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Chamber and committees

Meeting date: Wednesday, November 1, 2017

Meeting of the Parliament 01 November 2017

Agenda: Portfolio Question Time, Health, Lobbying (Scotland) Act 2016 (Reporting Procedures) Resolution 2017, Business Motion, Parliamentary Bureau Motions, Decision Time, Pancreatic Cancer


Portfolio Question Time

Motorways (Noise Levels)

To ask the Scottish Government what action is being taken to alleviate the noise levels impacting on residents since the completion of the M8, M73 and M74 improvement programme. (S5O-01385)

Significant work has been undertaken to mitigate the effect of the M8, M73 and M74 motorway improvements project. During the construction phase of the project, 24 acoustic barriers or noise bunds were created on the M8 and A725. That mitigation was provided in each instance in which the predicted noise increase as a result of the project was more than 1dB. Furthermore, the fact that low-noise road surfacing, which produces less traffic noise than previous types of road surfacing, was used in the construction of the new road is benefiting all neighbours to the project.

I thank the cabinet secretary for that answer but, quite honestly, what he says has been done has not been done for the residents that I am speaking about. He will be aware of the on-going case of the noise and other impacts that are faced by my constituents in Burnacre Gardens in Uddingston. What assistance can the cabinet secretary provide me with in facilitating a meeting between my constituents and the chief executive of Transport Scotland in order to work towards a positive outcome for all involved?

I have, of course, previously had discussions on the issue with Richard Lyle, who will have been sent a response from the chief executive of Transport Scotland agreeing to his request to meet him. I will be happy to discuss the matter further with the member after that meeting.

I say to Richard Lyle and to all other members who have had an involvement in the project that, although there is no question but that it has been a hugely beneficial project, it has necessitated some disruption and inconvenience to the local population. That is true of all major transport projects. I am very grateful to Richard Lyle for the support that he has given for the project while—quite rightly—raising issues of concern to his constituents. As we both know, the project represents a huge benefit to central Scotland and to the transport network of Scotland. It has involved £0.5 billion of investment and the establishment for the first time of a motorway between Glasgow and Edinburgh.

Economic Growth

2. George Adam (Paisley) (SNP)

To ask the Scottish Government what action it is taking to encourage economic growth. (S5O-01386)

We are taking a number of actions to support long-term economic growth, including significant investments in transport—one of which I have just mentioned—and digital connectivity, and we are supporting investment in our cities and regions.

Moreover, we are expanding funded early learning and childcare facilities to improve young children’s outcomes and reduce barriers to parents participating in the economy. In addition, we have invested more than £5 billion in the higher education sector over the past five years, and a further £1 billion has been allocated in 2017-18.

To boost Scotland’s trade, exports and international connections, we have established a board of trade, and we are establishing permanent trade representation in Berlin and Paris to add to our innovation and investment hubs in Dublin, London and Brussels.

The Fraser of Allander institute believes that up to 80,000 jobs could be lost to Scotland on the back of a hard Brexit. Does the cabinet secretary agree that that is simply unacceptable, and that it proves that the United Kingdom Government is playing fast and loose with the future of many Scots families as it continues to struggle to come to terms with the European Union during the Brexit negotiations?

George Adam and the Fraser of Allander institute underline the real risk that Brexit poses to the Scottish economy. The European Union is the largest single market for Scotland’s international exports. In 2015, exports to the EU were worth £12.3 billion, which represented an increase of £520 million on 2014. The Fraser of Allander institute’s research estimates that, in 10 years’ time, gross domestic product is expected to be more than 5 per cent lower than would otherwise have been the case—that is £8 billion in 2015-16 terms.

The institute also estimates that leaving the single market and the customs union threatens 80,000 Scottish jobs in a decade’s time. In fact, the BBC reported only this week that the Bank of England believes that up to 75,000 jobs could be lost in the UK financial sector alone in the event of a hard Brexit. It is therefore no wonder that, in its latest economic commentary, the Fraser of Allander institute says:

“In looking forward, the greatest cloud on the immediate horizon remains the Brexit negotiations.”

