Meeting date: Wednesday, December 9, 2020
Meeting of the Parliament (Hybrid) 09 December 2020
Agenda: Portfolio Question Time, Budget Update, Education, Economy, Coronavirus Acts Report, Business Motions, Parliamentary Bureau Motions, Point of Order, Decision Time, Bus Services
- Portfolio Question Time
- Budget Update
- Coronavirus Acts Report
- Business Motions
- Parliamentary Bureau Motions
- Point of Order
- Decision Time
- Bus Services
The next item of business is a debate on motion S5M-23622, in the name of Maurice Golden, on the economy.
I call Maurice Golden to speak to and move the motion. Mr Golden, you have up to seven minutes.16:31
The motion is about protecting jobs by ensuring better support in three key areas: grant support, taxation and the clear and consistent setting of regulations.
Currently, only businesses that are forced to close can receive the maximum level of grant support. Businesses that voluntarily close are penalised, whether their decision was made to help stop the spread of the virus or because their business is not viable under the restrictions. That situation is grossly unfair, and those businesses should be able to claim the maximum level of support.
However, we know that even when businesses qualify, the maximum level of support is often not enough. The Scottish Government’s own calculations suggest that it costs an average of £3,300 a week to run a pub, but the Government provides pubs with a maximum of £3,000—not per week, but per month. Further, it now turns out that even that low level of support will not be maintained.
Will the member recognise that that is a false analysis? That figure is based on those pubs remaining open, which is not the circumstance that we are in now. Will he correct the record in that regard?
I do not see it as a false analysis at all. Ultimately, a pub with monthly costs of more than £13,000 cannot keep going on that level of grant support, which, from Friday, will be downgraded to £2,100 a month.
Only 42 per cent of pubs can open after yesterday’s change in restrictions, so the warning from the Scottish Licensed Trade Association—that up to 12,500 jobs are at risk—still stands. There must be a rapid review of the grant support limits, not just for pubs, but for the entire hospitality industry, and for other sectors, too. We were told that new support measures are in the pipeline, but there is no detail and businesses cannot afford to keep waiting.
In Wales, hospitality businesses receive £269 per day—more than four times the amount that the Scottish Government provides in Scotland. In fact, at just £64 per day, Scottish hospitality receives the lowest level of support anywhere in the United Kingdom. The new measures should come up to at least the Welsh level—or is the Scottish National Party seriously claiming that Scotland does not have the power or the funds to at least match Wales?
The SNP has shown that when it wants to act, it can, such as with the welcome fund for the wholesale sector and today’s announcements for taxi drivers and travel agents, which are also welcome. However, months into this crisis, why does it still take so long to get support out the door?
Taxi drivers were promised support three weeks ago. I have spoken with drivers on the ground, and I know that their bills are mounting. When will they actually see a penny of the money that has been announced today, and will any support be backdated? I would be grateful if the minister could address that point. I have also been in contact with travel agents and the Scottish Passenger Agents Association, and they face the double whammy of all the challenges that this year has brought plus refunding last year’s bookings.
I am glad that the Scottish Government has listened to our calls, but why has it taken so long? There needs to be long-term support, because businesses that manage to survive into the new year face a new threat—a massive tax bombshell when bills for non-domestic rates come in.
Only a few months ago, we saw reports of 300,000 planned redundancies across the UK. Workers at Debenhams, the Arcadia Group and Burntisland Fabrications, and many other, smaller, businesses, face uncertain futures, on top of the thousands of pub jobs that are at risk, as I mentioned. The Scottish Conservatives want action to save those jobs, so we are calling on the SNP to do the right thing and extend the 100 per cent relief for non-domestic rates for another full year.
Does Maurice Golden agree that the Scottish Government’s ability to provide the 100 per cent relief for retail, hospitality and leisure is contingent on consequentials from Westminster? If so, will he join us in calling on his colleagues at the Treasury to confirm the position for the next financial year, to let us provide the support for which he rightly calls?
We already have £1.3 billion in extra funding from the UK Government, and if the SNP had managed to grow the economy since 2007, we would have more cash right now. If it had not blown hundreds of millions of pounds on ferries, or if it had grown employment at the same rate as in the rest of the UK, we would have had 250,000 more jobs pre-Covid and far more cash in the bank to fund the extended relief.
I turn to the restrictions and the effect that they have had on businesses. We all understand the need for restrictions, but in recent weeks, we have seen individuals and businesses trying to follow the rules in the face of confusing, and often abrupt, instructions from the Scottish Government. For example, Perth and Kinross was put into level 3 with just over two days’ notice, and Midlothian was supposedly moving to level 2, only to be given just 12 hours’ notice that it was staying in level 3. It is worrying that the Scottish Government does not seem to understand that businesses cannot turn on a dime. How are they supposed to organise staff and stock and make other decisions with so little notice? We are calling for a week’s implementation period to give businesses a chance to adapt, and I repeat that call today.
I also urge ministers to give businesses a seat at the table when those decisions are made, and to carry businesses with them, rather than expecting businesses to fall into line.
The Scottish Conservatives’ proposals are commonsense measures. I remind members that it is it the UK Government that has saved nearly a million Scottish jobs, helped more than 79,000 Scottish businesses and boosted Scotland’s budget by £8.2 billion to fight the virus. There is no reason for the SNP not to support our proposals today—other than because they come from the Conservatives. The members opposite have to decide whether they want to score political points or save jobs.
That the Parliament notes that too many businesses affected by the pandemic restrictions have been unable to access support grants; calls for the Scottish Government to undertake a rapid review into grant eligibility with a view to ensuring that businesses can access the support that they need over the winter; further calls on the Scottish Government to provide certainty for businesses next year by committing to extending the non-domestic rates poundage freeze and the rates relief for hospitality, leisure and retail businesses into 2021-22, and calls on it to establish a coronavirus business advisory council.16:38
I look forward to the Conservatives supporting my amendment to the motion. I could not help but notice that, in yesterday’s Finance and Constitution Committee debate on parliamentary scrutiny, without equivocation or clarification, Murdo Fraser described amendments that are moved by Scottish Government ministers as “credible and capable”. Being a man of consistency—and his consistency is a matter that many of us have often had cause to reflect on—I know that he will demonstrate his continued belief in the credibility and capability of what ministers bring to the chamber for debate by supporting my amendment today. Of course, I know, too, that he will, as he always does, take his party with him.
