Website survey

We want your feedback on the Scottish Parliament website. Take our 6 question survey now

Skip to main content

Language: English / Gàidhlig

Loading…

Chamber and committees

Meeting date: Wednesday, November 7, 2018

Meeting of the Parliament 07 November 2018

Agenda: Portfolio Question Time, Safeguarding Research Collaborations and Scientific Excellence, Business Motions, Parliamentary Bureau Motions, Decision Time, Emergency Workers


Contents


Portfolio Question Time


Tourist Tax

To ask the Scottish Government whether it will provide an update on what consultation is taking place regarding providing local authorities with the power to introduce a tourist tax. (S5O-02509)

As the First Minister announced on 1 October, we are taking forward an inclusive and transparent national discussion around issues related to a tourist tax, working in collaboration with local government partners and the tourism industry to support an informed discussion. We will be taking forward round-table discussions in the coming weeks, and we will make the evidence that is gathered through that available in due course.

I thank the cabinet secretary for his answer. Can he tell us when he expects those discussions to conclude? Also, will he confirm that at the heart of the debate there are actually two distinct questions: the first being whether councils should have this fiscal power; and the second being in what circumstances they should use any such power and what rates should be set? Does he accept that the first question is properly a matter for this legislature but the second is properly a matter for local authorities to determine as they see fit?

I think the second part of the question is a bit premature, because it relates to the outcome of the first part, which is about the issue in principle. It is important that we take that discussion forward over the next few weeks. To be helpful, I am very happy to write to Andy Wightman with the engagement programme that we have established.

Although Scottish tourism is doing well, in some quarters Scotland is still seen as a high-cost destination relative to other countries. Therefore, the Scottish tourism sector has raised a great deal of concern about the likely impact of a tourist tax in raising costs still further. As part of the work that the Scottish Government is doing—

Question, please.

—will it do an economic assessment of the impact of a tourist tax?

The answer is yes. We will do as much analysis as we possibly can so that we can have informed discussion and engagement in that regard. It is right to look at all the evidence. That is why it is important to engage with local authorities as well as with the hospitality sector, to hear its concerns, because its view is contrary to that of those in local government on the proposition that has come from local government.

We are facilitating that national discussion. I understand the point that Murdo Fraser makes about the costs for the hospitality sector. One of those costs is VAT, which is higher than in most other parts of Europe in relation to hospitality. That is a matter for the UK Government, but non-domestic rates are in our gift, and that is why Kate Forbes’s announcement on the on-going transitional relief for hospitality was so well received—it is an important intervention from the Scottish Government.


Scottish Taxpayers

To ask the Scottish Government what its position is on taxpayers in Scotland retaining as much of their income as do those in the rest of the United Kingdom, in light of the proposals in the UK budget. (S5O-02510)

The Scottish Government has consistently taken decisions to ensure that Scottish income tax is progressive and raises the revenue that is required to support our vital public services and, indeed, the Scottish economy. We have ensured that Scotland has the fairest income tax system in the UK. We will take income tax policy decisions on the basis of what works best for Scottish taxpayers, Scottish public services and the Scottish economy, and we will set out the details of our tax plans for 2019-20 in the forthcoming budget on 12 December 2018.

As was reported in the press last week,

“Headteachers have warned the Scottish Government a looming tax gap will further cripple the education system by making it harder to recruit school leaders.”

They raised the matter directly with the Cabinet Secretary for Education and Skills, John Swinney, last week. There has already been a shortage of applicants due to a decline in salaries, rising workload and stress. When combined with the increase in the higher tax thresholds that we see south of the border but do not benefit from in Scotland, is it any wonder that filling those roles is a struggle? Will the cabinet secretary confirm what fiscal action he will take to help to solve the shortage of headteachers in Scotland?

We propose to invest in schools and education and will, I hope, arrive at a satisfactory pay deal for teachers as well. To achieve those outcomes, we also need to have the right decisions on revenue raising, and we will take a fair and balanced approach.

