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Chamber and committees

Meeting date: Wednesday, February 7, 2018

Meeting of the Parliament 07 February 2018

Agenda: Portfolio Question Time, Undercover Policing, Single-use Plastics, Business Motions, Parliamentary Bureau Motions, Decision Time, Veterans Charities


Contents


Portfolio Question Time


Economy, Jobs and Fair Work


Financial Services Industries (Support)

1. Joan McAlpine (South Scotland) (SNP)

To ask the Scottish Government what it is doing to support the financial services industries. (S5O-01754)

The Cabinet Secretary for Economy, Jobs and Fair Work (Keith Brown)

Scotland’s financial services sector directly employs 86,000 people across Scotland and delivers 6.5 per cent of Scotland’s gross value added. The Scottish Government works in partnership with the financial services sector through the Financial Services Advisory Board to support the sector’s continued growth. Our development and skills agencies actively engage with the sector and key professional bodies to support development of the sector across Scotland, thereby building on our established global reputation in the industry.

In the programme for government, we committed funding of up to £250,000 to establish FinTech Scotland, which is an independent industry-led organisation that is backed by public, private and academic partners. It will champion, nurture and grow Scotland’s fintech—financial technology—community.

Joan McAlpine

During a recent Culture, Tourism, Europe and External Relations Committee visit to Dublin, representatives of the British Irish Chamber of Commerce explained that financial services firms from the United Kingdom are already putting in place plans to move jobs to Dublin because of uncertainty about the sector post-Brexit. The UK Government has failed to produce a position paper on the sector for its Brexit negotiations, so does the Scottish Government believe that there is a danger to Scotland that we will lose those jobs, and that there is also a missed opportunity, in that if we were still in the single market, we would be well placed to attract such jobs?

Keith Brown

I fully agree with Joan McAlpine. It is interesting that we are now seeing comments about passporting no longer being an option in the financial sector. The sector deemed passporting to be absolutely critical to its continued ability to thrive in a Brexit environment.

Of course, the UK Government should have produced a detailed proposal on the UK’s future relationship with the European Union and the implications for the financial sector. We see other countries in the EU quite happily being predators in respect of businesses in the UK. Financial firms are, of course, already planning for the future, but in the absence of any certainty or analysis by the UK Government, they have to base their arrangements on the worst-case scenario, which is a hard Brexit.

Continued uncertainty about the UK Government’s negotiating position risks jobs and future investment in the financial services sector in Scotland and across the UK. It is not just the Scottish Government that is saying that; every business organisation and every economic think tank says it. I think that British Chambers of Commerce, too, has said that today. The only people who do not say it are, of course, the Scottish Conservatives.

Dean Lockhart (Mid Scotland and Fife) (Con)

According to the latest available figures, Scotland’s finance and insurance trade with the rest of the UK represents 83 per cent of all the sector’s business and is worth 20 times the value of Scotland’s finance and insurance trade with the EU single market. What steps is the cabinet secretary taking to help the sector in Scotland to protect and expand its market with the rest of the UK single market?

Keith Brown

In my response to Joan McAlpine’s first question, I laid out some of the things that we are doing. I mentioned FiSAB, which the First Minister jointly chairs with the industry, and which Paul Wheelhouse and I attend. As Dean Lockhart suggested, many of the organisations have a UK presence, as well. A great deal is being done that is common to both areas, but there is also the question of the different perspective and demographic of the financial sector in Scotland, which people in FiSAB talk about.

Dean Lockhart mentioned funds that are looked after in Scotland. The strength of the global custody of funds and asset management in the Scottish economy in particular involves a perspective that is different from that of elements of the financial sector in London. However, the sector is hugely important. By some measures, it is the second biggest in the EU and is even greater than Frankfurt’s.

Of course there is substantial business with the rest of the UK, and nothing that the First Minister, Paul Wheelhouse or I have said suggests that we should do anything other than try to grow that business. We realise how important it is. It is not we who are looking to be isolationist and to cut ourselves off from markets. We will continue to do the work that we can do to grow our work and business with the rest of the UK and the rest of the EU. That is why it is vital that we stay within the European single market.


Trade Hubs (Berlin and Brussels)

2. Rachael Hamilton (Ettrick, Roxburgh and Berwickshire) (Con)

To ask the Scottish Government when the Berlin and Brussels trade hubs are expected to open. (S5O-01755)

The Cabinet Secretary for Economy, Jobs and Fair Work (Keith Brown)

The Scottish Government has committed to establishing innovation and investment hubs in Dublin, London, Brussels, Berlin and Paris as an integral part of wider work across the Scottish Government with our partners and businesses, in order to support trade, investment, innovation and intergovernmental relations.

The newly established Berlin hub, which is located close to the Reichstag, is already operational and recently recruited its first member of staff from Scottish Development International. The early focus for the Berlin hub will be to identify early priorities, build networks and establish key relationships.

