Finance and Sustainable Growth
Scottish Enterprise (Meetings)
Ministers and officials meet representatives of Scottish Enterprise regularly. The most recent meeting with ministers was on 30 August, when the Minister for Enterprise, Energy and Tourism met members of Scottish Enterprise’s executive leadership team.
I wonder whether the Government discussed with Scottish Enterprise Scotland’s early stage entrepreneurial activity rate. Why is the Scottish rate lower than the rates for the north-east of England, the north-west of England, Wales, Northern Ireland and now Yorkshire and Humberside?
Issues relating to the development of enterprise in Scotland are fundamental to the work of Scottish Enterprise. Ministers discuss regularly with Scottish Enterprise the organisation’s priorities and what measures and initiatives it can take to support the development of new business in Scotland. Scottish Enterprise is taking forward a number of interventions, which are set out clearly by the organisation, are promoted by its staff and will be used to encourage the development of new business in Scotland.
Scottish Enterprise has secured 60 highly paid jobs in Scotland at Barclays Bank. Has the Government made any evaluation of the downstream benefit to the Scottish economy that those jobs will bring?
The welcome announcement by Barclays will secure 600 jobs at the bank. The economic impact assessment indicated that the gross value added over three years will be at least £95 million. Investments of that type—there have been a number of recent announcements that have been a product of the effective work that Scottish Enterprise has done with Barclays and, into the bargain, on the Hewlett Packard situation—are welcome at a time of challenge in the employment market in finding new opportunities for individuals in Scotland.
My question refers back to that of Gavin Brown regarding the entrepreneurial rate here in Scotland. Would the cabinet secretary, in association with the Cabinet Secretary for Education and Lifelong Learning, care to consider that our undergraduates require much more business and entrepreneurial training as part of their undergraduate courses? In other nations, that is seen as an additional mechanism by which the rate of entrepreneurship can be grown.
I find that a helpful suggestion and undertake to discuss it with the Cabinet Secretary for Education and Lifelong Learning, to determine what additional steps can be taken to encourage entrepreneurship in the curriculum of higher and further education institutions. It is fair to say that, over the past decade or so, there has been much more significant emphasis on business start-up in that curriculum. However, if we can take more measures to assist the process, I would be delighted to do so. If Mr Kerr wishes to contribute to that debate, he is welcome to participate.
After all the changes that the Government has brought to Scottish Enterprise, this year its operating expenditure is £220 million but its expenditure on management, administration and costs is a further £90 million. For every £2 that Scottish Enterprise spends on supporting businesses, the agency costs £1. Is that the right ratio for our economic development agency?
Mr Purvis’s analysis does not take into account the fact that Scottish Enterprise operates under a particular business support model—the account management model, which is designed to ensure that businesses, instead of in all circumstances getting grants, get advice and support and development assistance. I meet countless companies that tell me—they volunteer this—that if it were not for the advice and guidance that they get from representatives of Scottish Enterprise they would perhaps not still be in business. The business is people-resource intensive and, as a consequence, the costs are those that are inherent in the structure of Scottish Enterprise to maximise that approach. If there are ways in which routine administrative costs can be reduced, the Government is giving Scottish Enterprise and Highlands and Islands Enterprise every direction to undertake that type of approach.
Glasgow City Council (Meetings)
Ministers and officials regularly meet representatives of local authorities, including Glasgow City Council, to discuss a range of issues.
Does the cabinet secretary agree that Glasgow City Council’s recent announcement that it is to spend £13 million on an early retirement programme for chief officials indicates a ludicrously top-heavy management structure, that the Labour Party when in power showed scant regard for the taxpayer at local and national level and that that might be an interesting topic for any future meetings that take place?
I think that Mr Aitken is encouraging me to become involved in the internal affairs of individual local authorities. As he will well know from his long and distinguished service in Glasgow City Council—and its predecessor organisation, I think—local authorities are independent statutory organisations that are able to take their own decisions.
Caledonian Maritime Assets Ltd
These issues are being considered as part of the on-going Scottish ferries review. The review document currently out for consultation makes it clear that the board of Caledonian Maritime Assets Ltd has been considering whether alternative structural or financing routes could deliver its desired investment programme more efficiently and effectively and in a way that is more affordable to the public purse.