Teaching should be an attractive profession, in order to bring people of quality and talent into it, and I think that teachers would prefer quality to a race to the bottom on tax cuts. Larry Flanagan of the Educational Institute of Scotland has said that there should be fair and progressive taxation—tax revenue that, of course, will contribute to the resources that we have available for education.

Will the cabinet secretary advise us of the impact of the Chancellor of the Exchequer’s decision to increase national insurance contributions on low and middle-income earners? Is he concerned that at least some members of Parliament who represent Scottish constituencies are classed as English taxpayers, depriving Scotland of around £20,000 per MP in income tax revenue? Does he agree that all such MPs should register as Scotland-domiciled taxpayers?

I will come to the second matter after I make the substantial point, which is that the chancellor did, indeed, sneak the NICs change in under the radar last week, with no mention of it in his budget speech.

In contrast, the Scottish Government will take policy decisions on the basis of what works best for Scottish taxpayers, Scottish public services and the Scottish economy. Whatever choices we make, we will be clear and transparent, unlike the United Kingdom Government. Given the link between income tax and national insurance contributions, we believe that decisions on both should be taken by this Parliament, with the interests of Scotland in mind. For that to happen, the powers over national insurance contributions should be in Scotland’s hands, not Westminster’s.

As for the tax affairs and other interests of members of the House of Commons, I am sure that Kenny Gibson will be all over that and will give me the information that I require to take the matter forward.

Does the cabinet secretary accept that, under the Scottish Government’s current taxation scheme, it is unfair that a principal speech and language therapist, who earns £45,000 a year, pays the same rate of tax as the managing director of Scottish Enterprise, who earns £135,000? Will the cabinet secretary bring forward proposals in his draft budget to ensure that top-rate earners, such as senior management at Scottish Enterprise, pay a fairer rate of tax and make a greater contribution to the funding of public services?

I will bring forward a fair, proportionate, balanced budget that is also progressive in relation to tax, and I have set out the principles that we will follow in that regard. I genuinely look forward to any proposition that might come from the Labour Party in relation to income tax. Whether from the UK Labour Party, the Scottish Labour Party or the future branch of the Scottish Labour Party—or whatever it happens to be—I look forward to a coherent alternative budget. Meanwhile, I will bring forward a competent, balanced budget.

On the top rate of tax, which we have debated a number of times, my objective is to raise tax in a responsible and proportionate way. If I had followed Labour’s advice on the top rate of tax, I would have generated less money for Scotland’s public services—what would have been the point of that? We will take an evidence-based approach to income tax.


Air Passenger Duty

To ask the Scottish Government when air passenger duty will be fully devolved. (S5O-02511)

As the Cabinet Secretary for Finance, Economy and Fair Work informed Parliament on 1 June 2018, the introduction of air departure tax will be deferred beyond April 2019. The Scottish Government has been clear that a resolution to the Highlands and Islands exemption issue has to be found before ADT can be introduced in Scotland. We cannot simply continue the current air passenger duty provision while there is an unresolved issue of European Union law.

Will the minister commit to fulfilling by the end of this parliamentary session the Government’s manifesto pledge to reduce air passenger duty by 50 per cent when it is devolved?

We remain committed to reducing air departure tax and we want to abolish it altogether when resources allow. We will set out our plans on tax rates and bands once a solution to the Highlands and Islands exemption has been found. That is of paramount significance.

Alexander Stewart might want to note that it is up to the United Kingdom Government, which is the member state, to notify the EU on that issue.

Would it not be sensible to use the extra time that the delay has given us to go back to square 1 on the Government’s policy and do the proper research, which has been lacking in the past, so that we no longer rely on the spurious, debunked figures that the Government has previously used and arrive at a policy that will reduce carbon emissions from aviation, instead of increasing them?

