Finance, Employment and Sustainable Growth
Employment Opportunities
The Scottish Government is deploying significant effort to increase employment opportunities during these challenging times. In 2010-11, the work of Scottish Development International generated more than 9,300 planned jobs. During the same period, £52 million of regional selective assistance funding was accepted, leading to the creation or safeguarding of more than 7,000 jobs in Scotland.
I welcome what the cabinet secretary has said, but he will know of particular concerns about the alarming levels of youth unemployment. Therefore, while welcoming the community jobs Scotland initiative, which is supporting 2,000 work opportunities in the third sector, will he give serious consideration to using some of the new resources announced for youth employment to expand that scheme within the voluntary sector and into the private sector, as happened with the future jobs fund, which the United Kingdom Government mistakenly abolished when it came into office?
The Government made clear in the Labour Party debate on youth employment a couple of weeks ago our determination to use the additional £30 million that we have allocated to support new projects that would involve dialogue with our local authority partners, colleges, the third sector and the private sector. Those issues are under consideration by the new Minister for Youth Employment, Angela Constance, and some initial information will be shared with Parliament before the Christmas recess. As we speak—or certainly this afternoon—Ms Constance is in discussion with a range of partners and stakeholders on how those issues will be taken forward. I will ensure that Mr Chisholm’s points are considered as part of that.
The generators are being switched over because of a fault with the power system. We will keep going.
What impact will recent high-profile investment announcements by companies locating to Scotland have on increasing employment opportunities?
We have been successful in a number of different discussions with companies about investing in Scotland. Amazon, Aker Solutions, Avaloq, Vion, Dell and FMC Technologies are among the companies that we have successfully recruited to Scotland. They have created or plan to create more than 2,400 jobs in a range of sectors and geographic areas, which will contribute to the creation of new economic and employment opportunities for the people of Scotland.
I am told that we will have to endure this gloom for a further five minutes; thereafter we should get the power back on.
Aberdeen City Council (Meetings)
Presiding Officer, I hope that your reference to the gloom was no reflection on my answers.
None whatsoever.
I am sure that it was not.
I am sure that the cabinet secretary will not keep me in the dark with his answer to this question.
I would be very happy to discuss the business rates incentivisation scheme with the leader of Aberdeen City Council. As I announced in my statement on local government finance last Thursday, we have come to an agreement with local government on the new scheme, which will take effect from 1 April 2012. The provisional individual local authority targets for 2012-13 will be issued before Christmas, after which each local authority will discuss and agree its own targets with the Scottish Government during the consultation period.
Question 3 has not been lodged by Jim Eadie, although we have received an explanation and an apology.
Job Creation (Inverclyde)
The Scottish Government is committed to supporting sustainable economic growth and job creation throughout Scotland. We are prioritising spend on capital and investing in a supportive business environment to maximise the impact on jobs.
The minister will be aware that, according to the unemployment figures that were released last week, Inverclyde suffered the biggest rise of any area in Scotland in the past year. With year-on-year cuts in the urban regeneration company budget, the challenge of attracting jobs and businesses gets ever more difficult.
Duncan McNeil makes extremely fair points. We are all concerned about the levels of unemployment. The statistics that I have suggest that the employment rate for people between the ages of 16 and 64 in Inverclyde was 70.4 per cent in the year that ended in March 2011, which was in line with the rate for Scotland as a whole.
I welcome the money that has been announced for the building of ferries in Port Glasgow, and the additional money for Riverside Inverclyde. Over the past four years, some £99 million of investment has been put into social housing in the Inverclyde area, which has kept a large number of apprentices and skilled employees in work.
I was not aware of that matter, so it is probably correct that I decline to comment, other than to say that, plainly, all of us across all political parties welcome the taking of every practical and effective step to generate jobs and to create apprenticeships and youth employment in the area. It would not be appropriate for me to comment on a situation the details of which I am unaware of.
Growth Forecasts
We come to question 5 from Richard Baker, as we emerge into the sunlight.
As I rise, Presiding Officer. [Laughter.]
I am looking forward with optimism to the supplementary question, which I am sure will be a bundle of cheerfulness and sunshine.
Just like you.
I hear Jackie Baillie saying, “Just like you.” That sums up the position. [Laughter.]
Given the revision downwards in the growth forecasts both by the OBR and, for the Scottish economy, by the Ernst and Young independent Treasury economic model—ITEM—club report, does the cabinet secretary intend to produce Scottish Government forecasts for economic growth and supply such figures to the Economy, Energy and Tourism Committee? Given the worrying growth trends that we are facing, will he rethink key aspects of his spending review, including his proposals on college budgets and to reduce the budget for affordable housing?
The Government has at no stage set out economic forecasts for the Scottish economy. We have set out an economic horizon and a set of targets, aims and ambitions, which is the correct thing for the Government to do.
