Chamber and committees

I am aware of the letter that Ferguson’s sent to the committee today. The Government will interrogate the report that has come from Ferguson’s, with appropriate due diligence, to determine our response to the points that it raises.

I stress—I will come on to this in a moment—that there is a necessity for sustained investment in the ferry network, and the Government has, of course, committed to that in other respects.

That is precisely what I addressed in my response to Mr Rennie; we will carry out due diligence on the points that Ferguson’s raises with us and the update that has come forward. Obviously, I want to minimise any further cost to the public purse as a consequence.

Before I leave the question of the procurement of 801 and 802, I take the opportunity to place on record my deep personal appreciation for the contribution of Alex Logan and John McMunagle, who appeared in the “Disclosure Scotland” programme last night—two fine individuals whom I met many years ago, before Ferguson’s got into difficulties in 2014. Throughout that time, they have been faithful servants to Ferguson’s, and I thank them for their contribution and the generous welcome that they have always extended to me in my associations with them.

Over the past 10 years or so, the Government’s investment in ferries has increased from £140 million in 2013-14 to £315 million in this financial year.

I am afraid that I have to watch my time as I have some ground to cover.

That indicates the significant investment that the Government has made in ferries. Commitments to new routes, such as Mallaig to Lochboisdale and Ardrossan to Campbeltown, and extra sailings to Colonsay and to Coll and Tiree have been delivered. A host of elements of the ferries plan have been implemented as we expanded services. We have procured 801 and 802 as well as the two Islay-class ferries that will be delivered in 2024-25. The network has been expanded and invested in.

In relation to performance, any ferry cancellation is inconvenient to islanders or to other members of the public, whatever their reasons for being in the islands. I point out that in 2021, only 1 per cent of services were cancelled because of mechanical issues; three times as many were cancelled because of weather conditions. There has also been disruption to the network because of Covid infections spreading.

I close on an interesting element of the debate that is emerging on project Neptune, on which the transport minister briefed Parliament three weeks ago. It was also raised by Katy Clark in her contribution, although I was not able to follow all the elements of what she referred to. She raised the importance of there being no unbundling, which the Government agrees with, and no privatisation, which the Government also agrees with, and I welcome the opportunity to place that on the record.

The BBC’s allegations were first put to me in advance of an interview that I conducted last week as part of a programme that is to be broadcast this evening. Scottish ministers are not aware of any impropriety in the procurement process, but take the claims that have been made extremely seriously. It is important that they are addressed carefully.

As I made clear in my interview, those issues are concerning. I know that the current management teams at Caledonian Maritime Assets Ltd and Ferguson Marine (Port Glasgow) Ltd share that concern. I have already committed to ministers exploring what further steps the Government needs to take to ensure that all questions about the fairness and appropriateness of the tendering process are properly and independently investigated.

I confirm that, at the request of ministers, the permanent secretary has already proactively been in contact with the Auditor General for Scotland to discuss the matter. The Auditor General informed the permanent secretary that Audit Scotland will look at the substance of the allegations around procurement that are raised by the programme before deciding whether further audit work is required. I welcome that, and the Scottish Government, CMAL and Ferguson’s all commit to fully supporting that exercise.

Obviously, we do not want matters of this nature taking an inordinate amount of time to be investigated. If concerns are raised, they should be properly looked into. That is the step that the permanent secretary has taken, on ministers’ behalf, in raising the issue with Audit Scotland.

As I said, I welcome what the Auditor General has said this afternoon to allow independent investigation of the claims that have been made in order to determine what further action is required to be taken.

I agree with Emma Roddick on that point. From the mini budget on Friday, it is very clear that the United Kingdom Government wishes to take policy in a dramatically different direction, in contrast to the prevailing decisions that have been arrived at in this chamber, which are, of course, a product of the choices that have been made by the people of Scotland.