Our operation in Brussels is in the process of transitioning into a hub from our existing presence: Scotland Europa has been operating for more than 25 years and the Scottish Government European Union office has been there since 1999. That transition should be completed by the summer and will include a representative of SDI.

Rachael Hamilton

The 2016 Scottish National Party programme for government said that opening of the Berlin and Brussels trade hubs is critical to Scotland’s economy. They were announced way back in October 2016. The 2017 programme for government even stated that the Berlin hub would be open in 2017. The cabinet secretary has outlined some processing that is on the way to getting the hubs open, but we have not seen action. We want action, because it is important that the hubs are open. We want to see performance targets: currently they do not exist for the hubs in Berlin and Paris, which are not yet functionally operational. Can the cabinet secretary give us some more detail on the hubs, please?

Keith Brown

Perhaps Rachael Hamilton should have listened to the detail that I already provided. She just said that the hubs are “not ... functionally operational”. My first answer said that the Berlin hub “is already operational”. I do not know how much more explicit than that I can be. It is operational and has recruited its first member of staff. That builds on the work that is already being done through our presence in Düsseldorf and the work that was done when I visited Berlin last year.

In Brussels, there is a transitional arrangement because we have an existing presence in Brussels. We are building on that, which is the rational thing to do.

I think that this is the first time that a question has been asked—certainly by the Conservatives—about performance measures for the hubs. I am perfectly willing to get into that discussion.

However, we have done that—and we have done so in the teeth of substantial opposition from some people. That is important in the context of Brexit. The question that is never asked by the Conservatives is what the impact of Brexit will be on Scotland. The reason why we are doing this, and building our presence not just in the EU but in Canada and other parts of the world, is in part the challenge that is posed by Brexit—a challenge that at least one Conservative in Parliament should acknowledge.

Tom Arthur (Renfrewshire South) (SNP)

This week, in an attempt to pacify the hard-line Brexiteers in her own party, the Prime Minister ruled out membership of the customs union. I have already raised in Parliament the importance of the customs union for musicians from Scotland and elsewhere across the United Kingdom. Can the cabinet secretary state what impact he thinks leaving the customs union will have on Scottish businesses and on trade with European Union countries?

Keith Brown

We think that being outside the customs union will create barriers to trade for businesses in Scotland and, indeed, across the UK. We have consistently made the case that maintaining our membership of both the single market and the customs union is essential to the prosperity of Scottish firms and the Scottish economy. In the document, “Scotland’s Place in Europe: People, Jobs and Investment”, which we published last month, we demonstrated that Brexit will significantly weaken our economy. We have carried out and published analysis: apparently, the UK Government has done some analysis, but it does not want to publish it or tell anyone about it—yet we get a lecture from Conservative members about transparency. We have done the work and published it. It is about time the UK Government did the same.

The Presiding Officer (Ken Macintosh)

Question 3 has been withdrawn.


Cupar North Relief Road (Funding)

4. Willie Rennie (North East Fife) (LD)

To ask the Scottish Government whether the Cupar north relief road will be funded through the Tay cities deal. (S5O-01757)

The Cabinet Secretary for Economy, Jobs and Fair Work (Keith Brown)

The Scottish Government is committed to securing a city region deal for the Tay cities as soon as possible, and we are currently considering all proposals and fully exploring all financing and funding options. A proposal to accelerate the Cupar northern bypass project is one of those put forward by the Tay cities, but it is not possible, at this stage, for me to confirm details of which projects may or may not be included as part of the final deal.

Willie Rennie

The Tay cities deal aims to create a smarter and fairer region with innovation to create sustainable growth. I was surprised that the Cupar north relief road was put forward as part of the Tay cities deal, especially when the planning permission specified that the consortium of house builders should build that road. Why is the state even considering bailing out house builders to build a bypass? If that proposal comes before the cabinet secretary, will he rule it out?

Keith Brown

Willie Rennie asked why we are considering that proposal. I said in my first response that we are considering it because it is a project and proposal that has come from the relevant local partner—the local authority—and that is the basis of city deals. Neither we nor the United Kingdom Government decide which projects come forward; we decide which to support, which is perfectly legitimate. The whole virtue of city deals is that the projects come from local partners. I do not know whether Willie Rennie is saying that we should rule projects out at the very early stage of a city deal or before we come to a conclusion. I think that I am right in concluding that Willie Rennie does not like that project.

I do not know whether Willie Rennie’s concerns are related to the planning application, but, if that is a concern, I make the point that nothing that we agree in a city deal takes away the need for local partners, especially local authorities, to follow whatever statutory processes are involved.

It is also worth saying for Willie Rennie’s benefit that sometimes there are other ways to fund things, if that is what is desired, including the application that he referred to. For example, when I was the housing minister, back in 2011, we established a housing infrastructure loan fund to help with infrastructure that was related to developments. I have asked officials to ensure that they look at all options for any proposals that come forward from local authorities that might unlock further development. The city deal will be concluded when the local partners, the Scottish Government and the UK Government are ready to conclude it.

