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Chamber and committees

Meeting of the Parliament [Draft]

Meeting date: Wednesday, March 27, 2024


Portfolio Question Time

Wellbeing Economy, Net Zero and Energy

The Deputy Presiding Officer (Annabelle Ewing)

Good afternoon. The first item of business is portfolio question time and the first portfolio is the wellbeing economy, net zero and energy. I remind members that questions 3 and 7 have been grouped and that I shall therefore take any supplementaries to those questions after both have been answered.

Economic Inactivity

To ask the Scottish Government what analysis it has undertaken to measure the extent of economic inactivity in Scotland post-Covid-19 pandemic. (S6O-03260)

The Cabinet Secretary for Wellbeing Economy, Net Zero and Energy (Màiri McAllan)

The Scottish Government routinely analyses labour market data. Despite challenging conditions, the labour market remains resilient, with near-record numbers of payrolled employees in February this year. Scotland’s inactivity rate from October 2022 to September 2023 was 22.1 per cent, which was similar to the pre-pandemic rate. Data from the Office for National Statistics indicates that more people were inactive because of being students or because of illness, whereas fewer people were inactive because of looking after the family and home or because of retirement.

We are taking action to help people access and stay in the labour market. That includes employability support, health and work services and an investment in childcare.

Liz Smith

The cabinet secretary will know that, two years ago, her colleague John Swinney identified economic inactivity as the biggest challenge facing the Scottish economy, which I entirely agree with. Since then, the economic inactivity rate has remained stubbornly high. Will she explain in a little more detail what policies the Scottish Government is enacting to address that problem, particularly given that the economic inactivity rate here is higher than that elsewhere?

Màiri McAllan

Tackling the inactivity rate in the economy remains an important part of the Government’s approach to economic prosperity. It is in our national strategy for economic transformation, which I am working to refresh.

As my initial answer suggested, there are a number of reasons for inactivity in the labour market—not least study, care, retirement and ill health. As I have set out recently in a number of fora, I am determined to tackle that high number, in particular through our employability work, to which £90 million has been dedicated in the coming year.

We are pursuing other policies to support that. One that is important to me, which I take the opportunity to highlight today, is childcare. Scotland is the only part of the United Kingdom to offer 1,140 hours of funded early learning and childcare per year to all three and four-year-olds and to eligible two-year-olds. That sits alongside the work that we have been doing with Public Health Scotland to understand the barriers that ill health—physical and mental—can create to having and sustaining work. I hope that a combination of all those factors will drive down the economic inactivity rate.

Willie Rennie (North East Fife) (LD)

The Scottish Women’s Budget Group’s recent childcare survey found that 55 per cent of respondents said that the challenge of managing childcare was impacting on their ability to work. In my constituency, after-school provision has closed in Newburgh and Newport, which is causing further problems for working parents. What further pressure is the cabinet secretary putting on her education colleagues to ensure that more is done, particularly with wraparound care and after-school provision?

Màiri McAllan

I have just narrated the present childcare offer and will not do so again, but it is worth noting that that has been in place since 2021 and that, if families had paid for that themselves, it would have cost about £5,800 per eligible child per year.

The results of the 2022 ELC parent survey were in some ways encouraging, because 74 per cent of parents reported that accessing the 1,140 hours enabled them to work or to look for work. However, I agree with Willie Rennie that there is a strong case for expanding access to funded childcare, particularly for families who are on the lowest incomes and for those who are furthest from the labour market, and I am beginning work to develop an expanded national offer for more families with two-year-olds, which will focus on those who will benefit most. As Willie Rennie correctly points out, that is very much a cross-Government objective.

Michael Marra (North East Scotland) (Lab)

I am sure that the cabinet secretary will share Labour’s concern that the numbers of people who are economically inactive are rising, particularly among younger people. Given that habits are formed between the ages of 18 and 24 that can guide people’s participation in the labour market for a significant part of their life, what concerted effort is the Government making to understand the causes of that change in behaviour among younger people?

Màiri McAllan

I do not disagree with what has been said at all. I will quote some of the most recent data. For 16 to 24-year-olds, the most common reason for inactivity is being a student, which accounts for 77.9 per cent of those who have presented as inactive. As Mr Marra notes, that is followed by inactivity due to being long-term sick.

I am reluctant to and will not generalise about the reasons why people find themselves economically inactive. That data speaks to some of those reasons. However, I am clear about the importance of the employability work that the Government is doing. That is why I am pleased that, despite very challenging financial circumstances, we have managed to back a package of measures with £90 million in the coming year. That sits alongside really important work to understand what creates difficulty with regard to ill health in respect of mental and physical health. I should say that this is about working not just with those who are inactive but with employers to ensure that the right conditions, including flexibility of work, are in place to ensure that people can have and sustain work.

