the work of tomorrow, and skills are key to boosting productivity. That means working with our schools, colleges, universities, research institutions and businesses to ensure that our young people, those who are out of work and, indeed, those who are looking for a change know exactly what skills they need to get on in life, and where best to get them.
However, skills are only part of the story, because they are worth having only if there is somewhere to use them—
Will the cabinet secretary take an intervention?
—and that is why, thirdly, we will back the industries of the future.
Talking about the future, I will give way to Willie Rennie.
He is a charmer, is he not?
On the point about skills and the workforce, what is the cabinet secretary’s answer to the high levels of economic inactivity in the workforce aged 16 to 64? I have not heard anything yet that gives me confidence that the Government is on top of that issue.
The point that Mr Rennie rightly makes is incredibly important, and it is no surprise that he chose to make it. I tried to reference in my remarks the importance of working across institutions and with business to bring people together to make sure that, from the youngest to the oldest, people have the skills that they require to get back into the workplace. I do not think that anyone could put their hand up and say that there is an easy answer in that regard, but we are—and we will be—willing to engage across the chamber and across civic society and business in Scotland to ensure that that happens. I am looking forward to working with Willie Rennie in that regard.
I return to the industries of the future. Our vision must go beyond simply adopting new technologies to, instead, helping to create and commercialise them. Areas such as life sciences, digital and artificial intelligence, critical technologies such as quantum and photonics, advanced manufacturing and—of course—the energy transition offer major opportunities for high-productivity and high-value jobs.
We must be able to build on our existing strengths in energy, engineering and innovation while opening up new opportunities in sectors such as hydrogen, carbon capture and storage, and offshore wind. That is how growth is felt across generations; it is not just announced from a podium. We must wrap an arm around the supply chains in those sectors, to ensure that they grow, innovate, export and stay anchored right here, in Scotland, for Scotland. Our high growth unit will help to make that scale-up possible. It will sit directly adjacent to the office of the First Minister, so there will be nowhere to hide.
Fourthly, we will continue to expand Scotland’s global reach. Given that we are a small, open economy, our long-term growth depends on selling more goods and services to the world and harnessing our export potential. That outward-looking tradition runs deep, and there is a golden opportunity in the coming weeks to harness the export potential of our biggest single-nation export market, as Scotland heads to America for the world cup. We all know that success abroad will help to bring success at home, and our task is to help more Scottish firms succeed in such global markets.
Fifthly—I am sure that there will be agreement across the parties on this—we must reform the system so that it supports growth rather than holding it back. When done well, the planning system is an effective tool in delivering economic growth, but businesses and investors need a system that is quicker and gives more certainty; regulation that is more predictable and less complicated; and support that is less fragmented. Certainty breeds confidence, but risk and delay do the opposite. Reform matters because delivery matters and because growth will be felt only if Government acts with urgency, clarity and purpose.
The cabinet secretary has made a good point about speeding up the planning system; however, we have been talking about that for years. Does he have any specific proposals for achieving it?
If Graham Simpson has been talking about it for years in the chamber but not been able to deliver it, that may be a reflection on his abilities. However, I am new here, and I give him the commitment that we can—and, indeed, will—do so. In short, we want the planning system to act as an enabler rather than a barrier.
I am conscious that, to anyone who lives near Mossmorran or Grangemouth, or in my home city of Aberdeen, all of this may feel a mile away from their lived reality, in which deindustrialisation is leaving them without hope for the future or the certainty that they crave for their family. They want to hear that their jobs of today can be protected so that they can have access to the jobs of tomorrow. I want them to know that we hear them and will do our part to deliver the opportunities for a future that they and their communities deserve.
None of that will be easy. We can shout about the energy profits levy that is choking investment and creating a cliff edge for jobs. We can yell that energy security matters, and that jet fuel from Grangemouth would have been better than jet fuel from outside Scotland. However, to be successful, we need Westminster to listen. Although it may well try to ignore this Parliament, we will not let it do so, because the issue matters so much to those residents and to Scotland’s future.
When I was elected to this Parliament, I could barely hide my delight—so much so that I could not even get my words out when I was sworn in. The reason why I was so happy was because I believe that this Parliament can deliver on Scotland’s potential. To be a part of that story should be a special thing for us all, delivering a productive, dynamic, prosperous Scotland, where growth is a real thing that changes people’s lives through the jobs that they can get, the homes that they can afford, the businesses that they can build and the confidence that they can have in their future. That is not just my mission; it should be this Parliament’s mission.
I move,
That the Parliament recognises that higher economic growth is essential to delivering long-term prosperity, tackling child poverty, improving public services and achieving climate ambitions; agrees that supporting enterprise, investment, innovation and trade is key to maximising productivity and increasing sustainable and inclusive economic growth; supports action to remove unnecessary barriers to success; acknowledges Scotland’s economic potential, including its key strengths in sectors such as energy, food and drink, financial services, and space, and endorses a continued focus on economic growth to build a more resilient, prosperous, and fairer Scotland for all.
16:05
I am not sure whether I have had the chance before to welcome you to your place, Deputy Presiding Officer, but I do so now. I also welcome the cabinet secretary to his place. For a first speech, I thought that he did very well.
I agree with Mr Flynn on the fundamental points of his premise. I believe that economic growth is important, because it is about the potential of this country, and that potential is measured in wages and jobs. We must all be focused on that, but it is complicated. I welcome that the cabinet secretary has added transport to his portfolio, because in previous parliamentary sessions, the economy has had a name check in the brief, but it has not necessarily had connections to the parts of policy that can directly impact economic growth.
In a sense, I do not envy the cabinet secretary his task, because it is complicated. It is a big portfolio, and he has a task ahead of him. It reminds me that I was once told by a former boss that, given the complexity of his job, he was not there to be liked but to be effective. I say to the cabinet secretary that he is halfway there already.
If we are to confront this issue, we need a bit of frankness and candour as we look at the opportunities that are in front of us. First, I say to the Government that it needs to confront some of the economic context. Time after time, the Scottish Fiscal Commission has made the point that there is a £785 million fiscal performance gap, which it defines as Scotland’s wages growing more slowly than those in the rest of the United Kingdom. Let us put that in context. That £785 million could fund Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise, the Scottish National Investment Bank and Skills Development Scotland combined. We need to address and confront that gap.
We must also acknowledge Scotland’s relative economic performance. It is a fact that, between 2014 and 2024, Scotland’s economy grew by 8.4 per cent, compared with 14.3 per cent across the UK. Let us be clear—we need to be candid on all fronts—that that correlates with a significant decline in oil and gas extraction from the North Sea. Ultimately, we need to recognise the scale of the oil and gas sector and the fact that it is a declining sector, whether we like it or not, because of geology, and we must focus on how we replace those jobs. They are high-paid jobs that pay well above the median wage, and we have a challenge to replace them, regardless of our views on climate change. That is the reality of the North Sea.
I am listening carefully to the member’s point. He will presumably acknowledge that the Labour Government’s ban on new exploration and production will not help the oil and gas industry one bit.
The member completely fails to acknowledge the bodged process that the previous UK Government put in place, which is why those licences ended up in the Supreme Court in the first place. If I am coming to the chamber with candour and honesty, I would ask that the member does the same.
We need to focus on three core things. The first is the economics of place; the second is around people and skills; and the third is partnership.
[Made a request to intervene.]
I apologise, Mr Hoy; I would like to make a little bit of progress.
For all three things, we have the powers here, but we fail to focus on them. On place, if we examine the figures, we see that there are parts of the United Kingdom where gross domestic product per head is growing far faster than it is in Scotland. Greater Manchester has had a GDP-per-head growth of 15.4 per cent in recent years, and in West Yorkshire it is 7.5 per cent, whereas Scotland’s GDP-per-head growth in a similar period has been 4.3 per cent. We need to look at the Government’s pledges to put regional economic partnerships on a statutory footing, but we must consider what they will do and how they will work. What power from this place will we push out so that they can deliver in partnership with industry?
The cabinet secretary was right to point to the importance of people and skills, but the reality is that the number of modern apprenticeship starts is falling and we have barely got going on upskilling and reskilling. Yet we have to wait for the organisational reform of SDS into the Scottish Funding Council. I worry that we will not have the scope or capacity to implement the changes that we need in terms of upskilling and reskilling, let alone deal with the increasing difficulties that young people face in getting into the workforce at all.
On partnership, we need a much greater focus on the issue of the time and uncertainty that the Government introduces into investment pipelines—I accept that the cabinet secretary referenced that. Let us take renewables: it takes seven to 10 years from start to finish to get projects through the planning and consenting regime, in comparison with Norway, where similar projects take three to four years to go through that process. We need a comprehensive mapping exercise from the Government, understanding where it has touch points and where it increases time and uncertainty. More importantly—I say this to people from all political parties—I think that there is an overwhelming tendency for politicians to assume that everyone in business is driven only by the profit motive. Actually, the profit motive is vital for business. Yes, we need to be cautious about profiteering but the fact is that we need to work in partnership and understand how businesses can generate a return, because that is what economic growth ultimately requires.
My time is up, but I will say that this is perhaps a hopeful start. We need a renewed discussion around the economy, one based around decentralisation, people and partnership.
I move amendment S7M-00290.3, to insert at end:
“; notes that the Scottish Fiscal Commission has projected Scotland's ‘Tax base performance gap’ for 2026-27 to be £785 million while data shows that GDP increased by 8.4% between Q2 2014 and Q2 2024 for Scotland compared to 14.3% across the UK as a whole, and believes that understanding and addressing these gaps is imperative in order to grow jobs, wages and opportunities, as well as maximising revenue for funding public services in Scotland.”
16:11
I extend my congratulations to Stephen Flynn on his new role as cabinet secretary. I very much welcome the debate on growing Scotland’s economy, because I believe that a genuine focus on growth has been desperately missing from this Parliament, and certainly from Scottish National Party Administrations, for a long time. I hope that Mr Flynn brings a fresh approach. I was encouraged by some of his words, so I am thankful for that.