I am grateful to the minister for his response, which is perhaps somewhat less exciting than the reports that we have been reading in the media. I take it from his response that a mutualised solution is something that the Government might be prepared to consider, along with the board. If that is sauce for the goose of the maritime industry, is it not also sauce for the gander of Scottish Water?
The member will be absolutely aware of our commitment to make Scottish Water even more successful in future, to build on the huge success that has delivered an average household water bill that is lower than that provided by the private companies south of the border. The company is demonstrating true entrepreneurship in the commercial sector where competition is available, and it is providing huge help to its customers. All that shows that enterprise is not lacking in the public sector. I give Scottish Water unreserved support in its future development.
In considering any changes to CMAL, will the minister bear in mind its role as a provider of vessels to CalMac and the fact that it is essential that CalMac continues to operate, not least as an operator of last resort for isolated communities?
CMAL has in the past provided vessels for services outside Scotland, specifically in Northern Ireland. However, the member makes an entirely valid point. We need to ensure that we support communities that have lifeline services on which they depend. One of the benefits of having centralised control of the assets that we use in our ferry network is the ability to move resources around when circumstances require.
Renewables Targets (Wind Generation)
The Scottish Government does not impose such targets. Local authority wind-generating capacity targets, where they exist, are therefore a matter for specific planning authorities. The national target to secure 50 per cent of electricity by 2020 from renewable sources cannot be compared with local wind-generating targets, because the national target can include other technologies, such as hydro and marine renewables.
The minister might be aware of a view that is emerging across Scotland whereby given communities think that their share of Scotland’s wind capacity has been delivered and therefore no further planning applications should be approved. Such comments can give the impression that parts of Scotland are closed for business as far as onshore wind developments are concerned. Does the minister think that that should be the case? If it is the case, how does it square with the need to meet the Government’s overall target for renewables? Will the minister seek to clarify the status of local targets in that regard?
Some local authorities embrace wind power much more than others do. The arguments of some councils that they have done their share perhaps derive from older strategies, a lack of recognition of national targets or recent draft spatial frameworks that started from a position that a large enough share had been taken. Those are not arguments that the Scottish Government finds justifiable. We will work with planning authorities to capitalise on the wind resource when it is appropriate to do so, and we will seek to deliver the clarification for which the member asked.
I am slightly concerned by the minister’s response. He should be aware that Scottish Borders Council has just ended a consultation on the local plan review. Current information shows that more onshore wind energy is generated in the Borders than in any other part of Scotland. The level of onshore wind energy that is generated in my constituency is the highest in Scotland. Will the minister meet me and officials from the council, to discuss the area and the valid issues of cumulative impact and local capacity?
I would be delighted to meet the member to discuss the issue in detail and to give him the hearing that he requires.
Independence (Debt)
The proportion of the United Kingdom national debt assigned to Scotland under independence would be subject to negotiation, as part of a revised constitutional settlement.
After all the work that was done on the national conversation, why cannot the cabinet secretary name a figure for what the debt would be should the Government enter into negotiations with the UK about an independent Scotland? Does he acknowledge the authenticity of the report of the Centre for Public Policy for Regions, which estimates that a £125 billion debt for Scotland would be the starting point for negotiation?
The Labour Party is in no position to talk to me about debt, after what it did to the UK economy and public finances during the past few years. It is more than a little rich of the member to lecture me about debt.
The cabinet secretary is aware of the new oil fields that have been found in Scotland, and he will be aware that the Nobel prize winner and former chief economist of the World Bank, Professor Joseph Stiglitz, said that it is “imperative” that an oil fund be established. Can the cabinet secretary give the Parliament details of how such a fund would affect Scotland’s budget?