Given the downgrades, will the Scottish Government undertake modelling to see what impact the reduced growth could have on its business rates collection?
As I have made clear to Parliament before, I keep the issues of business rate collection under constant review. That is a routine part of Government activity, and I monitor those returns on an on-going basis during the financial year. I also monitor closely another factor that impinges on the issue, which is the pattern of appeal losses as a consequence of revaluation, to determine that they are within the boundaries that I established in my assessments.
Does the cabinet secretary agree that, rather than being anchored to the dead weight of the Con-Dem coalition, we should have all the financial powers here in Scotland so that we can implement our own policies to achieve growth and not be dragged under by poor decisions by Messrs Osborne and Alexander?
As a matter of fact, I agree with Mr Wheelhouse. Indeed, I think that we could all do with hearing a bit more from Mr Wheelhouse. A lot of people would benefit—it might even make some more people cheerful on a Thursday afternoon.
We regret that Hugh Henry has not lodged question 6.
Small Business Bonus Scheme
The latest official statistics, published on 27 October 2011, show that 85,000 premises in Scotland, or two out of every five commercial premises, are currently in receipt of the Scottish small business bonus scheme.
Many businesses across Scotland are continuing to operate as a direct result of the small business bonus scheme. What does the minister believe the impact would be if the Labour Party’s plan to take away the scheme were to be implemented?
I am pleased to reassure Scotland that, for the next five years, the small business bonus scheme will remain firmly in place. From what I understand of the Labour Party’s proposed reforms, given the limited amount of detail available, they would place administrative burdens on councils, which would need to monitor the number of employees in each property. Entrepreneurship would be stifled, and many sole traders would simply not qualify. Perverse incentives, such as an incentive to replace full-time staff with part-time staff, would also be created. In any event, the amount that would be saved by the proposals for the small business bonus scheme would, in many cases, be insufficient to employ anyone. I think that we would be better sticking with the Scottish National Party Government and our secure, robust, guaranteed offer of the small business bonus scheme for the next five years.
Capital Investment in Glasgow
The significant capital investment programme that is being undertaken in Glasgow will support jobs through the construction phase and will create a legacy of assets that have long-lasting economic benefits.
I welcome particularly the long-term approach that the Scottish Government is taking to capital investment in Glasgow; that approach is illustrated by the £285 million upgrade to the subway by 2019, for which I have long campaigned, and the new City of Glasgow College, which will get £200 million of expenditure and which will be completed by 2016. When work begins as a result of significant capital investment in Glasgow, will local companies and my constituents benefit through contracts being awarded, jobs being created and skills opportunities such as apprenticeships being developed?
I can certainly assure Mr Doris that the Government has every intention of embarking on a procurement process that will deliver as many opportunities as possible for companies based in Scotland. The public contracts Scotland portal is a convenient and effective way of ensuring that companies in Scotland are informed and advised about the opportunities that exist in that respect.
Small Businesses
Scotland’s small businesses are key to sustainable economic growth and we are committed to ensuring that we have a supportive business environment. Official statistics published on 27 October 2011 show that 85,000 properties, or two in every five commercial premises, were in receipt of a tax break through the small business bonus. In addition, support from the business gateway is helping record numbers of start-ups and existing businesses.
In my constituency, the Edinburgh 21st century homes regeneration project has given way to the demolition of more than 900 homes in Muirhouse. The previous Labour administration’s decision to demolish those homes en masse has resulted in businesses struggling and many of them closing. Will the minister look into the matter to see how the businesses can be assisted throughout the regeneration phase?
Plainly, the events that the member described amount to a change for the worse in the trading expectations and patterns of the businesses concerned. Members will appreciate that I used to be a bit of an anorak in respect of business rates—used to be—so I can advise members that valuation joint boards are independent of Scottish ministers and that all businesses have a right of appeal for rateable value assessments where there has been a material change in circumstances. I would therefore recommend that the member pursue that point with the businesses concerned and perhaps ensure that they are aware of the potential right of appeal.
Solar Panels (Domestic Use)
I have seen for myself the success of solar photovoltaic businesses in Scotland and I met representatives of the sector last Thursday to discuss how we continue to support its growth beyond the current difficulties caused by the United Kingdom Government’s review of the feed-in tariff.
I agree with the minister that the UK Government’s reduction of the feed-in tariff has been very damaging to the solar panel industry. Does the minister share my view that the three crucial benefits from the solar panel industry are employment, its helping us to meet our climate change targets and its being excellent in relation to our renewables targets? Would the minister consider using the fossil fuel levy of £110 million, which has now been ring fenced, for a Scottish equivalent of the feed-in tariff scheme that would ensure that over the next 12 months there is employment in the solar panel industry and that we continue to meet our climate change targets?