Patrick Harvie will know that our climate change plan accommodates projected changes in aviation emissions. The Committee on Climate Change advised in September 2017 that such an increase is likely to be manageable. As I said to Alexander Stewart, we will set out our plans once a solution to the Highlands and Islands exemption has been found. They will be informed by the independent report that we have commissioned, consultation and on-going stakeholder engagement.


City Deals

To ask the Scottish Government how much of its budget it has allocated for city deals. (S5O-02512)

Cities and their regions are the engines of our economy. The Scottish Government is committed to working with all our cities to unlock investment, whether that is individually or collectively, and whether that is through a city region deal, one of the Scottish Government’s devolved initiatives to stimulate growth and deliver infrastructure investment, or a combination of those measures.

The Scottish Government has consistently supported deals for all Scotland’s cities and, indeed, all of Scotland, and is a full partner in all the city region deals that have been agreed in Scotland.

In the light of yesterday’s events, I am continuing to look at the resources for city deals in-year, but details for the forthcoming financial year 2019-20 will be updated in due course, once the final budget has been determined.

The United Kingdom Government’s budget last week contained only a passing reference to the Ayrshire growth deal, with a commitment to “progress”. Frankly, that is not good enough. Can the cabinet secretary reaffirm that the Scottish Government sees the Ayrshire growth deal as a priority and is committed and fully focused on investing in a full growth deal for Ayrshire that will bring benefits to the whole region?

I absolutely reaffirm to Ruth Maguire that the Scottish Government remains committed to securing a growth deal for Ayrshire. The Cabinet Secretary for Transport, Infrastructure and Connectivity discussed the Ayrshire growth deal with the Secretary of State for Scotland when they met last month, and made clear the Scottish Government’s intention to achieve a heads of terms agreement that clearly outlines the commitments of both Governments to the deal as soon as possible. I will meet the secretary of state this afternoon and will raise the issue with him again, as well as, of course, the Tayside cities deal, for which the UK Government should also step up to the plate to deliver more support for that region.

When will the proposed islands deal be in place, and will it take account of the additional cost of providing goods and services in our island communities?

Michael Matheson, the Cabinet Secretary for Transport, Infrastructure and Connectivity, leads on city deals, notwithstanding the remarks that I have just made. Progress on the islands deal will be contingent on agreement with the UK Government and the islands authorities. We are working in partnership with those stakeholders and partners and—of course—we want to take the deal forward as quickly as possible. We are in the hands of others with regard to the ask that is made of that collective partnership, but I want to Parliament to be very clear that we are keen to get on with that growth deal.


Health Budget Consequentials

To ask the Scottish Government whether it will pass on any health budget consequentials resulting from the United Kingdom budget to Scotland’s national health service. (S5O-02513)

The Scottish Government will continue to deliver its commitment that all health resource consequentials will be passed on in full to the health portfolio budget. Every penny of health resource consequentials that arise from the UK autumn budget will be passed on to the Scottish Government’s health budget.

We know that the Tories’ promised uplift for Scotland’s NHS has already been cut by £50 million, with the cumulative impact being that more than a quarter of a billion pounds will be withheld from Scotland’s health service over the next five years. In its budget, the UK Government failed to set out that further consequentials over the years to come would not be cut further, thereby leaving open the risk of further cuts. Has the cabinet secretary had any confirmation from the UK Government that further cuts will not happen?

I regret that no such confirmation has been given and, to add to the uncertainty, the Chancellor of the Exchequer has raised the prospect of a new budget in the event of a no-deal Brexit. The Cabinet Secretary for Health and Sport highlighted last week that that increases the significant uncertainty that is faced by our NHS staff, which is on top of the uncertainty among the very valuable members of our healthcare workforce who are European Union nationals. I continue to urge the UK Government to provide the level of clarity that I have been requesting since June this year.