That is why we are using all the powers at our disposal to grow the Scottish economy. It is also why the UK Government should accede to the request of my colleague Michael Russell and release all the analysis that it has done of the effect of Brexit on various sectors and parts of the UK in order that we can take the best possible decisions to protect the Scottish economy from the Tories’ obsession with Brexit.

Figures that were released last week showed that the United Kingdom economy expanded by 1.5 per cent compared with growth of only 0.5 per cent in Scotland under the Scottish National Party.

The SNP is clearly trying to blame Brexit for Scotland’s economic underperformance, but the reality is that Scotland’s economy under the SNP has been lagging behind for years—years before Brexit—and future growth under the SNP is forecast to remain low for years to come. When will the cabinet secretary start taking responsibility for delivering the economic growth that Scotland deserves and stop blaming Brexit and others for this Government’s economic incompetence?

It is interesting that, when the previous figures came out, which showed Scottish growth at four times the rate of that of the UK, the member did not ask me to take responsibility for that.

The head-in-the-sand attitude is appalling. It is not only me saying it, or even the Fraser of Allander institute, which members on Mr Lockhart’s side of the chamber like to quote regularly; it is the Bank of England and every other economic commentator. The UK has the lowest projected growth of all the EU countries. It is simply the case that Brexit is the major threat to this economy. Mr Lockhart might disagree with that, but, if so, that means that he disagrees with every economic commentator.

Perhaps Mr Lockhart is saying that there is no threat at all from Brexit. He certainly seems to be sanguine about it. However, there is a huge threat from Brexit. It would be interesting to know whether he supports the call that Mike Russell has made for the detailed analyses that the UK Government has conducted to be released so that we can better inform our decisions on the Scottish economy. Does he support that or not, I wonder.

The one thing that we can agree on is that year-on-year comparison of gross domestic product figures shows that the Scottish economy grew by 0.5 per cent in a period when the equivalent UK growth was 1.5 per cent. I am interested to know what the Scottish Government is doing to close the gap. Specifically, in the context of reducing capital infrastructure projects, would the cabinet secretary consider a fiscal stimulus for the construction industry?

We have done exactly that in the past, as the member knows, including—not least—the fiscal stimulus after the decision on Brexit. However, decisions on capital expenditure, as with those on revenue expenditure, would be for my colleague Derek Mackay to answer. He and I were discussing this very issue as recently as yesterday afternoon.

Of course, we want to maximise capital investment in the economy. We have seen the benefits of that over many years, with the Queensferry crossing, the M8 bundle and the other infrastructure work that should have been done years ago by various other parties in the chamber but which it has been down to this Scottish Government to bring forward. We will continue to do that to the maximum of our ability using not only the resources that are available to us but any new means, such as the Scottish national investment bank, that might help us to increase capital expenditure. On that, I think that Jackie Baillie and I share the same aim.

Questions 3 and 4 were not lodged.

Carbon-free Economy

To ask the Scottish Government how it promotes the carbon-free economy. (S5O-01389)

The Scottish Government undertakes a range of activities not only to promote but to accelerate Scotland’s transition to a low-carbon economy. To name a few, we have committed a further £60 million to support innovative low-carbon energy projects through the low-carbon infrastructure transition programme; committed to the Scottish energy efficiency programme, making available a minimum of £500 million over the initial four-year period from 2017-18; and promoted low-carbon actions through Greener Scotland to encourage changes in consumer behaviour that households can take.

I know that the minister recognises the contribution that East Kilbride has made to the Scottish economy in the 70 years since it became Scotland’s most successful new town. [Laughter.] For the benefit of Mr Wheelhouse’s fellow minister, I hasten to add that Cumbernauld is rather good as well—[Laughter.]—as is Glenrothes.

Does the minister recognise that, in terms of zero waste, recycling, green transport and industrial innovation in relation to the circular economy, East Kilbride could easily become an exemplar of the carbon-free economy in Scotland, and will he undertake to meet again with the members of the East Kilbride task force to discuss East Kilbride’s future in that regard?

