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Chamber and committees

Meeting date: Wednesday, March 28, 2018

Meeting of the Parliament 28 March 2018

Agenda: Portfolio Question Time, Bus Services, Local Taxation, Business Motion, Parliamentary Bureau Motions, Decision Time, Earth Hour 2018


Contents


Portfolio Question Time


Finance and the Constitution

Good afternoon. The first item of business is portfolio questions. We have quite a lot to get through, so if we could have quick questions and succinct answers, that would be appreciated.


Scottish Fiscal Commission Revenue Forecast

To ask the Scottish Government what assessment it has made of the Scottish Fiscal Commission’s revenue forecast for the increase in the top rate of tax. (S5O-01937)

The Scottish Fiscal Commission is responsible for producing income tax revenue forecasts. Those forecasts set the amount of money that the Scottish Government can draw down from Her Majesty’s Treasury for each tax year. Scottish Government officials regularly engage with the SFC during fiscal events as part of the SFC’s regular challenge and question-and-answer process.

The increase is forecast to raise just £3 million annually, which means that a just slightly larger-than-expected behavioural effect could result in its being a measure that actually loses tax revenue. Given that the cabinet secretary has always professed to being practical when it comes to tax, if, at the end of a financial year, it was found that the increase in the top rate of tax had lost money, would he reverse the decision?

That is a very interesting question—which, of course, is why Jeremy Balfour asked it. Of course I will review the actual take from our tax decisions and make future tax decisions in the light of the evidence. However, the point at which we have set the top rate of tax is based on expert advice from the SFC and the Council of Economic Advisers. It is the optimal point at which to raise more money, but all such matters remain subject to review as we look forward to the next budget and tax consideration.

The Government has cited the fact that the complex interaction between Scottish income tax policy and entitlement to universal credit reduces to just £7 the net benefit of the starter rate of income tax. Has the cabinet secretary requested of the United Kingdom Government a resolution in the form of a disregard of the net benefit of the starter rate of income tax for the calculation of universal credit, or a supplementary payment of universal credit, so that those low-income earners do not miss out?

That is a valid question on an issue of which I am well aware. I have been trying to work with the UK Government to ensure that people enjoy the full benefit of the tax position in Scotland being more progressive. I am continuing to pursue the UK Government to address that, because it is in the UK Government’s gift to address the matter in respect of universal credit. I hope that I will get a positive result. The fact that it has not responded to date is certainly not a reason not to have a more progressive tax system. Of course, I want people to enjoy all the benefit of the system, in terms of those at the lower end of earnings paying less tax than they otherwise would.


Business Rates (2017 Revaluation)

To ask the Scottish Government how many appeals there were in relation to the 2017 business rates revaluation, and how many have been resolved. (S5O-01938)

As at 31 December 2017, 73,577 properties have appealed the 2017 revaluation and 528 appeals have been resolved. That means that 32 per cent of all properties appealed the 2017 revaluation, which is similar to the 31 per cent that had appealed at the same point in time in relation to the 2010 revaluation. All appeals must be disposed of by local committees by 31 December 2020. There is a fast-track process for businesses that wish to have their hearings expedited.

I thank the cabinet secretary, but that figure represents a 0.7 per cent clear-up rate, which is too slow. It is shocking that businesses are having to wait so long for their appeals to be resolved, which is causing businesses, especially small businesses across Scotland, including in my area, a lot of concern.

With the new financial year fast approaching, what action is the cabinet secretary taking now to speed up the resolution process, and what reassurances can he give businesses that all will be resolved before it is too late?

I am fairly familiar with the fact that Liam Kerr has a legal background. I am sure that he understands that the assessors and the appeals process are independent of Government. I cannot direct assessors in the appeals to carry out their function in a particular way. I am sure that, with that clarity, their independence will be protected.

I have, of course, made the point, without direction, that we want appeals to be considered as quickly as possible, as a practical matter. Appeals are sometimes grouped so that they can be considered in batches, if it is appropriate to do so. In relation to wider engagement and support for assessors and appeals, I am trying to be as supportive as I can so that they can execute their functions effectively.