Those two factors are in no way separate, because the implications of the UK Government’s decisions on Friday will be felt acutely by the Scottish Government and Scottish public finances. I would have thought that, during a cost of living crisis, the priority in a mini budget would have been to support the most vulnerable and boost public expenditure to cope with the raging levels of inflation that are undermining the value of public expenditure. None of that happened on Friday. Indeed, my concern, having looked at the UK Government’s publications and statements, is that the pressure on public expenditure in the years to come will become even more intense than what I set out to Parliament in my statement two weeks past Wednesday.

Mr Lumsden needs to work out what he is actually arguing for. I assume from what he said that he wants me to replicate in its entirety what the UK Government has set out. If I did that, I would be taking decisions to reward the already very, very wealthy with significant tax cuts. That is the reality of what Mr Lumsden is asking me to do. [Interruption.] I hear Mr Lumsden saying from a sedentary position that that is not what he asked for, but I have read numerous comments from the Conservatives demanding that I just get on and do what the United Kingdom Government has done.

I will consider all the issues carefully, which is why I will take the necessary time to do it, why I am going to draw together an expert panel to provide advice to the Government, and why I will engage with business and trade union interests.

None of us should underestimate the scale of disruption and damage that was done by the announcements on Friday—they were very damaging. I have to take a careful and prudential approach to managing Scotland’s public finances, and that is what I am going to do. Mr Lumsden and his colleagues can engage in soundbites, but I will place a wager in front of Parliament that, at the same time as Mr Lumsden is arguing for tax cuts, colleagues of his will come to the chamber demanding that I increase public expenditure on other things. Those two things cannot be done at the same time in the fiscal envelope that is provided by the United Kingdom Government.

I find myself in the rather unusual position of actually agreeing with most of what Mr Cole-Hamilton said, which is a slightly discombobulating situation. He raises serious issues, however. Future generations are being lumbered with colossal costs of borrowing because a windfall tax has not been applied to energy companies. Various very wealthy people are being given even more money, when people are facing destitution in our society.

I therefore entirely support the call for the United Kingdom Parliament to reconvene immediately in order to rectify those matters. We are already seeing the damage to individuals—there will be very disappointed people who expected to be able to acquire properties and get on the first step on the property ladder, but who will have had that taken away from them by the recklessness of the decisions on Friday. I therefore hope that Mr Cole-Hamilton’s call for the recall of the United Kingdom Parliament is acceded to, and I would support it.

The Chancellor of the Exchequer’s statement provided little respite for many families who already face a winter being unable to afford essentials, such as buying food and heating their homes. The United Kingdom Government needed to use its reserved powers to provide support for those who need it most. Instead, we got tax cuts for the rich and not much for anyone else.

The chancellor is taking a huge gamble with public finances and the health of our economy, and the markets have reacted strongly. The pound fell to record lows on Monday, the cost of Government borrowing has risen to its highest level in more than a decade, and investor confidence is plummeting. Many householders will now face much higher mortgage costs as a consequence of the decisions that were made.

We are doing everything within our power to support people, public services and the economy, but our efforts are under threat from the UK Government beginning a new and dangerous race to the bottom. We are not willing to run that race. We will not replicate the Tories’ reckless tax cuts but will consider carefully the correct measures for Scotland.

I intend to seek advice from an expert panel that will be convened specifically to consider the implications of the mini budget. I will also embark on discussions with business and trade union interests. The Scottish Fiscal Commission will incorporate the impact of any changes in its next forecasts. I intend to report to Parliament on those issues as part of the emergency budget review in the week commencing 24 October.

The damaging impact of the UK Government’s decisions on Friday demonstrate why Scotland needs the full range of financial powers to avoid living at the mercy of bad decisions that are taken at Westminster.

I do not think that that should be the case. The UK Government is pinning all its hopes on a discredited approach of trickle-down economics that benefits high earners as opposed to people who are most in need now. Supporting those people who are most in need should be the UK Government’s priority.

Against a backdrop of political instability at UK level, we will continue to take a responsible approach to tax policy by building on our fair and progressive approach to taxation, which has protected low earners while raising additional revenue for public services. I can assure the chamber that the Scottish Government will take sensible and careful decisions that are about helping people who need assistance the most.