Job Creation (Chapelcross)

To ask the Scottish Government what steps it is taking to support the creation of new jobs at the Chapelcross site near Annan. (S6O-03261)

The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater)

Through the Borderlands inclusive growth deal, the Scottish Government has committed £7.5 million to unlock the potential of the former nuclear site at Chapelcross. That investment will deliver a strategic investment site for low-carbon energy generation and energy-efficient businesses. The project is part of the Borderlands plan to create high-value jobs that support low-carbon energy generation and carbon reduction schemes.

South of Scotland Enterprise has also purchased 17 acres of land adjacent to the main Chapelcross site to accelerate access and infrastructure development and is actively working with inward investors that are expressing interest in the site.

Oliver Mundell

As the minister said, part of the site is now available and in the hands of South of Scotland Enterprise. Alongside a cross-party group of local MSPs, I have been working hard to support a company that is called ReBlade, which is interested in setting up a wind turbine recycling hub on the site. I have raised the matter before, but there has since been a change of cabinet secretary. Is the minister interested in meeting the MSPs that are involved in the cross-party group to see what more can be done to ensure that the project becomes a reality?

Lorna Slater

I thank the member very much for his and his colleagues’ work on that. Yes—absolutely—I am happy to meet him and his colleagues. The Minister for Energy, Just Transition and Fair Work is also content to meet, so I ask the member to please contact her office to make arrangements.

Prestwick Airport

To ask the Scottish Government what its position is on the importance of Prestwick airport as a strategic asset for Ayrshire and Scotland. (S6O-03262)

The Cabinet Secretary for Wellbeing Economy, Net Zero and Energy (Màiri McAllan)

Glasgow Prestwick airport is an asset of strategic importance to Ayrshire and Scotland. It directly employs 300 staff and supports a growing cluster of aerospace businesses that have created several thousand skilled jobs in South Ayrshire.

The value that we place on Prestwick airport is clear from the Scottish Government’s decision in 2013 to take the airport into public ownership. Thanks to the hard work of the board, management and employees at the site, the airport is now consistently profitable and can look to its future with confidence.

Willie Coffey

The cabinet secretary is well aware that it was this Government that saved Prestwick airport and the jobs there, which brought certainty to the wider aerospace industry. All that was despite claims from the Tories that the airport was a failure, that money was being wasted and that the airport should be closed. Will the cabinet secretary give me and the thousands of workers who are associated with this strategic airport an assurance that any possible future sale will ensure that all its current activities are maintained and developed in the years to come?

Màiri McAllan

Willie Coffey is absolutely right that Prestwick airport is the hub of an innovative aerospace cluster in Ayrshire. It was therefore vital that we intervened to secure its future, along with the thousands of jobs that he was absolutely right refer to.

I stress again that the airport is now consistently profitable. I am sure that colleagues across the chamber will welcome the contribution that the airport brings to the region.

The terms of any sale of Prestwick airport will be a matter for negotiation between relevant parties. I have been clear that any decision to sell must be guided by the best interests of taxpayers, Glasgow Prestwick airport and, of course, the Ayrshire economy.

Prestwick Airport (Former Chairman)

To ask the Scottish Government what its response is to reports that the former chairman of Prestwick airport resigned his post to lead a bid to purchase the airport. (S6O-03266)

The Cabinet Secretary for Wellbeing Economy, Net Zero and Energy (Màiri McAllan)

Following receipt of an expression of interest from Forsyth Black, it was mutually agreed that he should step back from the role of chairman of the board of Glasgow Prestwick airport, to ensure that an independent and fair assessment could be made.

Brian Whittle

During Forsyth Black’s time as chair of Prestwick airport, various expressions of interest were made to his board. None were recommended to the Scottish Government, and bidders reported a lack of willingness to engage from airport management. Now, after suddenly leaving his post in February, Mr Black has emerged to lead a new bid.

Does the cabinet secretary consider that it is acceptable for the former chair to take his financial and operational knowledge of the airport, which is certainly beyond what is publicly accessible, and his knowledge of all the content of previous bids, which ministers have declined to detail on grounds of commercial sensitivity, and lead a bid? Does she agree that that represents an unfair advantage that should preclude the bid from going forward?

Màiri McAllan

It was mutually agreed by both parties that Mr Black should step back to ensure a fair and independent process, which will now prevail. Brian Whittle refers to previous bids. In late March 2023, the board of GPA was approached by a party that expressed an interest in acquiring the airport. The board considered that expression of interest and, after drawing on independent advice from commercial advisers, it advised ministers not to proceed because of the high risk of transaction failure.