There is no doubt that Scotland’s businesses continue to be impacted by the coronavirus pandemic. Even with the easing of restrictions in level 4 areas such as my own at the end of this week, the circumstances, which are unprecedented in our lifetimes, remain difficult for them. I take nothing for granted and appreciate every sacrifice that is being made by individuals, organisations and businesses in every community across the country.
The vaccination programme, which is in its initial stages, offers us all hope, but we need to appreciate that we will not see its full benefits until next year. Therefore, for the time to come, we must continue to strike a balance between our health needs and our economic needs.
When the pandemic began, we moved rapidly to put in place a support package worth more than £2.3 billion to provide lifeline support to businesses. We continue to provide support through the strategic framework, and we are providing £30 million in discretionary funding for local authorities, which can be used to address the specific needs of local economies, such as support for supply chains. We are also committed to a second round of the newly self-employed hardship fund, with an additional £15 million to support those who have been overlooked by and are ineligible for the UK Government’s self-employment income support scheme.
We recognise the need to provide on-going support, and today the Cabinet Secretary for Finance has allocated additional funding of £185 million to help build resilience for our businesses throughout the winter. The package includes support for hospitality businesses, taxi drivers, arts venues and travel agents. That is action by this Government in response to the real challenges that businesses in those sectors across the country face at this time.
Can the minister tell us when applications will open for taxi drivers?
We are currently working with local government colleagues on that, and we hope to open applications as soon as possible. I am happy to come back to Elaine Smith with details, when those are available.
Just as it is important that we support businesses, it is important that we ensure that we support their workforces. Mr Golden’s motion fails to mention that—a mere oversight on his part, I am sure.
I consider it vital that we take this opportunity to signal the importance of that support to employers, and my amendment cites the Covid-19 fair work agreement that we have jointly endorsed with organisations such as the Institute of Directors, the Scottish Council for Development and Industry and the Scottish Trades Union Congress. That underlines the collaborative approach that is needed as we work our way through the crisis.
I turn to the motion that is before us. Further to the exchange between Ben Macpherson and Maurice Golden, I want to make clear that we would also like to be able to provide clarity for businesses on rates relief, but it is difficult to do so at this stage—the limitations of the devolution settlement mean that our ability to continue to offer relief next year is contingent on the UK budget extending the equivalent policy in England and generating consequential funding.
The Cabinet Secretary for Finance has been clear that, should the UK Government introduce such an extension, we are committed to creating a tailored package of business support measures, including on rates relief, which best meets Scotland’s needs. On that basis, the assistance of Mr Golden and his colleagues in making the case to their colleagues in the UK Government would be welcome. I did not hear him offer that assistance a moment ago, but I would be happy to hear him offer it any time that he is willing to do so.
On an issue that both my amendment and Mr Rowley’s amendment mention, we know that some larger businesses such as supermarkets have pledged to reimburse the Scottish Government for the rates relief offered at the outset of the pandemic. I welcome that decision and call on other businesses that are able to follow suit to do so.
Will the minister take an intervention?
How long do I have, Presiding Officer?
You are just closing, minister.
Mr Golden will have to forgive me.
Ultimately, we could do much more to support our businesses and wider economic recovery if we had greater fiscal flexibility and borrowing powers. In that regard, the Finance and Constitution Committee’s pre-budget scrutiny report is timely. On that issue, it says that
“without its own borrowing powers to fund day to day spending, the Scottish Government is largely constrained by UK spend and policy decisions when determining its own COVID-19 related spending and policies.”
Those are not my words—they are the words of Finance and Constitution Committee in its unanimously agreed report.
This evening, I hope that Parliament will unite behind the Government amendment to endorse that position; to endorse our call on retailers who can to return any rates relief they do not require for the benefit of businesses across Scotland; to recognise that more needs to be done to support Scotland’s businesses; and to back the fair work agenda for Scotland’s workers. I commend the amendment in my name.
I move amendment S5M-23622.3, to leave out from “too many businesses” to end and insert:
“many businesses affected by the pandemic restrictions have been able to access Scottish Government support grants totalling more than £2.3 billion, including the Strategic Framework Business Fund, and welcomes the additional financial support that will be made available through the £15 million second phase of the Newly Self-employed Hardship Fund and the £30 million Local Authority Discretionary Fund; welcomes the use of Barnett consequentials to provide this support for businesses and jobs, alongside other forms of support from the UK Government such as the Coronavirus Job Retention Scheme and the Self-Employed Income Support Scheme; recognises that the Scottish Government will continue to review and refine the COVID grant offer, within available resources, with a view to ensuring that businesses can access the support that they need over the winter and notes that the Cabinet Secretary for Finance will set out how additional funding will support businesses and their employees; welcomes the repayment of rates relief by supermarkets and calls for other businesses who can do so to follow this example and for this resource to be allocated to the devolved governments to enable the provision of further support for businesses and their workforces; understands the need for workers to be supported through the current period and commends the Coronavirus (COVID-19): fair work statement, which has been jointly endorsed by the Scottish Government, STUC, COSLA, SCVO, IoD Scotland and SCDI to employers; recognises that the Scottish Government will only be able to deliver the certainty sought by Scottish businesses in terms of extending rates relief for hospitality, leisure and retail businesses into 2021-22 with consequential funding from an equivalent investment by the UK Government due to the lack of fiscal powers and flexibilities devolved to the Scottish Parliament, and endorses the Finance and Constitution Committee’s unanimously-agreed pre-budget scrutiny report, which recommends that the Treasury should consider providing the devolved governments with greater access to borrowing in emergency situations, such as the current crisis, to allow them to tailor their own spend and policy response to the pandemic and economic recovery.”
I call Alex Rowley to speak to and move amendment S5M-23622.2. You have up to four minutes, Mr Rowley.16:44
The idea that we could build consensus is important. We must do so because, at the end of the day, people’s jobs are on the line out there. As we come up to Christmas, many people are worried. The furlough scheme has been widely recognised as having been the right thing to do, and it has helped, but we are seeing more and more job losses and worry.
