Finance, Constitution and Economy
Good afternoon. The first item of business is portfolio question time. At the outset, I remind Parliament that, in order to get in as many members as possible, I will need short and succinct questions, and answers to match.
HM Revenue and Customs (Centralisation)
To ask the Scottish Government what the impact would be on Scotland’s economy of the proposed centralisation of HM Revenue and Customs offices. (S4O-05534)
As I indicated in my letter to Margaret McCulloch on 27 January, I know that we share concerns about the organisational change programme that HMRC announced on 12 November. Over a 10-year period, the number of HMRC jobs in Scotland is estimated to reduce by around 825, as local offices are closed and centralised in Edinburgh and Glasgow.
That is a worrying situation for staff, those whom they serve and the local economies concerned. We are fully committed to working with all interested parties at local, national and United Kingdom level, including the trade unions, in order to mitigate the impact of HMRC office closures in Scotland.
I thank the cabinet secretary for that response and for his correspondence with me about the impact of the planned HMRC closures in my region.
What plans does the Scottish Government have to provide assistance to trade unions and community leaders to help them to build a case for the retention of HMRC’s offices in the central belt and for the continuation of employment for all tax office workers in Cumbernauld and East Kilbride?
In my earlier answer, I signalled my willingness to work with all relevant parties to make that case. We have been in touch with the UK Government on the issue and have raised it with HMRC in particular. We have made the case for maintaining the expertise that exists in these facilities, and marshalling those arguments will be essential to put in place a credible proposition that will encourage HMRC to take a different approach.
Is the cabinet secretary aware that the announced closure date of the HMRC operation in East Kilbride is dependent on the lease negotiations for the building, which was disposed of by Gordon Brown to a subsidiary of a company whose financial arrangements enable it to avoid paying UK corporation tax? Will he impress on the relevant UK minister the importance of maintaining the East Kilbride operation and of the negotiation with the Guernsey-based Mapeley group being robust?
Linda Fabiani highlights some of the practical and detailed issues that it will be challenging to address.
I reiterate what I said: the Government is willing to work with all interested parties to marshal a strong case for preserving the facilities in question and the employment that they provide. It is vital that the specialist skills that are available in those centres are able to be deployed to undertake the very important work of tax collection and to manage those resources so that they can be utilised to support public services in Scotland.
Economy (Aberdeen)
To ask the Scottish Government what steps it is taking to support the Aberdeen economy. (S4O-05535)
With the global downturn in the oil and gas sector, the region faces challenges, but there are also significant opportunities for the future. On 1 February, the Scottish Government announced the provision of further support to the oil and gas sector, including a new £12 million transition training fund and £12.5 million for oil and gas innovation and further business support.
The Scottish Government believes that Aberdeen and the north-east are central to driving future growth and prosperity in Scotland, which is why we recently committed to investing £125 million through a city region deal agreement, which will be matched by the United Kingdom Government. The Scottish Government believes that more can be done to achieve a more significant step change in the economy of the north-east, which is why we also announced a further £254 million of additional Scottish Government investment to help to cement Aberdeen as one of the world’s leading cities for investment and business. That funding is paving the way for massive investment in innovation, digital connectivity and infrastructure across the region.
I welcome the near half a billion pounds of investment that the minister has highlighted has been provided on top of the nearly £1 billion that is being invested in the Aberdeen western peripheral route and the improvements to the Inverness rail line. However, does the minister share my disappointment that the sum total that the United Kingdom Government, with its broad shoulders, has so far been able to cough up is £125 million for the city deal and £20 million to support the oil and gas industry, amounting to £145 million? Does he agree with me that the Chancellor of the Exchequer needs to make meaningful changes in his March budget to support the industry and the wider economy of the city?
We did seek a greater contribution from the UK Government; that was not successful.
In answer to the second question, it is absolutely imperative that George Osborne uses the opportunity of the spring budget to announce a substantial package of tax measures, not because tax is the major issue facing operators at the moment—that is survival—but because the chancellor providing a substantial package of tax reduction measures will be the loudest, clearest signal of a boost of confidence in this key sector. It is absolutely central to giving the industry a “second wind”, as one of the leaders I met on Monday put it.