All expressions of interest will be fairly and independently assessed and, ultimately, decided on by ministers. Potential buyers will need to provide a clear pathway for the airport and demonstrate that they have the financial experience to make it a success.

Daniel Johnson (Edinburgh Southern) (Lab)

The future of Prestwick airport needs to be viewed in the broader context. Will the cabinet secretary give her reaction to the report that was commissioned by Edinburgh airport and authored by Duncan Maclennan, which asserts that policy making has viewed airports too narrowly as consumers of energy and in narrow economic terms and says that it needs to view them in terms of their spatial role, their connectivity and their broader role in the economy?

Cabinet secretary, please focus on Prestwick airport.

Màiri McAllan

I will try to, Presiding Officer. In that context, I will stress what I have already said. First, Prestwick airport is consistently profitable. Secondly, it is an aerospace hub and it plays an important part in contributing to the Ayrshire region and Scotland’s national economy.

We absolutely have to work on future proofing our airports. To combine my economy and net zero interests, I am clear that sustainable aviation fuel and the development thereof are a key part of that. One of the final things that I did prior to leaving my transport post was commission a working group on sustainable aviation fuel, which I hope will play an important part in the future viability of our airports.

Small Modular Nuclear Reactors

To ask the Scottish Government whether it will undertake an evaluation of the potential benefits of small modular nuclear reactors within Scotland’s energy provision. (S6O-03263)

The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater)

The Scottish Government’s position on traditional fission nuclear energy is clear: we do not support the building of any new nuclear power stations in Scotland using current technologies.

Small modular reactors use the same method of electricity generation as traditional nuclear fission. That causes the same environmental concerns as traditional nuclear power plants. SMRs still create radioactive waste that requires complex and expensive management, and they are unnecessary in Scotland given that proven renewables and storage technologies already provide a pathway to net zero for Scotland.

Russell Findlay

More than 20 countries around the world have pledged to triple nuclear energy capacity by 2050. Canada, Finland, France, Japan, Sweden, Poland and the Netherlands all get it. To be pro-nuclear is to be pro-environment, yet the Scottish National Party and its Green bosses reject all new nuclear and the thousands of jobs that it would create. How can the minister possibly justify her Government’s opposition to highly skilled and high-wage Scottish jobs?

Lorna Slater

I can justify opposition to that particular type of energy because we do not agree with the United Kingdom Government that nuclear energy is environmentally sustainable. As I have previously stated, it is not required in Scotland. Our draft energy strategy sets out that the capacity for renewable generation in Scotland could mean that Scotland’s annual electricity capacity generation will be more than double our demand by 2030 and more than treble by 2045. We have a route to net zero through renewables. We do not need nuclear power.

Bill Kidd (Glasgow Anniesland) (SNP)

It could take decades for new nuclear power to become operational, and it would involve great expense, which could potentially push up household bills. What assessment has the Scottish Government made of the benefits of a significant growth in renewables, compared with nuclear power, in reducing household energy bills?

Lorna Slater

New nuclear is expensive, and those costs will impact consumer bills. Under the contract for difference that the United Kingdom Government awarded to Hinkley Point C, the electricity that it generates will be priced at £92.50 per megawatt hour, at 2012 prices. That is significantly higher than the administrative strike prices for solar and onshore and offshore wind that were set in the March 2024 allocation round, which were £61, £64 and £73 per megawatt hour, respectively, at the equivalent of 2012 prices.

Wellbeing Economy (United Kingdom Government Policies)

To ask the Scottish Government what assessment it has made of any impact of United Kingdom Government policies on its vision for a wellbeing economy in Scotland. (S6O-03264)

The Cabinet Secretary for Wellbeing Economy, Net Zero and Energy (Màiri McAllan)

A wellbeing economy, which the Scottish Government is building, places economic growth side by side with our pursuit of the health and wellbeing of our people and the integrity of our natural environment. We have achieved success: since 2007, Scotland’s gross domestic product per capita has grown by 10.8 per cent, whereas the UK’s has grown by 5.6 per cent. For the benefit of Murdo Fraser, I point out that those are onshore levels.

At the same time, more workers in Scotland are paid the real living wage; likewise, the gender pay gap and child poverty rates are lower in Scotland than they are in the rest of UK.

Equally, we have reduced our greenhouse gas emissions by around 50 per cent since 1990, while our economy has grown. At the same time, policies that the UK Government has pursued—chief among which are austerity, so-called social security reform and Brexit—have undermined that.

Collette Stevenson

The Tory Government’s budget offered nothing to the millions of people who are really struggling with the cost of living, and Sir Keir Starmer has already confirmed that Labour would follow the Tories’ tax and spending rules. If we add to that the fact that Labour and the Tories do not want to devolve employment law, it is clear that Westminster offers no solution for the people of Scotland.

