Chamber and committees

Will the member accept an intervention?

We all know Scotland’s wonderful heritage of innovation, which goes far beyond the inventions commonly listed on a souvenir shop tea towel. Almost every town in Scotland can point to at least one major invention or innovation that happened there or that is attributable to someone who came from there. That is important, because the past inspires the future. My constituency is no exception. Sir James Dewar, who was educated at Dollar academy, invented the vacuum flask, and George Meikle of Alloa invented a water-raising wheel that was used to drain the moss of Kincardine in 1787.

In creating that reputation for innovation, Scotland benefited from being in the vanguard of the industrial revolution—although, with the hindsight given by history, we should recognise that that period of growth was built on the backs of the working masses and often involved resource-thirsty enterprises being fed at the expense of the peoples of an empire that then covered the globe.

Our search for innovation continues, as it must, and I am pleased to be able to point to a package of investment in innovation and infrastructure that will help to drive inclusive economic growth in the area that I represent. The city region deal funded by the Scottish and UK Governments, Stirling Council, Clackmannanshire Council and the University of Stirling will invest more than £214 million over 10 years and will deliver innovation hubs specialising in aquaculture, the environment and intergenerational living, each of which will play a crucial role in addressing the challenges of the future.

World-leading technology solutions will be developed in those centres of excellence, transforming the local economy, tackling low job density through the creation of high-quality, skilled local jobs and strong regional supply chains and, at the same time, supporting community wealth building and the wellbeing economy.

Stirling University Innovation Park, which is in my constituency, was established in 1986. Its aims are to assist the regeneration of the local and national economies by providing an environment that facilitates, encourages and promotes businesses with a focus on innovation. Those are the kinds of projects that the national innovation strategy, which is outlined in the motion, can and must support and promote.

The new fields of knowledge on which the future of our planet will depend need the same explosion of innovation that the industrial revolution brought about, and it is essential that Scotland is at the forefront of this new revolution, in which we must, admittedly, play our part in repairing the climatic and economic harms that have been caused by global industrialisation.

Arthur Herman of the Smithsonian Institution in Washington DC wrote a book, published in 2001, entitled “How the Scots Invented the Modern World”. As the Scotsman reviewer said at the time, the

“overblown rhetoric invites a sceptical reaction. But I suggest we just accept this extraordinary compliment graciously.”

The important thing now—for us and as part of our continued contribution to the world—is that we continue our love of knowledge and our support for innovation and play a leading role in the development of the postmodern world. We could talk about the almost unique achievement of Scotland’s universities; the last time that I heard, five of them were in the top 200 universities in the world. The explosion of ideas during the Scottish enlightenment is an inspiration. Perhaps we will not see the Boris Johnson school of philosophy on the nature of truth or the political economy thesis of Kwasi Kwarteng, but there are important antecedents that should inform how we look forward and give us inspiration that Scotland can lead again.

There is a wider message here, too. If we are determined to become a world leader in entrepreneurship and innovation—I know that it will be uncomfortable for some Conservative members to hear this—we must reverse the isolationist approach that has been thrust on us as part of Brexit Britain. Scotland must use all our powers to create an economy that supports businesses to thrive. We will do that by harnessing the skills and ingenuity of our people and by seizing the economic and social opportunities that are provided, but not as part of a delusion about being a world power. We will do it best with the normal powers of an independent nation.

I support the motion.

Laudable though I think what Martin Whitfield proposes is—I think that we should aim for that—bringing it about depends on and is interlinked with the level of female representation that each of the parties achieves. We must drive up the total level of female representation in the chamber. If we do not achieve more balance in that way, we will be asking a smaller group of women to do more and more work. I simply wanted to point out that those two things are related.

The need for additional fiscal flexibilities to allow the Scottish Government to better manage its budget is pretty clear to most of us and has been highlighted beyond doubt by the pandemic and the challenging economic conditions that we continue to face, not least the projected 14 per cent cut from Westminster to our capital budget over the next four years. Can the minister provide any update regarding the Scottish Government’s latest engagement with the UK Government on the review of the fiscal framework and can he say any more about the outcomes that the Scottish Government would hope to see as a result of that review?

Will the member take an intervention?

I thank the member for taking the intervention. Would the member support the Parliament, through its Presiding Officers and its structures, becoming more involved in monitoring that kind of behaviour towards MSPs where they can? I know that that has been talked about across different parties. Is that something that the member would support or is that going too far?

Good morning. Some of the questions that I was going to ask have been asked by Michelle Thomson and others. However, I will revisit, first, the fiscal framework. From what you have said, deputy first minister, the negotiations—about which, I know, you cannot go into detail—seem to be in the undergrowth and on the detail of the framework.

I wonder whether there are more fundamental issues. My view is that the fiscal framework has failed over time. Michelle Thomson talked about its impenetrability: people cannot possibly understand it. It is a bit like the UK tax code in that it is so complex. That cannot be good for transparency and accountability. Is that being looked at?

Secondly, the very basis of the framework, whereby expenditure in England is decided and then—literally consequentially—Scotland gets a share of that, seems to me to be totally counterintuitive to what devolution is meant to be about, which is recognising the differences in different parts of the UK.

Are those more fundamental issues being examined, or is the review really only about how the detail of the framework is working?

Thanks for that. However, there is obviously a relationship between private and public sector wage growth and the economy.

My final question goes back to the point that Michelle Thomson raised in relation to the 14 per cent cut in the capital budget that we will see by 2028. I have been a critic of the £2.5 trillion of debt that the UK Government has accumulated, but most economists agree that debt that is incurred as part of capital expenditure is beneficial for an economy. That being the case—you may have answered this when responding to Michelle Thomson’s point—is an argument being put to the UK Government that the current capital constraints are not serving the UK and certainly not Scotland? Beyond making the general point to it about how damaging an austerity budget is, on the capital side, is there any sign that the UK Government would be willing to move on that?

I will make a brief last point in relation to that. As I am sure that you will remember, in the 2010 to 2018 period, it was not unusual for the UK Government to announce sudden expansions of capital finance. We used to have to find shovel-ready projects. However, that seems to have fallen away. Do you not expect there to be any movement in relation to that?

That is, in some senses, disappointing, but I would hope for something even within the constraints of a technical-led review. It used to be said that the grant-aided expenditure formula for local authorities in Scotland was understood by two people. I think that half that number understand the fiscal framework, and it would be good to see that expanded, if possible.

On the general area of tax and resources, you mentioned a generally improving tax position. Research was published last night showing that there has been a 79 per cent increase in council tax in England, whereas in Scotland we are on average at about £300 or £400 less than what is paid in England, so we have a pretty competitive position across the tax take. Have you done any analysis on whether the generally higher public sector wages in Scotland are driving that increase in tax revenues? We have also had generally lower unemployment in Scotland, certainly over the past year or so. I realise that some of that is quite recent, although, again, evidence that has just been published shows, I think, that the increase in wage growth in Scotland was 8.4 per cent as opposed to 7.1 per cent in England and Wales. Is that driving the increased tax take?