I am glad that Linda Fabiani managed to keep the peace in the chamber—I am sitting next to Jamie Hepburn, so I was nervous for a while.

I welcome East Kilbride’s ambition to become a carbon-free model location. Linda Fabiani is quite right—we have met the task force. The meeting was very positive. As I have just reinforced, the Scottish Government offers a number of policy measures and funding opportunities that are aimed at accelerating the transition to low-carbon growth. Those go beyond the three examples that I gave, with further support available for business communities and individuals.

In response to Linda Fabiani’s request, if she agrees to my doing so, I would be happy to ask my officials to offer a meeting with representatives of East Kilbride, whether that is the local authority or other parties, to explore how sources of support from the Scottish Government and our agencies might best be utilised to support East Kilbride’s very laudable aim to be a low-carbon model. I would be happy to meet the task force, or others, once that discussion has taken place.

Business Growth (Areas of High Unemployment)

To ask the Scottish Government what action it is taking to stimulate business growth in areas with high unemployment. (S5O-01390)

The Scottish Government uses all available levers to create the economic conditions to stimulate business growth in areas with high unemployment. Working closely with a wide range of partners, including the enterprise agencies, Skills Development Scotland and local authorities, we work to ensure that businesses of all sizes and sectors can access the support that they need to grow and create employment opportunities.

The unemployment rate in my constituency is almost 11 percent, which is the highest rate in Fife. What are the Scottish Government’s proposals for creating jobs and apprenticeships in areas of high unemployment in order to ensure that more of our young men and women get into work and stay in work?

Jenny Gilruth mentioned unemployment figures. It is true that the figures are different in different parts of the country. However, we have the highest employment figures on record—2,655,000 people are in work. We have higher employment rates and lower unemployment rates than the United Kingdom—the Conservatives have never mentioned that—with 91,000 more people in employment than in the pre-recession peak. Youth unemployment rates continue to outperform UK rates. That comes on top of our fulfilling, four years ahead of schedule, our commitment to reduce youth unemployment by 40 per cent.

Although those are positive figures, we recognise that there are still many barriers to people getting into work. We are continuing to work to improve labour-market conditions—not least by expanding the range of opportunities that are available to young people through our apprenticeship programme and our £96 million investment to deliver fairer employment support services through the new fair start Scotland programme, which Jamie Hepburn recently announced in a statement to Parliament.

The latest employment figures, which came out last week, show that the Scottish economy continues to perform well against a difficult backdrop, with the UK Government’s lack of clarity on Brexit and its proposals to leave the world’s biggest single market posing the single biggest threat.

Even with those good figures, we must redouble our efforts in areas where we still have issues. Jenny Gilruth’s constituency is not far from my constituency: we face similar challenges. We have the opportunity to address those challenges through some of the measures that I have outlined.

Section 36 Applications (Caithness, Sutherland and Ross)

To ask the Scottish Government how many section 36 agreement applications are in progress in the Caithness, Sutherland and Ross constituency. (S5O-01391)

In the Caithness, Sutherland and Ross constituency, eight applications made under section 36 of the Electricity Act 1989 are in progress. Of those, four are with the planning and environment appeals division—the DPEA—to administer the public local inquiry process.

Does the minister agree that there is incredible potential in Caithness, Sutherland and Ross for renewable energy—in particular, from hydro and wave technologies? Will the Scottish Government work to ensure that any new policies on wild land will factor in the need for renewable energy that is not necessarily wind generated?

The Scottish Government is very strongly committed to supporting continuing growth of the renewable energy sector—not just in Caithness, Sutherland and Ross, but across Scotland—as a key driver of economic growth. Nevertheless, we recognise that we need, through the planning system, to ensure that each application is considered on its merits and that we take into account any potential detriment to our natural environment.

Gail Ross mentioned wild land. Although “wild land” is not a formal designation, it is important to recognise that it is taken into account in making determinations on planning applications. It is also important to stress that Scottish planning policy is clear that development may be appropriate in wild land areas where impacts can be

“substantially overcome by siting, design or other mitigation.”

Any future revisions to Scottish planning policy will be subject to consultation.