Does Mr Rowley think that workers at BiFab, and indeed throughout Scotland, have been let down by the SNP Government?
There is a wider debate to be had about how we can build back the Scottish economy, and specifically about the renewable energy sector, on which the country has been let down. We need to be more ambitious in our approach to building back.
I return to the motion and the amendments that are before us today. This morning, I read a report about Unite the union’s survey of taxi drivers. I also heard a BBC interview with a lady who is a taxi driver from Edinburgh, who explained the situation in which drivers currently find themselves. The Government’s move to announce support for that industry is good, but we need to speed up the process, because people are desperate.
Unite Scotland surveyed more than 200 taxi drivers. The results, which were issued this morning, showed that 37 per cent reported that the support represents less than 25 per cent of their average earnings; 18 per cent reported that it represents between 25 and 50 per cent; and 20 per cent reported that it represents between 50 and 75 per cent. Whether they are self-employed or work in firms, many drivers have just been left to their own devices. The same is true of quite a number of sectors in the Scottish economy. Therefore, more than anything else, my plea is that we must work with the trade unions and listen to all those sectors. We must be able to respond as quickly as we can.
I recognise that time is constrained, so I will be brief. I assure Mr Rowley that I meet STUC representatives weekly. I recently met Pat Rafferty of Unite to discuss matters affecting taxi drivers, so it has been influential in our making that choice.
That is good news. However, I will quote what Pat Rafferty has said:
“The stories shared by taxi drivers in our survey is heartbreaking and clearly shows a trade in crisis. The reality is behind the figures there are workers and families across Scotland who are in despair.”
That is the reality, and it is why the Government must act. It is also why we need to build consensus. We must be able to respond where people are in difficulty, and do so quickly. Therefore, in response to Jamie Hepburn’s answer to Elaine Smith’s question on when the support will open, I say that we need to move that forward and to be flexible.
Further flexibility is needed on the guidance that is being issued to councils. In this morning’s coverage, the point was made that some self-employed taxi drivers who share cabs have extra financial outgoings because they have to pay for those vehicles. However, because they do not fit within the terms of the guidance that has been issued, they are being refused support. I discussed that with the Cabinet Secretary for the Economy, Fair Work and Culture last week. I agreed that local authorities need to have discretion, but I also said that we must get across to them the message that such funds are being introduced to help people. It must be generally accepted that, when businesses approach authorities, they should not simply be told that they do not fit the criteria—end of. I have made such an appeal to Fife Council, which is the one that I have dealt with most. However, the Government must get the message out to local authorities that we want to help such people and not put barriers in their way.
I see that I am out of time, Presiding Officer, so I will conclude my remarks there.
I move amendment S5M-23622.2, to leave out from “, and calls on” to end and insert:
“; welcomes the repayment to date of business rates relief from larger retailers that have seen an increase in their sales over the course of the pandemic and calls on the Scottish Government to encourage these practices from other retailers that have not required the same level of rates relief as other businesses; recognises that, for the economy to recover effectively from this crisis, the Scottish Government must invest money back into small businesses, hospitality and town centres and prioritise the regeneration of the high street, and calls on it to establish a coronavirus business advisory council and produce an industrial strategy to ensure businesses are adequately supported.”16:49
I welcome the chance to take part in the debate. I doubt that it will come as a huge surprise to members in the chamber that the Greens do not back everything that the Conservatives had in mind in bringing this motion to the chamber.
The Conservatives repeat their call for a business advisory council, for example. That is a well-rehearsed argument by now and I put on record once again my concern that what it would turn into, if the Government agreed to it, would not be a group of people advising on how best to implement public health measures but a group of people lobbying within Government against implementing such measures. I fear that that is how it would go if that council was created, and I am sorry to see that the Labour Party is now echoing a Tory talking-point.
On extending rates relief, I agree that there is no doubt that many businesses need that support, but others do not. Supermarkets, for example, have seen high profits during the pandemic. This year has been awful for so many of us to live through, but it has been good for the profits of some big businesses. It is important that our tax policy seeks not only to protect those who really need support but to redress the inequality that has been exacerbated by Covid. The difference between small, independent businesses and giant multinationals is one example. Simply continuing with rates relief without taking a different approach is not something that I would support.
As for grant eligibility, I would be fine with carrying out a review, but I suspect that my purpose for that review would be different from that of Maurice Golden and the Conservatives. I have consistently made the case that the Government should use conditionality in its grant support, with incentives for ethical practices such as payment of the living wage and support for those employers who were already doing the right thing before the pandemic; we do not want them to be the ones most likely to be tipped over the edge and forced to fold. Too often, when we discuss the economy, we only see narrow metrics such as overall economic activity without asking who benefits from it, who bears the harmful impact of generating that activity and in whose interests our economy operates.
When we debate business support, too often we only see support going to business owners without ensuring that it gets directly to the people who do the work in our economy. The Scottish Government certainly does not have everything right on this issue, although its amendment is preferable to the Conservative motion. Ministers place an emphasis on the fair work agenda but, during the pandemic, just as was the case before it, they have been far too reluctant to place robust conditions on publicly funded business support to ensure that it goes to ethical practices and truly sustainable industries. If they begin to do better, we have a chance to ensure that the economy that emerges from the trauma of 2020 is a better one than the low-pay, low-tax, low-regulation, exploitative, unsustainable and unhealthy one that came before.16:53
Today’s debate is a bit of a side show. It is a side show because the answers that businesses are desperate for are locked in the secret process of negotiating a trade deal with our closest neighbours in the European Union. I can understand why the Conservatives do not wish to debate that, as it has been difficult to justify the self-inflicted chaos that is Brexit. That chaos has gripped our country for getting on for five years now and it has resulted in few, if any, benefits and a shedload of uncertainty and disinvestment from the UK, directly impacting on the businesses that we are debating today.
Brexit should be a stark warning for those on the SNP benches who think that the process of breaking from the UK would be any easier. If they want to predict what independence negotiations would be like, they do not have to look too far to find out. Businesses that are worried about their trade, people who are worried about their jobs and young people who are worried about their future would never forgive politicians if we spent the next decade arguing about flags, borders and the name of our country when we should be focused on an economic recovery. The fact that the Conservatives and the SNP are inflicting this double chaos in the middle of a global pandemic shows what happens when people let destructive ideology override common sense.