In Glasgow alone, 10,480 appeals were lodged, none of which had been resolved by 31 December 2017. That is totally unacceptable. Will the cabinet secretary therefore use his offices to influence the assessors to ensure that a plan is published with timelines for resolving outstanding appeals—or is he just going to blunder along while businesses suffer higher business-rate costs and uncertainty?

That was outrageous language. I said that I am sympathetic to businesses that want to have their appeals heard, while at the same time pointing out that that is an independent process. A judicial element is available as well, if required. How assessors conduct the appeals is largely a matter for them, in keeping with legislation and the guidance. Of course I will provide encouragement as best I can, but without interference. If I was to interfere, I am sure that the Opposition would be the first to criticise me for so doing.

In relation to the Barclay review and quicker revaluations, I have led a lot of work on quicker implementation, more frequent revaluations and improvement of the assessors. It is no wonder that many representative organisations have said that Scotland is ahead of the curve on rates reform—and not always organisations that are easy for Governments to quote. We have made a lot of progress, but there is due process that should be followed, and the law should be respected.


Procurement

To ask the Scottish Government what progress is being made with other Administrations in the UK in relation to Government procurement post-Brexit. (S5O-01939)

We are reviewing Scottish legislation in that area to ensure that it functions after the United Kingdom exits the European Union. Members are, of course, well aware of our position on that.

Procurement is one of 24 areas that were identified by the UK Government in its analysis that was published on 9 March as potentially requiring a new legislative framework. As mandated by the joint ministerial committee (European Union negotiations), officials from the four UK Administrations have met to explore the possible need for any such framework. Procurement is a devolved matter, and the Scottish Parliament has used its powers to establish a distinctive and, in many cases, more progressive and sustainable devolved procurement regime. I am clear that Brexit must not be used as cover to introduce any new constraint on our ability to continue to do that.

My constituency of Caithness, Sutherland and Ross could be adversely affected by the uncertainty that is being caused by Brexit—in particular, in the supply chain for large contracts. Does the cabinet secretary agree with me that new arrangements need to be made, and soon, to ensure that all procurement can be carried out effectively with minimal disruption to the supply chain, and to ensure continuity of service?

I know that you wanted brief answers, Presiding Officer.

Yes: in essence, I agree with that position and proposition.

That was a good answer. There is a supplementary from Murdo Fraser. We will see whether this one goes as smoothly.

I do not know what you mean, Presiding Officer.

Does the finance secretary agree that we should be seizing the opportunity that Brexit gives us to devise a new procurement policy, free of EU constraints, and which allows us to use our extensive public spend better to support home-grown responsible businesses, and thus grow our economy?

Presiding Officer, I am now conscious that the briefer my answers, the more members of the Opposition you will call.

Pragmatically, the Scottish Government will try to get the best result in the circumstances. Clearly, that means trying to get the best result in terms of social, environmental and economic benefits from procurement, and in terms of safeguarding what we have put in place, while going as far as we can within the law. We want to safeguard that, whether it is part of negotiations with the UK Government or anyone else. We will try to get the best result to protect the kind of issues that we debated last week, while complying with the law. Murdo Fraser is well aware of the Scottish Government’s position in relation to Brexit and UK-wide frameworks.


Tax Bands

To ask the Scottish Government whether it will provide an updated estimate of how much it will cost to implement and administer the new tax bands introduced in its budget. (S5O-01940)

We anticipate costs of up to £2 million in relation to the introduction of the rates and bands set for tax year 2018-19, and administration costs of £400,000 per year.

The introduction of the new tax bands will cost up to £2 million. Yet, in the response that the finance secretary gave to my written parliamentary question, he—or HM Revenue and Customs—estimated that the cost might go up to £5 million depending on the divergence of Scottish income tax rates from those of the rest of the United Kingdom. We heard earlier that, according to the Scottish Fiscal Commission, the increase in the top rate will bring in only £3 million annually—

Will you get to your question, please, Mr Lockhart?

