Chamber and committees

Gillian Martin has laid out our approach to the climate change plan, and we also have the advice from the CCC on carbon budgets.

There are two steps to take. First, the company must declare that, to the best of its knowledge, its products are not being used in such countries. It is a self-declaration process. Secondly, the enterprise agency must engage with the company to understand the full details. I will not give you the joy and delight of having me express a view in committee on a hypothetical application, because a very important process has to take place.

I will answer the question, but I caveat all this by saying that I am recused from decisions on this matter because of an entry in the register of members’ interests in relation to accommodation provision, through family members. I am intimately familiar with all the arguments about the visitor levy, as a Highland MSP. The Government’s position is that, through engagement with local authorities and businesses, a number of points have been highlighted about the implementation of the levy.

If my memory serves me right, when the nature of the levy was consulted on, it was about 50:50 with regard to who was in favour of percentage rates and who was in favour of flat rates. Highland Council, for example, wanted neither—it wanted a tiered flat rate—and, in the past, the Scottish Tourism Alliance has publicly favoured a tiered flat rate. The Government has been open to exploring the implementation of changes that have been requested by local authorities and industry. The challenge is finding a legislative mechanism to do that, because time is very tight over the next six months.

There is an appetite—a willingness or a keenness—to find a route to offer local authorities the option of levying a flat rate rather than a percentage rate. The question is the means. There is quite a sensitive conversation around how to link that with housing, which is why I imagine that that did not happen through the Housing (Scotland) Bill. Generally, tourism businesses do not want to see the levy used for what they believe are statutory obligations on the state; they want to see the funding being used to improve visitor facilities. There is openness on the part of the Government and there are very active conversations happening with industry and local authorities to look at how we do that.

No, I do not think that it would be sensible to have a moratorium instituted by the Government, because this has always been a local tax, so it is a matter for local authorities. I believe that the feedback to the consultation from the Convention of Scottish Local Authorities—again, I am going into the deep recesses of my mind—was that it did not come out unilaterally in favour of a flat rate. Some local authorities, such as the City of Edinburgh Council, are keen to make progress with the current arrangements, but others, such as Highland Council, want neither a flat rate nor a percentage rate—they want a tiered rate. In other words, I do not think that a moratorium from central Government is in the spirit or the letter of this policy or legislation.

The policy will apply to the full global footprint of a defence company and all associated activities. If the specific Scottish part of the company has no links to an identified country, but another part of the company elsewhere in the world does, the Scottish part of the company becomes ineligible for the grants and investments.

To an extent. Obviously, the broader conversations all come back to what we have set out as our core objectives.

One of the three main objectives that I have on the attracting investment work is the energy transition. The issue that investors raise with me more than anything else is whether I can ensure that they will have the workforce. Therefore, skills underpin all the investment work. The investment work is exciting and I can talk about the statistics, but ultimately it becomes a reality only if we have the skills. Therefore the energy skills hub is an obvious, logical place to make the investment because it is so critical to all the other work that we are trying to do.

Every few months, I chair the Cabinet sub-group on investment in the economy—we had a meeting yesterday—so the matter is obviously of Cabinet-level importance. It is a brilliant place where we talk through all the big investment opportunities and what the implications are for every portfolio. Gillian Martin was there yesterday morning talking about the overlap between the investment approach and the climate change, energy transition and net zero approach that she takes. Fiona Hyslop was there talking about transport. Ben Macpherson is one of the members and he talks about skills. That brings it all together.

We are doing that by taking a very streamlined approach to attracting developments and investments. An obvious example of that is the work that we have done through the investment pipeline, where we have provided a tangible prospectus on where investors can invest in Scotland, and data centres are one obvious such area.

We see evidence that that approach is working. There are some challenges along the way. The high price of energy represents a risk, but all the reasons that you identified—such as the fact that we have a cooler climate and will have access to a surplus of green energy—are of interest as well. Those factors are all driving quite high levels of interest in data centres in Scotland.

We have talked about that issue before, and I think what sets Manchester out is strong leadership and a cohesive approach to delivering results. That is perfectly possible in Scotland, and I see evidence of that in different parts of Scotland. There is one example that stands out most starkly. Forgive me—I obviously have an element of prejudice in this regard, but I have never seen people in the Highlands and Islands working together as cohesively as they do now, or with such strong leadership. That is largely born of the fact that Highlands and Islands Enterprise is a little bit independent and can show that strong leadership. There are brilliantly strong leaders right now in all the key public bodies. There is a sense among industry that something exciting is happening, and those leaders are working collaboratively together. None of the most recent investments happened accidentally; they were pursued quite intelligently. That is what stands out.

The Manchester example is fascinating, but it is not a model for rural areas. I would argue that the Highlands and Islands is showing what kind of approach could work in a rural area, which is exciting.

The report then goes through what those high productivity sectors are. I talked about the big beasts and the high productivity sectors in energy and finance. We have world-leading universities, so the skills element is good, but, as the University of Glasgow’s report says,

“The business ecosystem in Scotland lacks a critical mass of large scale-ups.”

Cue Techscaler. The report mentions good progress on export performance and, going further, support for business start-ups. That is a little insight into really solid strengths in some areas. It goes back to Lorna Slater’s point, which is that if you just take the high-level data, the regional or the industry variation underneath is masked.

Not to go back to my pet subject of the Highlands and Islands, but Graeme Roy did an interesting report on the Highland economy over the past 60 years, looking largely at the progress since the time of the Highlands and Islands Development Board, when the generally accepted wisdom was that the Highlands was such a basket case that the only thing that could be done to improve the region was to encourage people to leave rather than to encourage investment in it. I think that the economist Professor Sir Donald MacKay made that point. Graeme Roy’s point is that productivity growth in the Highlands and Islands has often exceeded what was happening Scotland-wide, and that the region was able to weather some economic storms better because of its resilience.

There is a lot to learn not only by looking outward but perhaps by looking inward at particular regions of Scotland in which there has been significant growth over the past 60 years.