Clearly, the example of creating a long-term investment fund from finite resources is a well-tried approach to creating financial stability and certainty for individual countries. As I am sure Sandra White will be aware, the strength of the position in Norway is generated by its long-term investment fund, from which the Norwegian Government derives an income and which provides capital security for the Norwegian economy into the bargain. Although Norway and Scotland discovered oil at entirely the same time, the approach that Norway took to the development of that resource, which was fundamentally different from the approach taken in the United Kingdom, demonstrates an important lesson on how long-term financial security can be delivered and secured by establishing a long-term investment fund from natural resources such as oil.
Has the Scottish Government made any assessment of the percentage of Scottish gross domestic product that an independent Scottish Government would have had to spend on bailing out the Royal Bank of Scotland and HBOS in the same way that the UK Treasury did?
Perhaps if Mr Fraser was keeping up with events, he would understand that at various stages over the past 18 months the United Kingdom Government has dramatically reduced the level of provision in its accounts in support of the bank bail-out. As a consequence, the UK Government will undoubtedly be in a position to make a financial return on that investment. That benefit will of course go to the United Kingdom Government. Perhaps if Mr Fraser could abandon the short termism that is so characteristic of his approach to politics and debate, he could take the broad perspective that I take in considering how some of these questions can be addressed.
Convention of Scottish Local Authorities (Meetings)
I and my officials meet representatives of COSLA regularly and have done so several times in the last few weeks. A wide range of issues are discussed at those meetings.
Has the topic of giving greater powers to local authorities to deal with unauthorised encampments by Travellers been raised at those discussions? Moray Council is currently consulting on proposals for authorised encampments near Buckie and Forres, where significant local concerns have been raised, but there seem to be differing views on what councils are required to provide at encampments for travelling families. Will the cabinet secretary provide further information and guidance on that issue?
I will write to Mary Scanlon more fully on the issue, but I can tell her today that the discussions in which I have been involved have not considered changing the guidance on encampments or the protocols that surround that. However, I will confirm to her whether there has been any other discussion at ministerial or official level. Over the years, various elements of procedure have been set out on the approaches that local authorities can take. In a number of different parts of the country, there are established sites at which people from the travelling community can reside. If there is a need for that guidance to be considered again, I can certainly give Mary Scanlon an assurance that the Government will consider a request that we do so. For the sake of completeness, I will write to her to give her a fuller explanation of where these issues stand at the present time.
Council Tax Freeze
The Scottish Government has provided £420 million in total to councils to fund the council tax freeze since its introduction in 2008-09. Because the annual increases in the funding for the freeze have been at or above inflation, councils have had around £45 million more to spend on local services than would otherwise have been the case.
I assume that that means that no assessment has really been made. Under this Administration, local authorities have already had to make service cuts. Does the cabinet secretary agree that all such decisions must go through rigorous equality impact assessments? In light of the independent budget review’s description of the council tax freeze as unsustainable, how is he planning for any possible changes to—or, indeed any continuation of—the council tax freeze to be assessed for impacts on equalities? Will an equality statement be published with the budget when it finally comes?
On the last point, yes there will be a statement, as there was last year. I have confirmed that to the Equal Opportunities Committee. During this morning’s debate I confirmed to Duncan McNeil that that work is on-going as part of the spending review and will, of course, be part of the decision-making process that ministers undertake. It is essential that that work is carried out.
Labour Market Participation
Progress against the participation target is measured by comparing the employment rate for the population aged 16 to 64 across the countries of the United Kingdom. Although the Scottish employment rate, as a result of the recession, has recently fallen just below the UK average, Scotland’s employment rate performance has been the highest of all UK countries during 11 out of the 13 quarters of this Administration.
We heard earlier from Gavin Brown about business tariff rates, entrepreneurship and labour market participation. We also have some dire statistics for unemployment and labour market participation. The cabinet secretary’s Government has said that its key focus for the economy, in terms of gross domestic product and growth, is that Scotland will do better than all the other regions and parts of the UK and yet the Government is failing to do so. What other measures can he take to meet at least one of the Scottish National Party’s manifesto commitments?
As Mr Kerr knows, the Government is trying to ensure that we take decisions to support economic recovery in Scotland. That is precisely why I took the decision in 2008 to accelerate capital expenditure to sustain and support employment in Scotland and why our economic recovery plan was focused on providing interventions to support the labour market.