—to the Scottish economy. Does Mr Mackay think that the tax increase for the top rate is fiscally justifiable, and does he agree with the Fraser of Allander institute report that was published today, which says that it is time for a new economic policy in Scotland?

That was a bit of a mess of a question. In essence, I have answered that question accurately every time that Opposition members have asked it. They keep asking why the number changes, but that is because HMRC has given me different numbers for its projected costs. It is true that HMRC’s upper-level cost has come down from £5 million to the cost as it stands now, which is the figure that I just gave in answer to the question. Perhaps the costs will come down further, but it is a matter for HMRC to determine them. I work in partnership with HMRC and those are the figures that we have been given.

On the question whether the divergence is worth it, you bet it is, Presiding Officer. The tax decisions that we have taken have turned a real-terms reduction from the United Kingdom Government’s resource budget into real-terms growth for our public services. It amounts to more than £2 million or £5 million. In total, the divergence amounts to hundreds of millions of pounds more going into our public services, and that has been welcomed by the people of Scotland.

Given that the new tax rates and bands incur a cost to implement and administer, does the cabinet secretary recognise that the cost could be better justified if, instead of tinkering around the edges, the Scottish Government used the new taxation powers so that the richest paid their fair share in order to properly tackle poverty and, specifically, the shocking rise in child poverty in our rich country?

With regard to, say, just the top rate of tax, our tax policy delivers the optimum amount for the next financial year. The proposition that the Labour Party and some other parties put forward would have resulted in less money in the next financial year for our public services and for tackling some of the issues that Elaine Smith would like us to tackle.

We have made the right, balanced decisions on taxation. It is not accurate to describe our policy as “tinkering around the edges” when, in effect, it has realised hundreds of millions of pounds more for our public services. Thanks to the decisions that this Government has taken, we have turned the Tories’ real-terms reduction to our budget into real-terms growth for our public services, lifted the public sector pay cap and delivered real-terms growth for many parts of the public sector, including local government.


Vacant and Derelict Land Levy

To ask the Scottish Government whether it will consider introducing a levy on vacant and derelict land. (S5O-01941)

Vacant and derelict property is already liable for non-domestic rates, subject to statutory exemptions and reliefs.

Additionally, the Scottish Land Commission is looking at the development of a strategic approach to tackling vacant and derelict land, and developing detailed proposals for a compulsory sales mechanism.

Data collected by the Scottish vacant and derelict land survey shows that, in Mid Scotland and Fife, more than 900 hectares of land are vacant or derelict, which is an area greater in size than the entire town of Alloa. If that derelict land was made liable for non-domestic rates, it could be worth more than £7 million to councils in the region. In 2016, the Scottish Government promised to consult on introducing such a levy—

Please come to your question.

—through, I understand, the work of the SLC. When will the consultation take place? When might the SLC report on its work so that councils can start collecting the money, which they so desperately need to maintain vital public services?

The round-table forum has already been convened; I think that I have supplied the minute to the Scottish Green Party before, but I would be happy to do so again. On the other work, I am happy to look at timescales and report back to Mark Ruskell. We should make decisions in an evidence-based fashion, and that is what I propose to do.


Procurement Process (Business Pledge)

To ask the Scottish Government, when considering awarding contracts, what importance its procurement process attaches to whether a company has signed the business pledge. (S5O-01942)

We expect those who deliver public contracts to adopt ethical business and fair work practices. The Scottish Government highlights the values of signing up to the voluntary Scottish business pledge as part of our procurement processes. Earlier this month, ministers wrote to the Scottish Government’s suppliers highlighting the benefits of the business pledge and encouraging them to sign up to it. The Minister for Employability and Training announced in Parliament last week a review of the business pledge, which will focus on attracting greater business buy-in and impact.