This Parliament should be united on one fundamental truth, and that is that higher economic growth is essential. It is essential if we are serious about delivering long-term prosperity for everyone, serious about driving jobs and opportunity for everyone, and serious about improving our public services for everyone, yet the reality is that Scotland today faces stagnant growth, causing stagnant wages and resulting in far too few opportunities for people—especially young people.
Too many people feel that the economy is simply not working for them and that they do not have a future. Partly as a result, we now have unsustainable numbers of people who are out of work and relying on benefits. Scotland, with a working-age population of around 3.6 million, has only 2.6 million people in work. After allowing for students, carers, retirees and those who cannot work, we are still left with about half a million people who are effectively locked out of opportunity and prosperity.
Will the member take an intervention?
I will move on with my arguments first, thank you.
That is a national failure and one that must be addressed by growth and coupled with reform of the benefits system.
Another of the core reasons for the underperformance is that Scotland has become the highest-taxed part of the UK. Whether it is income tax, property taxes or other costs such as minimum unit pricing for alcohol, the cumulative burden is clear. Our taxes are too high and the system is too complex. It is riddled with cliff edges that discourage people from taking on extra work or progressing in their careers. It makes Scotland less competitive and less attractive, particularly when we try to recruit skilled professionals from the rest of the UK. Nowhere is that clearer than in our national health service, where doctors and consultants are increasingly reluctant to take on additional shifts or even to relocate here.
The reality is simple. The most expensive purchase that any person makes in their life is not their home, their car or their holiday—it is their Government. Unlike any other purchase, they have no choice but to pay for it. Indeed, last week, we heard, thanks to the—
Will the member take an intervention on that point?
Yes, I will.
Surely, to use the member’s metaphor that the biggest purchase that an individual will make will be their Government, we could say that, every five years, we get a chance to make that choice in an election. The SNP has just won an overwhelming victory in the election, so the member is talking complete and utter nonsense, is he not?
I am not sure that it was overwhelming, and I am not sure that it was a vote on the tax system of Scotland.
Anyway, we heard last week, thanks to the Mandelson files, that the Labour Government mainly sits around asking, “Who can we tax in order to pay benefits to others?” If anything, this place seems to embrace that approach, but on steroids. Even any thoughts of controlling the benefits bill are totally forbidden—
Will the member take an intervention on that specific point?
Sure.
Independent analysts have shown that the Scottish child payment is resulting in people choosing not to take on extra shifts, giving up work entirely or turning down pay rises. Would the member, therefore, join me in imposing a two-child benefit on the Scottish child payment?
I will not be drawn on specific policies, but the whole benefit system obviously needs reviewed, and that is going to be a key point for the Government.
Another reason for the lack of growth is the high cost of our energy. Despite some of the rhetoric that we have heard about our energy system, we currently have a struggling system that delivers through an ever-more fragile grid and is dependent on huge subsidies from the UK Government. It is driving some of the highest energy costs in the world, especially industrial energy prices, which are hurting consumers and businesses across the board.
Most obviously, we are deindustrialising at a rapid rate. I was encouraged by the fact that we have heard Grangemouth refinery and Mossmorran mentioned. The Alexander Dennis bus factory in Falkirk has also closed down, because we have made most energy-intensive businesses simply unviable in Scotland. Those problems are caused not by gas price spikes but by net zero policies, in particular very expensive subsidised intermittent renewables. Renewables are a welcome part of the mix, but the more accurate Office for National Statistics figures show that we are simply not getting the jobs to replace the industries that are being shut down.
We have talked about North Sea oil and gas, which is one of our great industries that has driven so much engineering excellence. It is being crushed by deliberate policy choices, whether it be the Scottish National Party’s presumption against oil and gas; the Scottish Government’s continuing refusal to unambiguously back new projects or new drilling; or the energy price levy, which was introduced by the Tories, increased by Labour and supported by virtually every party in the chamber, apart from Reform.
Would the member confirm that, while he was a member of, and got his start in politics with, the Conservative party, he unequivocally backed Conservative party policy?
I did not, and that is, of course, one of the main reasons that I left.
Let us move on to another area: let us talk about Europe. In this place, it seems to be a matter of faith that a failing, declining European Union is somehow a great place to be. I highlight that, over the period since Brexit, Britain has had higher gross domestic product—
Will the member take an intervention?
Not just yet—I will expand my argument.
Oh, please do.
I highlight that, over the period since Brexit, Britain has had higher GDP growth than all the other major EU economies—admittedly, it is well behind the fast-growing economies of the world such as America and countries across Asia.
The well-known meme goes like this: the US innovates, China replicates and the EU regulates. That is now very unfair on China, which, one could say, is now innovating the entire world, but it is perfectly fair on the EU, which is now a sick man blocking innovation across the board in areas such as AI and is—with the exception of nuclear France—energy and resource poor and has an ageing population and limited military capability. The EU now makes up only 13 per cent of global GDP and, like the Titanic, it is going down towards irrelevance. The tragedy is that many people in the chamber want to get back on.
[Made a request to intervene.]
I will take the intervention.
Mr Massey, I am afraid that you are in your closing few seconds.
I will close here. I agree that Scotland has enormous potential. We are blessed with many business sectors that are generally world class and have great potential to move on. However, we are not realising that potential. Scotland needs to once again be one of the best places in the world to do business, for people to invest and for people to come and work.
First, we must fix our tax system—we need to be competitive again. That means getting rid of the six bands and moving back to three, removing the punitive cliff edges and aligning rates to at least the level in the UK. Secondly, we need a pragmatic energy policy that is focused on delivering cheap, abundant and reliable energy. Thirdly, we need to maximise our oil and gas resources in the short and medium term while planning for a transition that includes nuclear power, with renewables playing a complementary, not dominant, role.
We must also ensure that our benefits system—
You need to conclude.
I will conclude. We must reform our benefits system to ensure that work always pays and that opportunity is always there for everyone.
We must be a Scotland where young people have opportunities—
I am sorry, Mr Massey. You need to wind up.
This is the last sentence.
I am afraid that you have already had two last sentences. I gave you extra time because you took the interventions. I am sorry, but we will move on.
I move amendment S7M-00290.2, to leave out from “, improving” to end and insert:
“and improving public services; agrees that lowering the tax burden and bureaucracy are essential to support enterprise, investment, innovation and trade, in order to kickstart the economy, which has stalled due to the high tax regime implemented by the SNP administration; supports action to remove unnecessary barriers to success; acknowledges Scotland’s economic potential, including its key strengths in sectors such as energy, food and drink, financial services, and space, and endorses a continued focus on economic growth as the best way to create a prosperous Scotland where there is hope for a better future, people can thrive and hard work is fairly rewarded.”
Members, we are now running quite a bit behind time. I call Patrick Harvie, to be followed by Rachael Hamilton. Mr Harvie, you have up to six minutes.
16:21
I congratulate Stephen Flynn on his appointment. This will be his first opportunity to hear my traditional rant about the ideology of economic growth. Other members have been listening to that rant from me for decades, but this is his first chance to hear it—I am sure that he has been looking forward to it.
Greens are far from alone in criticising the myopic approach to measuring GDP. We recognise that some economic activity is good for our health and our environment, generates wealth that is fairly shared and rewards workers with secure jobs, rights and protections in the workplace and high levels of local ownership. There is also economic activity that undermines our health, degrades our environment and exploits the workforce while enriching remote corporate interests.
We criticise the focus on growth as a simplistic measurement. It measures everything that is good and bad for people and pretends that it is all of equal value—it is a simplistic metric. It is wrong to focus on that alone, and it is the wrong target for a Government that cares about people’s wellbeing.
The Scottish Government and the SNP have certainly never fully shared the Green critique of growth, but they began to move in the right direction. The national performance framework recognises wider economic indicators, even if it keeps GDP on a pedestal. As First Minister, Nicola Sturgeon placed a strong emphasis on the concept of a wellbeing economy, working with, for example, Iceland and New Zealand to create the wellbeing economy Governments group. In her TED talk in 2019, she said that the time for GDP to be seen as the only measure of a country’s success was over.
As recently as January 2024, the Scottish Government backed a motion in the Parliament that set out the aim of
“a fair, green wellbeing economy in Scotland”.
The SNP’s position was never an outright rejection of growth. Indeed, even the Green position is often misrepresented. As our amendment makes clear, there are certainly areas where our economic activity should increase. However, we argue that an increase for its own sake, that takes place regardless of who benefits or bears the social and environmental cost, is the wrong goal to pursue.
Therefore, although there were always differences between the Green and SNP positions, the motion that we are debating today looks like a complete reversal of the Scottish Government’s previous direction of travel. It reads as a repudiation of the Government’s previous work on the concept of a wellbeing economy, which would be a regressive change compared to the previous decade. Stephen Flynn’s speech did not give so much as a nod to the previous progressive track record.
I will try to seek consensus. Surely a view of growth that is grounded in jobs, wages and opportunity would be a compromise between the position that the member is articulating and those taken by members in other parts of the chamber.
There are better ways to think about that, which I will come back to later. However, the record in Europe, across decades, is that long-term economic growth has benefited the 1 per cent vastly more than the large majority of the population.
There will be those who say that all growth is good growth and that it simply does not matter that a tiny number of people become immensely wealthy while others are hungry and homeless or if growth comes from depletion of finite resources. For example, the cabinet secretary’s remarks today seem to suggest that he no longer even supports environmental impact assessments and that Rosebank should have been approved without them.
Some people might think that growth is desirable even if it continues the destruction of our ecosystem, but the world is already finding out just how self-defeating that argument is. The UK’s national security assessment on global biodiversity loss and ecosystem collapse shows the scale of the crisis that has been brought about by the current economic model, and it illustrates that the economy is wholly dependent on a healthy environment and a fairly functioning society, with up to 12 per cent of GDP at risk as a result of ecosystem collapse by 2030—that is just a few years away.
A reckoning is needed with the profound failure of the old economic model, which has left us with a legacy of poverty and inequality, hollowed-out public services, public infrastructure in private hands, and a climate and nature crisis. A reckoning is also needed with the political model that enabled that system and has, for decades, handed away power that should be democratically accountable to corporations and markets. Dare I say it: it is time to take back control.