Does the minister acknowledge that the bid for the Aberdeen city deal contained projects to the value of more than £1 billion in devolved areas that the Scottish Government has yet to agree to support? Does he accept that it is in those devolved areas that the city deal falls so far short of what was hoped for and will he, therefore, indicate the Government’s intention to bring forward funding for those projects at the earliest possible date?
I am afraid to say that I do not agree with that presentation of the facts. Indeed, I was able to see for myself some of the investment that is taking place in Aberdeen and the north-east on Sunday and Monday during a visit to Aberdeen. I was able to see the Inveramsay bridge nearing completion; to discuss the western peripheral road, which is going ahead on budget—from memory, at a cost of £744 million; to meet Sir Ian Wood and discuss Opportunity North East and the exciting opportunities not only in oil and gas but in food and drink and in life sciences; and to learn about the Scottish Government’s investment in other areas such as health and housing. Therefore, I think that Mr Macdonald’s characterisation of the position is unnecessarily churlish as well as being inaccurate. [Interruption.]
Order, please.
Minister, if you turn away from your microphone, members in the chamber cannot hear you.
Local Government Finance Settlement
To ask the Scottish Government what assessment it has made of how the reduction in the local government budget settlement could impact on the economy and inequality. (S4O-05536)
The Scottish Government funding proposals for the coming financial year deliver a strong but challenging financial settlement for local government. Taking into account the addition of £250 million to support the integration of health and social care, next year’s reduction in local authority overall estimated expenditure is less than one per cent.
I believe that such a reduction should have a minimal impact on the economy or inequality. Scotland’s councils should be able to address those challenges from a healthy base, as local government funding has been rising in Scotland in recent years, with core funding being protected and new money being provided for additional responsibilities.
The Scottish Government has added to the Tory cuts and has squeezed local councils further. Glasgow City Council is facing a real-terms cut of £64 million. I have already had several elderly minority ethnic constituents and minority ethnic organisations raise concerns about the tripling of the cost of their day centres. Subsequent job losses are also expected in the area.
Does the cabinet secretary agree with me that as resources are cut for specialist services, the Government should assess the impact of those cuts on minority ethnic staff and services and make sure that an equality impact assessment is carried out before any further jobs or services are lost in that field?
The Government’s budget is subject to assessment for equality considerations as part of the budget process and I publish the equality impact assessment along with the budget. I did that in December. I maintain on-going dialogue with the equality and budget advisory group, which always makes a fruitful and thoughtful contribution to the budget process. I warmly thank its members for the contribution that they make to the assessment.
It is for Glasgow City Council to determine the equalities impact of any specific decisions that it makes on programmes. The council has duties that it has to fulfil, and I am certain that it will attend to those as part of its decision-making process.
Can the cabinet secretary tell us how much more the City of Edinburgh Council has received in funding for the current financial year, over and above the funding formula allocation and the level of reserves available to the council? How does the local government settlement in Scotland compare with the cuts that are being imposed on councils south of the border?
The Government has taken two decisions that are material to the City of Edinburgh Council’s funding. One of those was negotiated with our dear late colleague, Margo MacDonald, in the very early years of the Scottish National Party Administration, when she made the case for a capital city supplement. In 2015-16, that generated £3.9 million for the city of Edinburgh, beyond the allocation that would have been determined by the formula. Mr Eadie will also be aware of the application of the additional funding floor that I established, which in the current financial year generates £13.7 million extra for the City of Edinburgh Council on top of the funding formula. According to the most recently available statistics, the City of Edinburgh Council had general reserves totalling £123 million.
The Parliament has considered the comparative strength of local authority funding in Scotland compared with the significant reductions that have taken place in authorities south of the border. That funding creates a strong platform for local authorities to undertake their financial planning, and has been part of the long-term commitment of the SNP Administration.