The scheme requires private sector firms to pay the living wage, avoid using exploitative zero-hours contracts and make progress on diversity and gender balance, so it is astonishing that, after two years of the business pledge being in place, the finance secretary is only now asking the companies to which the Government gives public money to sign up to the pledge. Why is there no Scottish Government target for companies to sign up to the business pledge—Keith Brown confirmed that in response to my recent parliamentary question—and why is it not mandatory, when he is giving away hundreds of millions of pounds of public money without banning those practices?

The scheme is not mandatory because it is not legal to make it mandatory as part of a contract. We are trying to promote the scheme, and to encourage and support businesses. Incidentally, we are encouraging not just those who supply goods and products to the Scottish Government, but all parts of the business community. While visiting a company today that does not rely on Scottish Government finance, I encouraged it to sign up to the business pledge and I am sure that it will do so. As parliamentarians, we should encourage as many as possible to sign up.

Of course, we should be trying to ensure that every business in the country is delivering the business pledge. Why should we not be trying to reach out and get as many businesses as possible to deliver that? We must do it in a legally—

There is no target.

Ms Dugdale, stop shouting from your seat. Please carry on, cabinet secretary.

We must do it in a legally compliant way. That is why the earlier question was so important—it shows that our ability even to encourage may be under threat as a consequence of some of the negotiations. We have gone as far as we can, and we will continue to promote the business pledge. In the review of the business pledge, we are happy to take on board any other ideas about what we can do, because we really believe in the benefits that the business pledge can bring to businesses and to wider society.


Draft Audit and Accountability Framework

To ask the Scottish Government what its position is on the Treasury’s draft audit and accountability framework and its proposals for effective scrutiny of shared services. (S5O-01943)

The Scottish Government is working closely with HM Treasury to improve the current draft of the audit and accountability framework. Our aim is to ensure proper accountability to the Scottish Parliament of all devolved service delivery, whether it takes place in a United Kingdom public body or a Scottish public body, and effective assurance provided through independent national auditors. We also want to see a framework that is written as simply and as clearly as possible.

The Public Audit and Post-legislative Scrutiny Committee and the Finance and Constitution Committee, as well as Audit Scotland, have expressed concern about the proposed framework. It introduces unnecessary complexity and red tape and makes far worse a process that is working reasonably well at the moment; we already have good arrangements in place with HM Revenue and Customs and Office for Budget Responsibility staff, who regularly attend to give evidence. Will the cabinet secretary give an assurance that the Scottish Government will try to persuade the UK Government to simplify the framework and make it far simpler and more workable?

The Scottish Government is trying to do that and will continue to do that. I will report back to the member if I have any progress to announce.


Local Government Funding

To ask the Scottish Government how it ensures that any additional funding it provides to councils for specific purposes is used in that way. (S5O-01944)

Any funding that the Scottish Government allocates to local authorities for a specific purpose is provided by means of a ring-fenced specific grant. Each specific grant is accompanied by individual terms and conditions and is administered by the relevant policy team. That ensures that the money provided is used exactly for the purpose that it was intended for.

I draw the cabinet secretary’s attention to the actions of Angus Council, which is to receive an additional £1.56 million for the purposes of meeting additional expenditure associated with social care, and which has passed on just £510,000 of that, made up of £200,000 for Carers (Scotland) Act 2016 implementation and £310,000 for living wage inflationary impact. Does he share my anger that money earmarked for such important purposes is being pocketed by a local authority?

Although the extra £66 million in support of social care in 2018-19 is not ring fenced, I made it clear in my letter of 14 December to the president of the Convention of Scottish Local Authorities and the leaders of all 32 local authorities, including Angus Council, that I look to local authorities to continue to prioritise their financial support for social care. I have not received any replies to say that councils were not prepared to accept the 2018-19 local government finance settlement, so I expect all councils to comply fully with the terms that were set out in my letter.

That concludes questions on finance and the constitution.


Infrastructure Investment (South Scotland)

1. Emma Harper (South Scotland) (SNP)

To ask the Scottish Government what future infrastructure investment plans it has for South Scotland. (S5O-01947)

The Scottish Government’s infrastructure investment priorities include: increasing the supply of affordable housing by 50,000 homes by 2021; continuing with the expansion of broadband to deliver access to superfast broadband to all residential and business premises by 2021; and the expansion of early learning and childcare, which will benefit citizens throughout the country, including South Scotland.