New thinking is emerging. The “Global Justice Report” that the Green amendment mentions makes the case that a global transformation that reconciles planetary habitability and high standards of wellbeing for all people is possible. However, that depends on rapid decarbonisation, a shift away from overconsumption towards efficiency and a dramatic reduction in inequality. That would certainly be bad for the billionaire class, but it would be a path to shared prosperity for the majority of the world’s population that is better than they have access to today.
We need a Government with that willingness to confront the failures of the current dominant, failed economic system and with the vision and ambition to bring new thinking to the challenge. This country has huge potential to meet the needs of all our people without trashing our life support system, and to contribute to the wellbeing of others around the world without allowing a tiny number to hoard the wealth that we all generate together.
There will be things that we need to grow: clean energy, nature restoration and efficient resource use, as well as the social capacity that improves everyone’s lives, from health and care to education and culture.
Growth in the areas that improve our lives, help people to help one another and protect the world that we all depend on is healthy growth. However, growth for the sake of growth is the ideology of the cancer cell.
I urge the Government to rediscover that understanding, which, for a few years, it was beginning to embrace. I move amendment S7M-00290.4, to leave out from “is essential” to end and insert:
“does not necessarily deliver prosperity, tackle child poverty, improve public services or achieve climate ambitions, and that only government action can ensure that economic activity helps to achieve these objectives rather than undermining them; believes that growth is needed in areas such as clean energy, housing, nature restoration, as well as social provision, including health, education and care, and that public, community and worker ownership should play an increased role; welcomes the recent publication of the Global Justice Report by the World Inequality Lab, which, it considers, is an important contribution to the debate about how high standards of living for all people can be compatible with decarbonisation and sustainability; urges the Scottish Government to ensure that its economic strategy shows similar ambition in combining these vital objectives, and rejects the failed idea that GDP growth inevitably builds a fair or sustainable economy.”
16:28
Our amendment has a laser focus on Scotland’s economic potential. I welcome Stephen Flynn to his role and congratulate him on his first speech.
I appreciate that this may sound obvious, but after nearly two decades of SNP Government, it is worth restating the basics. Prosperity means improved services, such as building new schools and saving swimming pools—the obvious things that all of us are talking about in our constituencies. It means ensuring that we improve people’s life chances. It means job creation.
However, under the SNP, the economic landscape looks perilous. Scotland’s economic growth has lagged behind that of the rest of the UK by £12 billion since the SNP took power. Its failure to grow the economy means that, despite Scots being the highest taxed of those in all parts of the UK, only half of that tax gets to public services.
We need sound fiscal management, but how can we accept that the party of John Swinney, Peter Murrell and Colin Beattie is fiscally responsible? The SNP has left this country with a deficit—a black hole—that will reach £5 billion by the end of the decade, and spending is growing faster than revenue. As I said, that leaves less money for infrastructure projects such as dualling the A9, for essential housing and energy projects and for supporting jobs and investment. It is fantasy economics. It is a dangerous game to be playing with Scotland’s future.
Instead of fixing those problems, the SNP is obsessed with another dangerous game. The very first vote of this session of Parliament was a symbolic vote on the constitution, which clearly sends the wrong message to businesses. Sir Tom Hunter warned that that vote will have people asking themselves whether they should invest in Scotland if there is something going on that makes it politically unstable. That is the wrong message to send to businesses. There are business representatives in the gallery today, and they want Scotland to succeed. For the SNP, economic growth has always played second fiddle to breaking up the United Kingdom.
Now to Mr Flynn: at Westminster, as a backbencher, he could shout from the sidelines and show off his leadership potential, but he could of course dodge any blame for SNP policies. Now he has a responsibility to deliver for business, and there is no hiding; the business sector is watching. In a recent interview, he criticised the fact that Scotland is the highest-taxed part of the UK, despite it being his own Government’s policy.
The business community says that there is no direction of travel for Scotland’s long-term growth. The previous Finance and Public Administration Committee concluded that economic strategies have not delivered the scale of growth that was promised, and Audit Scotland has said that it is concerned about the SNP’s unclear and weak delivery mechanisms.
Unlike the SNP motion, my party’s amendment highlights Scotland’s key sectors, such as oil and gas, energy, food and drink, financial services and space. Nowhere is security more at stake than in our oil and gas sector, and in Aberdeen—the city that built it. When I spoke to voters in Aberdeen South, I heard at first hand about the pain and turmoil caused by the SNP’s presumption against oil and gas. Livelihoods are being lost—1,000 jobs are being lost per month. That is shocking.
That is not serious economic policy. It is the exporting of Scottish jobs, prosperity and growth for political posturing.
Will Rachael Hamilton accept that the energy profits levy introduced by the Conservative UK Government is costing 1,000 jobs a month across the sector? What is her explanation for that?
That was an interesting intervention from Jack Middleton. I wonder whether he supports the introduction of licences for Jackdaw and Rosebank. We are coming on to Jack Middleton, so he can listen up on non-domestic rates. Get your intervention ready, Mr Middleton.
Now that Stephen Flynn has landed at Holyrood, he must find it pretty shameful that his own party disagrees with him and is refusing to remove its presumption against oil and gas to protect those jobs in the north-east. Any party that claims to support economic growth must support our oil and gas sector in Aberdeen.
My other concern is that 80 per cent of Scots think that income tax should be the same or lower than the rest of the UK. It is one of the top concerns of business owners in Scotland. The Scottish Chambers of Commerce, the Confederation of British Industry, the Institute for Fiscal Studies, the Fraser of Allander Institute, the Institute of Chartered Accountants and many more have argued time and again that the SNP Government has a complicated high-tax regime. It is damaging our growth and prosperity.
Moving on to non-domestic rates—I have a short time left—former SNP special adviser Jack Middleton said that there are clear flaws in his party’s business rate revaluation, which led to 412 businesses having rises of more than 1,000 per cent. He is quiet now, is he not, Presiding Officer? It is a bit like an arsonist helping SNP ministers pour petrol over a burning fire and not calling the fire service.
Constituents in my constituency have been in touch about the damaging non-domestic rates. A constituent from Berwickshire contacted me to tell me that their draft rateable value could be more than double the current figure. At a time when energy and other costs are rising, that is very worrying. The Scottish Hospitality Group has said:
“the Scottish Government and local authorities must urgently fix the immediate implementation failures on rates reliefs.”
I see that time is marching on, Presiding Officer, so I will close there.
I move amendment S7M-00290.5, to leave out from “recognises” to end and insert:
“acknowledges Scotland’s economic potential, including its strengths in sectors such as oil and gas, energy, food and drink, financial services and space; recognises the vital contribution of the oil and gas industry to jobs, investment and energy security; regrets the Scottish National Party administration’s increases to Scottish Income Tax and failure to reform business rates, which have harmed Scotland’s competitiveness; endorses a continued focus on economic growth to build a more resilient and prosperous Scotland, and calls on the Scottish Government to support continued investment in the North Sea, reform business rates and reduce the tax burden on hard-working people in Scotland over the next five years.”
16:35
I join others in welcoming the cabinet secretary to his post and I commend him on his first speech. Daniel Johnson talked about a hopeful start. I am not sure whether Mr Johnson has retained that hope since he sat down, but I welcome the debate that we are having on economic growth.
Very often, such debates are framed in the context of cities and city regions. I absolve the cabinet secretary from that as, in his remarks, he recognised the role of our rural and island communities, which are often underestimated and undervalued, whether that is in terms of their contribution, ambition or innovation. If we look at many of the key sectors that drive our economy, such as energy, food and drink, the creative sector, tourism and space, we find that those are areas in which our rural and island communities can claim to be punching above their weight.
Very often, however, the argument can be made that, as well as those communities are doing, they cannot fulfil their potential because they are being held back, whether that is because of the slow and patchy progress in the roll-out of digital infrastructure or because of a transport network in which we see delays in the dualling of the A9, underinvestment in the ferry network—and the chaos arising from that—and cuts in air services. I am grateful to the cabinet secretary for engaging with me on that issue, but it is holding back our rural and island areas.
In rural and island areas there is a specific dimension to the housing crisis that we are seeing across the country. We see the same issue with care, whether it is social care or childcare. There is the impact not just of the failure or inability to meet the needs of those who require care but of people who would otherwise be in the workforce being drawn out of it to take on caring roles because support is not available.
We see the same issue with centralised procurement. I understand and acknowledge that that can have benefits but, in areas such as the one that I represent, that approach very often adds to the cost and crowds out opportunities for businesses to grow, expand and develop jobs and value.
Support and funding will be needed but, in rural and island areas, that is often seen as some sort of subsidy, whereas in every other part of the country it is recognised as an investment. That investment is key for Scotland and the UK to achieve their ambitions, whether on the economy or the transition to net zero, which we have heard quite a bit about in this debate.
Islands are part of what makes Scotland Scotland. That is exemplified in my Orkney constituency, where, pretty consistently over the years for which I have represented those islands, colleagues across the chamber who have been fortunate enough to visit have reflected on the can-do attitude of the people who live there. We have a track record of delivering on quality, change and innovation but, too often, we are held back, very often by a one-size-fits-all approach to policy or regulation that is unnecessary to meet our wider obligations and ambitions and that I think stems from a sense of administrative simplicity rather than a sense of what is best for Orkney or the country as a whole.
Of course, small and medium-sized enterprises are the lifeblood of places such as Orkney—there are very few large companies in those areas—and SMEs have faced shocks, such as those on business rates, which have been mentioned. Although action was taken on that in the previous budget, not least due to the intervention of Liberal Democrats, I think that the Federation of Small Businesses and others are right to call for much wider reform.
The amendment in my name highlights Brexit’s costs to Orkney, Scotland and the wider UK, which are estimated by Bloomberg Economics at between £100 billion and £200 billion a year. There are also costs to the European Union. I lived and worked in Brussels for around five years, and I know that there is a recognition of the mutual disadvantage that has arisen from this breakage.