As Gail Ross has identified, a number of technologies have less impact on wild land than wind power does. We very strongly support investment in hydro power, which was mentioned, and in wave and tidal power and offshore floating and fixed-installation wind farms, in order to enable development of our vast renewable resources with, we hope, minimal impact on areas including wild land.

Although section 36 appeals are free, they incur considerable legal costs. Highland Council, which represents local views, is finding those appeals to be a real financial burden. Will the Scottish Government help the council with extra funds, given the number of wind farms in the Highlands that are being decided on under section 36 powers?

We believe that we resource local government well to deliver the services and planning functions that it delivers on our behalf and on behalf of communities. We are obviously prepared to listen to particular concerns about the volume of activity, but we have been here before. Areas of the country have had waves of investment in renewable energy—I am familiar with the Scottish Borders and the rest of the south of Scotland—and issues have been managed well at local level. However, if there are particular issues, I encourage Mr Mountain to make them known to the minister who has responsibility for planning, Kevin Stewart, who will be able to take forward any concerns that he has.

Economic Growth (North Ayrshire)

To ask the Scottish Government what it is doing to grow the economy of North Ayrshire. (S5O-01392)

The Government is committed to promoting economic growth across all our communities, including those in North Ayrshire. Our substantial investment in infrastructure, regeneration and business support helps to deliver inclusive growth and economic resilience, by creating and retaining jobs in communities across the area. For example—it is just one example—the Scottish Government modern apprenticeship programme has supported more than 800 modern apprenticeship new starts in North Ayrshire in each of the past four years. We recognise that apprenticeships are an essential way for all employers, regardless of size and sector, to develop their workforce and contribute to business and economic growth.

Does the cabinet secretary share my concern that neither North Ayrshire nor Ayrshire as a whole are keeping up with economic or income growth in Scotland and the United Kingdom, such as they are. What specific steps will the Scottish Government take to narrow that growing gap and to tackle unemployment, in particular in the over-40 age group?

Kenneth Gibson is entirely right to draw attention to that. Of course, we are focused on areas where there may be a lag, compared with other communities in Scotland. As I have stated already, the Government is committed to promoting economic growth across all our communities.

However, I want to take cognisance of the proactive and positive steps that have already been taken by North Ayrshire Council, South Ayrshire Council and East Ayrshire Council, and their plans to create a new partnership to boost the Ayrshire economy. That is a tremendous step and one that other local authorities will be looking at with interest. The proposal to establish an interim Ayrshire development board and to explore options to deliver a single Ayrshire economic vehicle that will aim to drive change across the three council areas is an example of partnership working in action.

For our part, the Scottish Government will continue to support the Ayrshire councils as they develop that approach to working with all partners. We will make sure that the agencies for which we have responsibility work with the partners and, of course—as we have stated many times—we have the on-going commitment to explore an Ayrshire growth deal. It would be far better if we were able to have the UK Government working with us on that, but we will also consider any other possible options to improve economic performance and income growth in North Ayrshire, as the member suggests.

Does the cabinet secretary share my concern that the number of people in work in North Ayrshire has plummeted by 10 per cent since his Government came to power a decade ago? What words of comfort does he have for the people in North Ayrshire that that negative trend will reverse any time soon?

Much of what I said in my previous answers addressed that matter. Success will undoubtedly look like something that is born of a partnership. The partnership that we see already through the initiative that has been taken by the three Ayrshire councils is very promising, not least in terms of the commitment that I have just given that the Government’s agencies will work with that partnership. We encouraged it to happen in the first place and we have said that we will respond positively to the suggestion from the three authorities for an Ayrshire growth deal. Once again, I state that we want the UK Government to be part of that growth deal, which it has so far refused to do, in order that we can do exactly as Jamie Greene and Kenneth Gibson suggest, which is to increase employment opportunities in that part of the country.

Brexit (Economic Impact Analysis)

To ask the Scottish Government whether it has had sight of the economic analysis that has been carried out by the Department for Exiting the European Union. (S5O-01393)

I am sorry to say that the Scottish Government has not had access to any analysis that has been carried out by the Department for Exiting the European Union on the economic impact of leaving the EU on either the United Kingdom or the Scottish economy.

