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 the chamber that there is a lot of interest in supplementaries. As members will know, we are under considerable time pressure across the afternoon and into the evening. Therefore, I require brevity in questions and responses if we are to get through them all.
Gross Value Added (Growth)
To ask the Scottish Government for what reason Scotland will see the slowest GVA growth of the devolved nations over the next three years, according to the EY “UK Regional Economic Forecast 2025”. (S6O-04962)
Economic forecasts continue to underline the economic headwinds that we face, which are particularly difficult for an open, trade-focused economy such as Scotland. We have prioritised driving growth through investment and innovation and addressing economic inactivity with the limited powers that are at our disposal. However, if I could choose one issue that directly answers the member’s question, it would be that we face distinct demographic challenges. There is a strong need to boost our working-age population and seize the significant economic opportunities that are available to us which, in turn, would drive GVA growth.
I thank the cabinet secretary for that answer, but interrogating the data shows that, following 18 years of Scottish National Party rule, Aberdeen is projected to be the slowest-growing city in the United Kingdom, with falling household incomes between 2025 and 2028. Having hammered Aberdeen through a naive and ignorant presumption against oil and gas, an unevidenced low-emission zone, Scotland’s highest tourist tax and a business rates regime that is killing Union Street, what exactly is the Government going to do to reverse Aberdeen’s suffering under the SNP?
Let us be very clear on a point of agreement, which is that there are significant economic challenges across our regions. The member will know, particularly in the oil and gas industry, that companies that have unfortunately made part of their workforce redundant have nearly always cited the adverse impact of the energy profits levy. If memory serves me right, it was Mr Kerr’s party that introduced that.
The Scottish economy is currently part of a UK economic model that is less productive, with lower national income per head and greater inequality than independent countries that are comparable to Scotland. The UK’s relatively poor economic performance was evident before Brexit, which has made our economic prospects even worse. Can the Deputy First Minister outline how making decisions in Scotland, combined with our economic strengths, will lead to better outcomes?
The member is absolutely right to highlight those points. As I mentioned in my opening answer, there are particular challenges around the working-age population. Time and again, when I speak to businesses about their growth aspirations, they talk about the importance of securing the right skills. That comes from investing in training and skilling our population. However, without expanding the working-age population, it becomes a case of one employer taking skills from another employer in a circular way. The point is that, without devolution, which would allow a more progressive approach to visas and immigration, those issues will remain.
Visitor Levy (Impact on Hotel and Tourism Sectors)
To ask the Scottish Government what recent discussions the business minister has had with ministerial colleagues regarding the impact of the visitor levy on the hotel and tourism sectors. (S6O-04963)
The Scottish Government recognises the importance of the visitor economy and ministers regularly discuss how to grow the sector further. The Visitor Levy (Scotland) Act 2024 gives councils broad powers to shape a levy that suits local needs and benefits communities, councils and businesses, while supporting tourism. Some areas want greater flexibility, so, as the chamber heard yesterday, we are exploring options to extend powers and allow single or tiered flat-rate models in addition to the current percentage-based approach. Tourism stakeholders are involved, and the Minister for Public Finance will keep colleagues updated as that work progresses.
The minister should be ashamed about the chaos into which the Scottish National Party’s tourist tax has descended. Across Scotland, councils are consulting on the visitor levy, and some are on the point of introducing it, but huge uncertainty now hangs over them. Dumfries and Galloway Council is consulting on its plans, and local hotelier Matthew Wallace, who runs the Cairndale hotel and spa in Dumfries, says that there is no overtourism problem in the region. He adds that the levy is just a further increase in taxation and makes the region needlessly more expensive.
Will the minister join me in urging the Scottish Government to pause the implementation of the levy until it listens to the very real concerns of businesses in Dumfriesshire and fixes the problem that the Government has created?
I am surprised that, given his experience, Mr Hoy appears not to appreciate the fundamental point of the legislation, which is to enable local authorities to introduce the levy, should they so wish, after consultation with their local tourism sectors and wider communities. The Scottish Government does not impose the levy on any part of Scotland; we enable local authorities to take advantage of the legislation, should they so wish, and to do so in a way that is tailored to local circumstances. I know how valuable the visitor economy is to the south of Scotland.
I have visited Dumfriesshire many times. It is undergoing a revolution in tourism at the moment, and has a very positive story to tell. The member should make those representations to his local authority, and it should take those concerns on board.
The Visitor Levy (Scotland) Act 2024 gives businesses the opportunity to work with local councils to generate funding for enhanced facilities, heritage events and the promotion of local culture. Does the minister share my view that, in many cases, the visitor levy can enhance the visitor experience by making destinations more attractive and competitive?