I agree with Mr Stewart about the three benefits. However, the feed-in tariff scheme is reserved to Westminster. I am always happy to look into a suggestion, but I suspect that we do not have the legislative powers that are required in this case, although I hope that Mr Stewart will support our moves to acquire them.
A 200-signature letter and a 17,000-signature petition were yesterday handed in to the Prime Minister and the Deputy Prime Minister by industry representatives. What representations does the minister plan to make to the UK Government to try to have it reverse what I believe to be an illogical decision on the feed-in tariff for photovoltaics?
I wrote to Chris Huhne on 24 October and 3 November to express my concern and met, at my behest, a number of solar energy companies last Thursday, which members will recall was not a particularly sunny day. There was huge concern around the table about the number of job losses in Scotland, which could reach the high hundreds, or more.
Council Tax Benefit
The UK Government is abolishing council tax benefit and removing altogether from the social security system support to help individuals to meet their local taxation liabilities. We have been working with local government colleagues to explore future means of providing relief to individuals in meeting their council tax liabilities and will consult in due course.
I thank the new minister for his response. Given the critical importance of council tax benefit to people on low incomes, I am sure that he shares my regret at the 10 per cent cut that the UK Government has imposed on it.
No decisions have been taken on how the measure will be applied in Scotland. It is wrong to assume that we will simply accept the UK Government’s decision. The Scottish Government continues to challenge the UK Government on the decision about, and direction of, the policy and we also challenge the timescale for the 10 per cent cut, the logic of and rationale behind such a move, the impact on people, and the baseline figures. I ask Jackie Baillie to join me and others in putting maximum pressure on the UK Government to steer away from what is a very reckless decision for Scotland.
Economic Growth (Capital Spending)
The “Infrastructure Investment Plan 2011”, which was published on 6 December, sets out our ambitious programme of capital investment from now to 2030 and explains how the spend will help to boost economic growth.
Does the cabinet secretary agree that the recently announced capital investment programme, which includes a £32 million investment for Harris academy in Dundee, a £20 million investment in an unlicensed medicines unit in Dundee and a £9.2 million investment in a child and adolescent mental health facility, also in Dundee, will not only provide maximum value for taxpayers’ money but deliver world-class education and health facilities that are fit for the 21st century? Does he share my hope that many of the jobs in constructing the facilities will create and sustain employment in the local economy?
I welcome Mr FitzPatrick’s remarks. The projects that he referred to come on top of the Government’s existing commitments in Dundee, not least of which is the commitment that we were able to fulfil in the spending review to supporting development of the Victoria and Albert museum, which will have a transformational effect on the city.
Wind Farms (Guidance on Siting)
Paragraphs 187 to 191 of the “Scottish Planning Policy” document set out the strategic approach to dealing with wind farms, including siting. The document is available on the Scottish Government’s website.
I thank the minister for his answer, but in practical terms we are experiencing a periodic free-for-all in applications. Local authorities that address their responsibilities in this respect are being immediately inundated with applications, as a result of which hotspots exist and continue to form around the country. Will the Government accept its responsibility for this ill-advised energy policy and shoulder its responsibility to provide real and usable strategic guidance on the siting of wind turbines?
Guidance was put in place in 2002, 2006 and 2009, and—as I said in the debate a couple of weeks ago at which Alex Johnstone was present—further guidance on cumulative impact will be issued shortly by Scottish Natural Heritage.
The minister was present at the members’ business debate on wind farms two weeks ago. He will have noticed the significant level of public and cross-party interest in the issue. Will he commit to a debate on this important issue in Government time early in the new year?
I am aware of the debate the other week, which Neil Findlay led. I thought that members from all parties made useful contributions, which we are studying. I expect that we will debate matters further in the Parliament as time goes on.
Fossil Fuel Levy (Energy Demand)
The provisions of the Energy Act 2004 that apply to the fossil fuel levy funds state that they must be used
I welcome the potential for using the fund in the broadest fashion. Could the infrastructure for renewables development benefit from the fund through the development of ports and means of communication, to link places where developments are taking place in the renewables sector with the rest of the country?
We will be happy to consider whether it will be possible to use fossil fuel levy funds for such purposes.
Does the minister intend some of the fossil fuel fund to go to yards in the Highlands and Islands, such as the Nigg yard, to give them the opportunity to play a key role in wind farm construction? When will the allocation of the fund be announced?
I am pleased to say that I understand that the Nigg development, which we all welcome and which will bring around 2,000 jobs to the Highlands, is already being assisted by public funding, through Highlands and Islands Enterprise. Whether there is a need for further public funds is a matter that we would look to, and we would do so sympathetically.