Instead, we should have a needle-sharp focus on the recovery. Today, that is the work of the Cabinet Secretary for Finance, Kate Forbes, who made a welcome statement earlier this afternoon. I am sure that, if Kate Forbes were here, she would acknowledge the constructive approach that my colleagues and I and others in the chamber have adopted to the development of financial schemes for different sectors. Along with other members from across the chamber, I have made cases directly to Kate Forbes and Fergus Ewing. We welcome the engagement from them. We have made representations from business directly to ministers, and they have engaged and responded well. We should be doing more of that, rather than having more debates about the constitution.
Although I welcome the support that has been announced today, I share the concern of Liz Cameron from Scottish Chambers of Commerce about the urgency of the situation and the need for early payment if we are to keep businesses alive. I have spoken to many businesses that are thinking about closing up in a matter of weeks. If we do not act swiftly and with clarity and get the money out the door quickly, I do not think that they will be here any more. The Government should adopt that position urgently.
Companies in the tourism sector such as self-catering businesses, bed and breakfasts and guest houses were directly impacted by the travel ban and the indoor meeting rules, but they have not had any support through the Government schemes so far, and they have been in despair. Travel agencies that have spent the past nine months getting money back for their customers from travel companies have not been able to put staff on furlough and have been desperate for support. Thankfully, that support has been made available today, which I welcome.
Golf tourism companies are important for the many parts of our country that have great golf courses. Their business evaporated overnight, as people cannot come from far-flung parts of the world. Wedding venues have really been struggling, as have taxi drivers and coach tour operators. We have had good announcements from the Government on those matters today. Again, through co-operation, we have worked to make that happen.
I was puzzled and concerned by the decisions yesterday on the levels. I thought that we had a clear, consistent and cautious approach in the strategic framework. It was clear that, if certain measures were taken and the indicators went down, and if people made sure that they followed the rules, the result would be that their area would go down the levels. However, a new set of rules was introduced yesterday, with extra caution in place. We did not know about that. Apparently, Christmas is a time when people go shopping—we never knew that before. Suddenly, there was a new rule in the framework. We needed clarity and certainty, but we did not get that in yesterday’s announcement, and the Government has lost a certain amount of confidence.
We move to the open debate. Speeches should be a strict four minutes, as we are a bit pushed for time.16:57
I draw members’ attention to my entry in the register of interests.
Despite valiant efforts by businesses and their employees up and down Scotland, there have been widespread job losses and a continuing air of uncertainty hangs over our cities and towns as we reach the Christmas festive period. On top of that uncertainty, resentment has grown among businesses about the lack of Scottish Government support—it has been slow to deliver that support.
The chief executive of VisitScotland, Malcolm Roughead, has just sent out an email in which he states that there is a high level of stress out there as everyone tries to stick to the rules while keeping their businesses afloat. That really sums up what is going on out there.
No sector has felt that more than the Scottish hospitality and tourism industry. The restrictions meant that stays in hotels and in self-catering and bed and breakfast premises dried up overnight. I will put that in plain words by sharing with members recent findings from the newly formed South of Scotland Destination Alliance. It found that the tier restrictions “wiped out” any prospect of visitors coming to the south of Scotland. An eye-watering 94 per cent of tourism-related businesses had cancellations across the south of Scotland and a third of businesses saw between 90 and 100 per cent of their bookings disappear.
The consequences of those cancellations were stark. They resulted in a collective loss of just over £1 million across the 83 businesses that were surveyed and £0.5 million of income lost as a direct result of the introduction of Scottish levels. It is true that the Parliament agreed to and voted for those restrictions, but that equates to an average of £6,680 per business. Businesses simply cannot make ends meet, let alone bear the cost of the bills that they are incurring for rent, wages and stock.
It is only today, after the Scottish Conservatives’ sustained calls for the Government to get the cash out of the door, that support has been provided for businesses that have been left out purely as a result of badly thought-through Government eligibility criteria, which have affected wedding companies, taxi drivers and self-catering operators. We await the detail on the latter.
A solution is clear. Our motion calls on the Scottish Government to provide a cushion for businesses for what has been deemed “three winters in a row” by committing to extending rates relief for the sector, including retail, which David Lonsdale of the Scottish Retail Consortium supports.
We have consistently called for a coronavirus business advisory council, which might have assisted the Government to understand a bit more quickly why businesses were falling through the cracks because of ineligibility. I am glad that the Labour Party’s amendment recognises that, too, and I thank Alex Rowley for that. I do not agree with Patrick Harvie that such a council would be a talking shop for corona deniers, and it is short-sighted of him not to recognise a collegiate approach.
I turn to the minister’s amendment. We agree that we are fortunate that Scotland has benefited significantly throughout the pandemic from the scale of the support that has been provided to Scotland. [Interruption.]
Excuse me, Ms Hamilton. There are two gentlemen who are being very rude while you are speaking, and I ask them to desist.
Thank you, Presiding Officer.
Our union of four nations has wrapped its arms around Scotland and cushioned us from an unprecedented economic shock by protecting jobs and livelihoods to the tune of £9.5 billion. In September, the Scottish Government’s independent economic and fiscal forecaster said:
“The largest increase in spending in Scotland has been through UK-wide schemes”.
In addition, David Phillips of the Institute for Fiscal Studies highlighted the fact that the Scottish budget has been boosted by 14 per cent since the projections that were set out in February. As we know, that has been driven largely by extra funding from the UK Government.
Struggling businesses are not interested in politicking in the form of an SNP amendment. They know that additional funding was received in the spending review. That was weeks ago, but it is only today that we have heard how it has been allocated. Policy choices are in the gift of the Scottish Government.
That is precisely why we had to bring the debate to the chamber. Businesses want answers and clarity, not an exhaustive wish list that delays addressing the emergency that we now find ourselves in. Time is running out—as is the time that I have left for my speech—and Liz Cameron agrees. She said:
“For many, January will be too late to save business owners, their families and their employees from economic ruin.”
