Official Report 764KB pdf
Deputy First Minister Responsibilities, Economy and Gaelic
Good afternoon. The first item of business is portfolio questions, and the first portfolio is Deputy First Minister responsibilities, economy and Gaelic. I advise members that there is a lot of interest in asking supplementary questions. I will try to get in as many as possible, but that will require brief questions and answers.
Visitor Levy
To ask the Scottish Government, in light of its recent decision to allow a flat-rate approach to the visitor levy, what discussions the economy secretary has had with ministerial colleagues regarding whether to also introduce lower non-domestic rates for retail, hospitality and leisure businesses. (S6O-05259)
The Scottish Government has regular engagement with the retail, hospitality and leisure sectors through the non-domestic rates consultative group, which is chaired by the Minister for Public Finance, and other forums such as the Scottish hospitality round table. We regularly discuss matters of importance, including budget priorities and the views of stakeholders, in the run-up to the Scottish budget. As is normal, decisions on non-domestic rates policy for next year will be set out in the budget on 13 January 2026.
The Deputy First Minister knows that it was the Scottish Conservatives who warned that a flat-rate levy would be much fairer and easier for businesses to administer, which is why we lodged amendments to make that happen. Now that ministers have finally accepted that position, will the Deputy First Minister commit to continuing to listen to the constructive pro-growth solutions that the Scottish Conservatives set out, starting with action on business rates, to restore confidence in Scotland’s retail, hospitality and leisure sectors?
It is always nice, if a little bit rare, to hear constructive pro-growth policies from the Conservatives—[Interruption]—although I always appreciate Liz Smith’s contributions in that regard. We just need to get the rest of her colleagues into the same space.
The Scottish Government’s rates relief policies are the most generous anywhere in the United Kingdom, and the visitor levy is designed to make popular tourist destinations more competitive, with enhanced visitor services and facilities. Will the cabinet secretary say more about how the Scottish Government’s measures of support will continue strengthening Scotland’s regional visitor economy?
They are not.
We do not need any sedentary interventions.
Colin Beattie is absolutely right to talk about the Scottish Government’s rates relief being some of the most generous anywhere in the UK. That is particularly important when it comes to our high streets, where businesses benefit from the small business bonus scheme in particular. The visitor levy is designed to help to reinvest levies that are raised in popular tourist destinations. The choice of whether to introduce a levy is a matter for local authorities.
Living Wage Places
To ask the Scottish Government how it supports Scotland’s living wage places to encourage the uptake of the real living wage amongst employers. (S6O-05260)
The Scottish Government has a funding partnership with Living Wage Scotland going back to 2015 that supports the real living wage accreditation scheme. That has led to the establishment of five living wage places, an increase in the number of accredited employers from 14 in 2014 to more than 4,000 in 2025, and at least 72,000 workers in Scotland receiving a pay rise as a direct result of their employers’ decision to accredit. The partnership has made Scotland the best performing of the four United Kingdom nations, with the highest proportion of workers aged 18 and over being paid at least the real living wage, at 88.7 per cent against the UK average of 85.4 per cent.
I congratulate the Glasgow city region, where 200 new employers have been accredited as paying the real living wage in the year to November 2025, benefiting almost 2,000 additional employees. The city region now has 1,300 accredited employers and it has ambitions to reach 2,000 in the next three years. How can the Scottish Government support that ambition, whether by working with sectors that find paying the real living wage more challenging, such as hospitality, or by helping to remove barriers such as the UK Government’s employer national insurance contribution increases?
I congratulate Glasgow on being a real living wage place and on the progress that the member outlined. He referred to hospitality, and fair work continues to be at the heart of our national tourism strategy. The Fair Work Convention has done a lot of work on fair work in the hospitality sector, and we continue to support and enable the adoption of fair work practices in the tourism and hospitality sectors.
We are taking a lot of other measures. I mentioned our funding partnership with Living Wage Scotland, which includes a low-pay sector strategy that involves targeted engagement with employers in sectors such as hospitality, social care, tourism and retail. A lot of work is taking place on that.
Oil and Gas Jobs (North-East)
To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues on how its internal modelling of oil and gas jobs in the north-east compares with the latest industry estimates. (S6O-05261)
We monitor and consider a range of evidence in relation to the energy sector. As part of that approach, we commissioned and published independent analysis of Scotland’s energy system and just transition. That analysis considers the economic impact of Scotland’s oil and gas industry, including in terms of employment, during the transition to net zero.