Fiscal Framework (Adjustment Mechanism)
To ask the Scottish Government what the impact on Scotland’s future budgets would be of not adopting the indexed deduction per capita method as the block grant adjustment mechanism in the fiscal framework. (S4O-05537)
Independent academics such as Professor Anton Muscatelli have estimated that the proposals that would take forward the levels deduction or indexed deduction mechanisms would reduce the Scottish Government’s budget by up to £7 billion over a 10-year period. Any mechanism that would systematically reduce the Scottish Government’s budget simply as a result of devolution and before the Scottish Government makes any policy choices is unacceptable and will not be agreed by the Scottish Government.
Does the cabinet secretary agree that the failure of the United Kingdom Government to agree to fairness in the no-detriment principle in delivering the fiscal framework will be a breach of faith in relation to the vow made to the Scottish people before the referendum; that it will show the Prime Minister’s promise to deliver the Smith commission proposals to be false; and, as we approach another referendum—this time on Europe—that it will demonstrate that the Prime Minister’s words cannot be trusted?
We are at a key moment in the fiscal framework discussions. As the First Minister set out yesterday, the key issue in resolving the question of the block grant adjustment is the interpretation of the no-detriment principle. I am confident that when the Smith commission made its recommendations on what powers were to be devolved it was not volunteering a systemic reduction in the Scottish block of expenditure as a consequence. The Smith commission was agreeing to the devolution of the powers on what is essentially a no-better-off, no-worse-off principle. The exercising of powers is a different matter, because there is clearly a risk that must be accepted by the Scottish Government and we are prepared to accept it.
The no-detriment principle is central to the discussion, which hinges on the question whether we should be better off or worse off as the consequence of the devolution of powers. If we adopt a mechanism other than indexed deduction per capita, we will be worse off, which is why that would be unacceptable to the Scottish Government.
Will the cabinet secretary give us an absolute assurance that the Scottish Government will remain at the table until an agreement that is fair to all is secured?
The Scottish Government is committed to the negotiations. I have now taken part in nine meetings of the joint exchequer committee. I do not think that anybody could question the amount of time, energy and commitment that I have put into trying to resolve these questions.
It is clear that we have to have difficult discussions in order to resolve our different interpretations of the no-detriment principle. I am committed to continuing the discussions to get to an outcome that is fair to the people of Scotland and fair to the people of the rest of the United Kingdom. That is what the no-detriment principle is, and neither Scotland nor the rest of the United Kingdom would be better or worse off as a consequence of the devolution of powers under the mechanism that I have advanced.
The Scottish Government will not sign up to a mechanism that is damaging to the interests of the people of Scotland; that was not what the Smith commission intended.
Fiscal Framework (Agreement)
To ask the Scottish Government what progress it has made in finding an agreement on the fiscal framework. (S4O-05538)
I met the Chief Secretary to the Treasury on Monday for the ninth time with the intention of agreeing a fiscal framework for Scotland that meets the Smith commission recommendations.
Any agreement must be true to Smith and fair to Scotland and the rest of the United Kingdom. It has not yet been possible to reach such an agreement but the Chief Secretary to the Treasury and I are committed to continuing to meet with a view to reaching agreement shortly.
I would grateful if the cabinet secretary could highlight what the process will be if no deal can be reached before the dissolution of Parliament. For example, could the discussions reconvene after the parliamentary elections in May?
The Government’s objective is to secure agreement on the fiscal framework. That will be welcomed across the board, provided that the agreement is acceptable to the Scottish Parliament. It will enable a much wider discussion and debate around issues connected with the exercising of the Smith powers that the Government wishes to be able to have.
The convener of the Devolution (Further Powers) Committee has asked me to ensure that a fiscal framework agreement is available by the end of this week so that the committee can properly consider its contents before taking evidence from me during the week after next week’s parliamentary recess. I have now written to Mr Crawford to ask the committee to identify what further flexibility it might have to enable discussions to continue, so that Parliament can have the proper opportunity that I wish it to have to fully scrutinise the contents of the fiscal framework.
Surely it is clear to everyone except the UK Government that population increase is relevant when analysing the growth of tax receipts. Is it not therefore essential to focus on the growth of the UK tax base per capita in order to be true to the no-detriment principle, to treat Scotland and the rest of the UK equally, and to avoid money being withdrawn from Scotland simply because the English population is growing at a faster rate than ours?