Time is very short, as I said. I ask members to please bear that in mind.17:02
The Conservatives’ motion calls on the Scottish Government
“to provide certainty for businesses next year by committing to extending the non-domestic rates poundage freeze and the rates relief for hospitality, leisure and retail businesses into 2021-22”.
The Scottish Government provided 100 per cent rates relief for the retail, hospitality and leisure sectors for this year. It is difficult for it to make decisions for 2021-22, as the Tory Government’s spending review at the end of November did not provide clarity on its budget plans, specifically around non-domestic rates for the next financial year. As the Tories are well aware, the Scottish budget is dependent on the generation of consequential funding via the Barnett formula. Scottish businesses need certainty, but so does the Scottish Government for next year’s budget, so that it can continue to provide that support for businesses.
Following the Tory Chancellor of the Exchequer’s announcement at the end of November, the head of business rates at the commercial property company Colliers International stated:
“It’s also worrying that the Chancellor has not mentioned a timeline for when he will announce on the ‘Rates issue’. Although the statement today was not a tax review, it is inconceivable if he feels he can wait until the March Budget to discuss changes to the business rates system. By then many retailers will have made their plans for the forthcoming year and many of these will include closures and job losses in anticipation of the big bills coming through the letterbox.”
As the minister said, the Scottish Government is committed to creating a tailored package of business support measures, including rates relief, that best meets Scotland’s needs, and it is important that the package is tailored to those who need it most. In recent weeks, we have witnessed many supermarkets and discounters hand back to the UK Government £1.8 billion of business rates relief, following a backlash. The sector has rightly been criticised for paying huge dividends to shareholders while receiving taxpayer support that was designed to help businesses that have been crippled by the pandemic to survive.
A recent KPMG report on UK retail sector trends in 2020 highlights that many retailers have fared very well during the pandemic, with some having double-digit increases in sales. Those included supermarkets, retailers in the furniture and homeware sectors, do-it-yourself retailers and those that sell electronic goods. Those high-street brands that have good internet presence, such as Argos, Next, Boots, GAME and Wickes, are among the biggest winners. Hospitality, leisure and most clothing and footwear retailers need our support, however, and the Scottish Government should provide that additional support when it is in a position to do so.
I have highlighted that the Scottish Government requires certainty in order that it can consider business rates relief for next year, and that position is confirmed by the Finance and Constitution Committee in its pre-budget scrutiny report. In its conclusion, it states:
“The Committee recognises the enormity of the economic and fiscal challenge facing the Scottish Government in preparing next year’s Budget.”
With the support of the Conservative members of the committee, it states:
“without its own borrowing powers to fund day to day spending, the Scottish Government is largely constrained by UK spend and policy decisions when determining its own COVID-19 related spending and policies. For example, it would be very challenging for the Cabinet Secretary to continue with policies like business rates relief, in its current form, without Barnett consequentials.”
I therefore ask Conservative members to support their colleagues on the Finance and Constitution Committee and get behind the Scottish Government’s call for devolved borrowing powers so that we can provide the tailored support that Scottish businesses need.
I remind everyone that we are pushed for time.17:07
This is a really important debate and it is long overdue. The public health response to Covid-19 has been largely understandable, but let us be frank that the consequences of the pandemic have been extremely damaging and life changing for many people, and not in a good way. Livelihoods have been lost, the hopes and dreams of young people as they leave school or university have been put on hold or maybe dashed for ever, and people have lost careers.
All MSPs know that businesses have suffered, too. We know that there has been a colossal response from the UK Government because there had to be, and the Scottish Government, too, deserves praise for the work that it has put in. I was delighted to hear Kate Forbes announce earlier today that extra money will be dished out on a sectoral basis. However, we have not been able to help everyone, and people have fallen through the cracks.
Maurice Golden mentioned the hospitality sector, which is important not just to those who work in it but to all of us. It is been hollowed out and, to be frank, I fear for what will be left. We cannot force businesses to close and not fully reimburse them, but that is what has happened. Members will have received an email from the Scottish Beer & Pub Association, which highlights the difficulties that will be caused by Edinburgh being kept at level 3. It says that that decision could cost the sector £3.2 million between now and January and will see pubs close down. That is not good.
Too many businesses and people have struggled to get help. People such as taxi drivers, who have been mentioned in the debate, and sole traders who have not been in business for long have not received anything. Cabbies will have been pleased to hear about the £19 million from Kate Forbes to cover fixed costs, because, as we heard from Unite the Union today, many drivers are regularly working 16 to 17-hour days, with a shift being determined as having been good if £50 is cleared. The Unite survey shows that 30 per cent of drivers have been unable to access any financial help from Government support schemes. According to the Federation of Small Businesses, one in five of its members in Scotland has had no support from the Scottish Government, so it is right that we are calling for a review to see where the gaps are.
For example, the Covid-19 strategic framework business fund is, on the face of it, a good idea. It is for businesses that are required to close by law?or to significantly change their operations due to restrictions that apply from 2 November. However, in the application pages on North Lanarkshire Council’s website, if someone answers “no” to the question
“Was your business trading on the 2nd November 2020?”
they are told that they are
That is clearly a mistake—at least, I hope that it is. That sort of confusion should not be happening.
It would be easy to dismiss the idea of a coronavirus business advisory council as just another task force of the kind that Opposition parties call for—I have done that sort of thing myself. However, throughout this pandemic, Douglas Ross has been positive and his ideas have been helpful. He made that particular call in a speech to businesses, and he was right do to so, because businesses—the job creators—should be at the heart of Government decision making.
His other good ideas included a call for the SNP Government to co-operate with the UK Government to ensure parity of taxes between online and physical businesses. Mr Ross is nothing if not an optimist, and we should repay his optimism by supporting Maurice Golden’s motion.17:11
It is a tale of two responses: one by the SNP-led Scottish Government for businesses in Scotland, and the other by the Tory-led Government for businesses where it has control. In Scotland, £2.8 billion was deployed quickly to many struggling businesses. Sectors that were hit particularly hard, such as hospitality, retail and leisure, were given rates relief of 100 per cent. Quite rightly, the Tories did the same for English businesses in those sectors.