I thank the Deputy First Minister for that answer, but it is not good, because the North Sea industry has been trapped in a vicious circle of Scottish National Party Governments that demonise oil and gas, egged on by student politicians and Green extremists, who delight in every announcement of hundreds of jobs being lost in the north-east. Does the Deputy First Minister agree that we should do everything that we can to reverse the worrying downward trend in oil and gas jobs, which will damage our energy transition in the long term?
Every employer that is facing the prospect of redundancies in the oil and gas industry right now cites the energy profits levy and the damaging effect that it has. If the Conservatives had not extended the levy, it would have expired at the end of this year, so perhaps the Conservatives need to ask why they extended it.
On that note, does the cabinet secretary share my concern that industry modelling has consistently shown that the biggest threat to oil and gas jobs remains the Tories’ energy profits levy, which is now continued by Labour?
Absolutely—I could not agree more. The biggest threat—those are not my words, but the words of multiple employers—to jobs in the energy sector in the north-east is the energy profits levy. That was introduced by the Conservatives and extended by the Conservatives, and it has now been extended by Labour. We all hoped that, at the recent budget, Labour would suspend and replace the levy, but the UK Government obviously does not appreciate the level of threat that is facing our energy industry right now.
Modelling by Uplift shows how new oil and gas licensing does not and cannot lead to new jobs in the north-east because, over the past decade, hundreds of new licences were awarded, but jobs in the sector still halved. What is the Scottish Government doing to support Labour-founded Great British Energy to become the UK’s energy champion, to accelerate the deployment of clean energy technologies that benefit us all and to redress deindustrialisation in the north-east region?
Let me be clear that we are working collaboratively with GB Energy and we appreciate the work that it is doing, particularly in collaboration with, for example, the Scottish National Investment Bank. The primary issue, however, is that jobs are being lost in the north-east—largely because of the energy profits levy—at a faster rate than new ones are being created through renewables and particularly offshore wind. Some clear policy levers could be deployed to shift that balance. We encourage the UK Government to move faster when it comes to things such as auction rounds and grid connectivity to accelerate the roll-out of offshore wind. At the same time, the UK Government should, as a matter of urgency, replace the energy profits levy, which the UK Government itself accepts is unjust and unfair.
“A Trading Nation”
To ask the Scottish Government whether it will provide an update on the impact of its export growth strategy, “A Trading Nation”, including what metrics it has used to assess this. (S6O-05262)
The Scottish Government has provided regular updates on the delivery of “A Trading Nation”, our policy on the issue, since it was published back in 2019. We published a full progress report in 2022 and we have also published an independent evaluation of the delivery and impact of “A Trading Nation”, with a further update due next year.
In 2024-25, Scottish Enterprise secured a record forecast of £2.46 billion in future export sales, which was an increase of more than 10 per cent from the previous year. However, as the member might be aware, Scotland’s international exports remain just below 21 per cent of gross domestic product against our 2029 target of 25 per cent, which reflects the scale of the challenge that is being experienced in trade as a result of global uncertainty and the impacts of Brexit.
Recently released data shows that United Kingdom exports have grown by 4.6 per cent while Scotland’s have fallen by 7 per cent. Since 2018, Scotland’s international exports have fallen by 4 per cent in real terms, and instead of rising to 25 per cent—the target that is set out in “A Trading Nation”—they now sit at just 20 per cent. In light of those outcomes, will the minister admit that the Scottish National Party Government is failing on trade and failing businesses that export?
I am astonished by the points that Tess White raised in her question. It is clear that Scottish exports to Europe were very important to the overall picture of Scottish exports. Therefore, Brexit, which was introduced by her party, has really damaged Scotland’s export efforts. We have a lot of work to do to recover from that. It would help the Parliament if she at least recognised that Brexit is the key factor behind the decline in exports from Scotland to Europe in the statistics that she mentioned.
The minister is doing an admirable job in defending the Government’s record, but the target is 25 per cent and exports fell from 22 per cent to 20 per cent last year. Worse than that, the figures show that exports to the rest of the UK have fallen by 10 per cent. What is the Government doing to help exporters to export to our biggest and most proximate market—the rest of the UK?