I absolutely agree with the member’s points. We should remember that 21 out of 27 European countries have some type of occupancy tax that is broadly equivalent to the visitor levy, and they do so for the very reasons that the member outlines.
Many people whom I have spoken to in the tourism and hospitality sectors of Scotland are relaxed about the levy. We want to ensure that it is implemented where appropriate and in an appropriate manner locally. That is, of course, a discussion for local authorities.
Our communities face many issues, and they want them to be addressed through the improvement of infrastructure to enable them to cope with the number of tourists and visitors in their areas. Money being put back into the community to grow local facilities and infrastructure is a positive story that people want to tell. It is only a good thing for visitors and local communities.
Does the minister agree that the Scottish Government has sought, by way of an amendment to the Housing (Scotland) Bill, to bring in the power for local authorities to change the levy to a flat tax or to provide that as an option? Will he confirm that that request was made but was rejected by the Presiding Officer? If it was made, does that not prove that the Government has accepted that the law is flawed? If it is flawed, will the Government now pause it and correct the flaw by bringing forward primary legislation, or is tourism not important enough?
As I explained to the chamber yesterday, having listened to the sector, the Minister for Public Finance has been exploring how to find a legislative vehicle to introduce further flexibility. Of course, if we had not listened to the sector, members would right now be protesting that we were not listening to it, but we are listening to it and are looking for opportunities to introduce further flexibility. Clearly, there was consultation on the original legislation, and there have been further comments from industries since then. We are responding to the feedback that we have been hearing, and we are listening closely to the concerns of the sector.
Town Centres (Development)
To ask the Scottish Government what steps it is taking to redevelop town centres across Scotland. (S6O-04964)
We want our town centres to be revitalised. That is backed up by policies such as our leading town centre first principle, the delivery of the town centre action plan and provision of support through the national planning framework 4.
We also provide direct financial support for town centres through the regeneration capital investment programme, the place-based investment programme and the regeneration capital grant fund. That includes investment of more than £62 million this year alone to help transform vacant properties, bring them back into productive use and unlock opportunities for housing, business and enterprise activity in town centres.
I am sure that many colleagues across the chamber, including the Deputy First Minister, will now be familiar with my constituency, which mirrors many towns throughout Scotland that have been starved of funds and neglected over the past 18 years when the Scottish National Party has been running Scotland.
Members will also know that, although there remains a distinct Hamiltonian identity, the town centre is in much need of regeneration—the issue was in the top 3 during my election campaign. However, thanks to budding potential from renewables, digital, cybersecurity and infrastructure projects, Hamilton is primed for growth—
Question.
—from new industries. As a result, the town centre must be fit for purpose and able to embrace the growth. At the same time—
I need a question, Mr Russell.
South Lanarkshire Council has undertaken a comprehensive consultation and allocated £8 million to kick start the redevelopment. However, it needs Scottish Government—
I need a question, Mr Russell.
Can the Scottish Government match the £8 million that South Lanarkshire Council has put in?
It is for South Lanarkshire Council to develop plans for Hamilton town centre, and it sounds as though it is doing so. I am aware that the council published details of that 15-year master plan for Hamilton town centre and that there was strong support when the plans were consulted on.
South Lanarkshire Council has received more than £27 million of regeneration capital investment since 2014, which includes £3.4 million through the town centre fund.
We will continue to work with local authorities such as South Lanarkshire Council on their priorities.
I have a number of supplementaries. I will try to get in as many as I can.
There are many town and city centres, such as in Perth in my region, where there are a large number of former commercial premises that will never come back into use for retail. They could potentially be converted to residential properties, but the current process for doing that is cumbersome, bureaucratic, expensive and time consuming. Can the Scottish Government look at some way of streamlining the planning process to make it easier for the owners of those properties to transfer them from commercial use to residential use?
There are a number of points that I agree with, not least because of the potential to revitalise Perth town centre, of which I have great memories.
There are a number of non-domestic rates incentives for bringing vacant properties back into use. We have also gone through a consultation process on compulsory purchase of property that has remained empty and derelict for some time.
If there are particular suggestions on how to streamline the process to enable residential development to take place, I am certainly open to them, and I imagine that the planning minister is as well.
The retail sector is vital to Scotland’s economy and supports our local communities with services, amenities and employment opportunities.
Can the Deputy First Minister say any more about what the Scottish Government is doing to support Scottish businesses and regenerate our local areas, in particular through the investing in communities fund, which has provided £336,000 for New Start Highland in my constituency?
I am a big fan of New Start Highland—I saw some of its representatives at an event on Monday.