NHS Dumfries and Galloway’s Royal infirmary, which is worth £275.5 million, has recently been completed. In the Scotland’s schools for the future programme, St Joseph’s college and the North West community campus in Maxwelltown in Dumfries and Galloway and Jedburgh high school in the Scottish Borders are all currently in construction.

In addition, we are providing Forest Enterprise Scotland with £500,000 of capital funding in 2018-19. That will be used to develop infrastructure and improve the visitor offer in South Scotland.

The Scottish Government has agreed heads of terms for the Edinburgh and south-east Scotland city region deal, investing £300 million over 15 years, and has also committed to exploring the potential for a borderlands inclusive growth deal.

That is interesting news. I am interested to know whether, as well as the housing, schools and health investment that the cabinet secretary mentioned, the programme includes the upgrades to road and rail infrastructure that are urgently needed in the south-west of Scotland, especially in relation to the A75, A76 and A77.

The Scottish Government understands the important role that the transport network plays in supporting the south-west and wider Scottish economies. It has a good track record of investment in South Scotland. I could mention, of course, the completion of the longest piece of new rail track in the whole United Kingdom for 100 years, which was the Borders railway, elsewhere in South Scotland.

However, further improvements are important to local businesses and communities—the member has made many representations on that issue. That is why we recently commissioned the south-west Scotland transport study. That study will consider the rationale for further improvements on the strategic road and rail corridors throughout the region, with a focus on access to the ports at Cairnryan, and consider the case for change in relation to transport infrastructure investment, which will then form part of the second strategic transport projects review.


Cunninghame North Economy

2. Kenneth Gibson (Cunninghame North) (SNP)

To ask the Scottish Government what steps it is taking to grow the economy of Cunninghame North. (S5O-01948)

The Scottish Government is committed to achieving inclusive economic growth across Scotland, including in Cunninghame North and North Ayrshire. Our enterprise agencies work with local businesses to help them to meet their growth aspirations. Scottish Enterprise currently account manages 150 companies in North Ayrshire, and Highlands and Islands Enterprise is actively engaging with key businesses on Arran and Cumbrae. Last year, Scottish Development International supported 28 companies in North Ayrshire to internationalise and, this year, there has been inward investment worth £1 million to Cunninghame North, which created 10 new jobs and safeguarded 60.

During yesterday’s debate on the Local Government and Communities Committee’s report on city region deals, the Cabinet Secretary for the Economy, Jobs and Fair Work and a number of Ayrshire MSPs, including the member, called for the United Kingdom Government to commit to an Ayrshire growth deal. The Scottish Government has already confirmed that it is fully committed to that deal.

A number of potentially exciting economic developments are being advanced in my constituency. However, some local employers feel that such developments will lead only to some of their skilled workers being enticed away by other businesses. How do we ensure that the skills base is enhanced so that local people benefit from additional employment opportunities and skilled jobs do not just move from one company to another with a marginal impact on unemployment?

In the area of skills, Scottish Enterprise and Skills Development Scotland are active partners in the team North Ayrshire business support model, which provides companies with a co-ordinated approach to their business and skills support. A good investment for any employer is the recruitment of apprentices. Skills Development Scotland has invested £2.3 million in the apprenticeship programme in North Ayrshire in 2016-17, and, at the end of 2017, there were 800 apprentices in training.

We also need to support employers to upskill their existing workforces. We have introduced a pilot flexible workforce development fund and individual training accounts to help people who are in low-paid work or seeking employment to upskill, and we will continue to transform the approach to bringing young people into the workforce through the developing the young workforce initiative. Employers have a big role to play in shaping and responding to that agenda, and yesterday I was delighted to attend an excellent DYW Ayrshire event, where I saw the energy, creativity and enthusiasm of young people in vocational education and of the employers who are responding to the skills challenges that industry faces in North, South and East Ayrshire.