I agree unreservedly with Mr Chisholm’s cogent and well-articulated point. From his extensive experience with such issues, he will also be aware that population difference is already factored into the Barnett formula, so Scotland already carries risks in relation to the growth in our population compared with growth in the rest of United Kingdom. The analysis that Mr Chisholm has presented to Parliament is absolutely accurate and I agree with it in its entirety.
Fife Council (Budget 2016-17)
To ask the Scottish Government what discussions the Cabinet Secretary for Finance, Constitution and Economy has had with Fife Council regarding its budget for 2016-17. (S4O-05539)
I have not so far had direct discussions with Fife Council about its 2016-17 budget. I have had a series of meetings with the Convention of Scottish Local Authorities, of which Fife Council is a member. I have also written to the leader of Fife Council setting out the details of the 2016-17 local government finance settlement. I have indicated to Councillor Ross that, when I am in Fife next week for a meeting of the Tullis Russell task force, I will see him to discuss those issues.
Thanks to the choices that have been made in the Scottish Government’s budget, Fife Council faces an additional cut of £17 million, on top of the cuts of £21 million that are anticipated for this year. Two thirds of the people who responded to Fife Council’s budget consultation said that, to make up for those cuts and protect local services, they would be willing to pay more council tax. However, yesterday, the leader of Fife Council, David Ross, was forced to accept the Scottish Government’s budget settlement, thanks to the sanctions that Fife Council would face if it went along with the wishes of Fifers. The result will be job losses, cuts to third sector projects and cuts to our schools. How does slashing council budgets fit in with a commitment to local democracy and fighting austerity?
When we take into account the investment that has been made in the integration of health and social care, which all of us accept concerns an integral part of local authority services, the local government finance settlement represents a 1 per cent reduction in local authority revenue. We need to get a sense of perspective about some of the language that has been used on this issue.
The second point concerns the contents of the issues about which I have been concerned in the local government settlement. The integration of health and social care, the payment of the living wage to social care workers, the protection of the numbers of teachers in order to preserve the pupil teacher ratio and the freezing of the council tax are all material issues that matter to local residents with regard to the delivery of their local services. I have been anxious to ensure that we secure a local authority settlement that protects all those items.
I appreciate the fact that 32 local authorities have now indicated their willingness to accept the Government’s local government settlement. That enables us to proceed to its implementation. What is surprising is that the Labour Party seems to be taking exception to an investment of £250 million in social care, the payment of the living wage to members of staff in the social care sector and the maintenance of the council tax freeze, which I thought that the Labour Party supported—certainly, many of its local authority members were elected in 2012 on a commitment to freeze council tax. Further, I would have thought that maintaining the teaching population would have been critical to improving attainment in our schools. I am, therefore, at a loss as to why the Labour Party cannot support the Government’s approach.
Superfast Broadband (East Lothian)
To ask the Scottish Government what the target is for access to superfast broadband in East Lothian by 2018 and whether it expects to achieve it. (S4O-05540)
The digital Scotland superfast broadband programme aims to deliver fibre broadband to at least 95 per cent of all homes and businesses in East Lothian by the end of 2017, and is on track to deliver that target. Commercial coverage alone would have delivered fibre broadband to only around 67 per cent of homes and businesses.
The fact is that nearly half of the residents in East Lothian do not have access to superfast broadband and just 57 per cent of premises in the county have that access. It seems extremely unlikely that the target that the cabinet secretary has just described will be achieved by the end of next year. Indeed, East Lothian has one of the worst figures in Scotland—better than only the extremely remote local authority areas such as Orkney, Shetland and the Highlands. Will the cabinet secretary take some action to prioritise getting East Lothian up to speed so that he can reach the target that he has just recommitted himself to?
I will consider Mr Gray’s points in detail, and I may well raise them with BT when I meet its representatives at 4 o’clock this afternoon. However, I want to reassure Mr Gray on a number of points. First, the commitment to at least 95 per cent of all homes and businesses in East Lothian having access to superfast broadband is a contractual agreement with BT. It has to be fulfilled and I assure Mr Gray that it will be, in terms of the contractual obligations.