Kintore Station (Reopening)
We have already allocated funding, through our support for Network Rail, for work to be done in developing options for improving services on the Aberdeen to Inverness route. Specifically, the work will consider the potential for and layout of new stations at Kintore and Dalcross and changes at Inveramsay bridge, as well as frequency improvements and journey time reductions.
I take that as a no to my first question, so I will try a second question. The minister must be aware of the feasibility study that the north east of Scotland transport partnership has already carried out, which indicates that a single-platform station could be established for £6 million. Does the minister agree that that represents good value for money? Will he give a commitment today finally to come up with the necessary funding to reopen Kintore station for the benefit of the people of the north-east?
The member really should listen to what I say. We have already allocated funding. More fundamentally, we are not limiting our ambition at this stage to a single-platform station at Kintore. Until the design work is complete, we do not yet know whether there will be a new passing loop at that part of the network, which would require a double platform at Kintore if such a station were to be opened. That is precisely why a systematic end-to-end look at the requirements of that vital part of the rail network in the north is required, and it is why we have already provided funding to take forward the issue of a station at Kintore.
The minister and Mr Rumbles know that I have been campaigning for the reopening of Kintore station for a number of years, and I have held some positive meetings with the minister and local people on the issue in the past. Given that the reopening of Laurencekirk station has resulted in a number of passengers using the station that has greatly exceeded the provisional estimates—by about 80 per cent, I think—what revision of the appraisal system has taken place? What impact, if any, could that have on project funding for station developments such as that at Kintore?
The member makes the very good point that estimates have consistently underestimated patronage at new stations. In future, we will be using a new, Great Britain-wide model, which is being tested as we speak. We have already taken steps on the line, by extending to Inverurie services that previously stopped at Dyce. We have started to build the patronage that would be necessary for a station at Kintore.
Road Equivalent Tariff Pilot (Extension)
The Government is committed to supporting lifeline ferry services and promoting economic growth in all our remote and island communities. We are piloting the road equivalent tariff approach to setting fares in Scotland because we believe that it is the best way to deliver cheaper fares for islanders, tourists and businesses. The RET pilot has been focused on the Western Isles, but we want it to pave the way for fair ferry fares for everyone.
Let me quote from the independent “Road Equivalent Tariff Study: Interim evaluation” of March 2010, which was commissioned by the minister from Halcrow Fox. The evaluation states on page 73:
The selection of the Western Isles for the RET pilot was based on economic and social factors. [Laughter.] There has been a 19 per cent drop in the population of the Western Isles in the past 20 years, which is not by any means a matter of levity for the people who live there. [Interruption.]
Order.
The Western Isles has an average wage some £50 to £70 per week lower than that in the northern isles. The RET pilot was a clear intervention to support a part of Scotland that requires our support.
The minister will be aware of the anger in my constituency at his decision to extend the pilot for a further 12 months. When the decision was made, he and his colleagues in the Western Isles were at pains to highlight the unsurprising success of the cheap ferry fares scheme. It is also not surprising when consultants inform the Government that further work needs to be done.
It is clear that patronage has risen on the NorthLink routes over the past year. That is a welcome sign of the value that is placed on the ferry links to the northern isles. It is important to realise that, last year, in an attempt to raise further revenue in the face of rising fuel costs, we increased fares on the CalMac Ferries network by 2 per cent but did not apply that increase to the fares for the northern isles in recognition of the fact that the long ferry routes are of a different character. Were we to apply our formula for RET to the northern isles, it would substantially increase fares on certain routes to Orkney and Shetland.
Question 11 was not lodged and question 12 has been withdrawn.
Opencast Mining
Scottish planning policy fully sets out the Scottish Government’s planning policies on surface coal mining. No further limits on development are being considered in relation to opencast mining.
In 2009, the Scottish ministers issued a new planning circular that removed a key safeguard for local communities that are threatened by opencast mining in their areas. Between 2007 and 2009, permission was granted for an increase of one third in the tonnage of coal that companies could extract by opencast mining. The minister is aware of the concerns that communities throughout Scotland—from Mainshill in Ayrshire to the Airfield site on the border between East Lothian and Midlothian—have about the new opencast plans. Will he meet me and representatives of those communities to discuss their concerns?