However, the future relationship with the EU is not simply ours to determine. EU member states have a view on that debate, but mutual self-interest surely depends on rebuilding ties. We have already seen positive signs, which are welcome, but we must go further. As referred to in my amendment, a new customs union would help to reduce trade friction and would benefit small and medium-sized enterprises and communities, not only in rural and island areas but across the country. I urge the Parliament to support my amendment.
I move amendment S7M-00290.1, to insert at end:
“; believes that Brexit has had a deeply damaging impact on the economy, and agrees that one of the biggest changes that could be made to boost growth, fix trade and cut the cost of living would be a new bespoke customs union between the UK and the EU.”
We move to the open debate.
16:40
I welcome the cabinet secretary to his new post. It is great to see him in the Parliament.
When we talk about the economy, it can sometimes feel like we are talking about something that is quite abstract—something that is separate from people’s everyday lives. It sounds technical and distant, full of forecasts and figures and a language that does not always mean that much to the people who live with the dire consequences of disastrous economic decisions. The word “economy” has its roots in the management of resources, and that is a useful reminder. Having an economy should never be just about producing more wealth somewhere for someone; it should be about how we use Scotland’s resources, develop our skills, support our industries and ensure that our communities benefit from it all. That is the question that I come back to: who is this growth for?
When I think about economic growth in Banffshire and Buchan Coast, I do not think first about a graph or a statistic; I think about the young folk in Buckie who wonder whether there will be a good job for them if they stay in their home town. I think about the folk across the constituency who are deciding what skills they want to build at North East Scotland College, whether that takes them into fishing, engineering, offshore renewables, construction, care, education or local business and enterprise. I think about the folk who want to raise their families in the towns that they grew up in, because they can see opportunity, stability, a decent standard of living and a future for those who come after them. That is what economic growth has to mean in real life.
In my constituency, I see that potential everywhere. Fraserburgh harbour has a master plan that looks to future proof one of Scotland’s key fishing ports. Peterhead port, with links to fishing, energy and trade, is already a massive asset for Scotland. In Buckie, Macduff, Fraserburgh, Peterhead and right along the coastline, our harbours, ports and communities all have a part to play in Scotland’s economic future, and we must protect it.
If we want that growth to be meaningful, we need to connect the dots. We cannot look at economic cases and business plans in silos, which is why, for example, the Campaign for North East Rail’s economic case really matters. Peterhead and Fraserburgh are two of Scotland’s largest towns without a rail link—that is not only a transport issue but an economic issue. It affects access to education, work, freight, business confidence and how quickly and cleanly produce from one of Europe’s most important fishing ports can reach the market. Addressing that is what sustainable and inclusive growth should look like: not only growth that appears in national figures but growth that reaches the communities, workers and businesses that helped to create it.
I find myself in very strong agreement with the member on the benefits of north-east rail and the Buchan railway line being relayed, as called for by the CNER. What would she have the Government do about that? I certainly think that the Government needs to do proper case studies and get on with relaying the line.
I thank the member for that intervention because it gives me the opportunity to say that I have already opened conversations and will discuss what next steps the campaign is asking for. The SNP manifesto said that there would be support for the campaign, and I look forward to working cross-party to see whether we can help to get that work delivered.
The north-east needs a stronger and more bespoke economic focus. We have Highlands and Islands Enterprise, South of Scotland Enterprise and Scottish Enterprise working nationally.
Will the member give way?
I am sorry, but I will make headway and come back to the member.
The north-east has its own mix of industries, pressures and opportunities, which deserves focused attention. The north-east is not waiting for somebody to come and fix everything. The people, businesses, ideas and work ethic are already in place. They need the right support, connections and doors opened. If we are serious about removing barriers to success, we have to listen to the people, businesses and communities who know what those barriers are.
There are limits to what Scotland can do while key powers remain at Westminster, such as those relating to energy policy and immigration, as well as major fiscal levers and big parts of economic decision making. That matters when energy-rich communities still face fuel poverty, when local businesses struggle to recruit, when care services need staff, when schools need teachers and when rural and coastal communities need policy that reflects the reality. That is why independence matters in this debate. There is a practical question of whether Scotland has the powers to build an economy around Scotland’s needs.
However, we have responsibilities now, and we should use every power that we have to support enterprise, investment, innovation and trade. Growth cannot just be about numbers on paper; it must mean better lives, fewer children in poverty, stronger public services, healthier towns, better jobs and communities where people feel proud to stay, work, raise families and build something lasting.
What Banffshire and Buchan Coast needs is support to turn its potential into prosperity that is seen and felt locally. That is the kind of economic growth that I want for Scotland—growth with purpose, growth that reaches people and growth that strengthens the places that we all call home.
16:46
I welcome today’s debate on economic growth, which is one of the most important topics—if not the most important one—for the Parliament to address. If the Government can concentrate on driving up economic growth for the next five years, that will be five years well spent for the sake of our fellow citizens, businesses and, of course, public services.
However, to do that, we must confront and address the fact that earnings and employment growth in Scotland are lagging behind that in the rest of the UK. As my colleague Daniel Johnson laid out, the Scottish Fiscal Commission projects that, in 2026-27 alone, the economic performance gap will be £785 million. We need to confront that reality. It cannot be wished away, and populists of various political stripes have ill served our people and our economy by pretending otherwise.
We also need the Government to recognise the convening power that it possesses. A key example relates to business rates, as the Government should be a much more constructive partner with businesses, in contrast to its track record over the past few years, with reliefs not being passed on in full and the recent damaging revaluation, as many members across the chamber have acknowledged.
Even as AI and other technologies play an ever-greater role in the economy, we simply cannot deliver economic growth without recognising that it is people who make our economy turn. As a proud trade unionist and GMB member—I happily declare that interest now—I know that that is the case. There are huge skills shortages in our economy, but there are also huge numbers of people—particularly young people, as other members have said—who are not currently in education, employment or training. There is a huge amount of untapped potential in our economy, and the Government is not doing enough to unlock it.
As other members have said, this is undoubtedly a time of economic transition, primarily in our energy sector, but there are, of course, impacts on the wider economy. Colleges should be in prime position to work with businesses and support transitions by training and retraining workers. However, instead, over the previous parliamentary session, the SNP cut college funding by 20 per cent. The Scottish Funding Council now estimates that 22 out of Scotland’s 24 colleges are not sustainable. Just when our economy, businesses and workers need colleges the most, colleges the length and breadth of Scotland are having to cut costs, let staff go and scale back.
Yesterday, I met Forth Valley College’s principal, Kenny MacInnes—
Will Jenny Young take an intervention?
Yes—happily.
Many of the college staff I speak to in my constituency cite the increase in employer national insurance contributions by the Labour Government as one of the reasons why colleges are not investing in people and skills. What representations to the UK Government on scrapping that policy will Jenny Young make?
Rachael Hamilton will be well aware that, when we inherited the financial and economic mess that the Tories left in 2024, we had to make difficult decisions to fund the NHS and other public services. I am sure that she will agree that it is the Scottish Government that has done the most damage to our colleges. There has been a 20 per cent cut to their funding over five years. How are colleges supposed to fix that?
As I was saying, I met the principal of Forth Valley College, Kenny MacInnes, at the college’s campus in Falkirk yesterday. That campus has long specialised in construction and engineering, which are two vital sectors for our economy nationally, as well as locally, in my region, in proximity to Grangemouth. If the Scottish Government’s talk of a just transition and economic growth meant anything, the college nearest to Grangemouth would not be forced to scale back at what is a critical moment for the region that I represent.
The injection of funding from the Scottish Government in the 2026-27 budget—
Will the member take an intervention?
Not just now, thank you.
That funding did not repair the damage done to Scotland’s colleges done by the 20 per cent cut, and a spending review promising flat cash—which, in reality, is a cut—gives Scotland’s colleges no light at the end of the tunnel.
If the Scottish Government is serious about growing Scotland’s economy—I sincerely hope that it is—colleges must not be left to wither on the vine.
16:50
Without a successful economy, we will struggle to deal with the many challenges that the country faces. Scotland currently has limited powers and, without the powers of a normal, independent nation, there will always be limitations placed on the Scottish Government.
However, with the powers that we do have, the SNP Scottish Government has delivered a great deal. Since 2007, GDP and productivity growth in Scotland has outpaced that in the rest of the UK. Scotland is the top destination in the UK for foreign direct investment outside of London for the 10th year running, according to EY’s latest attractiveness study. In 2025, this city, Edinburgh, outperformed London for the first time. Thanks to the sustained focus by the SNP through policies such as Techscaler, Scotland is by far the fastest-growing start-up economy in the UK and one of the fastest growing in Europe.
Scotland actually ranks eighth in the UK for FDI. Can the member clarify whether he is referring to the number of projects being invested in, rather than the economic and financial value that is being delivered?
I am not going to stand here and do the research for Rachael Hamilton; I am sure that she can go and do the research herself.
Every MSP should welcome this information and these facts. The SNP has never lacked ambition for this country, and that is why we want independence: to fully harness the opportunity and the potential.
Within the limitations of devolution, establishing and maintaining the small business bonus scheme has been vital. FSB Scotland supports it, and 98 per cent of private sector businesses in Scotland benefit from it. I absolutely welcome the commitment that the non-domestic rates system will be realigned, with businesses such as Amazon paying their fair share and contributing to communities. Daniel Johnson made a point earlier regarding businesses and profits, and I agree with him on that. Amazon used to operate in my constituency, and I know how important the jobs were for my constituents, although I also know how the community was so badly let down by the company when it left. The same can be said for EE, which left Greenock in recent years, and for the profitable Cigna Healthcare, which recently announced some job losses in Greenock and Glasgow. The galling thing about that is the fact that some of those jobs are already being advertised in other countries.
Despite the two companies leaving and the information from Cigna Healthcare, the Scottish Government has helped to safeguard and create jobs in Inverclyde. That touches on the Green amendment, to which Patrick Harvie spoke, referring to Government action. When Texas Instruments announced its intention to leave its profitable Greenock site, the Scottish Government worked with its agencies and Inverclyde Council to find a buyer. They put together a £14 million package to help safeguard highly skilled jobs, and they brought Diodes to the table—which also invested significantly. Those jobs remain local.
