Chamber and committees

We have grown used in recent months to hearing about the cost of living emergency and the harsh reality of people’s wages not stretching to pay their bills or cover the cost of their shopping and the fundamentals of life.

The stark truth is that this emergency has not come out of nowhere. Wages have been stagnant for a decade—a fact that the UK Government seeks to ignore. Liz Smith hinted at another stark fact, which is that

“Scottish productivity growth has stalled since 2015.”

Those are the Scottish Fiscal Commission’s words, not mine. That is coupled with the fact that the way that the fiscal framework works, which was agreed to and trumpeted at the time by John Swinney, is that when our income tax receipts grow more slowly than the UK average, we have less money to spend. Although there is good news today, we need to grapple with those fundamental and serious issues.

I welcome the opportunity to debate those issues, but like others, I lament the fact that we have had no real time to digest what is contained in the papers. There is nothing to prevent the Government sharing them under embargo, and frankly, it is slightly shameful to point to the Queen’s death as a reason why they could not be shared.

The fundamental issues and trends are those of productivity and wage growth.

It is perhaps difficult at the end of this 10-day period of national mourning to find new or fresh things to say, except to express that I am surprised by the deep sense of loss and reflection that I have had personally. Indeed, my teenage self would be almost horrified by it. As a teenage political geek, I spent much time thinking about constitution and reform, but not much time thinking about monarchy. If someone asked me about the royal family, I would instead refer them to my dear, departed aunt Mary, who was both a corgi breeder and the owner of probably the best collection of commemorative china in Edinburgh. I am not sure whether her corgis were directly related to those of the Queen or whether that was just heavily implied.

I think that that personal reaction has been shared across the nation—and across nations—because the Queen’s was a remarkable life. For all of us who aspire to public service, she stands as a shining example.

Although the past few days have been an example of the state ceremony that always comes with a sense of shared experience and identity, what has been remarkable is how that has been expressed. There were cheers and applause as the Queen’s coffin passed the crowds. I wondered at first whether that was an appropriate reaction, but it absolutely was. Although people were mourning, they were also giving thanks to a remarkable person who lived a remarkable life and for the job that she did.

Above all else, as has been said by John Swinney and Jeremy Balfour, hers was a job that she did for others. It was a job that she did not apply for or ask to do, but was a job that she knew that she needed to do on behalf of us all. The selfless sense of duty with which she performed for 70 years was truly remarkable—many people have reflected on that. That she managed to do that job for all those years without expressing her personal opinions but simply reflecting those of the nation is her remarkable and outstanding legacy.

Above all else are the values and virtues that she embodied. She put others first. Her job was indistinguishable from her family life, which is a difficult balance. Although we are not all monarchs, we are all family members and friends. I think that we are truly giving thanks because of a sense that she put others first. She put our interests first and stands as an example of what we should do in putting others first.

On reflection, I would tell my teenage self that, although structures and institutions matter, it is our values and deeds and what we do that matter above all else. As monarchs or ministers, as shop workers or teachers, as parents, neighbours or friends, that is the outstanding example and legacy we have from Her Majesty the Queen.

God rest her soul and God save the King.

I thank the Deputy First Minister for advance sight of his statement. Families and businesses across the country are already feeling the pain of rising energy bills, which is why Scottish Labour has called for active measures and welcomes the fact that the Scottish Government has come to agree with many of those pledges.

We appreciate that the Government is not immune from such pressures, as we face an unprecedented economic crisis. However, as well as specifying £500 million of cuts today, the Deputy First Minister has hinted at a larger figure of £1.7 billion. We need greater clarity.

On the £3 billion of support, the Deputy First Minister does not need to place anything with SPICe, which has already done the analysis—only £500 million of that figure has been put in place since the rise in energy costs; the rest pre-dates the rise. [Interruption.] The Government does face difficult choices but, if that is to be anything other than a euphemism, we need greater clarity, transparency and honesty.

What is the total value of the funding shortfall for which the Scottish Government is planning? Given that his predecessor suggested that head count would need to be reduced across the public sector by 30,000, will the Deputy First Minister confirm that that reduction forms part of the plans? Given the scale of the cuts that he has seemed to imply with the £1.7 billion figure, what plans has he asked civil servants to examine? When will he confirm when those plans will be put in place and the timeline for implementing them?

A year ago in the programme for government debate, we discussed recovery—what it would take to recover from the truly historic impact of a 20 per cent drop in the economy, because that is what happened during lockdown. It gave rise to increases in the cost of labour and materials the like of which we had never seen. We are now plunged into a cost of living emergency, with the energy price cap rising initially by 50 per cent and the prospect that energy prices could quadruple. That would place up to 80 per cent of Scottish households in fuel poverty, which is truly staggering. We must therefore welcome the steps set out in the programme for government that will help to deal with that.