Ayrshire Economy

To ask the Scottish Government what action is being taken to help to boost the Ayrshire economy. (S5O-02514)

The Scottish Government and its agencies are taking a wide range of actions to help to boost the Ayrshire economy. Central to our ambitions for Ayrshire is agreement on a growth deal. We continue to work with regional partners on their investment proposals, and hope to be able to announce a heads of terms agreement as soon as possible, following the conclusion of negotiations with the United Kingdom Government, which I referenced earlier.

When does the cabinet secretary anticipate the UK Tory Government finally signing off the Ayrshire growth deal? It has dragged its feet for the past two years. How much does the Scottish Government expect the UK Government to contribute, and will inclusive growth be delivered across Ayrshire, given the concerns to date that North Ayrshire Council has not included Garnock Valley in its proposals?

Unfortunately, the Scottish Government cannot control the pace at which the UK Government makes decisions. It seems to be somewhat preoccupied at the moment.

However, I am clear that the Scottish Government is ready to move towards signing a heads of terms agreement on the Ayrshire growth deal as soon as possible. Local partners want fresh and transformative investment in the Ayrshire economy, as does the Scottish Government.


Innovative Technology

To ask the Scottish Government how productivity and the economy can be supported through innovations in technology. (S5O-02515)

We are working to ensure that innovation and technology drive sustainable economic growth and have positive outcomes for Scotland’s people, as was set out in our recent economic action plan. The plan covers key enabling technologies in which Scotland has strength, including quantum, digital and automation, to ensure that Scotland’s industrial base is equipped to embrace new technologies, through investments such as in the national manufacturing institute for Scotland and the medicines manufacturing innovation centre. By investing in emerging technologies, Scotland will create new high-value jobs with increased productivity.

The minister will be aware of areas in which Scotland is leading in innovation and technology, such as vertical farming, at the James Hutton Institute. Is not it the case that that is important for Scotland’s future economy, and that it has the potential to tackle food shortage and to help to work towards achieving the United Nations’ global sustainable development goals?

Indeed. World-leading projects such as the vertical farming demonstrator building at the James Hutton Institute have the potential to contribute to global challenges such as food security. My colleague, the Deputy First Minister, was pleased to open the facility officially in August. The demonstrator, which was developed by Intelligent Growth Solutions Ltd, is arguably the world’s most technically advanced indoor farm. It will assist with the research into, and development of, new crop varieties and technologies that are suited to vertical growth systems.

Supporting innovations in the bio-economy and addressing environmental and food security concerns through industrial biotechnology, agri-tech and animal health are opportunities that are highlighted in our life sciences strategy.


Green Economy (Small and Medium-sized Enterprises)

To ask the Scottish Government how it supports small and medium-sized enterprises to contribute to the green economy. (S5O-02516)

Through our resource efficient Scotland programme, the Scottish Government offers a full package of support to small and medium-sized enterprises. That helps them to implement energy, resource and water efficiency measures that cut their carbon emissions and running costs.

We also help businesses to understand the opportunities that are available to them in the green economy supply chain. Through the Energy Saving Trust, we help businesses to participate in the supply chain for energy efficiency and microgeneration by providing training, capacity building and networking events.

Does the minister recognise that former new towns in Scotland, such as East Kilbride, are well placed to contribute to the green economy? They have many small and medium-sized enterprises at the heart of innovation in the field.

I also ask the minister to visit EK with me to meet and learn from many such relevant businesses, and to hear from them about how they can contribute to Scotland’s green aspirations.

As a representative of a new town, I concur entirely with Ms Fabiani’s point. New towns such as East Kilbride and Cumbernauld—Ruth Maguire is here, so I had better mention Irvine, too—are well placed to benefit from the measures that we put in place. We rightly think of the green economy in terms of the measures that we are taking on energy efficiency and climate change, but we should also think of it in terms of natural capital. New towns have a lot of green space in them, so they are well placed in that regard.

Also, I would be very happy to visit East Kilbride with Ms Fabiani.