The Scottish Government has also helped Ferguson Marine. Notwithstanding some of the utter nonsense that has been spoken and written about the yard, the undeniable fact is that the yard remains open, the jobs are saved, more apprenticeships are being created and the yard has a future.
Those two investments alone have helped my local community and economy.
Investing in our home-grown businesses is crucial, as is inward investment. That is yet another reason why it is so important for the Scottish Government to have offices in other nations.
When considering investment, the easy option is to focus on cities.
Will Stuart McMillan take an intervention?
I have already taken an intervention.
Liam McArthur quite rightly touched on a point about island and rural communities, which I absolutely agree with. There are similar aspects for places such as my constituency—post-industrial towns with some villages—where there might be an expectation that we should commute to Glasgow. However, I do not think that we should all be commuters to a city.
There is an economic opportunity, with the West College Scotland Greenock campus at the centre of it. Karen Adam touched on this in her comments. We have a college building that is long past its sell-by date, but there is cross-party willingness and local consensus to work together to find a solution to deliver college infrastructure to drive economic change. It is about assisting and not about the Government stepping in. It will ensure that Inverclyde is sustainable, assisting more people into employment and upskilling more of my constituents. A creative solution has been discussed, and those options will now go to the SFC. I fully support the college and its ambition, and I will continue my engagement with the Scottish Government on that.
Successful local economies come in many guises. Creative Regeneration in my constituency is an example of a SCIO—Scottish charitable incorporated organisation—that is using the arts, culture, heritage and science to engage and educate, in addition to improving economic opportunities. Its biggest project by far is the purchase of the Glebe, a former sugar refinery, to turn into a multi-use creative space that will also be a great economic driver. That is a type of community regeneration that is ambitious but deliverable.
I could say much more about Inverclyde’s economic challenges and opportunities, but I note that, in general, we are at a turning point. From the 1980s Tory decimation of the shipbuilding industry and people being forced to leave—to get on their bike—and find a job somewhere else, there is now a real economic opportunity for regeneration in Inverclyde, with the college at its heart.
16:56
I am pleased to have the opportunity to speak in the debate and to have the chance to share some reflections on the key economic challenges and opportunities in my constituency.
Every member in the chamber will have had countless conversations with constituents who feel that the economy is just not working for them. Wages are not keeping up with inflation, energy costs in an energy-rich nation are soaring and home ownership is out of reach for far too many young people. People look around and see a UK economic model that is broken. The impact is felt by workers, public services and businesses in Moray and right across the country.
The context is important. As the cabinet secretary set out, in recent times, households and businesses have lived through an unprecedented number of unprecedented events: 15 years of Tory austerity, Brexit, a global pandemic, Russia’s invasion of Ukraine, the Liz Truss mini-budget and, now, events in the middle east.
Businesses have also lived through the appalling SNP rates regime. The FSB says that the most recent rates revaluation has seen significant increases to bills and that it is urgent that the eligibility thresholds are revisited. Does Laura Mitchell agree? If so, will she urge the Government to do that?
If Liam Kerr would have a little patience, I will come on to non-domestic rates later in my remarks.
As household costs have soared, so has the cost of doing business. Inflation and energy costs are key drivers, but businesses across Moray tell me that so, too, are UK Government economic choices. The hike in employer national insurance contributions is a tax on jobs, and employers large and small are feeling the pain. Hostile immigration policies are leading to skills shortages in key sectors in my rural communities. The duty increases on Scotch whisky are a policy that specifically prevents investment and growth in Speyside, which is a region that I represent. Hospitality businesses are struggling to cope with the 20 per cent VAT rate, which Faith Houlding of Scribbles in my constituency has been campaigning hard on; she deserves great credit for that. I note that my colleague Alyn Smith has lodged a motion on the issue, and I hope that members from across the chamber will support it.
Despite the challenges, businesses in Moray have shown remarkable resilience and ambition. Businesses in my community want to invest, grow and create more jobs. In a challenging environment, business owners in Moray are working together to do just that.
In that vein, I welcome the Government’s commitment to rebalance the non-domestic rates system. Although the relief that is on offer in Scotland is the most generous in the UK, many businesses feel that the current system deters them from growing and can be complex to navigate. Reviewing the system would be a boost for businesses, high streets and town centres up and down the country, and I look forward to discussing that with the Government in the weeks and months ahead.
As well as facing challenges, Scotland has tremendous opportunities. The economic opportunities of the transition to cleaner energy are enormous and, as has been set out by my local chamber of commerce in its ambitious business plan for Moray, our region wants to be at the heart of that. Not only do we have an abundance of natural resources on our doorstep, we have incredible expertise in our offshore and supply chain workforce. Many of my constituents have worked offshore for decades and have the skills that are required to make a huge contribution to the businesses of the future. It is therefore deeply regrettable that the UK Government’s hated energy profits levy continues to cost thousands of jobs per month in the north-east.
The First Minister’s renewed focus on growing Scotland’s economy and building on what the SNP has already delivered in government has been eloquently set out by Stuart McMillan and I am particularly interested in seeing how plans to empower regional economic partnerships will develop and how that will lead to strategic investment in rural communities such as mine.
Creating the prosperous country that we all want to see would, of course, be considerably easier if this Parliament had the full economic levers of an independent country, but I know that this new Government will use the powers of this Parliament to drive forward its ambitious agenda for Scotland, to ensure that we are building an economy that can support strong public services and that, crucially, will be one that people feel works for them.
17:01
As the cabinet secretary set out, Scotland has never lacked ideas or ambition. We have world-class universities, skilled workers, energy, science, engineering and creativity. Across the country, people are building things of real value, so the question is not whether Scotland can create but whether Scotland can turn what we create into real growth. Countries that succeed do not leave growth to chance; they choose where they can lead, then build the markets, skills and industrial muscle to make it happen. That is how ideas become industries and ambition becomes national wealth.
There is a quiet danger in our economy. Scotland could become a place where new ideas are born but not where their value is owned, a place where companies start and invention happens but where wealth moves elsewhere. Scotland’s scale-up firms make up a small share of our business base but, together, employ almost a quarter of a million people and generate more than £60 billion in turnover, according to Scaleup Britain.
Will the member take an intervention?
No, thank you.
If we are serious about growth, we cannot ask only how many firms start here; we must ask how many grow here, decide here and build wealth here. A business that begins here in Scotland should not have to leave Scotland to become world-class, and Scotland should not settle for a future of insecure gig work while the real value is owned elsewhere. Growth must mean skilled jobs, secure work and industries rooted here in Scotland.
The offshore wind industry shows what is at stake. Scotland has the resource, the skills and the industrial inheritance to lead the next energy age, but turbines in Scottish waters are not the same as wealth in Scotland’s hands. If high-value work is designed, built and owned elsewhere, Scotland will have hosted the opportunity while others captured the prize.
That is why Scotland needs the discipline to capture the economic opportunities ahead. We must make Scotland impossible for investors to ignore. Private capital does not move simply because politicians ask nicely; it moves when firms have customers, revenue and a clear route to growth. Public capital should help us to share risk, give confidence and put larger funds into Scottish deals and we should ask why more of Scotland’s long-term capital—such as that in pension funds—is not backing our long-term ambitions.
Government must also become a better first customer. The public sector buys billions of pounds-worth of goods and services every year, and that is not just administration but economic power. When the NHS buys technology, when councils retrofit homes or when public bodies invest in digital systems, we should all be asking how that helps a Scottish firm to prove itself. Every public pound should work twice—once to buy the service that we need and again to build the economy that we want.
We must build the places where firms can grow. A company cannot expand without the space, homes for workers and planning and infrastructure to match its ambition. Ardersier, Nigg and Kishorn show what that means in practice: ports, power, land, skills and supply chains that are ready to receive investment and generate growth.
Of course, Scotland does not yet control every lever of the economy. When a £1.5 billion investment in wind turbine manufacturing can be blocked by the UK Government, we are reminded that even Scotland’s industrial opportunities depend on decisions taken elsewhere. Those limits are real, but limits must never become a habit of mind. Devolution gives us tools, but independence would give us the full toolbox. However, no one should mistake the constraints of devolution for an excuse to think small. With the powers that we have, we can put investment behind ambition, make public money work harder and turn buying power into economic strength.
The future will not belong to the countries that simply host the transition. It will belong to the countries that build it, and Scotland must be one of them. We must have not just a country of invention but a country of industry; not just firms that start here but firms that scale here; and not just wealth created in Scotland but wealth held in Scotland. That is how we will create the dynamic, growing economy that Scotland needs.
The final speaker in the open debate will be Heather Anderson.
17:06
As one of the few people in the chamber who has run a medium-sized business, which I did for 15 years, I start by expressing my admiration and support for everybody in Scotland who has had the courage and determination to start up and run a business.
As everyone out there who knows what it takes to cover the wages every month knows, we have withstood enormous shocks since the financial crash in 2008. We have traded through the economic disaster of Brexit and we were dragged out of the world’s largest free market against our will. My food business imported fresh fruit and vegetables every week, and we certainly felt the impact. The UK now has the unique distinction of being the first country in the world to impose economic sanctions on itself.
Like other food businesses, we then traded through Covid and somehow came out the other side. We sold the farm a few years ago, but my heart still stopped when I heard Rachel Reeves announce the employer national insurance hike, because I knew immediately how that would affect the bottom line of every hospitality and retail business in Scotland. Now we are going through another wave of energy price spikes, and I applaud everything that our Government is doing to continue to support small, medium-sized and large businesses across Scotland.
However, the focus of my speech is the huge opportunity that Scotland’s economy has been given with the vast renewable resources that it has. In such an uncertain world, home-grown renewable energy is our path to energy security, more affordable bills, long-term economic growth and environmental resilience. Having won the energy lottery yet again, Scotland has a renewables sector that already supports 24,000 jobs, and every gigawatt of new offshore wind capacity delivers £2 billion to £3 billion to the economy. Renewable energy production has tripled in the past 10 years, and renewable energy is now one of the cheapest and fastest ways to generate energy at scale.