Will the cabinet secretary provide an update on the policies that the Scottish Government is pursuing, within the limited powers of devolution, to build a fairer, dynamic economy and tackle the scourge of in-work poverty? Does she agree that only independence can offer Scotland—[Interruption.]—a better future and give it the full powers to tackle inequality, abolish poverty pay and build an economy with wellbeing at its heart?

The groaning when a Scottish National Party member mentions the scourge of in-work poverty says a great deal—[Interruption.]


Màiri McAllan

—about the Opposition in this place.

The UK Government’s budget prioritisation of tax cuts over public spending and investment will have a significantly negative impact on our ability to develop a wellbeing economy. However, given the Westminster consensus on Brexit and austerity, it is clear that only independence will enable Scotland to take the action that is needed to fully tackle poverty and fully build our wellbeing economy.

Until then, we will use every power at our disposal to do what we have to do to support economic growth with purpose. Our economic strategy contains ambitious actions to deliver fairer, greener prosperity for all, and it reiterates our commitment to fair work, including the real living wage, living hours and flexible working, all of which are vital in reducing poverty, which, in and of itself, is vital to economic growth.

Murdo Fraser (Mid Scotland and Fife) (Con)

I say very gently to the cabinet secretary that she should perhaps have a word with her economic adviser, Professor Mark Blyth, about the strength of the economic case for independence.

According to the results of a survey of businesses that was published this week by the Institute of Directors in Scotland, their biggest concern is the tax difference that exists between Scotland and the rest of the UK—82 per cent of respondents cited that as an issue. It is clear that they prefer the UK Government’s approach to personal taxation to that of the Scottish Government. When will the Scottish Government start listening to Scottish business?

Màiri McAllan

I listen carefully to Scottish business and the IOD, which are among the members of our new deal for business group, with which I held my first round-table meeting as cabinet secretary last week. I take on board the results of that survey in respect of tax and the risks, as the IOD sees it, of tax divergence.

We have faced some of the most difficult financial circumstances in the devolution era. We are determined to continue to provide excellent public services and good, high standards of living for the people of Scotland, and that has required a progressive tax regime. However, I am clear that tax is but one tool that we have, that it has to be used carefully, and that we have to consider the risk of divergence across the UK.

John Swinney (Perthshire North) (SNP)

In making the judgment that she has just talked about, does the cabinet secretary believe that it is important that, in the tax debate, people are mindful of the significant benefits that arise to people in Scotland as a consequence of living here, such as access to elements of the social contract, including the much more significant early learning and childcare offer, the fact that people do not have to pay tuition fees and the fact that, comparatively, council tax is significantly lower in Scotland than it is in other parts of the United Kingdom? The kind of crude analysis that Murdo Fraser has just put to the cabinet secretary is as valid as his call was for us to follow the economics of Liz Truss.

I think that there was a question there, cabinet secretary.

Màiri McAllan

John Swinney is absolutely right. He has narrated so much of what is on offer with the strong social contract that we have fostered in Scotland. I do not need to narrate that again, but I add that I expect that people choose to come to live in Scotland for a wide number of reasons, not least some of the universal provisions that John Swinney has mentioned.

I am absolutely clear that the Scottish National Party’s pursuit, and willingness to pursue, a progressive tax regime since we came into government has insulated the people of Scotland from some of the worst aspects of the austerity that has been imposed on us, such as the cruel social security reform that I mentioned earlier, and that it is now helping to insulate people and businesses from the quite extraordinary act of economic harm that was Brexit.

Question 6 was not lodged.

Food Waste Reduction Target

To ask the Scottish Government whether it will provide an update on any progress towards meeting its target of reducing food waste by 33 per cent by 2025. (S6O-03267)

The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater)

Scotland is not on track to meet its target, due to an increase in food waste levels, which has been observed across the United Kingdom. To accelerate progress towards our 50 per cent reduction target in 2030, the Scottish Government has committed to resetting its approach. As proposed in the Circular Economy (Scotland) Bill, our refreshed approach will include the mandatory public reporting of waste and surplus by businesses. We also have ambitions to target household food waste, and we aim to deliver a behaviour change intervention plan to enhance support for householders and enable them to take action.

Annie Wells

The Government has failed to meet recycling targets. At the current pace, it is set to miss further recycling targets, such as to have a maximum of 5 per cent of waste to landfill and a minimum of 70 per cent recycling of waste by 2025. Given last week’s devastating report by the Climate Change Committee, what confidence does the Government have that it will meet all six of its targets by 2025?

Lorna Slater

The member is right about the challenge of meeting the existing targets, which is why we are resetting our approach through the Circular Economy (Scotland) Bill and our waste route map, both of which have significant measures in them to improve our reuse and our recycling, and to help us to meet the targets that we need to meet to achieve net zero for Scotland.