The member is quite right that the UK is a very important market to Scotland. We have more than £90 billion in exports, much of which goes to the rest of the UK, and there are a lot of international exports as well. We now have a six-point export plan to address some of the challenges.
Scotland has been disproportionately hit—I repeat the word “disproportionately”—by Brexit compared with other parts of the UK, which is why we face the challenges that we currently do.
Manufacturing (Renewable Energy)
To ask the Scottish Government what action it is taking to support manufacturing, including in the renewable energy sector. (S6O-05263)
The Scottish Government is committed to a thriving manufacturing sector, as underlined by our £75 million investment in the National Manufacturing Institute Scotland. Manufacturing accounts for 178,000 jobs and more than half Scotland’s international exports. In 2023, the sector contributed £18.1 billion in gross value added to Scotland’s economy.
The Deputy First Minister will recognise that securing manufacturing capacity in the renewable energy sector in Scotland is critical to the delivery of a just transition. She will also be aware that Ming Yang has proposed a £1.5 billion investment in a manufacturing facility at Ardersier. She will recognise that the delay in the United Kingdom Government making a decision on the matter is now causing significant uncertainty in the renewable energy sector.
What engagement has the Deputy First Minister had with the UK Government on the issue? Will she ensure that she presses the UK Government for an early decision on the matter, given the economic benefits that that investment would bring not only to the Highlands but to Scotland as a whole?
Jobs in the manufacturing sector are among the biggest prizes for our economy in the just transition. We have a once-in-a-lifetime opportunity to build, create and manufacture products that will be essential for the just transition and the renewables industry. The export of such products will ensure that Scotland is at the heart of the global transition to net zero.
We totally understand the importance of national security, but the time that it is taking for the decision to be made is damaging for the supply chain and developers, because the uncertainty is essentially stalling momentum, which means that others are not making the timely decisions that are required to boost our economy.
The Deputy First Minister has talked about support for manufacturing, but communities across Forth Valley are still waiting for basic transparency about the future of the Ineos Olefins and Polymers plant at Grangemouth. I have written to the Deputy First Minister a couple of times to seek some detailed answers about the Government’s contingency planning for the site, but I have not yet seen any detail.
Given the scale of the risk to hundreds of highly skilled jobs and to Scotland’s wider industrial base, will the Deputy First Minister set out what contingency planning is in place for the O and P plant, which Scottish Government directorates are leading the work and when the Parliament will finally be given a transparent plan, rather than reassurances that, sadly, have too often not matched reality in the past?
It varies, but I engage with the O and P plant, on average, about once a month, which reflects the site’s importance. I completely agree with Stephen Kerr’s emphasis on the importance of the site.
There are on-going conversations with the United Kingdom Government on the bulk of any support that would be required for the plant, but the Scottish Government has also explored options for support.
Ultimately—and I guess that this will create some frustration—a lot of the information is very commercially sensitive, as Stephen Kerr will appreciate. However, I assure him that engagement is taking place, on average, once a month, and that the issue forms part of the agenda for my direct engagement with UK Government ministers, such is the importance of the plant.
Gaelic School Provision
To ask the Scottish Government, in light of parents now being able to request Gaelic school provision in their areas, what financial and resource support it is providing to local authorities to ensure that such requests can be considered and implemented. (S6O-05264)
A number of sources of financial support are in place to respond to requests for Gaelic school provision. That can include support from the learning estate investment programme, the local authority’s capital programme and the Scottish Government’s Gaelic schools capital fund. We also provide resource funding to help with the delivery of Gaelic-medium education. Further support for GME in schools comes from a range of bodies, including Education Scotland and Stòrlann.
The cabinet secretary will be aware that the retention and development of the Gaelic language hinge on tackling depopulation in the Gaelic heartlands. What support is the Scottish Government providing to employers and further education institutions to enable them to target population retention? What specific measures are being taken to expand the pipeline of qualified teachers in Gaelic-medium education in order to tackle staffing shortages?
Rhoda Grant has asked a number of questions, so I might not do justice to them all in my answer.
First, the need to provide support for the Gaelic heartlands is precisely why the establishment of areas of linguistic significance is critical. I am keen to move at pace in encouraging local authorities to engage with communities before presenting proposals for the designation of areas as areas of linguistic significance, because that will unlock a number of other support provisions.