An emergency budget is undoubtedly necessary. Measures to deal with fuel insecurity, such as the fuel poverty fund, are welcome. A freeze on ScotRail fares is also welcome, although the Scottish Government could at least acknowledge that we have already seen those rise before the implementation of the freeze. Action on debt is, indeed, due. Although the First Minister is right to point out that financial regulation is a reserved matter, powers over debt policy and legislation on debt reside here. We must stretch every sinew. As not only fuel prices but interest rates rise and people struggle with their bills, they will, frankly, face debt the like of which we have not seen in more than a generation.

The proposed measures are all welcome, but they are the same ones that Labour members called for during the summer. When we recognised the scale of the emergency, we made the same proposals. Unfortunately, the context is set somewhat by the way in which the First Minister made her speech today. It took her a thousand words, set out on four pages—almost a third of her statement—before she set out a single one of those measures. That tells us something about her priorities: she would rather get her excuses in first than deal with what we can do with the powers that we have.

We know the reason for our not having had any proposals on the cost of living crisis sooner than now. It is because that was not the plan. We all know what the plan was: we were going to have papers about the constitution, which were to be released, one after another, during the summer. I think that we have had two. Where are the other half-dozen? They were pulled because the Government recognised that the subject was not the people’s priority and that whatever claim it might want to make about the constitution will not deal with the issues that people face here and now. Years and decades of constitutional wrangling have done nothing to help people to face the bills and costs that they have now—that is the reality.

The situation does not come without a wider context, too. The reality is that the economic situation in Scotland is a matter of concern. I welcome Michelle Thomson raising the issue of the rises in earnings and productivity. However, if we look at those measures, we can see that Scotland’s recovery is lagging behind that of the rest of the UK. The Scottish Fiscal Commission’s report showed that earnings growth here is lagging behind not only that in the best-performing parts of the UK but the UK average. Since 2015, our productivity has stalled. Where in the programme for government is there discussion of those issues?

Organisations such as the Wise Group and the Joseph Rowntree Foundation are calling for immediate action on wage maximisation. The simple truth—the simple logic—is that in our economy we have both wage suppression and labour shortages. Where is the direct action on those? How many people with driving licences could earn £40,000 per year—yet cannot, just for want of the right training course? That is not the only skilled trade that could benefit from having new people. There are jobs out there, but there is a lack of direct action from the Government to help people into them by removing the barriers that are in their way and helping them into the training that they might need.

I take issue with what Douglas Ross said about this being a programme for government that is full of political priorities. I do not think that it is. We have some cost of living measures, but this is apparently a pared-down programme, which has been reduced in order to focus on the cost of living. I question whether a number of its measures truly address our priorities right now. Do reform of the legal complaints process and changes to charities legislation really narrow the focus on the direct challenges? I wonder whether those should really be priorities in a pared-down programme for government.

We also have little detail on the major proposals that could make a difference. If we were to really examine the issues, we might reiterate our concerns about the proposed introduction of a national care service. Are people out there clamouring for more centralisation and better-quality bureaucracy in care? No—they want clear, practical and pragmatic changes to the way in which care is delivered, but none of those things is addressed in the Government’s current proposals. It is shameful that the Government has reiterated its pay increase of £10.50 per hour. Frankly, its rejection of our costed proposal for an immediate pay increase to £12.00 per hour for those workers now sounds very hollow indeed when the self-same workers, whose work is extremely important, are struggling with their bills.

Ultimately, this is not a Government that does transformation well. When we look at the police or the colleges we can see that there is a rebrand but no investment. Unfortunately, it looks as though the national care service is headed in the same direction, and the Scottish Qualifications Authority is also headed for yet another rebrand, with no substantial change—there is very little detail in the programme for government about what is planned.

The simple reality is that people are not clamouring for more constitutional change or for a referendum; people want action, help and bills dealt with now, rather than a court case, bickering or attempts to start a campaign for an election that might not happen for 18 months. People want a Government that stretches every sinew to use every power to help them here and now with bills the likes of which they have never seen before. That is not what we have in this programme for government.

One of the interesting aspects of the point that the member has just raised is that a lot of academic work and theory shows that mergers very often decrease, rather than add, value. Does he think that we should give more thought to that?

I am really pleased that John Mason secured this debate, because it asks the important questions that we need to ask, including the ones that Mr Mason himself posed.

It matters where our business and industry are owned. In part, there is a sentimental reason, to which Mr Mason alluded. It is sad when we see companies such as John Menzies—my mother always told me to pronounce it Mingiss—and others go into foreign ownership.