Gordon MacDonald (Edinburgh Pentlands) (SNP)

Recent major food organisations have warned that new Brexit border rules could cut the shelf life of fresh fruit from mainland Europe by a fifth and leave some deliveries from the European Union unsaleable. Does the minister share those concerns, and has the Scottish Government made any assessment of the impact of Brexit border rules on increased food waste?

Lorna Slater

I share the member’s concerns. Although the model is imperfect and might have an impact on food imports from the EU and on food waste because of Brexit, we must introduce import controls to deliver biosecurity protections for Scotland. We have repeatedly called for the UK Government to sign a veterinary agreement with the EU, which would remove many of those barriers. We will actively monitor the implementation of the first physical checks on some goods, which will start on 30 April.

We are finally getting the opportunity to see legislation. I presented one of the first pieces of associated legislation to Parliament just last week, and I am clear that the UK Government’s process for introducing this fundamental change in how we import goods from the EU is severely lacking. The UK Government has had years to prepare for it, but, like everything that it has done on Brexit, it appears to be making it up as it goes. There is no doubt that that negligence has created unnecessary barriers and costs to trade. Scotland, our communities and our businesses are paying the price.

Foysol Choudhury (Lothian) (Lab)

Last year, I visited Empty Kitchens Full Hearts in Edinburgh, which is an organisation that creates meals for vulnerable people using surplus food. Surplus food sharing can help to fight food poverty and reduce food waste. Will the minister outline how the Scottish Government is encouraging businesses to join the surplus food scheme?

Lorna Slater

The member is absolutely right. I know that he volunteers and is very active in this area. During a cost of living crisis, waste food costs a four-person family around £1,000 a year. For people who are unable to access food, organisations such as FareShare, which share out surplus food, are vital. Since 2021, the Scottish Government has provided around £1.4 million of funding to FareShare, and we are delighted with the work that it does.

That concludes portfolio questions on wellbeing economy, net zero and energy. There will be a short pause to allow front-bench teams to change positions, should they so wish.

Finance and Parliamentary Business

Public Finances (Impact of Stagnation)

1. Gordon MacDonald (Edinburgh Pentlands) (SNP)

To ask the Scottish Government what assessment it has made of any impact that stagnation has had on Scotland’s public finances, in light of the final report of the Resolution Foundation’s economy 2030 inquiry, which found that the United Kingdom is a decade and a half into a period of stagnation. (S6O-03268)

The Deputy First Minister and Cabinet Secretary for Finance (Shona Robison)

The Resolution Foundation has found that the stagnation that we have experienced has been devastating in terms of the wealth that has been taken out of the country. Despite limited powers of devolution, we have transformed the landscape in Scotland. The Resolution Foundation report highlights that the past 15 years of lost growth mean that the United Kingdom economy is 22 per cent smaller than it could otherwise have been. That has inevitably led to significant lost revenue, for which Scotland has paid the price.

Recent budget decisions by the UK Government have compounded that, with tax cuts being prioritised over investment in public services, and up to £1.6 billion in potential consequentials for Scotland that we will not see.

Gordon MacDonald

I thank the Deputy First Minister for that answer. The Resolution Foundation found that benefit levels have not kept pace with prices, and that people who rely on benefits have had their incomes reduced by £3,000 at the same time that wealth has risen from three times to more than seven times national income since the 1980s. Given the powers that it has, what steps could the Scottish Government take to address that?

Shona Robison

Gordon MacDonald is right to ask that question. Despite the limited powers of devolution, we have transformed social security in Scotland in comparison with the UK Government, which is steadily eroding the safety net with, for example, benefit freezes, caps and limits, and by providing inadequate levels of financial support. In contrast, we have spent more than £733 million in the past five years to mitigate the effects of UK Government policy.

As Gordon MacDonald alludes to, with full powers over social security, we would aim to eliminate poverty and to ensure that everyone has a decent standard of living through a fairer and more adequate benefits system.

Liz Smith (Mid Scotland and Fife) (Con)

Does the cabinet secretary agree that the stagnation issue to which Mr MacDonald’s question refers is as much a Scottish problem as a UK one, given that the recent Confederation of British Industry-Fraser of Allander report into productivity in Scotland clearly shows that Scotland is failing in 10 out of 13 productivity metrics?

Shona Robison

Liz Smith wants us to be held to account as if we are an independent nation when the macroeconomic levers lie with the UK Government. However, despite not having those levers, Scotland’s gross domestic product per capita has grown faster than the UK’s since 2007. Accounting for population growth since 2007, gross domestic product per person has grown by 10.8 per cent in Scotland, compared with 5.6 per cent in the UK.