On progress towards that, we have already surpassed the target of 85 per cent coverage by the end of 2015—that target was met in June 2015. The completion of this programme is absolutely practical.
Mr Gray’s constituency will have a range of properties and homes that are not covered by the 95 per cent assurance. I give him a commitment that the Government is increasingly focusing on ensuring that those individuals are not disadvantaged by not being part of the core programme at the moment. We are looking at various technological and programme solutions that can ensure that broadband is available to as many households and businesses in Scotland as possible.
Draft Budget 2016-17 (Public Services)
To ask the Scottish Government what assessment it has made of the expected impact of its draft budget 2016-17 on public services. (S4O-05541)
Within a challenging financial settlement, the Government continues to provide the resources that are necessary to protect and reform our public services, thereby ensuring that public resources better meet the needs of the people of Scotland. The budget will increase the national health service budget by £500 million to around £13 billion, invest £250 million in the radical reform of health and social care, protect the front-line police resource budget and deliver a pay rise for around 50,000 of Scotland’s lowest-paid workers.
Our budget will equip the country for the future and lay the foundations for the reforms that will define the next parliamentary session.
In my region, Renfrewshire Council has had its budget cut by £13.5 million, North Ayrshire Council by £13.3 million and Inverclyde Council by £8.8 million. Will the cabinet secretary explain to my constituents why he is implementing savage cuts to local authorities that will have an impact on education provision, environmental services and recreational facilities and will result in further job losses in under-pressure local authorities throughout West Scotland?
The comments that Mary Fee made are misplaced in two respects. First, it is a stretch of the vocabulary to describe a 1 per cent reduction in local authority expenditure as savage. What is savage is a 27 per cent reduction in local authority expenditure south of the border. [Interruption.]
Order, please.
Secondly, Mary Fee’s comments did not take into account the investment of £250 million in the reform of health and social care.
That is nonsense.
I hear Mary Fee. [Interruption.] I have not been able to catch up with all the shouting and muttering that has been going on from Labour members, Presiding Officer.
Cabinet secretary, I have called for order.
Every time that I have mentioned the £250 million investment in the reform of health and social care, there has been muttering and moaning about it from Labour members. That is precisely what the Labour Party called for. A week before the budget debate, it called for us to invest in health and social care. I have done exactly that to integrate those services to ensure that we can meet the needs of individuals, provide additional health and social care packages and pay the living wage to social care workers. I thought that the Labour Party might have supported that.
In recent weeks, Labour MSPs have suggested spending additional resources on building more homes, the NHS, climate change and local government, for example. Has the cabinet secretary been provided with any detail as to how the additional 1p in tax that Labour proposes to raise will be allocated to meeting its stated commitments, which now total £5 billion?
The only way that I could rationalise that is to say that the Labour Party intends to spend the penny several times over.
Local Government Funding (Reform)
To ask the Scottish Government whether it will provide an update on its plans to reform local government funding. (S4O-05542)
Before the end of the current parliamentary session, we will introduce plans for reform of the present council tax that reflect the principles of the commission on local tax reform’s report; enter into consultation with local government about the possible future assignation of a proportion of income tax receipts, thereby giving local authorities an incentive to boost economic growth in their areas; and launch a review of the non-domestic rates system in Scotland.
There is increasing concern that north-east households, which already pay the highest council tax levels in Scotland, will be hit by new higher bands that the commission and local tax reform proposed. Any change to the banding system, such as the introduction of two new top-rate bands, could mean that council tax in Aberdeen will increase from £2,461 a year to around £3,960. Therefore, Aberdeen, which has the worst local authority funding settlement in the country, could soon have even higher council tax rates than the rest of Scotland. Are the cabinet secretary and his Government willing to allow north-east taxpayers to be disproportionately affected in that way?
The Government will undertake a considered analysis of the commission on local tax reform’s report. We will formulate our proposals accordingly within the context of the issues that the report raises.