All four countries were covered by the furlough scheme, which was funded by the UK Government’s borrowing of money. Furlough money is very welcome, but it is not a gift—neither to the people of any UK nation nor from the UK Government to any of the devolved Governments. In the end, it is paid for by taxpayers—those in Scotland as well as in other UK nations. Independent countries across Europe have their own furlough schemes; if Scotland were one of them, we too would have had our own.
I turn to differences in approach. In Scotland, support was made available not only to businesses that had to close; it was used to capture more types of business than were eligible for support in England—in particular, supply chain businesses and sole traders. Those funds include the strategic framework business fund and the local authority discretionary fund.
Other specific sectors have been helped, with, for example £17 million for the seafood and fishing sector, and an £11 million contingency fund for soft-play businesses that did not qualify for other grants. Grants were provided to businesses that were required by law to close, and to those that had to modify their operations in order to stay open. The small business bonus scheme continues to be a lifeline for small high street retailers, who have seen their income drop significantly. Three quarters of businesses with premises in Scotland have rates relief.
Might that need to be expanded? Yes. However, those who heard me ask Kate Forbes that question will also have heard that, to do it, consequentials would be needed from similar actions in England. Asking the Scottish Government to commit to spending in 2022, given that it has no idea of its budget, nor of the cost of Brexit, is complete fantasy.
Like many MSPs, I am advocating on behalf of businesses that have not qualified for support but which have still been hit very hard. I am confident that Kate Forbes will work with me, as she has with many MSPs across the chamber. I am encouraged by today’s announcement of a further £185 million of additional business support, and the targeted support that she has outlined for events, hair and beauty, venues, travel agents, coach operators and others. That support has been advocated for by SNP, Labour, Liberal Democrat, Green and Tory members, and Alex Rowley was absolutely right to say that we all have a duty to do what we can collectively to save jobs.
However, it is in helping the many self-employed people that Scotland’s finance and economy ministers have taken a markedly different approach from that of the UK Chancellor. Self-employed people are reliant on the contents of their tax returns up to April 2019 to be eligible for any UK Government support. If they became self-employed after that date—I have many friends in that situation—they will have to apply for universal credit; in effect, they will be plunged into penury. In Scotland, we have addressed that with the newly self-employed hardship fund. Phase 1 has already delivered vital emergency support to people, and additional support of £15 million will be made available in the second phase.
I would have been far more impressed by Maurice Golden if, instead of asking for rates relief, which he knows the Government cannot commit to, he got behind asking for targeted help for the many sole traders and freelancers who have been left behind. Many of them are women, incidentally. Many of them have lost everything and are working in alternative minimum-wage jobs or are signing on to get by. However, I guess that those people do not vote Tory.17:15
This is an important debate. There are two central issues: how we support jobs in the economy, and how we ensure that money that has become available is distributed fairly throughout the country and to businesses and individuals who need it.
We all know that, throughout our communities, the pandemic has hit really hard and that it has had, and will continue to have, a massive effect on businesses and jobs. A person simply needs to walk down any main street to see that. There are businesses close to where I stay in Cambuslang that have not reopened since the pandemic struck in March. Small businesses are particularly hard hit. They have struggled in these very difficult times.
The issue of town centres is linked to that. People have started to change their shopping habits—they shop online more and more. I worry that, even when we emerge from the pandemic, some shops will not be able to—[Inaudible. ]—because people have changed their shopping habits, never mind the impact that there has been on their jobs and incomes.
An issue that has to be looked at is how we ensure that people who have until now fallen through the gaps in business support receive the funding that has been announced today. For example, freelancers and people who do not have allocated business premises have previously not been able to obtain any support.
A number of members have spoken about the issue of relief and the moneys that large retailers have returned. Earlier, following the budget statement, Murdo Fraser referred to those retailers as great examples of “responsible capitalism”. Those businesses could do much more. There is no doubt that those shops have raked in a lot of profits over the period of the pandemic because they have been essential and that their staff have had to work in very difficult conditions. That is why I have been pleased to support the GMB trade union campaign that calls on Asda to shut its stores and distribution centres in order to give its hard-pressed workers a day off on boxing day and on 2 January so that they can spend some time with their families over the festive period. That is only fair and reasonable.
The final issue that I want to touch on is youth unemployment. The Institute for Public Policy Research recently forecast that youth unemployment could rise as high as 140,000 as a result of the pandemic. Many studies show that younger people will be harder hit as a result of the economic downturn from the pandemic. We need to consider how some of the £570 million that Ms Forbes announced earlier can be allocated to cities such as Glasgow, which will be hard hit by youth unemployment.
There are big issues, and we have to ensure that there is support for jobs and the economy.17:19
I am very happy to take part in this debate on the economy.
It is ironic that the party that consistently argues for lower taxation and the subsequent inevitable cuts to public services has the gall to ask for increased public spending on business support. If the Conservatives are so keen on increasing public spending, I hope that they would support a tax rise in the budget next year. Maybe they would support a windfall tax at a UK level. How about increased tax for online businesses and others that have done so well throughout the pandemic? How about an increase in inheritance tax or capital gains tax?
We have already heard claims that there is a magic pot of money sitting somewhere that Kate Forbes can endlessly access. However, members know that the Finance and Constitution Committee has heard evidence that the Scottish Government has added to the resources that it has received from the UK Government. Much of the consequentials have already been spent; yesterday’s letter to the finance committee and today’s statement make that clear. Some money has to be kept for contingencies until 31 March 2021.
Most people, when they get their salary, do not spend it all on day 1. Rather, they keep it and spread it out over the month, keeping some for the bills that they know are coming up and some for emergencies, which are bound to happen from time to time. In the same way, we have to keep some money for consequentials up until the end of March.
Looking at the motion, I am interested in the phrase
“ensuring that businesses can access the support that they need”.
No government in any country can do that. Of course, we all want to help businesses as much as we can, but Covid is the enemy here and it is causing the damage. Covid has hit our citizens’ health and it is causing damage to our economy. The UK Government can borrow to an extent, but even that has its limits—it has now borrowed over £2 trillion and rising: that is something like £30,000 per head, which cannot continue.
The UK and maybe Scotland can raise taxes, but sadly, we cannot save every business. Are the Conservatives really arguing that no business should close and that Government should write a blank cheque for every business? That does not sound like normal Conservative policy, which, as I understand it, is that weaker businesses should be allowed to go to the wall. The Conservatives at Westminster have not given Debenhams the support that it needs. Are they saying that that is a mistake?