Secondly, on support for employers, we recently renamed the Gaelic group that I help to chair. We had our first meeting under the new name of Tog this week, and there are—for the first time, I think—representatives from the private sector on that group. That indicates how important it is that the private sector is also supported. Through that group, we are considering how to support the creation of new jobs.
Given that the light on my microphone is flashing, I will write to Rhoda Grant on the issue of qualified teachers, which is a matter of priority.
Pupils are being provided with an excellent Gaelic-medium education in my constituency—which is outwith the Gaelic heartlands—in Condorrat primary school and Greenfaulds high school, but there is a desire among the community for a dedicated GME campus for those aged three to 18. Does the Deputy First Minister agree that, even where there is already provision, local authorities should be open to considering new requests to further enhance such education, particularly in areas outwith the Gàidhealtachd?
I commend the work that goes on at Condorrat primary school and Greenfaulds high school, and I share Jamie Hepburn’s aspiration for enhancing Gaelic-medium education. He is absolutely right to reflect that GME campuses for those aged three to 18 are transformational, because all the data and evidence indicate that, when a child is educated in an entirely Gaelic-medium area from the age of three to 18, the outcomes are stronger.
OBR Economic Forecasts
To ask the Scottish Government, regarding any implications for its work to grow Scotland’s economy, whether it will provide an update on its engagement with the United Kingdom Government regarding the Office for Budget Responsibility’s recent economic forecasts. (S6O-05265)
Ahead of the UK budget, the Cabinet Secretary for Finance and Local Government wrote to the Chancellor of the Exchequer to set out the Scottish Government’s priorities, but, once again, Scotland did not receive what we had highlighted—I have already talked about changes to the energy profits levy.
The Office for Budget Responsibility’s forecast, which was published alongside the budget, downgraded the outlook for the UK economy, based on weaker productivity growth. Since 2007, gross domestic product per person in Scotland has grown by 10.2 per cent, compared with 6.8 per cent in the UK, while productivity has also grown at a higher average rate.
The OBR has updated its growth forecasts for the next five years. It now forecasts average GDP growth to be slower than was projected in March 2025. It also downgraded its forecast for the UK for 2026, 2027 and 2028. In the light of those forecasts, what policies has the Scottish Government implemented to help to grow Scotland’s economy?
Economic growth is a priority for the Scottish Government. We will continue to support businesses through transformative initiatives such as the Scottish National Investment Bank and Techscaler, and through investment of up to £500 million in offshore wind. Scotland is a top destination outside London for foreign direct investment, and Scotland’s green freeports are attracting early-stage investment, such as Sumitomo’s £350 million commitment at Nigg and Haventus’s £300 million commitment at Ardersier. Our strengths are recognised by global credit rating agencies, which gave the Scottish Government a rating that is the same as the UK’s and higher than that of major European and global economies.
Closure of Fife Ethylene Plant
To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues regarding support for the workforce and local economy of Mossmorran, in light of ExxonMobil’s announcement that the Fife ethylene plant will be closed. (S6O-05266)
We are engaging with them extensively, and I very much appreciated Willie Rennie’s attendance at the summit that I hosted a few weeks ago. Since the announced closure, the First Minister and I have been in regular discussion on the topic. I have also been engaging with the Minister for Public Finance and the Cabinet Secretary for Climate Action and Energy to ensure that the Government remains focused on securing the best possible outcome for the site.
I appreciated the Deputy First Minister’s leadership at that summit.
Apart from the initial furore, there has been a lot of silence since the announcement, despite the fact that it will have a big impact on the local economy—I am sure that that is what the Deputy First Minister found when she visited the plant. Will she tell us of more tangible progress that is being made, such as who has been interested in coming to the site, how many jobs could be secured from that and how quickly it could happen?
I would be very happy to give Willie Rennie an update today, but—and perhaps this would be more useful—I want to continue to keep him updated as the process develops. As part of Scottish Enterprise’s early engagement, it has been working very constructively with ExxonMobil since the announcement was made.
We are looking at two potential opportunities. The first involves projects that were identified through project willow or the Grangemouth task force. Some of those projects might be a better fit for Mossmorran, and some of the companies are indicating that Mossmorran might be of more interest to them. Those are slightly more medium-term opportunities.
Secondly, and in the short term, Scottish Enterprise is looking at how to mitigate the impact on the local community by identifying ways to increase the number of jobs locally through supporting other employers in the community.