However, there are other important reasons why it matters. When the investment decisions of those companies are being made in another place by other people, I feel, intuitively, that there are more likely to be reasons why they will not invest in the place where their acquired business rests, although they might do.

I agree with a lot of what Mr McLennan said. There are questions about the macroeconomic policies, but his contribution also hit on one of the tensions. While he was juxtaposing those downsides, he contrasted them with foreign direct investment. I gently point out the “F” bit of FDI . We are in a global marketplace and, regardless of our different views on the constitution, at the heart of the matter is how we strike the balance between indigenous growth—I am sure that we all agree that we must have an environment that allows businesses to be created and grown here—and acknowledging that there is a global economy, whether we like it or not.

The Labour benches are not full at the moment, but there are members who might be alarmed at some of what I am saying. We cannot undo the global economy, we cannot go back to the 1970s, and we cannot put up walls.

The example that I like to think about is that of Wolfson Microelectronics. It was founded in the 1980s and was very successful. Every time I pass its office building, I wonder whether it had to be the case that it got bought by Cirrus; however, if we think about it, there are still 300 people who are employed by the company in Edinburgh. On its jobs site, there are senior semiconductor engineers jobs being advertised. Therefore, there is a balance to be struck.

Ultimately, we need to question what we need to do to retain more businesses that are owned in Scotland. As part of that, we need to examine company law. We make it too easy. In 2004, France blocked the acquisition of Danone, a yogurt manufacturer, on the basis that it was of strategic interest to France. That is not the sort of thing that we see happening here, and we need to question that.

I highlight the fact that mergers do not tend to create value. We need to adhere to the market, so I do not think that we can just block mergers and so on outright, but there is an issue there.

We also need a to look at our own policies. Do we always use the right vehicles? Could we use golden shares when we are doing our co-investment through Scottish Enterprise and the Scottish National Investment Bank? Could we use joint venture structures so that we attract outside capital while actually building something here? That approach is used in other countries, and I wonder whether there are possibilities for us to use joint venture structures to build infrastructure in a way that means that we retain ownership at least in part in Scotland.

We also need to look at our wider policy landscape. When I talk to businesses, I hear that there are concerns that we are not necessarily retaining businesses in areas such as the life sciences; there is active concern about that. The issues there are not the big ones that Mr McLennan was pointing to but things such as planning and skills policy, which are absolutely within our control.

Some really good questions have been raised, some of which are outwith the competence of the Scottish Parliament but, ultimately, we are talking about growing businesses, growing jobs and growing wages. Although economic policy is complicated, it boils down to those simple things.

Will the First Minister clarify a point about the process that lies behind her statement? Did the Lord Advocate refuse to certify the referendum bill as being legally competent? Is that why the Lord Advocate is taking it to court, rather than the bill being brought before Parliament today?

I, too, thank the minister for early sight of his statement.

Covid and the cost of living crisis necessitate that the Government gets the money that it has out the door as quickly as possible. The minister has cited £5.7 billion of Covid spend, but that is £100 million less than was received in consequentials that year. Indeed, the total in consequentials due to Covid was £14.4 billion over the past two financial years.

Will the minister confirm how much of that £14.4 billion cumulatively has been spent over the past financial years? Also, given the issues that have been raised by Audit Scotland, how much of it remains not just in Scottish Government reserves, but in local authorities, non-departmental public bodies, health boards and integration joint boards?

Finally, I ask the minister for clarification: £650 million is very close to the threshold of what is permitted to be held in the Scotland reserve. Given that the outturn numbers are provisional, is there any risk that that threshold will be breached?

I thank the cabinet secretary for that response and I welcome the fact that the report has now been published. However, the facts are these: a promising young female officer was bullied out of the force; damages of more than £1 million were awarded; and an acting inspector is being investigated for perjury. Yet this report merely recommends a review of recruitment into firearms, training on standards and a refresher course on diversity. Is recommending diversity training in response to such serious issues not the very definition of tokenism? I find it incomprehensible that the report fails to offer any insight or recommendation on organisational or procedural reform. Given that officers at the most senior level were aware of it, I find it scandalous that the conduct of no individuals other than those who were directly involved was considered. In line with Dame Elish Angiolini’s recommendations in her report on police complaints, can we put an end to the practice of the police investigating themselves? Will the cabinet secretary write to the Scottish Police Authority chair and the chief constable to ask them to reject the report and undertake a robust and comprehensive examination of the culture—

A further 7 per cent cut would take the total cuts to Audit Scotland’s budget since 2006 to 25 per cent. If Audit Scotland receives that cut, does the cabinet secretary expect the quality of its audits to go up or down?