United Kingdom Government Welfare Reforms (Mitigation)

To ask the Scottish Government how much of its budget for social security is spent on mitigating United Kingdom Government welfare reforms. (S5O-02517)

We expect to spend more than £125 million in 2018-19 on welfare mitigation and measures to help protect those who are on low incomes.

The cabinet secretary will be aware that the Chancellor of the Exchequer made the bold statement that

“austerity is coming to an end.”—[Official Report, House of Commons, 29 October 2018; Vol 648, c 656.]

Given the fact that analysis from the Resolution Foundation shows that more than three quarters of the Tories’ planned £12 billion welfare cuts remain in Government policy, and that the budget failed to halt the roll-out of universal credit or to end the hated two-child cap, can the cabinet secretary confirm that that is not the case? Does he foresee the Scottish Government having to continue to set aside money to correct the worst aspects of the cuts?

Clearly, the United Kingdom Government budget did not signal the end of austerity. The cuts to welfare will still be felt, despite the announcements that the Prime Minister made previously. The UK Government could have made a different choice. It is holding £15.4 billion in reserve for what the Chancellor of the Exchequer described as his post-Brexit deal “firepower”. I would have suggested that that resource be put into protecting public services, stabilising the economy and protecting the most vulnerable people in our society.

I have mentioned the figure of £125 million on welfare mitigation in the current financial year. That includes spending to mitigate the impact of the bedroom tax, which will help more than 70,000 households in Scotland to keep roofs over their heads and sustain their tenancies, and the Scottish welfare fund, which provides a vital lifeline for people across Scotland.

However, there is only so much that this Parliament can do to protect the people of Scotland from a pernicious right-wing Tory Government. If we are to protect the people of Scotland fully from the ravages of the right-wing Government that is led by Theresa May, we need more powers around welfare.


Large Business Supplement

To ask the Scottish Government what analysis it has conducted regarding a timescale for reducing the large business supplement. (S5O-02518)

We seek to ensure that Scotland is the best place to do business in the UK. All non-domestic rates decisions are made in light of that and of the budgetary context, reflecting budget allocations from the UK Government.

The Barclay review recommended that the large business supplement be reduced to 1.3p in 2020-21 to bring it in line with the English rate, and to do so sooner if that becomes affordable. We committed to reviewing the LBS at each future budget in the light of affordability.

As the minister said, the Barclay review recommended that the large business supplement be reduced by 2020-21. That would significantly help the economy in my Ayr constituency, and would help the Scottish economy by £62 million. Can the Scottish Government give a timescale for the implementation of the reduction?

Any announcement on non-domestic rates will be set out in the Scottish budget in December, but we have focused on supporting small businesses and ensuring that Scotland is a competitive place in which to do business. We have already taken forward some of the Barclay recommendations and have established measures that are unique in the United Kingdom, such as the growth accelerator, which applies to large and small businesses, to ensure that Scotland is a competitive place in which to do business.


Stockpiling (Economic Effect)

To ask the Scottish Government what impact assessment it has undertaken of the long-term effect on the economy of stockpiling goods and commodities. (S5O-02519)

The latest Scottish Government “State of the Economy” report set out an analysis of the impact of businesses stockpiling in advance of the United Kingdom leaving the European Union in March 2019. That analysis shows that, between 2018-19 and 2021-22, that activity will have an overall negative impact on Scottish gross domestic product growth of around 0.2 percentage points.

The fact that businesses are having to consider stockpiling underlines the uncertainty that Brexit is placing on our economy. We will continue to argue that the only deal that will deliver for Scotland is to remain in the single market and customs union.

The British Retail Consortium, with a weather eye on Brexit, has condemned the idea of stockpiling, saying that it is not practical for two reasons: we do not have the spare capacity and it is impractical to store fresh produce. Does the minister agree?