Since 2007, productivity in Scotland—which Liz Smith referred to—has grown at an average annual rate of 1 per cent per year, compared with the UK average of 0.5 per cent. Earnings in Scotland grew by 8 per cent in 2023, which is faster than in any other part of the UK, including London and the south-east. Despite not having the macroeconomic levers, Scotland is doing pretty well, by comparison.

Michael Marra (North East Scotland) (Lab)

Those of us on the Labour benches agree that we need to get rid of the rotten Tory Government, which crashed the economy, left working people paying higher prices on bills and mortgages and has now led the country into recession. However, the reality is that the Scottish Government has made a bad situation worse because of its total failure to grow Scotland’s economy. A range of academics and economists have told Parliament that the recent Scottish Government budget is categorically not a budget for growth. Is it not time that we had two Governments that are focused on growing the economy, so that we can grow our tax base and fund the services that we need?

Shona Robison

The problem with what Michael Marra said is that the shadow chancellor, Rachel Reeves, is going to emulate the same tax and spending plans of the “rotten” UK Tory Government that he cited. It is hard to distinguish between UK Labour policy and UK Tory policy.

In my answer to Liz Smith, I outlined where—despite not having control of the economic levers—Scotland’s economic performance during the past 30 years was better, including its GDP per capita, productivity growth and earnings. Foreign direct investment has grown faster in Scotland than in the UK and Europe in recent years. Those on the Opposition benches tend to try to talk down Scotland’s performance. However, despite all of the headwinds, comparable data shows that Scottish economic performance is much better than they would have us believe.

ScotWind Option Fees (Allocation of Income)

To ask the Scottish Government how it has allocated the funding raised through ScotWind option fees in the 2024-25 Scottish budget. (S6O-03269)

The Deputy First Minister and Cabinet Secretary for Finance (Shona Robison)

As outlined in the budget document, £200 million of income from ScotWind option fees has been provisionally allocated in the 2024-25 Scottish budget to support the total resource funding position. As the end of the 2023-24 financial year approaches, I am pleased to say that the financial position has improved. I am working towards entirely removing any utilisation of ScotWind fees while still achieving a balanced budget. The upcoming medium-term financial strategy will provide a further update on the future approach to ScotWind utilisation.

Kate Forbes

I welcome the Deputy First Minister’s commitment. We have often lamented the way in which, during the past 30 years, revenues from oil and gas have been squandered on annual running costs, rather than on establishing a sovereign wealth fund as was the case in Norway. What plans does the Scottish Government have to ensure that we will not lament a similar situation happening with options fees from our great renewables potential in 30 years’ time?

Shona Robison

We continue to work closely with Crown Estate Scotland to ensure that we realise maximum economic benefits for ScotWind licence fees, and that we protect the value of proceeds that remain available for spending in future years. Sadly, the devolution settlement constrains our option to establish a sovereign wealth fund as such. I suspect that the member will agree that it would be far preferable for Scotland to have the full fiscal and economic powers of independence, so that we can take sensible steps to establish a sovereign wealth fund or an equivalent.

Willie Rennie (North East Fife) (LD)

As we heard, for decades nationalists berated Margaret Thatcher for failing to create a sovereign wealth fund from oil and gas energy resources. However, now that they are in Government, nationalists have failed to create a sovereign wealth fund and have instead used almost half of the funds from wind energy resources to repair the mismanagement of their public finances. Why is it one rule for the nationalists and another rule for everyone else?

Shona Robison

It is not. If Willie Rennie listened to my answer to Kate Forbes, he would have heard me say that the devolution settlement, as it exists, constrains our option of establishing a sovereign wealth fund.

I suspect that Willie Rennie, given that he often comes to the chamber demanding additional spend on various areas of public services, would be the first to challenge me if we were sitting with an unallocated ScotWind fund. He would, no doubt, be arguing for that money to be deployed to whatever spending area he came to the chamber about on that particular day.

There is a balance to be struck here. I would certainly want to utilise ScotWind money and, in fact, when we look at the £4.7 billion being invested in positive action on climate change, we could argue that ScotWind money has supported that £4.7 billion investment as well as supporting public services.

Freedom of Information Improvement Plan 2024

To ask the Scottish Government what steps it has made towards the goals of the freedom of information improvement plan 2024. (S6O-03270)

The Minister for Parliamentary Business (George Adam)

The previous commissioner’s October progress report recognised the significant advances that had already been made, which have been commended by the new commissioner. That progress has been achieved despite a significant increase in requests. More than 5,000 requests were responded to in 2023, an increase of 20 per cent since 2021 and an increase of two thirds since the pre-pandemic period.