Will the member take an intervention?
I am very conscious of the time, so I will continue.
That is because our natural resources are not globally traded or subject to volatile price hikes. New onshore wind is now half the cost of new gas, and new offshore wind is 40 per cent cheaper. Right now, the price of electricity is coupled to the price of gas, which makes electricity artificially costly. Of course, with the powers of independence, we could act on energy pricing for the benefit of the people in Scotland.
On the member’s claim that renewables are an extremely cheap form of energy, perhaps she could explain why the current contracts for difference costs for offshore wind are sitting at £95 per megawatt hour, which is significantly higher than the market price of gas.
My statistics are taken from reports from the industry, which explain those costs. I am not working in the industry, so I cannot answer the member’s question directly, but I am relying on reliable resources, which gave me those prices from the industry.
As I have said, if we had the powers of independence, we could act on energy pricing for the benefit of people in Scotland. Right now, what the sector needs is leadership and political stability to ensure that it will continue to attract long-term investment. The SNP has provided and will continue to provide that stability and leadership.
The success of our energy sector must be determined by not just how many turbines we install but evidence on the skilled workforce that the industry nurtures and the number of households that live in warmer homes and pay lower bills. In Dundee, a company called Whole Life Consultants Ltd has used smart modelling to work out that it would take 15,990 person years to deliver all the interventions that Dundee needs. It has worked out how many tilers, brickies, carpenters, joiners, scaffolders, plasterers, roofers, painters, surveyors, electricians, glaziers, architects, managers and professional staff are needed to get the job done.
In Dundee, that job is installing the insulation, replacing the windows and boilers, fitting the solar and photovoltaic panels and installing the smart decarbonised energy systems that we need. It will transform people’s quality of life and, if we are able to take advantage of the opportunity, provide real work for about 1,600 people a year as we go forward. Those are jobs that Dundee could do with. To give a sense of the scale of that, if members had to do it, it would take all MSPs 120 years—or probably much longer, because we do not have any of the necessary skill sets.
Thankfully, however, our job is to set the direction of travel and let other organisations address the skills shortage. Here in Dundee—I think that I am in Dundee all the time—Dundee and Angus College is one of those key institutions. It is doing the real job of ensuring that the future workforce is ready. It enrols around 800 students a year in construction, engineering and building services. It has worked out that skills for mechanical engineering are equally applicable to maintaining wind turbines. Working closely with industry partners such as Vestas, the college is ensuring that its students’ skills are fully compatible with and transferable to offshore wind technology. It has diversified its courses to ensure that its students achieve the mandatory qualifications that they need to work offshore. That is real work in the real world.
If Scotland is to remain a global leader in renewable energy, we must continue to support institutions such as Dundee and Angus College that are quietly doing the hard work of turning ambition into reality and developing the technicians, engineers and skilled professionals who will power our future economy. I fully support the motion and all that the SNP Government is doing to continue to grow Scotland’s economy.
17:12
I welcome Stephen Flynn to his new position. If the chamber is good enough to elect me as convener of the Transport Committee, I will look forward to his coming before that committee. Transport will be a key part of growing the economy, so I look forward to the partnership approach that we will, I am sure, be able to endeavour to take.
One thing that frustrates me about debates on the economy is that each person trades in their own statistics. We should agree that we can all pick stats that favour our argument over another. We can show that the rest of the UK is better than Scotland, or that Scotland is better in the UK, or best in the world or best in the universe; I am not sure which way it is or how that benefits us at all.
What is most important is that we recognise that we need to do better. Karen Adam was right: it is about how people feel that really matters—the people of Buckie want to feel better. The fact that only half of the electorate turned out to vote in the recent election was a clear indication that they did not think that this place was working for them. We need to do better, no matter what the stats say, because the stats are used only to try to prove that we are right politically, not to benefit anybody’s life. We should focus on making an improvement and a change in approach will be required.
First, detail matters. I am increasingly convinced that the glitzier the offer, the less convincing it will be, and the less meaningful in delivering change. The minister was right when he highlighted predictability and certainty. Daniel Johnson alighted on that as well.
Businesses want to know what is expected of them. They do not have time to look through every single press release that the Government issues to find out whether it is about real change, a repeat of a previous statement or spin of a previous announcement that does not mean anything different from what has been agreed before. Let us have a bit of boring predictability, so that businesses know what is expected of them and can get on with what they do best, which is running their businesses, rather than trying to second-guess what the Government is doing.
The second point, about which Daniel Johnson was absolutely right, is that we should not be squeamish about profit. Profit is a good thing. When my dad was in business, profit was invested right back into the business to grow it and provide a better service for the community. Let us not be squeamish about profit and let us recognise that we cannot achieve growth by ourselves. Government is not all-powerful. The private sector is playing an important role in delivering economic growth, so let us work together in partnership and have strategies that work together.
The next change of approach that we require is to accept—sometimes, this Parliament has not accepted this—that work is a good thing. People should be striving towards working. There is no shame in the fact that some people cannot work, but, if people can work, they should work. People should pay taxes, because that is good for society, and they should participate in society.
The next point—about which, again, this Parliament has had some blind spots—is that people feel a bit squeamish about certain sectors. I recently went down to see Babcock in Rosyth. There are 3,000 workers there now, and the place is absolutely buzzing. When I was the MP for Dunfermline and West Fife, at the height of the construction of the aircraft carriers, Babcock had 1,500 workers. The number is double that now, and we should celebrate that. Good young apprentices are getting good jobs that contribute to the defence of this country. That is an important factor. We need defence in this country, so we should celebrate the fact that Scotland has many great defence businesses and we should support them. We should say loudly and clearly that we are with them.
The next point is about energy. We have flip-flopped all over the place on that, depending on what the international challenge is—whether it is on price, security or the climate. Let us have consistency, so that businesses know what is expected of them, rather than having constant change, depending on which way the political winds are blowing.
We need pragmatism and an approach that works. The Government has various levers that it can use effectively. In an excellent contribution, Lloyd Melville highlighted exactly the power of procurement. That covers housing and all the areas around education and universities. All of those are great political levers, so let us use all of them to grow the economy of this country, because, together, by hunting for agreement, we can get economic growth to help the very people in Buckie that Karen Adam talked about.
17:17
As other members have done, I welcome Stephen Flynn to the chamber and thank him for his maiden speech. He posed the rhetorical question as to why he had come here. Some people thought that he came here because he wanted to be a very large fish in a very small pond after his period in Westminster—the SNP’s very own Andy Burnham. I think that he got off to a good start here. Although neither a sprat nor a minnow, he is perhaps not the great white shark that he hoped to be in these waters, and I think that there is still some work to do. What he could and should have done during his speech was apologise for some of the issues that arose in the previous parliamentary session and seriously impeded Scotland’s ability to compete globally and grow our economy. Principally, he could and should have apologised for the ongoing presumption against oil and gas, which, month after month, is resulting in thousands of jobs being lost in the sector.
He said—and other SNP MSPs have repeated this—that we introduced the energy profits levy. Yes, we did—during a period of excess profits. However, let us bear in mind that the SNP wanted us to go further and faster, and that, when Labour came into office, it sought to extend the levy when we were ready to wind it down. Only one party in the chamber is committed to growing our economy through growing our oil and gas sector, and that is the Scottish Conservative and Unionist Party.
Mr Flynn could and should have apologised for the damage that was done to the hospitality sector during the previous parliamentary session, when, in budget after budget, the SNP took funds from Westminster that were intended to provide rates relief to the struggling hospitality sector and, instead, diverted them into other areas.
Mr Flynn could and should have apologised to our island communities because a corruption of the procurement process meant that many of our communities are still deprived of those lifeline ferries, and because of the economic damage that that will do as we go into high season again. He could and should have apologised to the Scottish licensing and brewing sector for the damage that was done through, for example, the botched deposit return scheme and the ongoing problems caused by the seeds of doubt that the SNP is sowing in that sector.
As the minister sits down with businesses across Scotland, what he could and should do if he wants to restore their trust in Scotland as a place in which to invest is listen seriously to their concerns, because I think that their concerns are very clear. When it comes to recruiting the best staff from the United Kingdom and around the world, the damaging tax differential between Scotland and the rest of the UK is a fundamental issue. When it comes to the skills mismatch in our economy—which, year after year, the SNP has ducked—he could sit down with businesses and horizon scan to see what Scotland’s colleges should be producing. When he talks about deregulation and the planning system, rather than simply giving us an open and honest answer to, “Let’s talk about it,” the SNP, after 19 years in government, should have some big and bold ideas. When it comes to removing red tape, the SNP could and should do what it has said it would do in the past, which is reduce the size of the state. We will watch closely to see whether Ivan McKee can do that.
We heard some other interesting contributions today. Lloyd Melville, who is not currently in the chamber, quite rightly identified the huge pool of capital that we could have within Scottish public sector pension funds. I encourage the minister to look to Quebec and Ottawa to see how global investment is coming to Scotland through, for example, those Canadian state teachers’ pension funds.
Ultimately, none of this is rocket science. As my colleague Rachael Hamilton said, a low-tax, deregulated economy, in which we take Government off businesses’ backs and start to deliver true economic growth, is within our reach. However—I say this to Mr Harvie—it requires a realisation that economic growth is good in and of itself. That is something that we should continue to bang the drum for. Ultimately, if we want Scotland to prosper now and into the future, we have to tackle the burden of taxation and the burden of red tape. We have to ensure that the Government is off businesses’ backs. We should support our home-grown businesses, such as our hospitality sector and Scotland’s oil and gas sector.
I inform the chamber that we have received apologies from Lloyd Melville, who had permission to leave the chamber.
17:22
I begin by declaring an interest as a member of Orkney Islands Council and welcoming the cabinet secretary to his post.
