Chamber and committees

The minister does not want to accept questions coming from other parts of the chamber. Does he accept that questions are also coming from people who served his party, both in the NEC and in Parliaments? Those people are saying that blocks and obstructions were put in the way of them asking relevant questions, and that that goes to the heart of governance. There are questions about the statements made by people holding public office in this Parliament relating to those things. Does he accept that those questions are important and need to be examined and answered?

The member completely fails to acknowledge the bodged process that the previous UK Government put in place, which is why those licences ended up in the Supreme Court in the first place. If I am coming to the chamber with candour and honesty, I would ask that the member does the same.

We need to focus on three core things. The first is the economics of place; the second is around people and skills; and the third is partnership.

I will try to seek consensus. Surely a view of growth that is grounded in jobs, wages and opportunity would be a compromise between the position that the member is articulating and those taken by members in other parts of the chamber.

I am not sure whether I have had the chance before to welcome you to your place, Deputy Presiding Officer, but I do so now. I also welcome the cabinet secretary to his place. For a first speech, I thought that he did very well.

I agree with Mr Flynn on the fundamental points of his premise. I believe that economic growth is important, because it is about the potential of this country, and that potential is measured in wages and jobs. We must all be focused on that, but it is complicated. I welcome that the cabinet secretary has added transport to his portfolio, because in previous parliamentary sessions, the economy has had a name check in the brief, but it has not necessarily had connections to the parts of policy that can directly impact economic growth.

In a sense, I do not envy the cabinet secretary his task, because it is complicated. It is a big portfolio, and he has a task ahead of him. It reminds me that I was once told by a former boss that, given the complexity of his job, he was not there to be liked but to be effective. I say to the cabinet secretary that he is halfway there already.

If we are to confront this issue, we need a bit of frankness and candour as we look at the opportunities that are in front of us. First, I say to the Government that it needs to confront some of the economic context. Time after time, the Scottish Fiscal Commission has made the point that there is a £785 million fiscal performance gap, which it defines as Scotland’s wages growing more slowly than those in the rest of the United Kingdom. Let us put that in context. That £785 million could fund Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise, the Scottish National Investment Bank and Skills Development Scotland combined. We need to address and confront that gap.

We must also acknowledge Scotland’s relative economic performance. It is a fact that, between 2014 and 2024, Scotland’s economy grew by 8.4 per cent, compared with 14.3 per cent across the UK. Let us be clear—we need to be candid on all fronts—that that correlates with a significant decline in oil and gas extraction from the North Sea. Ultimately, we need to recognise the scale of the oil and gas sector and the fact that it is a declining sector, whether we like it or not, because of geology, and we must focus on how we replace those jobs. They are high-paid jobs that pay well above the median wage, and we have a challenge to replace them, regardless of our views on climate change. That is the reality of the North Sea.

I apologise, Mr Hoy; I would like to make a little bit of progress.

For all three things, we have the powers here, but we fail to focus on them. On place, if we examine the figures, we see that there are parts of the United Kingdom where gross domestic product per head is growing far faster than it is in Scotland. Greater Manchester has had a GDP-per-head growth of 15.4 per cent in recent years, and in West Yorkshire it is 7.5 per cent, whereas Scotland’s GDP-per-head growth in a similar period has been 4.3 per cent. We need to look at the Government’s pledges to put regional economic partnerships on a statutory footing, but we must consider what they will do and how they will work. What power from this place will we push out so that they can deliver in partnership with industry?

The cabinet secretary was right to point to the importance of people and skills, but the reality is that the number of modern apprenticeship starts is falling and we have barely got going on upskilling and reskilling. Yet we have to wait for the organisational reform of SDS into the Scottish Funding Council. I worry that we will not have the scope or capacity to implement the changes that we need in terms of upskilling and reskilling, let alone deal with the increasing difficulties that young people face in getting into the workforce at all.

On partnership, we need a much greater focus on the issue of the time and uncertainty that the Government introduces into investment pipelines—I accept that the cabinet secretary referenced that. Let us take renewables: it takes seven to 10 years from start to finish to get projects through the planning and consenting regime, in comparison with Norway, where similar projects take three to four years to go through that process. We need a comprehensive mapping exercise from the Government, understanding where it has touch points and where it increases time and uncertainty. More importantly—I say this to people from all political parties—I think that there is an overwhelming tendency for politicians to assume that everyone in business is driven only by the profit motive. Actually, the profit motive is vital for business. Yes, we need to be cautious about profiteering but the fact is that we need to work in partnership and understand how businesses can generate a return, because that is what economic growth ultimately requires.