Small and Micro Businesses (Highlands and Islands)
We are committed to offering a range of support, through Skills Development Scotland, to make it easier for smaller local businesses throughout Scotland to hire staff and take on one of the 25,000 apprenticeship opportunities that are available this year. The support includes access to £1,000, to support 16 to 19-year-olds who have completed pre-employment training into a job or an apprenticeship, and access to £5 million to help employers to recruit people aged over 18 who are struggling to find work. For businesses that have fewer than 50 employees, £2.5 million is also available, in the form of £1,000 rebates for the additional recruitment costs that small businesses incur.
Does the minister agree that by far the majority of businesses in the Highlands and Islands are small and micro and that there is a particularly high rate of membership of business organisations such as the Federation of Small Businesses and the Scottish Council for Development and Industry? Will Skills Development Scotland use those organisations to promote employment initiatives? Traditionally, take-up of such initiatives has been fairly low, so it would be good if better information was delivered through business organisations.
Jean Urquhart makes a good point. By sheer coincidence, I met business organisations this morning and discussed those and other matters with them. As Jean Urquhart said, in the Highlands and Islands there is a high rate of membership of organisations such as the Federation of Small Businesses, which provides comprehensive services to small businesses, as I well know. We will continue to do everything we can to ensure that businesses are aware of the support, assistance, advice and mentoring services that they can get from business bodies such as the FSB, the SCDI, the Scottish Chambers of Commerce and the Institute of Directors.
Renewables Projects (Employment and Economic Growth)
The “2020 Routemap for Renewable Energy in Scotland” set out the scale of opportunity for economic growth and job creation that is associated with renewable energy in Scotland. It highlighted the potential for renewable energy to create tens of thousands of jobs and secure billions of pounds of investment in our economy. The £200 million that has been committed to renewable energy as part of the spending review, along with the additional £103 million from Scotland’s fossil fuel levy surplus, will act as a significant lever to private sector investment and will help to deliver our ambitions.
The cabinet secretary will be aware of the long history of engineering in my constituency of Glasgow Anniesland and the essential role that apprenticeships play in the sector. How will future investment in renewables benefit Clydeside?
The city of Glasgow has a long history of innovation, invention and engineering excellence and many of those skills remain to the fore in the city. I have every confidence that many areas such as Mr Kidd mentioned will benefit from the engineering and technology developments that will be associated with the renewables revolution. Major investment is taking place in the city through Gamesa and through the University of Strathclyde’s international technology and renewable energy zone—ITREZ—project. A number of interventions are taking their course and I am sure that there will be many more as the city increases its presence in renewables activity.
Hotel Bed Levy (Edinburgh)
We have no plans to introduce a bed tax and there are no existing legal powers for local authorities to levy a local bed tax or tourism tax.
The minister will be aware that the City of Edinburgh Council has voted to investigate the possibility of such a levy and to come back with detailed proposals within the local government framework. Does he agree that it might make sense for there to be contact between the council and the Scottish Government to allow the council to tap into the Scottish Government’s expertise and network of contacts to ensure that all parties find a productive way forward?
I read about the bed tax proposal in the newspapers. Obviously, we are always ready to engage with local government, but there is a high risk that a visitor levy could damage the industry’s competitiveness, especially in the current economic circumstances. Price is a key threat to the United Kingdom’s competitiveness. Unfortunately, the UK ranks 135th out of 139 for price competitiveness. All but three members of the European Union have lowered VAT rates for hotel accommodation and some have done so for other tourism services. The UK VAT rate on hotel accommodation is high, at 20 per cent. Some people would say that we already have a quasi bed tax and that it is called VAT.
Question 18 has regrettably been withdrawn by David Torrance. Question 19 is from Anne McTaggart. Quickly, please.
Credit Unions (Membership)
The Scottish Government supports a range of initiatives that are designed to improve money management and tackle poverty and they signpost credit unions as an alternative to banks.
The United Kingdom Government’s Welfare Reform Bill will put significant financial strain on a number of our most vulnerable groups. Does the cabinet secretary agree that credit unions will have a crucial role to play in providing ethical financial support and advice, particularly to those who are most affected by the bill? Furthermore, does he agree with me—
Cabinet secretary. [Laughter.]
Does the cabinet secretary agree that credit unions require additional assistance from the Scottish Government?
I apologise.
I acknowledge the interest that Anne McTaggart has taken in credit unions in her role as vice-convener of the cross-party group on credit unions. I endorse the role that they play in supporting individuals on low incomes and those who face financial hardship. Advice from and participation in credit unions is infinitely preferable to some of the other money-lending opportunities that are all too readily available to vulnerable individuals in our society.
I inform members that the mains power supply to the building was—self-evidently—interrupted this afternoon due to a fault that is affecting central Edinburgh. Scottish Power advises that interruptions to its customers might continue until 4.30 pm. To avoid further disruption, a decision was taken at 2.15 to switch to our standby generator. We apologise for the short interruption to the lighting in the chamber. We are assured that there should be no further interruptions to the rest of today’s business.
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First Minister’s Question Time