Chamber and committees

We are experiencing an acute period of volatility and uncertainty, which was started by Brexit and has been exacerbated by the crisis around Covid, the war in Ukraine and, now, the recklessness of the new Conservative Government. The idea that somehow the United Kingdom can be described as a stable economy, in the light of all the chaos and damage that has been done to business, is a fallacy of the past.

One of the issues about which I am most concerned is the scale of energy price rises, even with some of the measures that are now in place, for entirely profitable and sustainable businesses. I give Beatrice Wishart the example—which I have shared openly—of a farmer in my constituency. He explained to me that his energy costs are currently £50,000 a year and that he is being quoted £250,000. A difference of £200,000 is just impossible for that farming venture to find. An individual who is producing food for our domestic market faces the potential of not being able to continue to do so. Beatrice Wishart will have examples such as that one from her constituency.

We have to recognise the enormity of the risk that is faced. The scale of intervention has to be acute, to ensure that businesses that are perfectly viable in every normal circumstance can be assisted through this difficulty, as we assisted them in the context of Covid. However, we should not do that by saddling future generations with the level of borrowing that the United Kingdom Government proposes.

Mr Fairlie will be familiar with the range of powers and responsibilities that the Government has within the parliamentary system. Of course, one of the key limitations is that we do not have the capacity to borrow for resource spending purposes, other than for very limited purposes in relation to financial management. Therefore, in the scenario that Mr Fairlie has put to me—a pandemic emerging that would require additional public expenditure within a financial year—in order to prioritise dealing with such a pandemic, the Government could provide support only by taking resources that are allocated to other areas of expenditure. Obviously, I would hope that if there were to be an event that happened at United Kingdom level, the wider workings that we saw during the Covid-19 pandemic would be relevant and would be applied. Obviously, the Government would co-operate with that in any future scenario.

The reason why that needs to be done is that we have to use all the means available to us to support public servants, many of whom work for integration joint boards, to deliver healthcare in our society following increased pay deals to deal with the consequences of inflation.

I do not need to explain this to Jackie Baillie, but I will, just for completeness. The Scottish Government cannot borrow for resource purposes, and we cannot change tax rates during the financial year, so unless the UK Government expands the resources that are available by changing the spending envelope, no extra resources will be available to us.

During my conversation with the Chief Secretary to the Treasury on Friday, I took the opportunity to press the case for increases in public spending. He was entirely unsympathetic to my appeals for that step to be taken, so the Scottish Government must, because we do not have access to flexibility, look at various ways in which we can utilise resources in order that we can afford increased pay claims and address other pressures within the financial year. What Jackie Baillie cited is one example of the steps that the Government has to take.

The bank has made loan commitments of £103 million, and made fund and equity investments of £155 million across 20 companies and projects. Those investments have seen £482 million of co-investment of third-party capital. The investments have supported all three of the bank’s missions on net zero, place and innovation and people.

I am very happy to engage on that question, because one of the Scottish National Investment Bank’s priorities is to lend to sustainable projects with growth potential in the net zero environment. I have a list of projects that have been supported to assist that objective. If there are particular examples that Mr Whittle is concerned about, I will happily look at them and explore them with the bank. Over time, we will look at the performance of the bank and determine whether there are any obstacles. However, I assure Mr Whittle and the chamber that the bank is keen to lend to projects in those key areas.

The Covid recovery strategy brings together more than 70 actions that will support people across Scotland by increasing the financial security for low-income households, enhancing the wellbeing of children and young people, and creating good, green jobs and fair work.

The strategy also focuses on renewing public services to ensure that they meet the specific needs of people and communities. For example, in Dundee, our best start, bright futures delivery plan, which will help tackle child poverty, is testing holistic support to help parents access work and increase their incomes.

Furthermore, Dundee City Council will receive £353.4 million to fund local services, which equates to an extra £27.8 million compared with the past financial year. That funding is in addition to Covid-19 funding of £50 million through the local government settlement, over and above regular grant payments.

I welcome the steps that the Dundee City Council administration has taken to support people who face challenges at this time. I agree with Mr FitzPatrick that those interventions will assist individuals. I regret the fact that they have been necessary as a result of the lack of action from the UK Government. However, those interventions demonstrate the benefit of Dundee City Council acting on behalf of the people of Dundee, as I would expect it to do.

The Covid recovery strategy is focused on reducing systemic inequalities and includes commitments to support the creation of good, green jobs and fair work in Scotland. Businesses play an important role in that aspect of recovery, and the Scottish Government has prioritised support for business. For example, in February 2022, the Scottish Government launched the £80 million local authority Covid economic recovery fund, which empowered local authorities to consider how best to support local businesses, communities and households through a focus on targeting support to maximise economic recovery in their areas.

All those steps have been assisted by the work that has been delivered by the Covid business resilience and support directorate.

There are three points to make in that regard. First, one of the consequences of the chancellor’s recklessness on Friday is the risk of very significant reductions in public expenditure to try to restore market confidence. That would be a disaster for Scotland.

Secondly, the cost of remaining part of the United Kingdom is now acute for people in Scotland, when we see the damage of Brexit and this fiscal mismanagement.

Thirdly, I am struck by the ridiculousness of the Conservative Party demanding that I replicate the changes that the chancellor made on Friday, when we look at the chaos that has been inflicted on all of us as a consequence.