There is time for a couple of supplementary questions, but they will need to be brief.
Does the cabinet secretary agree that the sky-high cost of energy is crippling Scotland’s industries and that, given the immediate implications for the workers at Mossmorran and while the levers to make a difference and save jobs remain reserved to Westminster, it is essential that the Labour Government acts now to ensure a just transition and to support the energy sector?
Every household in Scotland is aware of how challenging energy prices are and of the fact that they have continued to increase since Labour took office. That is even more challenging for some energy-intensive businesses, which have seen no support and are not subject to a cap on the increase in energy prices. It is all the more difficult to operate in a globally competitive environment when other competitors, particularly across Europe, are seeing lower energy prices.
I listened intently to the Deputy First Minister’s response to Willie Rennie, and in particular to what she said about the project willow projects—which, if it involves taking potential jobs away from Grangemouth to give them to Mossmorran, sounds like robbing Peter to pay Paul. However, there is a wider concern, which is that Grangemouth and Mossmorran closing represents the loss of our industrial base. Where is the Scottish Government’s industrial strategy for the future?
Murdo Fraser said that he was listening intently, but perhaps he was not listening enough. The point that I made was that some of the businesses that have been exploring the prospect of locating in Grangemouth are recognising that Mossmorran may be better suited to their needs. It is not a question of taking from Grangemouth to support Mossmorran; it is one of retaining the jobs in Scotland. Where one site may not be a perfect fit, there may be more appropriate sites, such as at Mossmorran.
We are keen to use the Grangemouth process to support industrial assets generally. We have our green industrial strategy and, at a point such as this, it is a matter of actively delivering for the sites and retaining the jobs as far as we can.
That concludes questions on the Deputy First Minister responsibilities, economy and Gaelic portfolio.
Finance and Local Government
Local Government Services (Community-led Initiatives)
To ask the Scottish Government what assessment it has made of the contribution that community-led initiatives can make to supporting local government services and outcomes, and reducing demand through early intervention and prevention. (S6O-05267)
Our recently published public service reform strategy recognises the critical importance of community empowerment to the design and delivery of local services. Through the democracy matters process, we have gained valuable insight into the contribution that community-based organisations and individual citizens are already making to improving outcomes in local areas, as well as their desire for greater influence and control over decisions that affect them.
The cabinet secretary will be aware of the innovative transformation work that is under way in Clackmannanshire, supported by £1 million of investment from the Scottish Government, which puts community voice at the centre of designing local solutions. By contrast, does she agree that the United Kingdom Government’s top-down pride in place programme, which provides no funding for Clackmannanshire, undermines both devolution and genuine community-led initiatives such as those in my constituency? Is she concerned that, although Labour members of the Welsh Parliament have spoken out against that devolution grab by the Labour Government in Westminster, there has not been a squeak from the Labour Party here in Holyrood?
I agree with that. Although we welcome all investment to support Scotland’s communities, we are strongly opposed to the use of the United Kingdom Internal Market Act 2020—as the Labour Party here used to be—to fund activity in devolved areas in Scotland. The UK Government’s local growth funding, including the pride in place programme, has completely bypassed democratic scrutiny and accountability and has created stakeholder confusion, undermining the governance structures and work of local communities. That is a view that is shared by Labour members of the Senedd in Wales.
We have a strong track record of delivering regeneration with communities, and I hope that the UK Government honours our previous ministerial agreement to work together to maximise the impact of those funds for Scotland’s people and places.
I ask for supplementary questions to be brief.
Audit Scotland has warned that councils are under severe financial pressure this year, with community facilities and local services already being cut back. Community groups tell us that they simply do not have the capacity to take on more. Does the cabinet secretary therefore accept that relying on community-led initiatives is not a substitute for properly funded local government?
We have confirmation from the Accounts Commission of real-terms increases to local government funding for this year and the past two years at least, which helps to protect services and deliver for local communities. I point out to Alexander Stewart that at no point, so far as I am aware, has any member of his party made local government funding a key priority in the budget discussions. Perhaps there needs to be a little bit more communication of what the priorities are from the Conservative benches.