Despite everything that the minister has just said, over the past 10 years, the number of young people in employment in North Ayrshire has dropped from 60 per cent to just 44 per cent, which is the second lowest rate in Scotland. Why is that the case? What will the Government do about it?

We know that the challenges are more substantial in some parts of the country than in others. North Ayrshire has an above average level of areas of multiple deprivation, which brings particular challenges. Jamie Greene could have listened to my previous answer for some of the things that the Government is trying to do, but I will rehearse the answer again. We are piloting our flexible workforce development fund, we have introduced individual training accounts, we are taking forward the developing the young workforce initiative—which in Ayrshire is well ahead of the curve, with some fantastic work there—and we are investing significantly in modern apprentices in the area. Next month, the fair start Scotland project will go live and many unemployed people in North Ayrshire will be able to benefit from its introduction.


Glasgow City Region Deal (Impact on Motherwell and Wishaw)

3. Clare Adamson (Motherwell and Wishaw) (SNP)

To ask the Scottish Government what impact the Glasgow city region deal will bring to Motherwell and Wishaw. (S5O-01949)

The Scottish Government has committed £500 million over 20 years to the Glasgow city region deal to support delivery of a programme of investment to stimulate economic growth and create jobs right across the city region. Three core North Lanarkshire projects have been identified by the Glasgow regional partners for delivery within the first 10 years of the deal, accounting for a total capital investment of around £170 million.

Those projects are progressing and it should be noted that recent efforts to re-scope have resulted in further positive impacts for Clare Adamson’s area, which I am sure that she is aware of, given her work in that area. North Lanarkshire Council secured approval from the Glasgow city region cabinet in December 2017 to widen its existing programme to include the vital infrastructure upgrades that are still required at Ravenscraig.

The new infrastructure will potentially make Ravenscraig one of the most attractive emerging areas for development. Although the improvements will be a few years in the making, in the longer term they will offer real opportunities in the area. What can the Government do to encourage people to look at the potential in Ravenscraig?

The Government remains committed to working with North Lanarkshire Council and other parties on the further development of the Ravenscraig site. On top of the considerable investment that has been made so far to remediate the site and deliver the first phase of improvements, which have totalled about £45 million, Scottish Enterprise has also recently helped to fund a refresh of the master plan for the site—I know that the member is aware of that from the meetings that she has asked for with me and others. The new strategy has taken on board feedback from local residents and it includes thousands of new homes, employment space, which is very important to the member, parkland and two new primary schools. The sheer scale of the Ravenscraig site means that a phased approach will still be necessary, but we expect the revised planning application to be with North Lanarkshire Council in the coming weeks. We will continue to work hard to help to bring those plans to fruition in the years ahead.

The work on Ravenscraig that has been approved by the city deal cabinet is to be applauded, but it is, of course, a new project for the city deal. Does the cabinet secretary agree that the city deal cabinet should say what projects will have to make way for that project? The cabinet should be clearer about its plans.

Clarity and transparency are always a good thing but, as the member knows full well, it is not really for either this Government or the United Kingdom Government to dictate to the Glasgow city deal partners how to conduct their business. As long as the deal complies with the conditions that were applied when the UK Government and the Scottish Government made those funds available, it is for those partners to take it forward.

I think that the member has asked me in the past—quite rightly, and I have acceded to the point—to allow some flexibility for the city deal cabinet to look afresh at some of the projects that it previously approved, not least because that deal was the first of the city deals. The deal was developed some time ago, before city deals had evolved to the extent that they have now—it was much more a list of infrastructure projects.

I know that the member’s view is that one or two of the projects are not ones that he would have supported in his time. There is scope within the flexibility that both the Scottish Government and the UK Government have offered to influence the Glasgow city deal cabinet but it is for the cabinet to make these decisions.


Data Capital of Europe

To ask the Scottish Government what steps it is taking to help Edinburgh to achieve its ambition to become the data capital of Europe. (S5O-01950)

The Scottish Government is investing £300 million in the Edinburgh and south-east Scotland city region, including £60 million towards innovation, as part of a £1.1 billion investment that was announced in July 2017.