My time is up, but I will say that this is perhaps a hopeful start. We need a renewed discussion around the economy, one based around decentralisation, people and partnership.

I move amendment S7M-00290.3, to insert at end:

“; notes that the Scottish Fiscal Commission has projected Scotland's ‘Tax base performance gap’ for 2026-27 to be £785 million while data shows that GDP increased by 8.4% between Q2 2014 and Q2 2024 for Scotland compared to 14.3% across the UK as a whole, and believes that understanding and addressing these gaps is imperative in order to grow jobs, wages and opportunities, as well as maximising revenue for funding public services in Scotland.”

16:11

I welcome the Deputy Presiding Officer to her position and I welcome the Deputy First Minister to hers, too. I look forward to working with her in the constructive way that we did in the previous session of Parliament.

Above all else, I congratulate all the members who have spoken for the first time in the debate. There have been a few too many to name check, but I say to Katie Hagmann that, given the quality of contributions from the new members, I think that it is returning members, not the new ones, who should be nervous.

I have to begin with something that I do not want to do, which is to confront some of the comments that were made by Malcolm Offord. Frankly, they were ridiculous. First, it should come as no surprise that Labour believes in creating opportunity through better work and better pay. Secondly, he should read Alan Milburn’s report, because it calls for Government intervention to bridge the structural gap that gets in the way of so many young people in the world of work. Above all, shoehorning in a racist, dog-whistle claim about two-tiered justice in the light of what has happened in Southampton is outrageous and irresponsible.

I apologise—I am out of time.

16:48

No, I will not take an intervention from the member. If he thinks that second-rate racism such as that will stand in the Parliament, he is sorely mistaken, and he can sit down.

I will continue my point, and the member can see whether or not it is relevant.

We have to have a debate about how we grow the economy and develop sustainable funding for public services. More broadly, I say to the parties of the right that they have to understand that this is not an either/or—we cannot cut our way to growth. Growth requires good quality public services. We need our schools to teach the right skills and knowledge; we need hospitals so that people can get better to return to work; and we need good roads so that goods and services can travel from point A to point B. This is not about either/or—we need both.

We do require some candour from this Government; its inability to acknowledge the performance gap that has been outlined by the Scottish Fiscal Commission over a number of years is worrying. That £800 million gap has arisen primarily because of

“slower earnings and employment growth compared to the”

rest of

“the UK.”

That is the definition that the Scottish Fiscal Commission has set out. If we want to make progress, both on economic growth and on public finance sustainability, we have to start by acknowledging that at least.

We also have to acknowledge longer-term growth trends. Before Ivan McKee gets to his feet, I am happy to acknowledge that economic growth in Scotland last year was 1.4 per cent, but it was only 0.1 per cent higher than the figure for the UK. In the previous 10 years—from 2014 to 2024—Scottish growth was 8 per cent, while UK growth was 14 per cent. We have to think about why we are lagging and how we can make up that difference, because economic growth is important.

Willie Rennie was absolutely right to say that we will not tax our way to growth or sustainable finances, but the issue is more important than that. Ultimately, economic growth matters because it is all about increased living standards, increased opportunities for individuals and increased wages. It matters for the Government, but it also matters for those who live and work in Scotland.

This is an important debate, but we need much more detail about how the Government will tackle these issues and the deficit that it faces. It did not want to mention the £5 billion figure, but even if it rejects that, the Government’s own figures, according to the IFS, show that we would need an extraordinarily increased rate of productivity growth in the health service just to stand still once we take account of increased pay. Additionally, the IFS identified £1.4 billion of additional pledges in the SNP manifesto. We need a grown-up, mature conversation, and it has to start from a realistic position about our growth and why it matters. Just saying, “We’re going to do reform” does not really cut it; we need to understand the detail if we are not to undermine the very public services that are so important.

Above all else, we have gone on too long talking about council tax reform and local government reform without getting into the detail. We have to reform council tax and non-domestic rates at the same time, and that needs to be done holistically. Partial tinkering around the edges might make the system much worse, given that it was arrived at in a hurried fashion in 1991 and was imperfect to begin with.

We also need to start with some principles. Let us have a non-domestic rates regime that is built on transparency, that is based on economic contribution, that does not hinder investment, and that aligns local government with the revenue from where it is generated. Perhaps that would be a starting point. If we want reform, let us at least establish the principles and have some dialogue about how it could take place. Let us get on with it, because we cannot wait another 20 years.

This is an important debate. At times, it has been useful and instructive, but we need an awful lot more candour if we are to actually make progress.

Will the member take an intervention?