Figures from the London School of Economics and Political Science show that every single part of Scotland and the UK as a whole will be adversely affected—even in the event of a soft Brexit in which single-market membership is maintained. Does the cabinet secretary agree that the UK Government cannot keep its assessment of the impact of Brexit from the Scottish public and Scottish businesses? Will he reiterate calls for the paper to be published?

Ash Denham is exactly right. The question is why the UK Government does not want to share the paper with the Scottish Government. We have responsibility for the economy of Scotland, as we are constantly reminded by members on the Tory front bench, but the UK Government does not want to share the figures that it has commissioned, and which have been paid for by taxpayers in Scotland and the rest of the UK.

I wonder why the UK Government does not want us to see that analysis. It seems that the only part of the UK that thinks that there will be no impact from Brexit is that part of the UK just over there—the Tory part of the chamber—where they are convinced that there is no problem with Brexit. If that is the case, the UK Government should release the figures.

As Ash Denham said, the LSE research highlighted that no part of Scotland will be unaffected by a hard Brexit. The Scottish Government has repeatedly called on the UK Government to publish its assessment of the impact of Brexit. The Scottish public have a right to know the effect that leaving the European Union will have on their communities, jobs and livelihoods. Surely the members of the Conservative Party should back the call from Mike Russell to UK ministers to release the analysis right away, for the benefit of the people of Scotland.

United Kingdom Government (Meetings)

To ask the Scottish Government when the finance secretary last met the United Kingdom Government and what was discussed. (S5O-01395)

I met the Chief Secretary to the Treasury on Thursday 26 October, along with Mark Drakeford, the Cabinet Secretary for Finance and Local Government in the Welsh Government, plus the permanent secretary to the Northern Ireland Executive. As I have advised the Finance and Constitution Committee, the agenda for the meeting included discussion of the prospects for the inaugural United Kingdom autumn budget and an update on Brexit, including on any progress on European Union programmes and guarantees. I also used the opportunity to once again call on the UK Government to reverse its planned cuts in expenditure, lift the 1 per cent pay cap for all public service workers and provide sufficient resources for pay rises across the UK that at least match inflation.

In the course of those meetings, was the UK Government able to explain why it is reducing the railway allocation budget to Scotland by £600 million?

No, there certainly has not been a satisfactory explanation of that. Members might be aware—they certainly should be—that the UK Government wants to change the previous formula, which was overseen by the regulator and which in essence provided a share of investment in the railway based on how much of the railway is in Scotland. The UK Government has proposed to change that and thereby reduce the resources to Scotland and not give us the resources that we require to maintain and develop the railway in the fashion that we all wish to see. I encourage all political parties to engage on that important issue to ensure that we get a fair deal for the railway in Scotland.

I understand that, during the finance secretary’s meeting with the Treasury, he pushed for more public spending. What additional level of borrowing does he think the Treasury should undertake? How much would that borrowing cost and over what period would it be repaid?

To understand that, Murdo Fraser would have to understand the financial headroom that the UK Government will have. Because of economic performance and a range of other factors, the UK Government will have more flexibility than it thought it would have, so it is no longer necessary to enact vicious cuts in public services across the UK and in Scotland.

How much?

There can be a sustainable borrowing regime that uses a current budget balance to invest in infrastructure in a sustainable way.

How much?

Murdo Fraser just says, “How much?” He is disregarding the information that I have given him, including the point about the important fiscal lever arising from the financial flexibility resulting from economic performance. That makes the point that the reductions that the UK Government proposes are unnecessary and ideologically driven, and it does not surprise me that Murdo Fraser wants to join that club.

Does Mr Mackay accept that, if the Scottish budget is to address the substantial issues that he is responsible for, such as giving public sector workers a real-terms pay increase, lifting children out of poverty and ensuring a proper settlement for local government funding, we require a step change in taxation from the Government and not simply tinkering around the edges, as he did with last year’s budget?