The member is absolutely right to talk about how critical the retail sector is. It is right at the heart of our agenda for economic growth. We have provided funding for the Scotland Loves Local campaign, the regeneration funding that I mentioned and, of course, the competitive non-domestic rates regime.
The investing in communities fund targets the most disadvantaged communities to deliver projects, services and activities that address poverty and disadvantage. We are providing more than £9 million in funding this year, which makes an enormously valuable contribution to organisations such as New Start Highland.
I hope that the Deputy First Minister will be as appalled as I was to learn that Port Glasgow was awarded the dreaded carbuncle award for the most dismal town in Scotland. Thankfully, sense has been seen. There has been a huge U-turn, and the award has been ditched in favour of the heart on your sleeve award. However, there is a serious point behind all this. Many small towns and high streets feel unloved and forgotten, and their Government in Edinburgh feels distant to them.
What more can the Scottish Government do to ensure that the so-called carbuncles of Scotland’s retail deserts can be turned into busy, buoyant and bustling town centres instead?
I put on record how much I love Port Glasgow—I am a huge fan of Port Glasgow. I have probably spent more time than many travelling to Port Glasgow in the years that I have been a minister, for very obvious reasons.
The member mentioned a number of different points that have driven the challenges for town centres, including the move to online shopping, which is a challenge for the retail sector in particular. I am very committed to working with local authorities and local leaders on the ground to deliver master plans or transformation for those areas.
Question 4 was withdrawn.
Small Business Support (Coatbridge and Chryston)
To ask the Scottish Government what targeted support it is providing to small businesses in Coatbridge and Chryston to help them deal with inflation and rising costs. (S6O-04966)
The Find Business Support website offers a centralised platform for accessing public sector support across the country. Businesses in Coatbridge and Chryston can explore available grants, funding and advice, as well as events that are tailored to their needs. To help businesses to manage rising operational costs, the cost of doing business section provides guidance and funding opportunities that support greener, more efficient and financially resilient practices.
The Scottish Government also offers a competitive non-domestic rates regime, with a package of reliefs that is worth an estimated £733 million this year. That includes the most generous small business rates relief in the United Kingdom. As of 1 June 2024, 4,110 properties in North Lanarkshire benefited from 100 per cent relief through the small business bonus scheme.
Given the significant pressures that local firms in Coatbridge and Chryston—especially those in our town centres—continue to face with rising energy bills and supply chain costs in particular, will the minister set out how the Scottish Government will ensure that support is targeted at and reaches the small businesses that need it the most? What further steps is the Government considering to help to sustain jobs and protect local economies in communities such as mine?
In her answer to another member’s question, the Deputy First Minister outlined some of the steps that we are taking as a Government. We will continue to support businesses and communities with our competitive non-domestic rates package. We have also allocated more than £236 million in the current financial year to Scottish Enterprise to support its work to deliver transformational projects across the country. The most recent figures show that, last year, it supported, helped to create or safeguarded more than 15,000 real living wage jobs, which was the second-highest figure on record.
Because the member mentioned the rising cost of energy bills, I urge him to signpost his local businesses to Business Energy Scotland. Although UK energy policy is being mishandled by the UK Government—that has been the case for many years, despite Scotland being an energy-rich country—we are doing what we can to help businesses to bring down their energy bills. A local butcher in my constituency saved a lot of money by contacting Business Energy Scotland after I referred him to it.
International Trading Links
To ask the Scottish Government what its current priorities are for international trading links. (S6O-04967)
Our export strategy, “A Trading Nation”, sets out the focus of our trading links. That was updated and published on 11 September. Europe and North America remain key markets for Scottish exporters and there are increasing opportunities in the Gulf and east Asia. The creation of a category for special interest markets also enables our enterprise agencies to engage flexibly with fast-growing emerging markets such as Brazil, Mexico, Indonesia, Singapore and South Korea. The addition of Ukraine also empowers us to bolster trade with that country in its hour of need.
The minister will be aware of the vital role that connectivity plays in international trade. I ask him to clarify where matters stand with regard to getting the proposed Rosyth to Dunkirk ferry over the line, specifically on what I understand is the key outstanding issue. What actions need to be taken by the Scottish Government and what actions are required to be taken by the United Kingdom Government to allow Grangemouth to be designated as a border control post on a temporary basis for the purposes of freight being transported on the new ferry route?
I thank Annabelle Ewing for raising an important issue in her constituency. I am aware that she has met the Deputy First Minister to discuss this topic and has been in correspondence with her. We continue to communicate with potential operators and Scotland’s main ports to explore opportunities for new commercial ferry services so that our exporters and passengers have more direct routes to and from Europe.