The key point is the uncertainty that is caused by the UK Government’s actions on Brexit. I am sure that there will be situations in which stockpiling is required in order to ensure that essential supplies are in place to deal with uncertainty, but I agree with the member that, in general, excessive stockpiling is not good for the economy or for individual businesses.


Equalities Budget

To ask the Scottish Government how the United Kingdom budget will affect Scotland’s equalities budget. (S5O-02520)

Following the UK budget, the Scottish Government’s resource block grant from the UK Government—the money that we are able to invest in day-to-day public services—will be almost £2 billion lower in real terms next year than it was in 2010-11.

For 2018-19, we have increased our budget for specific equalities activities by 12 per cent, to £22.7 million. That supports work to prevent discrimination, promote human rights and build more cohesive communities. Decisions on the budget allocation for equalities-related activity for next year will be taken as part of the process to develop the Scottish budget, which will be presented to Parliament on 12 December.

This Parliament is a human rights guarantor and, as such, should be a bulwark against regressive, austerity-driven economic policies. What direct action will the cabinet secretary take to ensure a holistic approach to equalities, with focused, joint work across portfolios, to ensure the best outcomes for equality spend?

That is an important question, and Mary Fee makes an important point. It is appropriate that the Cabinet Secretary for Communities and Local Government leads on this work, considering that it is within an area of her responsibility, but the work will be absolutely aligned across Government, to make sure that there is a cohesive focus on the equalities agenda and on the resources being there to support that work.


Large Business Supplement

To ask the Scottish Government how much has been raised by the large business supplement since 2016. (S5O-02521)

The large business supplement has raised a total of £381 million since 2016.

According to a recent written answer from the Scottish Government, businesses in Scotland have paid £200 million more in rates as a result of the Scottish National Party’s decision to double the large business supplement in 2016. Figures released today show that there are now 9,000 fewer businesses in Scotland than there were last year. Does the minister recognise the damage that the SNP’s large business supplement is having on Scotland’s business base?

I do not recognise that at all, because Scotland is a very competitive place in which to do business, and we are seeking to ensure that it can be even more competitive. We have focused on supporting small businesses in particular, and the small business bonus scheme is significantly more competitive than reliefs for small businesses anywhere else in the United Kingdom. The average value of relief that is received by businesses in Scotland is more than £4,500 in 2018-19, while the comparable figure in England is less than £4,000.

As I mentioned to the member’s colleague, we also have unique initiatives, such as the growth accelerator, which supports businesses that want to grow and improve their premises. Just last week, I announced that I would extend transitional relief to the next revaluation, in 2022, capping annual rates increases at 12.5 per cent in real terms for offices in Aberdeen and Aberdeenshire and all but the largest rate payers in the hospitality sector. We have a very competitive rates regime.


United Kingdom Tax Changes

To ask the Scottish Government what its response is to the analysis of the United Kingdom budget, which states that the announced changes to tax overwhelmingly benefit the richest households. (S5O-02522)

I covered this in some detail last week, but my response is that it tells people everything that they need to know about the Tory party. It is a strange proposition that the Labour Party in the Westminster Parliament is going to copy the Tories’ tax plan, but the Scottish Government has set out the key tests and the principles that we will follow in approaching the income tax discussion. Any change should raise additional revenue to support our public services, protect lower-earning taxpayers, make the system more progressive and—when considered alongside our spending proposals—support the Scottish economy. Those are the key tests that I set out last year in relation to income tax, and they are tests that we will stand by.

Given that almost half the announced tax cuts will go to the top 10 per cent of households alone, does the cabinet secretary not think that it is disgraceful that the better off get tax cuts at a time when those on low incomes continue to face hardship and even more disgraceful that such a move would be supported by the Labour Party?

As I have said, it is strange that the Labour Party is supporting the Tories’ tax plans in Westminster; maybe the branch office in Scotland will propose something different during the budget process as we work our way through it in Scotland.