Our revised improvement plan, which was published in January, builds on earlier work. Since January, investment in key roles has enabled further improvements around advancing and maintaining response times and providing more focused staff training. We are building resilience and capability through longer-term projects.

Evelyn Tweed

Last December, the Scottish Information Commissioner had a backlog of 200 FOI appeal cases. What discussions has the Scottish Government had with the Scottish Information Commissioner to ensure that the backlog is cleared in a timely manner and that those awaiting decisions are updated on progress?

George Adam

As members will be aware, the Scottish Information Commissioner is an independent regulator, who is appointed by His Majesty the King on the nomination of this Parliament. The Scottish Government therefore has no involvement in operational matters—rightly—regarding the commissioner’s discharge of his functions.

I am aware, however, that the commissioner has spoken publicly, including in his evidence to the Standards, Procedures and Public Appointments Committee on 22 February, about measures taken by his office to address that backlog issue.

Question 4 was not lodged.

Small Business Bonus Scheme (South Lanarkshire)

To ask the Scottish Government how many premises in South Lanarkshire currently receive rates relief through the small business bonus scheme. (S6O-03272)

The Minister for Community Wealth and Public Finance (Tom Arthur)

As at 1 July 2023, over 5,000 properties in South Lanarkshire were in receipt of small business bonus scheme relief. The Scottish budget for 2024-25 maintains the small business bonus scheme, which is the most generous small business rates relief scheme in the United Kingdom, offering up to 100 per cent relief for eligible properties.

Clare Haughey

Many of the powers to support businesses, as well as wider economic levers, are reserved to Westminster, including the level of VAT, alcohol and fuel duty, energy prices and interest rates, but I know that the Scottish Government’s small business bonus scheme has been a lifeline for many businesses in my Rutherglen constituency. Can the minister outline the work that will be undertaken through the new deal for business group, which is keeping reforms to the non-domestic rates system under review to ensure that they support businesses and communities?

Tom Arthur

Details on how the recommendations of the new deal for business NDR sub-group will be taken forward are outlined in the new deal for business group’s implementation plan and include the establishment of five short-term task teams to consider particular issues that were raised. The NDR sub-group has continued to meet regularly and is committed to quarterly meetings, which will support dialogue and engagement to explore how the NDR system can best support business growth, investment and competitiveness while acknowledging the important role that NDR income plays in funding public services.

Income Tax

6. Jamie Greene (West Scotland) (Con)

To ask the Scottish Government at what specific annual income any individual would start to pay more income tax in Scotland than they would elsewhere in the United Kingdom under its new Scottish income tax levels. (S6O-03273)

The Minister for Community Wealth and Public Finance (Tom Arthur)

Just over half of Scottish taxpayers will continue to pay less income tax in 2024-25 than they would if they lived elsewhere in the UK, including all individuals who are earning up to £28,850. Those who call Scotland home enjoy a range of support that is not available throughout the UK, such as the Scottish child payment, free prescriptions and free higher education. All of that helps to make Scotland a great place to live, work, study and do business in.

Jamie Greene

Buried away in that answer was the figure of £28,867. According to this Scottish National Party Government, the richest in society should pay more tax. I wonder what people who are earning £28,000 a year would have to say in response to that. In fact, when we get to £50,000 in income, there is a 20 per cent differential between what we pay in tax in Scotland and what is paid elsewhere in the UK. Those are not wealthy tycoons; senior teachers, senior nurses, senior police officers and many in our public sector are earning that sort of salary. How does the minister think we will attract the brightest and best to work in our public sector, as well as our businesses, if they are paying more in tax in Scotland than they would pay anywhere else?

Tom Arthur

One of the ways in which we attract the best and brightest to work in our public sector in Scotland is by giving them the best remuneration anywhere in the UK. There are many examples of that across the public sector in Scotland. We continue to invest and we have taken the decision to have a progressive tax regime, because that is what is required in order to invest in our public services. Had we replicated the tax policies of Mr Greene’s party, that would have left us £1.5 billion a year cumulatively worse off. It is important that we continue to invest in public services and that we continue to have a progressive tax regime that allows us to do so. That could not only help us to retain the best and brightest who are working in the public sector in Scotland, but provide a range of benefits and services that are not available to taxpayers elsewhere in the UK, which can attract many more people to come to Scotland.

Capital Spending Review

To ask the Scottish Government when its review of capital spending will be complete. (S6O-03274)

The Deputy First Minister and Cabinet Secretary for Finance (Shona Robison)

Work is currently under way to update the pipeline of projects and programmes relating to our infrastructure investment plan, which was published in 2021, to ensure that it is affordable and deliverable and that it provides the best value for money. We intend to publish the refreshed infrastructure pipeline this spring, alongside the medium-term financial strategy.