Some £300 million of the overall sum is to be invested in world-leading data innovation centres, including the Bayes centre for data, the Edinburgh futures institute and the Usher institute of population health sciences and informatics, to support creation of the data capital of Europe through direct capital investment and the creation of an environment to nurture and attract further innovation and investment.

Knowledge and innovation are key themes and one of our eight Scottish Further and Higher Education Funding Council funded innovation centres, the Data Lab, is taking great strides forward in supporting Scottish Development International’s work in promoting Scotland more generally, and Edinburgh within it, as a natural choice for inward investors in data analytics and informatics.

Edinburgh’s ability to achieve its ambition to become the data capital of Europe will depend on collaboration and co-operation with other countries, and on the ability to attract people with the right skill sets. What impact could Brexit have on Edinburgh’s ability to achieve that ambition if we are outside the single market and there is restriction of movement of people?

Gordon MacDonald has raised an important point. Although no specific assessment has been made of the potential impact of Brexit on the ambition for Edinburgh to become the data capital of Europe, it is vital to Scotland’s economic interests that we are able to attract workers who have the right skills. It is therefore a matter of great concern that leaving the single market and ending free movement of people to the United Kingdom will have a negative impact on our economy, on businesses, and on the individuals and their families who are affected.

The UK Government’s own figures show the negative impact of a stricter immigration policy as being greater than the 0.2 per cent boost to economic growth that, for example, a US trade deal might bring. We continue to believe that Scotland’s interests are best served by European Union membership. Short of continuing membership, the best outcome for jobs and living standards will be that we retain membership of the single market and the customs union.


Fife Economy

To ask the Scottish Government what action it is taking to support the Fife economy. (S5O-01951)

The Scottish Government is committed to supporting inclusive economic growth across Scotland, including in Fife. Fife has benefited from substantial additional investment in infrastructure, regeneration activity and business support, which is helping to create and retain jobs in communities across Fife.

For example, targeted support of £6 million helped to deliver the Fife task force action plan, which has seen investment in locations including Glenrothes. In addition, £2.7 million was awarded to Fife for an enterprise hub, industrial workshops and a subregional business park in Kincardine, to help to foster economic resilience and to benefit communities that have been affected by the early closure of Longannet power station.

However, I recognise that on a number of measures, further progress is needed in order to develop a more robust and resilient economy for the area. I want to reassure Claire Baker that I am engaging with Fife Council and the Fife economic partnership to deliver that.

It has been reported today that Burntisland Fabrications—BiFab—has received a letter of intent from 2-B Energy to develop a two-turbine demonstration that could extend to nine turbines. This is to be warmly welcomed and is testimony to the workforce.

However, concerns remain that a subsidy package that has been offered by the UK Government would require the turbines to be generating electricity by the end of September, which could jeopardise the project. Will the minister join me in calling on the UK Government to extend the deadline? Failing that, what action is the Scottish Government able to take to ensure that the contract can go ahead?

I certainly warmly welcome the fact that the contract is being offered to BiFab, which is a very important company in Fife. We have had many engagements in which we have discussed—as has the Cabinet Secretary for the Economy, Jobs and Fair Work, who has been leading on this issue—how to help BiFab at this time. I reassure Claire Baker that the cabinet secretary has written to the UK Government to stress the importance of allowing flexibility in the financial deadline for installation of the equipment for the 2-B Energy contract.

BiFab has obviously gone through a difficult time as a company, which has been partly triggered by this very issue. We have been calling on the UK Government to show sufficient flexibility. However, I assure Claire Baker that we will do everything that we can to support the company and to develop the technology here in Scotland, and I assure her that that we have supported the project until now.

Is the minister aware that Lower Largo is the birthplace of Alexander Selkirk, who provided the inspiration for Robinson Crusoe? Does he agree with me that there is a huge amount of untapped tourism potential in my constituency, and will he agree to meet me to discuss how repairing and restoring Lower Largo’s historic pier could lead to the economic regeneration of coastal communities in my constituency and the wider Fife economy?