It is true to say, as Willie Coffey has done, that on tax, it is the richest in society who will get the biggest benefits; the Tory tax plans disproportionately benefit those at the top end rather than basic rate taxpayers. On welfare, the Tories continue to hammer the most vulnerable in society. The Tories are acting like Robin Hood in reverse and it is outrageous that through all this, the UK Government is sitting on reserves—£15.4 billion of fiscal headroom—that it could have used to support the most vulnerable in our society, stimulate the economy and take us more constructively through the difficulties that it has created by its economic mismanagement.

Given the cabinet secretary’s concern for those on lower incomes, will he take this opportunity to welcome the latest rise in the personal allowance, which will benefit the typical basic rate taxpayers by at least £130 a year and which has, since 2010, taken millions of people out of paying income tax altogether?

Tom Mason should perhaps take a closer look at the whole package of tax cuts that the Tories are proposing and taking through Westminster. The richest in society—the top decile—benefit most as a consequence of the income tax changes. Of course I support actions that support low-income earners. Supporting that workforce and those income tax payers is exactly what we will do through our proposals. I cannot welcome the Tory tax plan, because it gives tax cuts to the richest in society while expecting everyone else to carry the burden of austerity. It is not fair, right or progressive.


United Kingdom Budget (Impact)

To ask the Scottish Government what analysis it has carried out of the impact of the proposals in the United Kingdom budget on the lowest fifth of households in Scotland, in light of the comment by the Resolution Foundation that it will “overwhelmingly benefit richer households”. (S5O-02523)

That is accurate reporting from the Resolution Foundation. Its analysis of the 2018 budget shows that the UK Government’s tax and benefit policies are strongly regressive. Looking at the overall effect of UK Government tax and benefit policies that have been put in place since May 2015, the Resolution Foundation estimates that the poorest fifth of households will be on average £400 a year worse off while the richest fifth are expected to gain on average £390 a year. It is outrageous.

Although I recognise that universal credit is not something for which the Scottish Government is responsible, will the cabinet secretary join me in welcoming the fact that people in Scotland on lower incomes pay less tax than is the case south of the border? Is that something that he hopes, and is working, to continue into the future?

For a majority of people, Scotland is the lowest-taxed part of the UK. We have delivered an income tax policy that is far more progressive, which is what I continue to aspire to. The UK Government should have stepped back from the appalling implementation of universal credit, which is harming so many people in our society and pushing many families towards food banks.


Brexit (Investment Decisions)

To ask the Scottish Government what analysis it has carried out of what impact uncertainty regarding Brexit is having on business investment decisions. (S5O-02525)

The Scottish Government’s “State of the Economy” report, which was published in January this year, set out analysis of the impact on the Scottish economy of the uncertainty from Brexit. The results showed that the short-term impact is estimated to reduce or defer the level of business investment in Scotland by a potential £1 billion by 2019, to increase the level of unemployment by around 0.8 percentage points by 2019, which is equivalent to around 21,000 fewer jobs in Scotland, and to lead to lower gross domestic product growth of around 0.3 percentage points cumulatively over 2018-19, which is equivalent to around £200 per household in Scotland. Furthermore, negative consumer confidence adds another layer of uncertainty, which will potentially further weaken the economy.

In last weekend’s Sunday Times, more than 70 business leaders, including former chairs of Marks & Spencer, Sainsbury’s and BT, signed a letter calling for a people’s vote, and on Monday compelling polling evidence demonstrated that the entire United Kingdom population has turned against Brexit. Does the minister agree that now is the time for the UK Government to end its false choice between a bad Brexit and a catastrophic no-deal Brexit and commit to remaining in the single market and the customs union?

Yes, I agree. The Scottish Government makes it very clear that the outcome that makes the most sense for Scotland, if we are not able to stay in the European Union, is for Scotland—or, preferably, the UK as a whole—to stay in the single market and the customs union. That route minimises the damage and impact that the uncertainty and economic consequences of Brexit are having on Scotland.