Rhoda Grant

The cabinet secretary will know that women in Caithness and Moray are currently travelling more than 100 miles to access maternity care in Raigmore hospital, in a unit that is not fit for purpose. The promised Caithness redesign has been shelved, along with the Dr Gray’s hospital and Raigmore hospital maternity unit improvements. People in Fort William have waited two decades for their new hospital, as have people in Barra and Vatersay, with their new hospital having been abandoned altogether. General practitioners and their patients in Grantown thought that they had a new surgery, but the last part of that complete service redesign has also been paused. A pause to those capital projects will disproportionately affect patients across the Highlands and Islands because of past neglect. Will the cabinet secretary give me a commitment that those projects will be reinstated when the review completes in the spring?

Shona Robison

Rhoda Grant raises important points. I remind the member and the chamber that the capital budget outlook will result in a nearly 9 per cent real-terms cut, which is a cumulative reduction of £1.3 billion over the period to 2027-28. That will impact the capital projects that were in the 2021 infrastructure pipeline right across the board. It is right and proper that we have had to analyse all of that, and that work is on-going. As I said to Rhoda Grant earlier, we will bring forward the revised infrastructure investment pipeline alongside the MTFS at the end of May.

There are already a number of investments in health infrastructure, and we are investing £314 million in 2024-25. However, I recognise that some vital health projects are in that pipeline. I will ensure that Rhoda Grant and the rest of Parliament get an update in May, but let us not underestimate the impact of taking £1.3 billion out of our infrastructure budget. That will have an impact and there is no avoiding it.

Budget (Impact on Highlands and Islands)

To ask the Scottish Government what analysis it has undertaken of the impact of its 2024-25 budget on the Highlands and Islands region. (S6O-03275)

The Deputy First Minister and Cabinet Secretary for Finance (Shona Robison)

The Highlands and Islands local authorities will receive more than £1.3 billion to support vital day-to-day services in 2024-25, which is an extra £70.7 million or an additional 5.4 per cent compared with 2023-24. All councils will receive their share of the currently undistributed £201.1 million following agreement with the Convention of Scottish Local Authorities. The Scottish Government is increasing the islands cost of living fund by £4 million in 2024-25.

Jamie Halcro Johnston

Budgets for Highlands and Islands Enterprise and VisitScotland have been slashed, with news breaking today that information centres across the region will be closing. Councils are facing severe strain on their budgets, and there are to be cuts to the housing budget across Scotland, with reports yesterday that housing association new-build starts were at their lowest level last year since 1998. Work on major health projects such as the Belford hospital in Fort William has been paused.

The cabinet secretary did not mention anything about the question that I asked her, which was about what analysis the Scottish Government had undertaken. If the Scottish Government has not undertaken any analysis of the impact of the budget on the Highlands and Islands region, given that it is a bad budget for the region, will she?

Shona Robison

Unfortunately, Jamie Halcro Johnston has failed to recognise a number of things. One is that the UK Government has delivered a real-terms reduction to our funding, not least a 9 per cent real-terms cut to capital funding, which is £1.3 billion cumulatively removed from our budget by 2027-28. Jamie Halcro Johnston’s Government cannot make those decisions—

Answer the question I asked.

The Deputy Presiding Officer

Please take a seat, Deputy First Minister.

Mr Halcro Johnston, the question has been asked and we are listening to the response. There is absolutely no point to this process if members are not going to listen to the response given and extend that courtesy to the Deputy First Minister.

Shona Robison

Jamie Halcro Johnston’s Government cannot make decisions to cut capital funding by £1.3 billion without that having some impact on some of the projects being undertaken around Scotland or on some of the investments that we would like to make. That is the first point.

The second point concerns resource funding, whether for HIE or for councils. Just a few minutes ago, the member sitting behind Jamie Halcro Johnston, Jamie Greene, was criticising some of the tax decisions that we have made that have resulted in extra funding for public services. Had we followed the tax plans of the Tories, we would have £1.5 billion less to spend on local authorities, Highlands and Islands Enterprise or any other services in Scotland. The Tories cannot come to this place arguing for more money when they set their stall against raising any more money and when the Government that they support cuts the funding to Scotland. Those things do not add up, and it is about time that we heard some honesty from Jamie Halcro Johnston and the Tories.

I have received a request to ask a supplementary question from a member, and I remind the member that, as per the Business Bulletin, the question concerns impacts on the Highlands and Islands region.

I will link my question to the Highlands and Islands region, because South Scotland faces similar challenges.

The Deputy Presiding Officer

Ms Harper, this is a question about the Highlands and Islands, and, to give the Highlands and Islands their place, we need to focus on the Highlands and Islands. Please resume your seat.

I have no further requests for supplementaries, so that concludes portfolio questions on finance and parliamentary business.