As has been covered by my colleague Patrick Harvie, all too often when we talk about growth in the economy, we are not precise enough. Not all economic growth is equal and not all investment delivers positive outcomes. Too often, economic success is simply seen as a volume of investment; Willie Rennie spoke about our obsession with statistics. Important questions need to be asked about our economy. Who owns it? Who benefits from it? Who controls where the profits are going? Karen Adam reflected very aptly on the need for inclusive growth in the right places and for the right reason. That is essential to building a fairer and more prosperous country and taking communities along with us.
Strong track records of enterprise and innovation already exist in communities across Scotland. That is not the same as unchecked foreign direct investment or multinational ownership of our economy and our assets. Does our future lie in an economy of extraction, or should it be one that is built on community wealth creation and resilience building? Community organisations across the country already own businesses, land, energy production, housing and harbours—the list goes on. Community groups are already creating jobs, providing services, enhancing resilience and stimulating economic activity, often where it is hardest for Government to do so. They do so more efficiently, with greater local benefit and at remarkable value to the public purse. They achieve that despite facing barriers to financing, ownership and decision-making power.
The challenge is not a lack of economic opportunity or potential—I agree with the cabinet secretary on that. However, one big challenge that we face is too much leakage outwith our economy. The Centre for Local Economies Scotland report entitled “Blown away: following the money in Scotlandʼs onshore wind sector” shows the extent of the situation. It shows the extent of profit generation in our rural and island communities versus how much they are benefiting, and that inequity is not sustainable. It shows that, all the while, hundreds of millions of pounds are flowing into offshore tax havens.
When it comes to profit that is being generated already—which, according to the Government’s own best-practice principles, communities are entitled to a share of—the figures are also stark. Government guidance suggests that community benefit payments should be around £5,000 per installed megawatt, index linked, yet the report found that, across 261 operational wind farms, actual payments averaged just £3,167 per megawatt. By contrast, community-owned wind farms delivered the equivalent of more than £260,000 per megawatt—that is nearly 83 times more value flowing back into communities and local economies, and back into projects by the community for the community, be it in housing, job creation, health and wellbeing initiatives or transport. All those things are saving the Government money in delivering services on its behalf. That is the difference that ownership of our economy makes.
I agree that there is a balance to be struck, and we have to be pragmatic about what we are able to deliver and work in partnership. However, we are nowhere near that balancing point yet, and the Government must recognise that, in laying out its vision for our economy, we have an excellent opportunity to find that balance and work in partnership on the issue of repowering.
Scotland’s first generation of wind farms are approaching the end of their operational life, yet less than 1 per cent of Scotland’s existing onshore wind capacity is community owned. We have an opportunity not simply to replace ageing turbines, but to rethink ownership and create generational economic impact and structural change in our economy. We can ensure that the next generation of energy infrastructure delivers benefits for our local and national economies. The recent report by Equitable Energy Research CIC shows in detail the scale of opportunity. The case for getting behind this as an economic opportunity is clear: the sites have roads, grid connections, planning histories and proven resource and capacity factors, and repowering those sites, and the economic gains that can be made from them, can be done more quickly and efficiently.
Likewise, the increase in generation that is possible with repowering already exists, with modern technology and turbine technology moving on. This year, we will see the first opportunities to repower inclusively and strategically on Forestry and Land Scotland sites. The Government must get behind that and ensure that those first-generation sites are delivered effectively, with long-term mass repowering options available to us.
I echo all the comments that Kristopher Leask has made so far. Would he also accept that, with regard to repowering, genuine community benefit can be derived only where communities have the skills that they need in order to drive forward those projects, and that investment in colleges in particular is therefore crucial?
Yes, I quite agree, and the broader point that Liam McArthur makes around community capacity and resourcing is crucial. When communities enter into such engagements with developers, they often face quite technical, legalistic and financial discussions, for which many of them are, understandably, not prepared. Historically, we have seen a postcode lottery, with communities that have the existing capacities and volunteers—often, those who are retired and have the time to take on the substantial roles involved—able to excel while others get left behind. We must do a piece of work to broaden that out, and I hope that the Government would welcome that.
There are, however, significant barriers to repowering as things stand. NPF4 as it stands is inadequate; we need additional guidance that unlocks repowering and provides clarity and certainty to developers and community groups alike. Our strategic spatial energy plan needs to reflect our repowering potential and understand the opportunity that lies ahead of us, and we must update our onshore wind policy statement with a strategic focus on repowering so that we can deliver on that potential.
As we look ahead to the next five—and the next 25—years for our economy, let us make the right choices about growth and where our priorities lie. The Parliament has the chance to create generational change and transform the relationship between energy, our economy and our communities, and I urge the cabinet secretary to work with the Scottish Greens in doing so.
17:28
It is good to be making my first speech of the session; members might be thinking, “I wish he’d waited a little longer.” I have asked a few questions in the chamber and I have got used to being shouted at by the Cabinet Secretary for Economy, Tourism and Transport, whom I warmly welcome to his new role. I hope that his somewhat robust approach to business in the Parliament does not translate into how he goes about what is a very serious and wide-ranging portfolio—[Interruption.]
I spoke too soon there, Presiding Officer—he is at it already. He should know that I am not really into those antics; I would rather have a constructive dialogue with Mr Flynn over the years. If, like his predecessor in the transport portfolio, he wants to listen to my ideas, he might get some credit if he introduces some of them, and that may help with any future ambitions that he may harbour; I do not know what those may be.
The cabinet secretary’s motion is surprisingly encouraging. It references growth and how that is key to delivering prosperity and improving public services—that is a good start. Unfortunately, there is no admission of the SNP’s failures, which are caused by its high-tax, high-regulation approach that is backed by their pals in the Scottish Greens.
Mr Flynn will no doubt have had a flurry of meetings with people—he is perhaps trying to squeeze them in before he abandons ship and heads to America. If he has met representatives of the tourism and hospitality sectors, he will have been left in no doubt that they want help. Parts of the sector, which is so vital to the economy of this country, are on their knees. Tourism levies will not help and sky-high business rates are more likely to lead to businesses closing, when we should be aiming for the opposite.
The hospitality sector is crying out for business rates reform, which needs to happen quickly. Action on business rates is also vital for rejuvenating our high streets. According to the Scottish Retail Consortium, shops that occupy medium-sized and larger premises in Scotland are set to face £162 million more in business rates over the next three years than their equivalent-sized counterparts down south.
Smaller stores that are liable for basic and intermediate property rates will benefit from the Scottish Government’s new rates relief for the retail, hospitality and leisure sectors. That is welcome, but the poundage rates will still be above those that are levied in England, while the amount that can be claimed will be capped, unlike in England.
Perhaps when Stephen Flynn is on his stateside jolly, he will check out the transport system there. In many parts of the world—and in many parts of Britain—transport systems are light years ahead of where we are in Scotland. Our transport system is not digitally connected, and we need multimodal smart ticketing. The technology exists and it is being used elsewhere in these isles—I will be happy to talk to Mr Flynn about that. I recommend that he gets out and about over the summer and that, when he returns, he meets the Government’s smart ticketing advisory board to ask it what the hold-up is. I would go a bit further, but politeness precludes me from saying what I really think about that.
Digital connectivity is an ask of the Scottish Tourism Alliance, as is a call for a Scottish tourism and hospitality growth plan—we need to have one and it needs to lead to action. The Scottish Tourism Alliance set the Government several challenges in its first 100 days, in its first year and in this parliamentary session. We already have its ask for the first 100 days, which was for a dedicated, named cabinet secretary—let us hope that Mr Flynn can deliver. I have already mentioned its second ask, which is to accelerate business rates reform.
Thirdly, the Scottish Tourism Alliance wants the Government to commit to no new regulatory and tax burdens on businesses or any policies that negatively impact on Scotland’s competitiveness. Instead, it asks the Scottish Government and MSPs to proactively partner with the sector to identify, shape and deliver a new set of ambitious policies to support the industry to grow in a sustainable and responsible way. All that may go against the grain for the SNP, but perhaps Mr Flynn will surprise us.
In the first year, the Scottish Tourism Alliance wants to see the growth plan that I mentioned. It also wants the Scottish Government to identify a multiyear funding package for VisitScotland, EventScotland and destination management organisations. It is realistic in wanting better transport over the course of this parliamentary session. I would act quicker, but, as most of us know, Transport Scotland does not work at pace, so we will perhaps need to wait.
Duncan Massey’s amendment retains much of the cabinet secretary’s motion but adds the obvious line that lower taxes lead to growth and more revenue. That is something that a previous finance secretary—and all others since—have failed to grasp, and it is holding Scotland back.
I have listened with interest to other members’ contributions, including that of Mr Flynn, who mentioned independence. He also mentioned having a faster planning system, but without saying how we would achieve that. Daniel Johnson made the same point. Like me, Jenny Young visited Forth Valley College this week, and she will have heard about the threat to our college sector from underfunding by the SNP over a period of years. That must stop.
Scotland’s economy must grow to pay for the public services that we all need. We need a coherent, cross-sectoral plan to achieve that—one that does not hammer businesses and individuals with more regular and high tax. Scotland needs to become more competitive than England. In short, Scotland needs reform.
17:35
It is a pleasure to close this debate on behalf of the Scottish Labour Party. I welcome the minister to his place and for making a fine first speech. We are certainly agreed on the ends—on the objectives for our country in the interests of its people. The debate has turned on the question of how best to achieve and effect those outcomes that we all want.
“Opportunity” and “potential” were the words most frequently repeated in speeches this afternoon. Their absence is a significant concern facing people in this country. As members have mentioned, the recent election clearly reflected a deep sense of alienation and injustice in the country today.
When the late, great Donald Dewar opened the Parliament, he said:
“I look forward to the days ahead when this Chamber will sound with debate, argument and passion. When men and women from all over Scotland will meet to work together for a future built from the first principles of social justice.”
Social justice is at the heart of what we are talking about today when we consider economic growth and how best that serves the interests of the people we represent.
GDP is a simple enough equation: consumption plus investment plus Government expenditure plus exports minus imports. However, behind that lies the question of who benefits from that equation and who owns the proceeds of the growth and the activity.