I welcome James Kelly’s point, which in essence is about using the powers of this Parliament. The First Minister and I have said that we will launch a discussion paper that sets out the context of the issue and the principles that we believe in. That discussion paper’s publication is imminent.

I invited all the political parties in the chamber to contribute their tax propositions to that paper. We know where the Tories are on tax cuts for the richest in society and the cuts to public expenditure that would go with them. The Liberals and the Greens have given me propositions to consider. I got an awfie nice letter from the Labour Party outlining what it says it believes in, or what Alex Rowley says he believes in, because the Labour Party has only an interim leader at the moment. I look forward to the Labour Party actually having a leader in place. When it has one, perhaps it will be able to engage in budget discussions in Scotland in the mature and responsible manner that has been absent from them so far.

Our discussion will raise the tone and the level of debate on how we fund our public services. I look forward to that engagement in the chamber.

Budget (Local Government Services)

Mr Mackay might tell us what he believes in once the First Minister tells him what he believes in.

To ask the Scottish Government how the budget will address the impact of reductions in local government finances to services in Lothian and across the country. (S5O-01396)

At least I have a leader I can believe in, which is more than the Labour Party has had for some considerable time.

The 2018-19 budget will continue to treat local government fairly, despite the cuts to the Scottish budget from the United Kingdom Government. The overall increase in spending power to support local authority services this year amounts to an increase of more than £383 million, or 3.7 per cent, compared to 2016-17.

When Mr Mackay was a council leader, he believed in cutting the school week to save money. Now, council leaders are having to look at eye-watering cuts to essential services—services that civilise our community. How can we address the appalling health and other inequalities in our community when jobs will be lost and education, social work, environmental services, libraries and youth work will all be cut because of decisions being made by someone who used to be a council leader and who should know better?

It is unfortunate that Neil Findlay wants to personalise the issue. When I was a council leader I was able to invest in schools—new build and refurbishment; target support in early years; expand free school meals across the area; and ensure that there was great support and that attainment was improved. I am proud of my record as a council leader.

I am also proud of my record as a finance secretary who has taken a number of actions, including delivering—not just talking about—the pupil equity fund to specifically target attainment in schools across the country, and delivering to local government a fair settlement, which I have described as an increase to resources for local government services. Of course I will work constructively with the Convention of Scottish Local Authorities; indeed, I will meet it later today. We will engage in a mature and responsible discussion on financial matters, something which seems alien to Neil Findlay.

How many local authorities chose not to use their power to increase the council tax to fund local services?

It might be a surprise to some Labour members, but it was actually eight Labour councils that chose not to increase the council tax but to freeze it. One could assume that the local government settlement was so satisfactory that those councils did not need to use those powers in an election year, although I would argue that they should have. Of course it is a matter for them, but all local authorities should use their local tax-raising powers responsibly. It remains the case that only Labour authorities chose to freeze the council tax, at the same time as telling anyone who would listen that they did not have the resources to do the job, when it was a very satisfactory and fair arrangement for local government across the country.

Does the cabinet secretary agree that Edinburgh Leisure, which provides affordable leisure facilities on behalf of the City of Edinburgh Council, could be devastated by the twin effects of a cut to its budget of several hundreds of thousands of pounds next year and a potentially enormous bill for business rates if the Scottish Government takes on that aspect of the Barclay review recommendations?

Gordon Lindhurst will be aware that many people welcomed my actions on the Barclay review, and that we went beyond a number of the Barclay recommendations. There are some recommendations that require further consideration and the issue of arm’s-length external organisations is one on which further engagement is on-going. As we approach the budget and the end of the year, I will give further consideration to the implementation plan that I have previously announced.

ALEOs are given reliefs of approximately £50 million—I will check the record on that and, if I am off, I will confirm; I will double-check the figure, but I think that it is less than £50 million. To put that figure into some context, the overall settlement for Edinburgh in support of local services and in the tax changes that we made available amounted to an increase of nearly 4 per cent, which was an increase of more than £30 million for local services in the city.

I will continue to engage on the Barclay recommendations and will conclude the matter before the end of the year.