The North West Glasgow Voluntary Sector Network supports, connects and advocates for organisations providing vital services to the people who live in the north-west of Glasgow, many of them from some of the most deprived areas. All that could end in March, however, because it was told this week that it is losing its funding. What can the cabinet secretary do to help the network, and will she work with me to ask the council to rethink the decision to defund that critical service?
As Pam Duncan-Glancy will know, it is for councils to make decisions about the various organisations that receive funding in their areas. We also provide considerable funding to third sector organisations. If Pam Duncan-Glancy would like to furnish me with further details, I would be happy to communicate with her about that particular group.
Planning Applications (Job Creation)
To ask the Scottish Government how the planning process monitors the delivery of any job creation figures included within planning applications, including applications for salmon farms, once they are built and operational. (S6O-05268)
Planning authorities may monitor developments to consider whether they have been carried out in line with approved plans and conditions, which must have a planning purpose. They can also take enforcement action where appropriate. However, it is not the role of the planning system to monitor the number of jobs that are created as a consequence of any grant of planning permission. Planning decisions are made in accordance with the development plan unless material considerations indicate otherwise. Decision makers identify the considerations that are, in planning terms, material to the determination of the application.
Recent independent research indicated that job numbers in salmon farm applications may be significantly overstated, for example by applying job figures per pen even where pens will be empty on rotation. Does the Scottish Government agree that it should adopt best practice by analysing and verifying job creation claims before approval and after farms are established to ensure that there is transparency and accuracy in decision making?
The salmon farming sector and its wider supply chain are an important employer in Scotland, particularly in our coastal and island communities. An independent report on the sector’s economic impact, which was commissioned by Salmon Scotland and published last month, showed that Scotland’s salmon farming sector supports 10,850 jobs in Scotland and contributed £953 million gross value added to the national economy in 2024. On any individual case, it is for the planning authority to satisfy itself as to the accuracy of any information that is provided in support of an application and to decide how much weight to give to any particular material consideration when deciding on the application.
There are 3,600 businesses across the country that are involved in the Scottish salmon supply chain. That includes W&J Knox in Kilbirnie, which supplies new nets and ancillary products, as well as washing, sterilising and repairing existing stock items, employing more than 60 people locally in my constituency. Does the cabinet secretary agree that it is important that figures on job creation and sustained jobs include the wider supply chain?
As I indicated in my previous answer, the salmon farming sector, together with its associated supply chain, is a significant source of employment in Scotland, particularly in coastal and island communities. Mr Gibson rightly underscored the essential contribution that fish farming makes not only through direct employment but, as the business in his constituency illustrates, through the extensive economic activity that is generated across the wider supply chain.
Aberdeen City Council (Support)
To ask the Scottish Government how it is supporting Aberdeen City Council to maintain its local government services, including in response to any increasing social need in the city. (S6O-05269)
The 2025-26 budget delivered record funding of more than £15.1 billion for local government, which was a real-terms increase of 5.5 per cent. As part of the record funding package for local government, Aberdeen City Council will receive £505.1 million to support day-to-day services, which equates to an extra £37.5 million or an additional 8 per cent compared to 2024-25.
Aberdeen Cyrenians, which is a charity that supports people across Aberdeen who are facing poverty and homelessness, has warned that reforming the energy profits levy
“is not just an economic imperative, it’s a moral one”,
which is needed to prevent a “spiral of decline” and social harm in the city that no amount of welfare spending can reverse. Does the cabinet secretary share my concerns about the impact of Labour’s fiscal policies on local communities in my constituency? Will she say any more about the Scottish Government’s work with local authorities to mitigate that impact?
I share Jackie Dunbar’s concern that the retention of the reserved energy profits levy risks further consequences for jobs and investment across Scotland’s energy sector over the coming weeks, months and years. I assure her that the Scottish Government will continue to do what it can with the powers that are available to us, working alongside partners such as local authorities and trade unions, to support the energy workforce. Through our just transition fund and the energy transition fund, more than £120 million has already been invested in the north-east to support the region’s transition to net zero.
Energy Profits Levy (North East Scotland)
To ask the Scottish Government whether it will provide an update on its engagement with the United Kingdom Government regarding the energy profits levy and its implications for North East Scotland. (S6O-05270)
When the First Minister met the Prime Minister last week, he made it clear that the UK Government must act now or run the risk of delivering irreversible deindustrialisation and decline in Scotland’s economy. The energy industry is facing an existential threat unless it gets the support that it needs from the UK Government—including the removal of the energy profits levy—to help to ensure that there is a just transition from oil and gas to renewables that protects skills and delivers a pipeline of future investment.