Then the Conservatives call in their motion for certainty for businesses for “next year”—presumably meaning from April 2021. First, no one can be certain at this point what will happen in April. Secondly, how can we have certainty for next year when the UK Conservative Government has refused to announce its budget at a responsible time? That will leave Wales, Northern Ireland and Scotland having to set their budgets in the dark. Surely members will accept that the UK is being irresponsible in that.
Thirdly, the UK Government has been incredibly poor at giving certainty to businesses with the furlough scheme, changing it at the last minute on several occasions. In contrast, countries such as France have given much more of a long-term plan. While I welcome the furlough scheme and its extension, I hope that Conservative members are embarrassed about the way in which their Government has treated business.
Fourthly and finally on the question of certainty, where is the certainty over Brexit? If the Conservatives were not so fixated on the constitution, they might do a better job of running the country and giving more certainty to business.
I said that I was happy to speak in this debate. It makes it so much easier when the Conservatives are in such a weak position.
We move to the closing speeches.17:23
In closing, I re-emphasise the importance of the debate. I will pick up on a few points.
I know that Patrick Harvie thinks that he knows everything, but what we are actually saying about the business advisory council is that we need to be able to bring together trade unions, businesses and small and medium-sized enterprises, which is an important point.
Graham Simpson made the point that we need to see where the gaps are and where things are working, because if we had done that earlier, we would have picked up that taxi drivers had not received support. Graham Simpson also said that we need to get the message out to local authorities that grants have been put in place to help people. We really need to see local authorities taking a proactive role in that, where that is not happening.
James Kelly mentioned youth unemployment. People aged between 16 and 24 currently make up 50 per cent of the hospitality workforce in Scotland. Youth unemployment has risen from 6.1 per cent to 14.5 per cent. We can link that to John Mason’s point about whether we should let weaker businesses go to the wall. The reason that most hospitality businesses are in difficulty is Covid and the restrictions that are in place. They are viable businesses, and if we support them to get through this period, we will be protecting those jobs for when they come out of it.
That is why this debate is important. It is not about Scotland versus England or the constitution. It is about what needs to happen and the fact that we need to listen to people in order to provide support.
On rates relief, the point has been made that there are SMEs and other businesses that fall through that gap. Yes, it was right for Tesco and others to hand back money, and I am sure that we would all urge others to do so, but there are SMEs that have to pay rates and that are struggling.
I take Ben Macpherson’s point that budget certainty is needed. The Finance and Constitution Committee is right to say to the UK Government that we need budget certainty in order to give certainty to businesses and local authorities. That is fair enough. We will not oppose the Government amendment, because we believe that it is about support for employees as well as for employers. That point was well made by Jamie Hepburn. We need to look at how we get that support and ensure that it gets to where it needs to go.
We support equally the Conservative motion in its call to look for where rates relief is needed and where more support is needed, and to give that support.
James Kelly also picked up on support for workers and the campaign that the GMB is running. We need to recognise that shop workers and other workers have been on the front line. It is right to reward front-line health and social care workers, and we support the Government’s awards for them, but many other workers have had a very difficult six to eight months on the front line. Patrick Harvie made the fair point that we need to be saying to businesses that although we will support them, we expect them to support their workforce who are on the front line. We need those workers to be treated with respect. The GMB campaign for public holidays, not just for Asda workers but for all workers, is one that I hope we would all support.17:27
This has been an important debate in that it has emphasised through various contributions—particularly from Alex Rowley, Patrick Harvie, Willie Rennie and Gillian Martin—that we serve our constituents better when we support business in this very challenging scenario. We can strike a balance between the health measures that we need to take and supporting jobs if we collaborate, think collectively and are constructive with each other. I also note Graham Simpson’s points in that regard.
We must find that balance, which is why, when Covid struck, the Scottish Government rapidly put in place a business support package worth more than £2.3 billion to provide lifeline support to businesses, using the consequentials from the UK Treasury. It enabled businesses to close down safely and survive through the initial crisis, which protected jobs and livelihoods.
Today, the Cabinet Secretary for Finance announced a further £185 million to help businesses build resilience through the winter. It was great to hear such positive comments in the debate about the difference that that will make in relation to the issues that have been raised with MSPs across the Parliament.
We understand the economic impact that restrictions are having on businesses and the economic effects of businesses being required to close. We continue to work with businesses and, importantly, their partners in local government to ensure that we understand all those impacts as well as how best to support businesses effectively.
It is important for the Parliament to understand that civil servants and council officials have been working relentlessly to get grant funding out. They deserve our respect and appreciation. We face together the sheer challenge of setting criteria that ensure that we get money out the door as quickly as possible, and we also must militate against fraud. We are helping as many different areas of the business communities as have been affected, within the limits of the financial constraints that we have.
I want to reassure members that I appreciate the calls for a business advisory council, but the Scottish Government’s engagement with the business community has been and continues to be extensive and regular, as it has been since the early days of the pandemic.
If the Scottish Government has such extensive engagement with businesses, why has it taken so long to get the timing and eligibility criteria right, and to sort out the delays?
Given the circumstances that we are in and the considerations that we have to go through, the schemes have been expedited at a remarkable rate, to the full credit of everyone who has been involved, including the business community, the Scottish Government and local government. There has been a remarkable collaborative effort, and that sense of collaboration and determination to help businesses is what we should take from today’s debate, whatever the outcome of the vote. That is the most important thing.
All that matters when it comes to non-domestic rates. We have to acknowledge the facts in this situation, and the fact is that we cannot give non-domestic rates relief for retail, hospitality and leisure until we have assurances from the Treasury, because of the constitutional framework in which we are operating. The Opposition should work with us and we can work collectively to urge the UK Treasury to give us that clarity.
We should be working together in this situation instead of playing party politics. Maurice Golden said that we should not be playing party politics, so I hope that when he is summing up, Murdo Fraser’s tone is much more consensual and collaborative, because that is what this situation demands of us as MSPs and as representatives of our constituents.