As Dr Milne will be aware, the Government has put in place specific funding that is designed to address Aberdeen City Council’s funding position in comparison with other authorities in Scotland. The position on funding is a product of the local government distribution formula, which is jointly agreed between the Government and local authorities, but we have taken exceptional action to strengthen local authority funding in the north-east of Scotland, and we will pay particular attention to the issues and considerations of the economic situation of the north-east of Scotland in any review that we undertake.
Scottish Rate of Income Tax
To ask the Scottish Government what the impact would be of raising the Scottish rate of income tax to 11 per cent. (S4O-05543)
Following the United Kingdom spending review in November, HM Revenue and Customs updated its forecasts for the direct effects of illustrative tax changes. It forecast that a 1p increase in the Scottish rate of income tax, allowing for potential behavioural responses to such a change, would have raised £475 million for the tax year 2016-17. HMRC will review that forecast following the UK Government’s budget in March.
Given that the Opposition policy includes a £100 rebate or payment or benefit—we do not have any detail as to what it would be—what does the cabinet secretary suggest would be the likely administration cost to local government of administering a scheme for low-income earners to get that £100 payment or benefit, or whatever it is?
The first thing to accept is that the need to put in place some form of mitigation demonstrates my point that this is a tax change that would have a detrimental effect on the incomes of low-income households. That is the principal consideration that persuaded me not to raise the Scottish rate of income tax beyond 10p. The second point, on which I marshalled evidence for the Finance Committee back in January, is that there would have to be the legislative and operational basis for putting a rebate in place. I set out to the committee the fact that I do not believe that it is within the legislative competence of this Parliament to legislate for such a rebate and that I do not think that the practical issues are in place to enable it to be undertaken.
As for the costs, we are several weeks into—actually, are we? No, it was just last week—my goodness, doesn’t time fly when we are enjoying ourselves? Just last week, the Labour Party set out its proposals, but we are no further forward in understanding the detail of how it proposes to deliver the rebate or what the administrative cost of the rebate would be. I simply say for comparative purposes that the cost of ensuring that council tax reduction and housing benefit are paid to individuals in Scotland is £41.1 million. That is an illustrative number as to the cost of a rebate scheme of this type.
The Institute for Public Policy Research, David Eiser of the University of Stirling and the Resolution Foundation understand the policy, and the Resolution Foundation says that the lowest four deciles in Scotland—the 40 per cent lowest-paid Scots—would have no net consequence from the policy. Does the cabinet secretary think that they are wrong?
That is based on the heroic assumption that it is possible for the rebate to be paid. I asked last week for the Labour Party to set out the detail of how the rebate would be paid. If it wants to be taken seriously, Labour should set out the detail, not just imagine it or hope that it can be done. If the member will tell us the detail, we will explore and examine it, but the Labour Party published a proposal—
Would you support it?
Order, please.
Mr Bibby will know that Labour said that the cost of administering the rebate would be £1 million. I think that Parliament and the public are entitled to understand the assumptions underpinning that number, given that it costs £41 million to administer housing benefit and council tax reduction, which are comparable types of schemes to the one that is proposed. Actually, they do not even touch the same number of cases. There are a potential 800,000 cases in the Labour Party rebate, and the council tax reduction and housing benefit deal with only 500,000 cases, so before the leader of the Labour Party asks me questions on that point, a little bit of detail would be nice.
Raising the Scottish rate of income tax will take money out of the pockets of hard-working families across all income scales. Has the Scottish Government done any assessment of the impact on Scottish economic growth of that spending power being lost to the economy?
As part of my consideration of the Scottish rate of income tax, I looked at various questions around behavioural response, informed by the analysis that was undertaken by HM Revenue and Customs. Some of that is illustrative with regard to the point that Mr Fraser highlights, but a much wider economic impact assessment would cover further ground on the issues that he raises.
Draft Budget 2016-17 (General Practice)
To ask the Scottish Government whether the Cabinet Secretary for Finance, Constitution and Economy considers that the draft budget for 2016-17 provides adequate resources for general practice. (S4O-05544)
In the draft budget for 2016-17, the Scottish Government has increased general practitioner and primary care funding to £780.1 million, which includes investment of £45 million in the primary care development fund. That will provide significant additional resource for general practice. The Scottish Government is also working to transform primary care, including developing new ways of working with multidisciplinary teams, reducing bureaucracy and working constructively with the GP workforce to ensure that services are fit for the future and meet the needs of the people of Scotland.