The replacement windfall tax mechanism ignores the fact that the industry needs certainty now, as job losses are already reaching levels of around 1,000 a month. Furthermore, the EPL undermines the shift to a balanced energy mix, as the loss of the requisite skills and experience from the north-east gathers pace. Most alarming of all, HM Treasury stipulates that a windfall occurs only at a Brent oil price of around $95, which is a price that has not been seen in three years. That means that the EPL is, according to the Government’s own determination, unwarranted.
Does the cabinet secretary agree that retaining the EPL until 2030 risks thousands of avoidable North Sea job losses and that, instead, bringing forward the new oil and gas price mechanism to 2026 will protect jobs, stimulate investment and deliver much-needed energy and job security?
I agree very much with Audrey Nicoll’s proposition. I share the concern that the retention of the energy profits levy risks further consequences for jobs and investment across Scotland’s energy sector over the coming weeks, months and years. As the First Minister set out to the Prime Minister last week, the energy industry will continue to face a threat unless it gets the support that it needs from the UK Government. The First Minister pressed that point very firmly. Such support must include an urgent transition from the EPL to a fairer fiscal mechanism, to help to ensure that there is a just transition from oil and gas to renewables that protects skills and delivers a future investment pipeline.
With the likes of Stephen Flynn and John Swinney previously demanding an even higher EPL and one without investment allowances, I am very pleased that the Scottish National Party has reversed its position to align with Conservative calls to scrap the levy. Will the Government now also reverse its presumption against oil and gas, which is doing so much damage to north-east jobs and the north-east economy?
That is very much a rewriting of the history of the energy profits levy. It was the Conservatives who introduced the EPL, and we did not support its extension to 2029, which happened under the previous Conservative UK Government, or its further extension to 2030 and the increase in the rate that was confirmed at last year’s UK autumn budget. The Conservatives are fooling no one on this point.
High Street Retailers in South Scotland (Budget)
To ask the Scottish Government what measures it will take in its budget to support high street retailers in the South Scotland region that are at risk of closing. (S6O-05271)
The 2026-27 Scottish budget will be published and presented to Parliament on 13 January 2026. Further details will be available at that stage.
Retailers are often the largest employers of young people in our communities, yet more high street shops in my region are closing, or choosing not to open, because of high business rates, and that trend is contributing to our growing youth unemployment. Our current rates put us at a disadvantage compared with other parts of the United Kingdom. What will the Scottish Government do to provide relief to get our local economies moving?
The Scottish Government is listening to all interested parties, industry sectors and others as we collect information, analyse the data that is required and make the decisions for the budget for 2026-27, which, as I indicated, will be presented to Parliament on 13 January next year.
The minister will be aware that, across South Scotland and beyond, reassessments of non-domestic rates bills are causing very real concern to businesses, particularly in the retail, hospitality and leisure sectors. One small pub in a rural community has been given a draft rateable value of £24,700, up from £9,474; last week, a restaurant in Edinburgh that faced a rates increase of 54 per cent announced its closure with immediate effect; and a bed-and-breakfast business that has been operating for 17 years faces a 116 per cent increase that could well put it out of business. Will the minister now urgently intervene and ensure that bills do not rise for businesses next year, otherwise it will be the last Christmas for many pubs, restaurants and shops?
The revaluation process is carried out by independent assessors, but I am aware of the concern and have had communication from businesses on the points that Craig Hoy raised. We continue to look at the challenging economic conditions and the pressure that rates bills put on businesses.
Family Protection Insurance Plan
To ask the Scottish Government what communication the finance secretary has had with the United Kingdom Government and the Financial Conduct Authority regarding what support is available for policyholders impacted by the withdrawal of the family protection plan by CMutual and Maiden Life Försäkrings. (S6O-05272)
On 21 November, the Cabinet Secretary for Finance and Local Government wrote to Lucy Rigby, the Economic Secretary to the Treasury, to highlight the concerns of Scottish credit unions and their members. The chief executive of the Financial Conduct Authority received a copy of that letter. I subsequently met representatives of the FCA on 3 December to discuss the matter. Although the regulation of financial services is a matter reserved to the UK Government, we will continue to engage with all parties to help to secure the best outcome for those affected.
