Chamber and committees

A couple of weeks ago, we had the Scottish National Investment Bank and Scottish Enterprise in front of the committee, and Michael Robertson from SNIB—I will just get the Official Report up—commented on the bank’s “perpetual status”. My colleague Murdo Fraser picked up on a question that I had asked the year before about how profit was dealt with under the UK Government budgeting manual. What is the cabinet secretary’s understanding of how the UK budgeting rules align specifically with the UK Government rather than the Scottish Government? The reason why I ask is that Michael Robertson said:

“Where we see potential for advancement within the Scottish rules is on flexibility, and potentially on multiyear investments”—[Official Report, Economy and Fair Work Committee, 25 September 2024; c 28.]

That question is slightly technical, but I wanted clarification of what the UK budget rules are and, therefore, of whether there is any flexibility.

I will be very quick, cabinet secretary. I would not be doing my job properly if I did not ask a little question about the refinery in Grangemouth, which is in my constituency. There has been a lot of talk thus far about opportunities and the work around project willow and so on. However, the cabinet secretary’s interest is in the economy, given her role. A report by Scottish Enterprise noted that the refinery contributed an estimated £403.6 million to the Scottish economy. PWC estimates that, rather than 400 related jobs that could go, there are nearly 3,000. The First Minister has stated that the closure will create a “significant economic shock”. Are we still focusing enough on the economic loss and shock, or is the balance skewed too far at this stage towards what the future might bring?

Good morning, and thank you for joining us. We have been nestling around the sides of the budget through the course of the evidence session. We know that the Scottish budget will be particularly tight, and I think that we all understand that without having to go into the detail of it.

Given the cabinet secretary’s relentless focus on economic growth—although I note that she has talked about prosperity for a purpose, which I agree with—against the backdrop of a historical long-term trend of UK productivity being very low relative to that of comparable economies, can she set out her understanding of the macroeconomic environment in the UK? How will the restricted investment in capital, in particular, have a follow-on impact on what she is trying to achieve with economic growth so that we can get vital funding to pay for public services and, of course, increase our productivity?

There is sometimes talk of rediverting revenue to capital. Can you outline the implications in other areas of the budget if that is done?

No problem.

It sounds as though you are adopting a very stock and sensible approach. To finish, I merely make the point that it needs a strong driving wind; otherwise, that stated position will never really change, because that is what the evidence has told us over a period of years.

When will the thematic gender review be published—on what date?

Keith?

Thank you for joining us, cabinet secretary. I want to cover a range of issues, and have short, sharp questions.

We often discuss productivity, and we know that there is a massive long-running issue with UK productivity—it is lower here than it is in France, Germany, the USA and so on. I know that you have written to us about the delay in the infrastructure investment plan. I want to hear your reflections on what the specific implications of that delay will be in the light of behaviour changes. What will be stopped and what will be started? What assessment have you made of the impact on internal work that is going on?

I have some sympathy with what you are saying about uncertainty, but there is a flipside to that, which perhaps takes us back to what Michael Marra was saying about pay. With regard to planning, you could have proceeded on the basis of, say, the latest projections from the Scottish Fiscal Commission—that is, the ones that were done earlier—and said, “Okay, this is the de minimis floor.” I accept what you have said about a change to the fiscal rules on debt; indeed, I think that that is highly likely to happen, because they are so constraining for the UK Government. You are saying that, because we do not know, we cannot do anything, but the question that I am exploring is what we can do within that uncertainty. Surely something must be made certain; otherwise, the lack of multiyear funding, which is an approach that we all agree on, is actually stopping lots of things and is, arguably, stopping confidence in moving forward.

I have a few random questions. I noticed that there is now uncertainty around the growth deal for Argyll and Bute. Have you had a chance to explore whether there is uncertainty around any other growth deals? I am thinking in particular, and perhaps selfishly, about the Falkirk growth deal—or rather, the promise of funds that have not yet been finally agreed. Are there any concerns about any of the other growth deals?