Scottish Futures Trust

To ask the Scottish Government what action it is taking to review the operation of the Scottish Futures Trust to help improve transparency. (S5O-01397)

There are no current plans to review the operation of the Scottish Futures Trust. Like all Scottish Government non-departmental public bodies, the SFT has in place appropriate accountability and corporate governance arrangements to ensure the effective stewardship of public funds.

I am very disappointed to hear that, because it is clear that some of the profits are considerable and I would have thought that, across the chamber, members would share a desire to secure best value.

My Westminster colleague Stella Creasy moved amendments to bring transparency to the tax relief arrangements of contractors who are involved in public-private partnership/private finance initiative contracts, yet the Scottish National Party failed to support those amendments. Some companies could be making even greater profits due to United Kingdom changes to corporation tax. Why is the SNP against greater transparency from the UK Government, and also against greater transparency in its own backyard?

Coming from Jackie Baillie, that is really incredible, as she supported Labour’s PFI model over the years. Our model is far superior to that in terms of transparency, accountability, value for money and the contribution that it has made to the infrastructure of Scotland.

Audit Scotland will continue to do its work under its work programme, and previous Audit Scotland reports to parliamentary committees have said that the level of information has been satisfactory. However, I am happy to continue to engage with members on the on-going operation of the SFT.

How do interest rates compare under the non-profit-distributing scheme with those under PFI?

Interest rates are lower under NPD than under PFI. The total, all-in interest rate cost across the NPD and hub is less than 5 per cent.

Borderlands Growth Deal

To ask the Scottish Government what discussions the finance secretary has had with United Kingdom ministers regarding the borderlands growth deal, which has been announced by the UK Government. (S5O-01398)

In his statement to Parliament on 5 October, the Cabinet Secretary for Economy, Jobs and Fair Work confirmed that we were looking at the borderlands inclusive growth deal. Mr Brown said that we would enter into detailed discussions with local authorities to explore a deal to support their aspirations. He called on the UK Government to work with us to support inclusive economic growth for all of Scotland through a coherent and planned programme.

I am pleased to hear that the Scottish Government is collaborating with the UK Government on the deal.

When visiting Stranraer on 8 April 2016, John Swinney announced five key pledges for significant investment in the south of Scotland, including a multimillion-pound investment in the Stranraer waterfront redevelopment, and a pledge to improve journey times by road, which constituents took as a commitment to upgrade the crucial A75 and A77. With the borderlands growth deal now moving forward, what additional funding will the Scottish Government commit to the people of Dumfries and Galloway to ensure that those pledges are fulfilled?

I advise Finlay Carson that the end figure is generally agreed at the end, and I say that to be constructive. We enter into dialogue with the local authorities and the UK Government—and sometimes, helpfully, with businesses and local partners—to arrive at the best possible deal, especially as there are other interests and contributors in any city deal or, in this case, local arrangement.

We will engage in this constructively. We will make resources available once we have arrived at a deal and I can answer the question more accurately once we know what the contributions might be and the shape of the deal crystallises.

Having been involved in the borderlands initiative since its inception in my previous role as chair of Dumfries and Galloway Council’s economy committee, I am pleased that the Scottish Government and UK Government are now taking an interest in the borderlands. By now, the finance secretary will have received proposals from the five borderlands councils for that growth deal. Will he give a commitment that the proposals will be considered for funding as part of the development of his draft budget this December? Will he urge the UK Government to ensure that it considers the proposals as part of its November budget so that we can see real investment in the borderlands sooner rather than later?

It was a bit churlish of Colin Smyth to talk about who created the initiative. I was previously involved as a junior minister, so I know that the Scottish National Party has always been involved and interested in the initiative.

To be constructive, I say to the member that we are engaged in discussions. We want them to progress. We are being positive and constructive, and we hope that the discussions will lead to appropriate investment and co-operation in the area. That might well not feature as early as partners would like, but we have to arrive at the deal to be able to know what economic contribution there might be. Of course I would consider it in this year’s budget if a deal could be concluded in time, but that is for all parties to agree. I hope that it can be progressed in a satisfactory fashion.