I expect supplementaries to be questions.

I am aware of the issue regarding Lower Largo pier. I had not made the connection with the local hotel, but I now realise why it is called the Crusoe hotel. I make it clear that avenues of funding are potentially available from Historic Environment Scotland; however, the owner of the hotel would have to apply. I will be happy to discuss with Jenny Gilruth any initiatives that we can take to support the wider Fife economy and the tourism sector, for which Fiona Hyslop is, of course, directly responsible as Cabinet Secretary for Culture, Tourism and External Affairs.


Scottish National Investment Bank

To ask the Scottish Government whether the Scottish national investment bank will have the power to refuse to lend to commercially viable businesses that it considers operate against its public-purpose missions. (S5O-01952)

In general terms, it is too early to provide detail on the lending activity of the bank, at this stage. Benny Higgins launched his implementation plan for the Scottish national investment bank on 28 February. The Scottish Cabinet will consider the report and its recommendations over the coming weeks, and will respond in early May. The plan recommends that the Scottish ministers should set the parameters within which the bank should work, by setting a strategic framework that will identify the missions that the bank will need to fulfil. The report also recommends that the bank should be administratively and operationally independent of the Scottish ministers and that it should not just operate to a code of ethics but should go beyond regulatory requirements and adopt a best-practice approach.

I thank the cabinet secretary for his response. Can he give assurances that the bank’s investment strategy will, at the very least, be guided by the strongest of public-interest principles—for example, that it will not lend to high-carbon-polluting industries or companies that use poor workers’ rights practices?

As a caveat to my previous response, I should say that it will be for the Scottish Government, through engagement with the wider population—the mechanisms for which are still to be established—to set the missions for the bank. Examples would include the transition to a low-carbon economy, responding to demographic pressures including an ageing population and promoting place-based inclusive growth across the whole of Scotland.

Ministers will consider the strategic framework under which the bank will operate, and will progress the mission-based approach in the Cabinet in the near future. That will be our process but, beyond that, I make the commitment to Alison Johnstone that we will of course, through the relevant committees of the Parliament and in the chamber, present our proposals and have them questioned by Parliament, as usual.

We will have two quick supplementaries, please.

Can the cabinet secretary confirm what percentage of funding for the Scottish national investment bank will come from financial transactions money?

Dean Lockhart will know, from the Scottish budget, the amount that the Cabinet Secretary for Finance and the Constitution has made available. However, it is a starting position; we are looking beyond that to see what other funding we can get.

As the member knows, financial transactions funding is part of the discretion that the finance secretary currently has, but that is not the limit of our ambitions for the bank, so we are in discussions with Her Majesty’s Treasury to see what might be possible. We would like to see a substantial portfolio of funds being available, some of which will be from financial transactions as Dean Lockhart suggests. I cannot say what the percentage will be until I know the size of the other quantum. We expect to have that in future weeks, and as soon as we have it, I will be happy to let the member know.

The cabinet secretary has already suggested that the Scottish national investment bank will be capitalised by £2 billion over 10 years. If he is now suggesting that the amount will be higher, I welcome it, because Labour’s proposal is, of course, for 10 times that amount. Does the cabinet secretary consider that the Scottish national investment bank is in danger of being undercapitalised, as was suggested by Jim McColl to the Economy, Jobs and Fair Work Committee?

Without question, even with the £2 billion that has been mentioned, the Scottish national investment bank could transform the Scottish economy.

Of course we would like more funding. Long before the Labour Party got on board, we requested from the United Kingdom Treasury, not least through the Scottish Futures Trust, between £5 billion and £7 billion to enable us to take forward major structural changes.

We have to work with the money that we have. We also have to work with the Treasury to ensure, for example, that we can carry forward balances from one year to the next. That is, unfortunately, the reality of the position that we are in, but we will carry on those discussions. There is no lack of ambition from the Scottish Government about what the bank might achieve.