Analysis by the Royal College Of General Practitioners Scotland has shown that, under the current draft budget plans, the proportion of the budget that is devoted directly to general practice in Scotland is set to reduce further. I have received several representations from my constituents—some of whom are practising GPs—who have asked that the Scottish Government reassesses the budget and ensures that an additional 0.5 per cent is available for general practice to begin the move towards an 11 per cent share of the overall national health service budget. Will the cabinet secretary undertake to consider the issues that my constituents have raised and work with colleagues to identify an appropriate way forward?
I recognise the importance of the issues that Siobhan McMahon raises in relation to general practice. We engage actively with the Royal College of General Practitioners on such questions, and I know that those issues have been aired in public. I will certainly reflect on the issues that the RCGP has raised in finalising the budget.
Question 12 has not been lodged. An explanation has been provided.
Oil and Gas Industry (Jobs)
To ask the Scottish Government how many jobs in Scotland it estimates have been lost as a result of the downturn in the oil and gas industry. (S4O-05546)
The number of redundancies or job consultations that have been announced by oil and gas companies in Scotland has reached almost 10,000. The industry body Oil & Gas UK estimates that the total employment that is supported by the sector across the United Kingdom has fallen by approximately 65,000 jobs. We continue to monitor the impact that low oil prices are having on the oil and gas industry and its wider supply chain, and that will be discussed at the next energy jobs task force meeting, which will take place in March.
The task force has helped to support more than 2,500 individuals and 100 employers through the current downturn and will continue to support the industry to improve collaboration, co-operation and innovation. Last week, we announced a £12 million transition training fund that will augment the work of the task force and will offer grants to individuals to support their redeployment through retraining or further education.
Has the minister read this week’s state of the industry report from the trade union offshore co-ordinating group? It notes that
“insufficient up-to-date economic and labour market data are available to paint an accurate picture of the impact the falling oil price has had on the Scottish economy”,
and highlights recent increases in claimant count unemployment of as much as 80 per cent year on year in the north-east. Will he undertake at his hand to address that serious undercounting of the number of workers who have lost their jobs, in order to allow Government agencies to provide adequate support and trade unions to do their job and protect their members?
On Monday, I discussed many of those issues with Grahame Smith. This morning, I wrote to the newly formed offshore co-ordinating group to seek a meeting to discuss the issues.
We entirely agree that the issues are extremely important, and we are determined to continue to do everything practical within our power to assist those individuals who need assistance. Some of them may not seek employment or may find employment by their own efforts, but those who need support will get it.
That is why the First Minister announced last Monday in Aberdeen the £12 million transition training fund; why I was in Aberdeen this Monday for discussions at three different meetings with Sir Ian Wood, with the industry leadership group and with senior representatives from the service companies; and why, incidentally, I was in Fort William yesterday discussing with the Underwater Centre—which I believe is the best-quality diving centre in the world—how the training fund can be best deployed. I think that Mr Macdonald and I have similar objectives, and I am happy to continue to work with him to achieve them.
Dennis Robertson may ask a very brief supplementary question.
What discussions is the Government having with the oil and gas sector and the wider supply chain to ensure that the appropriate skills will be retained in the event of the recovery, which I hope will be in the not-too-distant future?
You should be brief, please, minister.
Mr Robertson has identified an absolutely key point. If we lose skills, teams of experts in fields such as drilling and subsea exploration, and divers, when we emerge from the cycle—as most experts predict will happen, of course—we will not have the skills that we require to serve an industry that has an excellent future as well as a proud past of achievement. That is precisely why we have set up the £12 million transition training fund package. My job, working with my colleagues in the Scottish Government, Aberdeen City Council, Oil & Gas UK, Opportunity North East and the industry as a whole, is to ensure that that money is used to maximum effect and as quickly as possible to help the people whom Mr Robertson has identified as requiring support for the future of the industry.
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