The main factor in that equation that the Government deals with is expenditure. There were a number of thoughtful speeches, notably from the member for Angus South, who noted that a lot more could be done with Government expenditure and procurement, and that those aspects could work a lot harder for the people of Scotland. We would want to encourage that.
The latest statistics that I have seen show that there was £8.9 billion of public sector procurement expenditure in 2022–23. However, only around half of that is spent in Scotland itself, which affects the multiplier effect that could be generated to benefit Scotland’s people.
I will translate that into a practical example from shipbuilding, the industry in which I worked. I know that the member for Inverclyde has a strong interest in that, which he reflected in his speech.
Although we have a shipbuilding industry of which we in this country are proud, we could achieve much more with the purchasing power of the Scottish Government. However, significant numbers of shipbuilding contracts are going overseas—to Turkey, China and Poland. One of the main reasons for that is that the Government has not put in place the financial mechanisms to enable Scottish shipyards to front‑finance contracts, meaning that they are unable to compete for that business. That could be fixed relatively easily with a more joined-up approach.
I hope that the Government will look at that. I appealed to Kate Forbes, the then Deputy First Minister, to consider that when she was in Government. I hope that we can make progress on the issue in this session of Parliament.
That relates to a point that was raised in a number of speeches: the thwarted potential of our people. Half a million people in Scotland are locked out of work. They are the great unused capital of human potential.
Jimmy Reid was a great shipbuilder. At his funeral, Billy Connolly delivered a fantastic eulogy. He recalled that, as they passed a high-rise block of flats in Glasgow, Jimmy Reid said that behind every one of those windows was a Nobel prize-winning chemist or an Olympic athlete—someone who might have won gold—but who never got the chance because, from birth, they were denied opportunity.
That takes us back to the 20 per cent cut to colleges that was mentioned in a number of speeches and to the inability to connect people with educational opportunities. I see that in the shipbuilding industry, where lots of contractors are coming in from all around the world to work in Scotland’s shipyards, because we simply cannot get the skilled labour into the yards to do the jobs that are needed.
That is tragic, because we are seeing lots of potential being lost, as well as lots of jobs being lost elsewhere in the Scottish economy. Getting that joined up and connected in an efficient and effective way is really important. That is a good target for the Government in the coming years. Let us make that Government expenditure work harder to unlock investment, grow the economic base and the tax base, improve consumption and even promote exports around the world, which will all contribute to positive economic growth.
It is also important to reflect what other members said in their speeches about the nature of foreign ownership in Scotland. Around 6 per cent of Scotland’s wealth is taken out of the country in extractive investments, which are rent seeking. It is important to recognise that greater ownership of our economy is important.
Simply saying that foreign direct investment is up in Scotland does not mean that it is always a good thing. I will point to an example in the Cabinet Secretary for Economy, Tourism and Transport’s constituency. The recent takeover of Wood Group by Dubai-based Sidara is a great shame for Scotland. Wood Group was one of the great legacies of the North Sea for this country and was one of the great industrial champions that we built in Scotland. It was really disappointing that it was lost to foreign ownership in the way that it was, because that was avoidable. In the previous parliamentary session, I made suggestions to the Government about how that could have been solved by the Government taking a transitional stake in the business, but they were not listened to.
We need to be more interventionist, more active and more agile in protecting Scottish ownership.
Will you please wind up?
It is a great shame to see the loss of Scottish-owned businesses and Scottish industrial potential. To join up some of those themes, that is how the Government could work much harder for the interests of the Scottish people.
17:41
A fair few members who have just entered the chamber did not have the opportunity to enjoy the lively and spirited debate that we had this afternoon. I was particularly struck by the consensus that we managed to achieve. I managed to get Daniel Johnson and Duncan Massey to agree that what we are proposing is hopeful for the future. I think that I even got Patrick Harvie and Duncan Massey to agree on the purpose of taking back control, if I was listening correctly.
Nah.
Mr Harvie is correcting me in that regard. That might be where the consensus ended. I know that Mr Harvie is desperate to disagree with me, but, if he had listened to my opening remarks, he would know there was a lot on which we agree, because I was clear in setting out my view that we need an economy that works for absolutely everyone. I said that that means good jobs and good wages, and it means stronger businesses with the opportunity to grow. It means ensuring that the generations that follow our own enjoy better living standards than we do.
[Made a request to intervene.]
I am sure that Mr Harvie would agree on that point, as I expect him to do now.
I am grateful for that comment. I hope that, if Stephen Flynn is right, we will hear more about the concept of the wellbeing economy, which we did not hear much about today. However, one thing that he was unclear about in his remarks was Rosebank. He blamed Tory environmental assessments for having blocked it. Will he confirm whether he still supports what I took to be the Scottish Government’s position—that it supports environmental assessments—and that those projects must pass a climate compatibility test, whatever on earth that actually means? If they are not compatible with climate action, they should not go ahead.
Mr Harvie may have misheard me when I corrected Mr Hoy earlier in the debate. He was complaining about the fact that those projects had not gone forward, so I simply highlighted the fact that his party was in charge and in government at Westminster when the matter was dragged through the courts, and that, of course, we had the Finch ruling on scope 3 emissions. That was purely a point of clarity for Mr Hoy’s benefit. It is safe to say that he needed a fair bit of help in respect of clarity.
We listened as members detailed the various aspects of what people would like to happen to Scotland’s economy, and one theme that cut through is the narrative from Reform and the Conservatives on tax. What they do not recognise, posit or contribute to the debate is an acknowledgement of the importance of the state’s ability to contribute when it comes to skills, infrastructure and health. That is absolutely fundamental to securing an economy that is stable, that investors can have confidence in and that can secure growth. They would do well to reflect on that moving forward.
Where we did get agreement was on renewables. I, along with Daniel Johnson and many others behind me, talked positively about renewables. Why would we not talk positively about that when we recognise that billions of pounds’ worth of investment is flowing into Scotland and that there are in excess of 100,000 jobs in that sector alone? That is Scotland looking to the future and trying to capitalise on the golden ticket that we have been offered for a second time in relation to energy.
I can see Mr Massey squinting. The reason why he is squinting is that, during the election campaign, I had the joy of appearing in a hustings with him, when he argued that there was not one single job in Aberdeen related to the renewables sector—not a single job.
Will the cabinet secretary take an intervention?
I am very surprised that a Conservative member is about to try to defend Duncan Massey.
I do not think that that is the case—the cabinet secretary has misjudged me.
What is his view on the thousands of rural constituents who see their rural landscapes being industrialised and being dumping grounds for some of these renewables? What does he say to those communities?
I completely reject Finlay Carson’s assertion in respect of a dumping ground. If he had been in the chamber earlier, he would have heard me speak positively and hopefully about the benefit of farming, fishing and agriculture to Scotland’s economy, both now and in the future. He might not want to embrace the fact that, ultimately, when we produce energy, as Scotland will do, we need to get it from A to B and deliver it to that market. However, in using the terms that he is using, he does himself and the renewables sector a complete disservice.
I have found myself in agreement with Mr Rennie on far too many occasions since I came to the Parliament, although perhaps not in regard to the glitz that he inferred that we bring to the debate.
[Made a request to intervene.]
Och, it is Nigel Farage’s man—on you go.
Will the cabinet secretary highlight that, in allocation round 7, which was the most recent funding round, the furthest north project was offshore of Berwick? That is obviously not going to help the people of the north-east of Scotland. It was also set at a contracts for difference price of £95 per megawatt hour, which is much higher than market prices, and with a 20-year contract.
I am not sure that there was a question in there, but I think that Mr Massey misunderstands the concept of a strike price and a wholesale market price, and how that operates in terms of the end user. I am very surprised that a member for the north-east does not understand that supply chains operate right across Scotland and across the energy sector, both in oil and gas and in the renewables space. I am sure that, over the months and years to come, he will learn that.
Willie Rennie made a couple of important points in respect of profit and work, which Daniel Johnson also emphasised. None of us should be wary of talking about the benefit of profit, for the very reasons that Mr Rennie outlined. That money is hard earned by small and medium-sized enterprises, and, more often than not, it is reinvested back into their local communities.
The point about work goes to the heart of the point that I tried to make in my opening remarks about productivity and the need to skill up our workforce—our young people, our people who are out of work and our people who want to change jobs—so that they can contribute in a fashion that delivers for all of us collectively. I look forward to working with Mr Rennie in that regard.
Boosting productivity will be crucial to what we seek to do to grow Scotland’s economy. So, too, will be unlocking investment and championing the industries of the future, whether those are in AI, quantum or other areas. It is about making sure that we expand Scotland’s global reach, and we will build on the work that we have done on that up to now. It is about being brave in reforming the system, whether that is the planning system or the regulatory framework that sits behind it. I like to think that we can get common cause and consensus in that regard.
We have to be—we must be—the Parliament that delivers economic growth for Scotland, because far too many of our people do not know what that feels like. They do not know what that lived experience means to them, their families and their communities.
Craig Hoy rose—
Mr Hoy is tempting me to allow him in, Presiding Officer. With your good grace, I am more than happy to do so.
Before the cabinet secretary closes, I ask him to respond to Sir Tom Hunter, who said:
“The current state of our nation does not reflect our potential. I have never heard so much disquiet amongst business leaders paying yet more and more tax with poorer and poorer outcomes.”
Is that the kind of Scotland that Stephen Flynn wants to build on?
Fortunately for Mr Hoy, I was in the company of Tom Hunter recently. I heard him state that the meeting that he had with the First Minister—I think that it was the First Minister’s first meeting on returning to office—was “incredibly productive”. We will build on that and ensure that individuals like Sir Tom and others in our business community—the innovators, investors and entrepreneurs—know that they have a Government that is on their side and working with them to ensure that there is economic growth for Scotland in Scotland.
On a point of order, Presiding Officer. Earlier, I failed—
Can you first say which standing order you are referring to?
Earlier, I failed to register my interest as a shareholder in a hospitality business. I draw members’ attention to my entry in the register of interests. I am not clear whether the register of interests has been published, but I am doing this just in case.
Thank you for that. The deadline for entries is Saturday.
That concludes the debate on growing Scotland’s economy.
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Decision Time