In view of the role that I may play in any planning decision, including the ones to which Robin Harper referred, I will be unable to meet on the terms that he suggests. However, I offer a meeting with my officials, who can discuss the details of our policy and practice. That should be of assistance to him.
Councils for Voluntary Service (Funding)
We announced in March 2008 that funding for councils for voluntary service, volunteer centres and social enterprise partnerships would be transferred to third sector interfaces in March 2011. That will strengthen the third sector contribution to the work of community planning partnerships. Decisions on funding the interfaces will be made and announced in due course.
Despite having jumped through the hoops that the minister has given to them—which they have done—CVSs are still waiting for their funding formula. I met CVSs in my area over the summer, and rumours abound that most of them face funding cuts in the region of 50 per cent. Will the minister confirm that there is no truth in that rumour, and will he give the CVSs the reassurance that they require to continue their work in that most valuable area?
The Government has come to no conclusions on funding arrangements, so there should be no question that anyone is facing a funding reduction of the order that Rhoda Grant mentioned. Discussions are under way with Voluntary Action Scotland about how to design a formula that meets the needs of all the varied organisations around the country. Once those discussions come to a conclusion, the Government will make the appropriate decisions.
Question 15 was not lodged.
Council Tax Freeze
The average saving for a council tax band D dwelling over the three-year period of the council tax freeze has been £191.
Given that the cabinet secretary has announced plans to consult extensively on a future continuation of the council tax freeze, what steps will he take to consult the public as well as the councils, since it is the public who are the principal beneficiaries?
As Mr Adam probably knows, the Government is engaged in a range of discussions with members of the public around the country as part of the preparations for the budget. I undertook one of those events in West Lothian the other evening and the next one is in Kirkintilloch next Wednesday. If my memory serves me correctly, there will be an event in Aberdeen that might be accessible to Mr Adam or his constituents.
Question 17 was not lodged.
Council Tax Freeze
The average household in the north-east would have had to pay £194 more had the council tax freeze not been in place during the past three years.
Will the cabinet secretary reflect on the essentially strange anomalies that can occur across borders? I have constituents who live a few hundred yards apart but pay significantly different amounts of money because they live either side of a boundary. We have talked about how a local income tax would be a more appropriate way of funding. Does the cabinet secretary have any other options for reducing the inequity of council tax payments across constituencies?
Nigel Don is familiar with the Government’s position that a local income tax is the fairest way of raising local taxes. Clearly, we were unable to procure parliamentary support for our proposals during the current parliamentary session. The Government’s position remains that a local income tax is the appropriate mechanism for delivering fairness within the local tax system.
Midlothian Council (Meetings)
Ministers and officials regularly meet representatives of councils, including Midlothian Council, to discuss a range of issues.
When the cabinet secretary met Midlothian Council, did he discuss progress on the Waverley railway line, which, as he knows, is an infrastructure project that will benefit tens of thousands of my constituents in Midlothian? Ancillary work, including the relocation of utilities, was scheduled for this year. Will the cabinet secretary update Parliament on the progress that is being made on that work? Does the project remain on schedule for completion by 2014?
I can certainly confirm to Rhona Brankin that the project remains on schedule. It is in the process of procurement, and ancillary work relating to the diversion of utilities is being undertaken. I assure Rhona Brankin of the Government’s determination to take forward an important project that will provide important transport connections to her constituency and into the Borders, and which will create new economic development opportunities into the bargain.
We have a little time available. Just because I have never done it before, I call question 20.
Glasgow City Council (Meetings)
I hope that side betting on the Presiding Officer is not to become the next scandal.
Side bets on the Presiding Officer might be an option, now that snooker and cricket are no longer legitimate interests of the betting fraternity.
From his extensive experience in the area, Mr McAveety will be familiar with the discussions about the distribution formula for local authority funding, which takes into account a wide range of relevant circumstances, including the economic and social circumstances that affect individual localities.
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First Minister’s Question Time