Small Business Bonus Scheme (Glasgow)

To ask the Scottish Government how many businesses in Glasgow receive support from the small business bonus scheme. (S5O-01399)

The most recent statistics, published yesterday, estimate that almost 10,000 properties in Glasgow are benefiting from the small business bonus scheme this year, which is a 2 per cent increase on last year.

I should perhaps declare that my own office benefits from the scheme and does not pay rates, but the saving is not for me but for the Parliament.

Does the cabinet secretary accept that, for many small businesses, the small business bonus scheme is a huge advantage because they feel that they are often struggling to compete with big businesses, and they are very much hoping that the cabinet secretary will continue the scheme in future?

Yes, I envisage continuing. I suspect that John Mason is right and that a number of constituency offices are beneficiaries of the scheme. More than 100,000 properties in Scotland are in a similar boat. The scheme has been very well received as a lifeline for our town centres.

I have been able to do a range of things on business rates that have made a difference, but I know that the SBBS is valued and a review that will be carried out will ensure that we maximise the economic and social benefits of the scheme.

Retail Sector (Growth)

To ask the Scottish Government what support it provides to encourage growth in the retail sector. (S5O-01400)

The Scottish Government recognises the value of a successful and vibrant retail sector.

In response to recognised challenges to high street retailers caused by the growth in e-commerce, the impact of austerity and inflationary pressures, we encourage growth by providing various mechanisms of support to the sector, including a highly competitive non-domestic rates package, with the average rateable value of retail units having reduced at the 2017 revaluation by over 1 per cent.

Footfall in Scotland dropped in September by the biggest amount in more than a year, exceeding the United Kingdom rate. Does the minister accept that any rise in the basic rate of income tax would further hurt businesses by taking money out of the pockets of Scottish consumers and reducing their ability to spend in Scotland’s shops?

The discussion paper that I am about to launch will put tax issues into context. There is, of course, a relationship between tax and how we choose to spend the resources that the Government might raise.

We have taken a number of actions on business rates, including lowering the poundage, increasing the support for the small business bonus, and changing the thresholds to lift more people out of paying the large business supplement, as well as looking at the Barclay recommendations on the growth accelerator and no rates liability until occupation. All those interventions are helpful in supporting the retail sector. In addition to that, the town centre action plan and other interventions have supported retail.

If we are going to debate tax, we should do it in an informed way. It would be helpful if all parties could contribute to the debate in a mature fashion so that we can make the right decisions for all parts of Scotland, including businesses.

Scottish Growth Scheme

To ask the Scottish Government whether it will provide an update of the progress being made by the Scottish growth scheme. (S5O-01401)

Work has been undertaken to develop and design the Scottish growth scheme, working with financial institutions and our enterprise agencies. Currently, there are two distinct products under the scheme: the £200 million Scottish-European growth co-investment programme, which was launched on 16 June and is aimed at companies seeking equity investment of £2 million or above; and the new and additional funding to the small and medium-sized enterprises holding fund to support equity funding up to £2 million. Work is progressing with a number of companies seeking to access investment support under the European programme. At this stage, six companies have been referred to the European Investment Fund to be considered for investment from EIF-accredited venture capital fund managers, with five engaging in direct discussions with investors.

When the scheme was launched more than a year ago, we were told that support would be largely

“in the form of guarantees and loans”—[Official Report, 7 September 2016; c 32.]

However, no loans or guarantees have been paid out. Why should businesses have any confidence in the scheme if, 14 months after it was announced, it is still not doing what it said on the tin?

I must correct Liam McArthur: the announcement in the programme for government described what we were launching, which was launched earlier this year. There has been engagement with European opportunities, and there has also been specific engagement with banks, partly around the guarantee element to ensure that we get the right products. There is a £500 million commitment over the three-year period, and I am convinced that we will fulfil our commitment to doing this in a fashion that best supports economic growth through a range of tools at our disposal. We will continue to design this in such a way that, in the fullness of time, it gives businesses the support that they say to us they need.