On the obstacles that the member referred to, I know from first-hand experience that a main obstacle is the border control post requirements, which were brought in due to the UK exiting the European Union. There have been some recent announcements by the UK and the EU on potentially relaxing some of those obstacles through the sanitary and phytosanitary agreement, as it is known. However, until the effects and conditions of the agreement is known, it is difficult for the Scottish Government to provide certainty about future border control post requirements. As the member will appreciate, our officials are continuing to discuss those matters with the sponsors and with UK colleagues.
The minister claims to be focused on international trade, yet Scottish exports to the rest of the United Kingdom are worth three times more than exports to the EU and the rest of the world. Why is the Scottish National Party so obsessed with grandstanding abroad, instead of strengthening the most important trading relations, which are right here with the rest of the UK?
I do not know what to say—I feel speechless after hearing that point. Is the member honestly suggesting that Scotland should abandon our international trade links and the tens of thousands of jobs in Scotland that rely on exports to overseas markets, in particular to the US but also to Europe? Of course, if we had stayed within the European Union, we would have obtained many more of the benefits of that relationship.
The member must be the only member in any Parliament in the world—maybe not in the whole world, but certainly in the countries that I can think of—who would argue that we should cut off our international links. Of course trade with the rest of the UK is extremely important to Scotland’s economy, but so is international trade. As a country of 5.5 million people, if we want to grow our economy, we have to look towards the rest of the world as a big market, as well as to the rest of the UK.
Glasgow City Region Deal (Transport and Connectivity)
To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues regarding how the Glasgow city region deal can support improvements to transport and connectivity across the region. (S6O-04968)
We regularly discuss matters of importance with colleagues to ensure that we are securing strong economic growth, including with regard to transport investment. The Glasgow city region deal is supporting a range of projects to strengthen regional transport and connectivity.
I welcome that update. Residents in Lanarkshire are in favour of more action to make public transport more affordable and accessible, but they do not favour proposals by the Scottish National Party Glasgow City Council to introduce a charge for drivers visiting the city. Does the Deputy First Minister agree that that would be the wrong policy direction? Will she and the Government accelerate plans to boost transport and connectivity investment to support people in Lanarkshire, not punish them?
Without wanting to comment on decisions that are rightly to be taken by local authorities, because I am a strong believer in local decision making, I agree with the importance of integrated transport links, additional and improved transport links and ensuring that all parts of the region benefit, including Monica Lennon’s constituents in Lanarkshire.
A number of commitments through the city region deal emphasise transport. It is always worth remembering that it is a Glasgow city region deal; it is not just about the town centre.
It is vital that the Scottish Government continues to work to stimulate economic development, growth and connectivity across all regions of Scotland. Will the Deputy First Minister say more about how the growth deals and strategic targeted investment from the Scottish Government are enhancing economic opportunities and innovation across Scotland?
As briefly as possible, Deputy First Minister.
There are a number of examples of how the growth deals have supported the delivery of transport links, connectivity and improved infrastructure. What is important about the deals is that they are done on a tripartite arrangement. In other words, they are directly informed by local priorities, with the support of local authorities and the UK Government.
City Region Deals (Major Projects)
To ask the Scottish Government what action it is taking to ensure that major projects funded through city region deals are delivered at pace through administrative hurdles, to avoid any rising costs or communities waiting unnecessarily for planned infrastructure. (S6O-04969)
As part of our £1.9 billion commitment to the deals programme, we provide regional partners with the opportunity to lead on the delivery of major long-term infrastructure projects that will unlock transformative economic growth opportunities. That could be the Fife industrial innovation investment programme or the Edinburgh innovation hub, through the Edinburgh and south-east Scotland city region deal. In other words, deal-funded projects must adhere to statutory processes, but they are ultimately led and informed by local partners.
I accept the premise that local decision making is a priority, but we are facing congestion at Sheriffhall that is frustrating for drivers and is holding back the economy of the Lothians and, frankly, all of south-east Scotland by making transport for businesses slower and far less reliable. Why has it taken two years for ministers to even consider the outcome of the public inquiry, which was submitted back in October 2023? When will the decision be made that we will get our Sheriffhall roundabout?
We are keen to see progress being made. More than 1,200 items of evidence were lodged for that public local inquiry, which indicates the extent of the interest in it. That also needs rigorous scrutiny from technical and legal advisers, and they need to be separate from those who are involved in the promotion of the project. Consequently, only a small number of people are working on the decision-making advice, and they are also the only people to be sighted on the inquiry report. We await advice on that from those officials.
With apologies to those whom I was not able to call, that concludes portfolio questions on Deputy First Minister responsibilities. There will be a brief pause before we move to the next portfolio to allow members on the front benches to change.
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