Staying with business rates, that sense of collective responsibility has been evidenced by some large businesses committing to repay the rates relief that they were given. We will ensure that an appropriate mechanism is available for them and others to donate the equivalent to Government, if they wish, but that will require collaboration with the Treasury, because donations are not normally made to the Government. Again, that is an area on which we need to work together, and all parties should focus on that.
I note the points that have been made about what we do in next year’s budget, and, in the months ahead, we will continue to engage with trade unions, business organisations and all other parties on what will be an important budget.
We are doing what we can to meet the on-going challenges of Covid-19 and to support economic recovery, but we need the UK Government to give the Scottish Government the additional funding, assurances and powers that we need to respond. Our position on fiscal flexibility continues.
A lot of members referred to this, so I will reiterate the fact that the Scottish Parliament’s cross-party Finance and Constitution Committee has now unanimously agreed that HM Treasury should reconsider giving the devolved Governments access to emergency borrowing during the crisis. It is essential for the UK Government to take action on that. I urge members to support our amendment.17:33
This has been a timely and important debate. Every single one of us, whichever part of Scotland we represent, will have been contacted every day by constituents, businesses, people who are self-employed and people who are employed, all of whom are concerned about their economic situation and are looking for financial support.
Rachael Hamilton talked about the situation in tourism, which will be familiar to any member who represents any part of Scotland, but particularly those who represent rural areas where tourism is an important part of the economy. We have had big issues in parts of the country such as that which I represent, which have been in tier 3, where businesses are technically still allowed to operate but, because of the travel restrictions that have been brought in, their customers have not been able to travel. That has been the biggest impact for those who provide self-catering accommodation. Technically, they did not have to close, but their customer base has disappeared and, up to now, they have not got the required support.
Maurice Golden raised the issue of hospitality. We heard earlier this week from the Scottish hospitality group about support for pubs, and the information that it provided was quite striking. It said that the average support for pubs in England was £80 per week, in Northern Ireland it was £147 per week, in Wales it was £269 per week, but in Scotland it was just £64 per week.
That puts into context the remarks from Gillian Martin, who said how well the Scottish Government was doing in relation to other parts of the UK. That is not exclusively the case. There are areas in which Scotland has not done so well. The evidence suggests other than what Gillian Martin suggested.
Ben Macpherson exhorted me to be consensual in my winding up and I do not want to disappoint him. In that tone, I welcome again the earlier announcements from the finance secretary. The sums of money—UK Treasury money, of course; £8.2 billion in the current financial year—being paid out to support tourism, the wedding sector, taxi drivers, the travel industry and all the other sectors that we know about are very welcome.
We should not be equivocal about that—it is welcome and people look forward to such announcements—but we must not see a delay in that money being paid out. I read earlier the comments from the Scottish Chambers of Commerce in response to Kate Forbes’s announcement, which made it clear that there are businesses that cannot survive long into the new year. If the money is not paid out until January or later, that will create a real problem for many of them.
Nor must we have the sort of problems that Graham Simpson identified with applications. It is absolutely right that local authorities have done an extremely good job of trying to handle the numerous applications for grants and other financial support. That has put a huge burden on them. People in local government have worked hard to deliver that support, but mistakes have been made and we need to be very careful that barriers are not being put in the way of businesses that need that vital support.
I turn to the amendments, starting with Alex Rowley’s. He did not talk very much about it when he was speaking, which was a pity because it is a good amendment. It makes reference to the money that is being handed back by large-scale retailers such as Tesco and Morrisons, which is very welcome. I agree with what Mr Macpherson said about the need for the Treasury to co-operate with the Scottish Government to make sure that that money comes back to Scotland and I read the letter from the finance secretary to the Chief Secretary to the Treasury about that.
That could bring another £200 million back into the Scottish Government’s budget in the current year, which could be available for business support. When we add that together with the £300 million that is held in reserve, that is another half a billion pounds that is potentially available for supporting businesses and all the other things that we need to do. Let us not hear too much from the Scottish Government that every penny is accounted for—there are resources available.
Will Murdo Fraser set out how he will take forward and assist the process of raising with the UK Government the necessity of putting a mechanism in place so that we can get that almost £200 million?
I have an excellent working relationship with the Chief Secretary to the Treasury and speak to him on many occasions. I am happy to do what I can to oil the wheels of that process.
I turn to Mr Hepburn’s amendment, since he has tempted me. In his speech, he quoted me saying yesterday that Scottish Government amendments were “credible and capable”. Sadly, there is an exception to every rule and I am sorry to say that Mr Hepburn’s amendment today seems to be the usual whinge about the lack of fiscal powers, not recognising—as the report from the Finance and Constitution Committee did unanimously—the benefit of the fiscal framework for Scotland in protecting the Scottish budget against a decline in Scottish tax revenues, provided that that is in line with what happens elsewhere in the UK.
We never hear from Mr Hepburn and his colleagues in the SNP how they would fill the black hole that there would be in the Scottish public finances if we went down the route of stand-alone finances in Scotland—a black hole that amounted to £15 billion a year even before a penny was spent on Covid. [Interruption.]
They do not want to hear this, Presiding Officer. Let us remember that the cumulative fiscal transfer from the rest of the UK to Scotland in the period from 2007, since the SNP came to power, amounts to £62 billion. They never want to talk about that.
It is a little ironic that SNP members are talking about public finances on the very day when we read a report from a committee of this Parliament that talks about a “catastrophic” handling of ferry contracts that cost the taxpayer £200 million. This week, it is £200 million—last week, it was BiFab and £50 million of taxpayers’ money down the drain. One would think that the Scottish Government, before demanding more fiscal powers, would want to demonstrate that it can use the ones that it has a bit more effectively—[Interruption.]
I have to wind up, although I could say much more. Mr Russell is heckling me from a sedentary position—[Interruption.]
I am so sorry, but I do not have time to give way to Mr Russell; that is a huge disappointment to me in this particular debate. As you know, Presiding Officer, I am never tired of hearing from Mr Russell.
This has been a welcome debate. There have been some good announcements by the Scottish Government, and some good contributions from members on all sides of the chamber on what more needs to be done. Businesses need certainty and security for the future—that is what the motion in the name of Maurice Golden says, and that is why members should support it tonight.