Non-domestic Rates Poundage

To ask the Scottish Government what its position is on permanently linking the non-domestic rates poundage to the consumer prices index. (S5O-02526)

We are committed to maintaining a competitive and sustainable taxation environment while delivering sufficient resources to fund the public services upon which we all rely. The Scottish Government will outline the non-domestic rates poundage in the Scottish budget on 12 December.

The Scottish Retail Consortium has warned that not linking business rates to the CPI next year would cost businesses £21 million extra. For South and North Lanarkshire alone, it would mean businesses paying about £3.5 million more. Will the minister commit now to permanently linking rate increases to the CPI, as the United Kingdom Government has done?

As the member will know, the 2018-19 poundage was capped at the CPI level. That was requested by business and supported by the Barclay review. From memory, I do not recall the member voting for that in our budget.

We will continue to listen to business as we develop our draft budget 2019-20 proposals. We will confirm the non-domestic rates poundage rate when we announce the draft budget, as we have done in previous years, and I look forward to the member supporting whatever is in our draft budget.


Post Office (Banking Services)

To ask the Scottish Government what action it can take to encourage Post Office Ltd in Scotland to offer full banking facilities and services to businesses and private customers in all of its branches. (S5O-02527)

The Scottish Government recognises the importance of post offices to consumers, businesses and communities across Scotland. The position is similar to the one that applies to the banking sector, in that post offices and postal services are reserved. We have made it clear to the United Kingdom Government and Post Office Ltd that they have a responsibility to ensure that the availability of existing services is maintained throughout Scotland. We continue to fund Citizens Advice Scotland’s research into post office outreach services and how consumers can influence the provision of those outreach services.

It is interesting to note that 95 per cent of UK residents live within 1 mile of a post office and 99 per cent of UK residents live within 3 miles of a post office.

With the Allied Irish Bank being the banking partner of Post Office Ltd, according to Post Office senior management in Scotland, for Post Office Ltd to offer full banking facilities requires only that the other 27 banks in the British Bankers Association give their approval. Will the minister strongly encourage those banks to do so?

Yes, of course, although I reiterate the point that it is a reserved matter, which means that we are limited in our ability to influence it directly. I hear Mr Corry’s call, and I reiterate it. I encourage banks to engage with the post office network to ensure that those services can be supplied.


Scottish Government Budget (South Lanarkshire Council)

To ask the Scottish Government how its forthcoming budget will impact on South Lanarkshire Council. (S5O-02528)

All 32 local authorities, including South Lanarkshire Council, will receive their needs-based formula share of the 2019-20 total local government settlement, which will be announced by the Cabinet Secretary for Finance, Economy and Fair Work next month. It will then be for South Lanarkshire Council to allocate the total resources that are available to it, which will determine the impact on the people of South Lanarkshire.

In a previous answer, the cabinet secretary stated that he would compose his budget based on evidence. Will the minister and the finance team give appropriate weight to the evidence that was published yesterday by the Convention of Scottish Local Authorities, which is arguing for a fair funding settlement, and ensure that councils such as South Lanarkshire Council are not downgraded and penalised, as has happened in previous Scottish Government budgets?

COSLA’s case for a fair deal has been noted. Indeed, the finance secretary and I met COSLA just last week. That was the latest in a series of meetings to discuss next year’s local government finance settlement.

This year’s finance settlement was a case of treating local authorities fairly, despite the cuts that the United Kingdom Government has made to Scotland’s resource budget. This year, South Lanarkshire Council received £590 million from the Scottish Government. We want to ensure that public services are supported, and our policy on local authority spending is to give local authorities the financial freedom to operate independently.

That concludes portfolio question time.

On a point of order, Presiding Officer. On behalf of the back-bench members of all the parties, I would like to congratulate you on getting through all 20 questions.

Members: Sook!

That was not a point of order. I think that you have just given me a black spot.