Ten days ago, thousands of elderly people, many in our most deprived communities, had their family protection plan unilaterally cancelled by CMutual. I understand that, since then, at least seven people in Scotland, who had paid in good faith for that plan, have died without cover, so I thank the Minister for Business and Employment for meeting some of those affected when they visited the Parliament two weeks ago. I also want to recognise that the UK Government has offered to bring stakeholders together. Will the Scottish Government urgently convene a rapid response group, involving the coalition of independent credit unions, to find a solution, at this very distressing time, and so stand with and stand up for the victims of this national scandal?
The Scottish Government will continue to engage with those affected. As the member knows well, we very much share his concerns and the concerns that have been expressed by MSPs from across the parties on the issue.
A few days ago, I had a further meeting with Elaine Rae, who represents the Scottish League of Credit Unions. As I mentioned, I also met representatives of the FCA. We will continue that engagement. During our meeting, as well as addressing general issues on which it could not go into detail—for legal reasons, as it has not yet reached conclusions on what it is looking at—the FCA said that perhaps 5,000 people across the UK are affected, 1,000 of whom are aged 80 or over and so might not be eligible for an alternative product. A number of those 1,000 people will reside in Scotland, so we should be concerned about them, particularly given the time of year and the anxiety that the issue is causing.
I assure the member that we continue to engage with the credit unions at the UK level—but particularly at the Scottish level and with the Scottish League of Credit Unions—as well as with the FCA. As I indicated, we have also made representations to the UK Government.
RAAC (Support for Local Authorities)
To ask the Scottish Government how much it will allocate in its forthcoming budget to local authorities to provide financial support to those affected by reinforced autoclaved aerated concrete, including businesses. (S6O-05273)
The 2026-27 Scottish budget will be published and presented to the Parliament on 13 January next year, and further details will be available at that stage. We expect every local authority in Scotland to keep those affected by RAAC up to date with guidance and support to help to manage this issue. We are keen to work with councils on exploring solutions, such as flexibility to support more affordable housing projects in their area to create the fiscal headroom needed.
This week, I met representatives of four small local businesses that had been based on Main Street in Coatbridge but had been forced to relocate in what they had been told was an emergency due to the presence of RAAC in an adjoining property.
That has led to massive financial and personal costs to those businesses, whose operators tell me that they have no financial support and very little practical support from the council, despite them believing that support had been promised at a previous council meeting and despite them having taken, in good faith, the advice that the council gave them. The council says that the businesses do not fit the criteria for any of its current grants. Surely that is not right. Those businesses support a town centre that is already in trouble, and they provide valuable employment.
What more can the Scottish Government do to enable local authorities to provide support to businesses in such exceptional circumstances, thereby reducing the risk of our high streets going into further decline?
I recognise that this is a difficult time for businesses that are affected by RAAC, and Fulton MacGregor has laid out the impact on such businesses in his area. We encourage all business owners to follow the guidance that is available, including that from the Institution of Structural Engineers. However, I will be happy to look further into the matter if the member will share the details with me.
Tax Thresholds (Budget)
To ask the Scottish Government whether it will provide an update on what plans it has to amend tax thresholds in the next Scottish budget. (S6O-05274)
As is normal, we will outline our income tax policy decisions in the Scottish budget, which for the year 2026-27 will be published on 13 January 2026.
Labour’s decision to freeze income tax thresholds—which was unsurprising, given what Labour has been doing in government—pulls more ordinary workers into higher tax bands. Although the Scottish National Party has criticised the Labour budget, it is doing the same in Scotland. In 2018, an experienced teacher’s salary sat at around £9,000 below the higher rate threshold, whereas, next year, that same teacher will be at around £9,000 above it. I do not see how that can be fair. Does the cabinet secretary accept that the continuation of threshold freezes is nothing more than a stealth tax on working people at a time when they need more money in their pockets?
The Scottish Government has introduced many measures that have put more money into people’s pockets, including the Scottish child payment, which has meant that Scotland is the only part of these islands with falling child poverty rates. We expect those with the broadest shoulders to pay a bit more; however, we will deliver a budget that will be fair to households, fund public services and continue our ambition to eradicate child poverty.
That concludes portfolio questions on finance and local government. There will be a brief pause before we move to the next item of business, to allow members on front benches to change.