Alexander Stewart (Mid Scotland and Fife) (Con)

The Tay cities deal is a fantastic opportunity to bring vital investment into the area and to drive economic growth. Will the cabinet secretary provide an update on how talks are progressing? Does he agree that it is an excellent example of the benefits that are brought by co-operation between the UK and Scottish Governments?

Keith Brown

When I receive letters such as the one that I received from Alexander Stewart and his Conservative colleagues this week, I sometimes wonder about that co-operation. We are trying to work closely with the UK Government on the matter. When I and Lord Duncan appeared before the Local Government and Communities Committee, it was the first time that ministers from both Governments had appeared together before a Scottish Parliament committee. If members look at the Official Report of that meeting, they will see that a substantial degree of joint working is going on, which we are trying to continue. Unravelling the deals in advance by making announcements, which is what Alexander Stewart asked me to do in the letter that he sent, would be disruptive to that joint working.

It is true that we very much value the fact that local authorities and partners come forward with proposals and that the Scottish and UK Governments jointly consider and announce which of the proposals we can take forward. It is a valuable process, but we should observe the interests of the different parties that are involved in it.


Automation and Artificial Intelligence (Employment Opportunities)

5. Bill Bowman (North East Scotland) (Con)

To ask the Scottish Government what action it is taking to ensure that an increasing use of automation and artificial intelligence over the next decade will increase employment opportunities in Scotland. (S5O-01758)

The Minister for Employability and Training (Jamie Hepburn)

The Scottish Government recognises the importance of emerging technologies and how they will influence the future labour market. That is why I published our labour market strategy in August 2016 and why we established the strategic labour market group to provide advice on a range of matters, including automation and artificial intelligence.

In Scotland, we have record levels of employment and a highly skilled workforce, and we continue to encourage people to pursue science, technology, engineering and mathematics careers through careers advice and guidance in schools and the developing the young workforce programme. Through the enterprise and skills strategic board, we are working to ensure that the planning and commissioning of our annual £2 billion investment in skills is better co-ordinated and more responsive.

We continue to support businesses to take advantage of new technologies and to advance their ability to integrate with data and digital. We are investing £48 million in the national manufacturing institute for Scotland, and we are providing support for innovation centres such as CENSIS—the centre of excellence for sensor and imaging systems—and the Data Lab.

Bill Bowman

According to a recent report, almost a quarter of jobs in Dundee could be lost to automation by 2030. At 64.1 per cent, Dundee’s employment rate is already well below the average, and Dundee has the lowest employment rate of any city in the United Kingdom. An extra 10,000 jobs are needed just to put Dundee on a par with the rest of Britain. How will the minister create those 10,000 jobs? How many jobs has the Scottish Government created in Dundee since coming to power?

Jamie Hepburn

I know the report that Bill Bowman refers to, and I recognise what it says about the potential impact of the increased utilisation of automation. Of course, there are other reports that provide different assessments.

That said, I recognise that a lot of good things are happening in Dundee right now. When I am there, I am pleased to see the investment that is being made and the regeneration, particularly of the waterfront, that is driving an increase in jobs growth. Indeed, the report that Mr Bowman referred to highlights that Dundee has one of the strongest growth rates for private sector jobs. Just a few moments ago, we heard from the cabinet secretary about our commitment to progress the Tay cities regional deal as soon as possible. We are making every effort to ensure that Dundee continues to benefit from this Government’s efforts to give people in Scotland the chance to get into the labour market.

Ivan McKee (Glasgow Provan) (SNP)

Self-drive automated vehicles are a specific technology that will have a significant impact on employment profiles, opportunities for industrial innovation and many other areas of public policy including planning, housing and environmental, energy and regulatory policy. As the parliamentary liaison officer for the economy, I take a particular interest in that area. What work is the Scottish Government planning to prepare Scotland for that rapidly approaching technological revolution?

Jamie Hepburn

I assure Ivan McKee that I take an interest in the matter as well. It is critical that our workforce is adaptable, ready and responsive to changes in our economy and our labour market, as is likely to be the case through automation, and that we stand ready to benefit from opportunities by making sure that we are not just a consumer of new products and innovations but an inventor and producer of them. That is why we are taking forward developments such as the national manufacturing institute for Scotland, which I have referred to, and why we have supported innovation in Scotland by increasing support for research and development. Grant funding will increase by a total of £45 million over the next three years, which is an increase of almost 70 per cent.

Jackie Baillie (Dumbarton) (Lab)

I am sure that the minister will join me in welcoming the opportunity that is presented by automation, but there are understandable concerns about potential job losses—about 230,000 Scottish jobs were identified as being at risk by the “Cities Outlook 2018” report. I ask the cabinet secretary: what specific forward planning has the Scottish Government done, beyond the list that he has read out? We will be reassured if he is working with businesses on that specific issue to mitigate job losses and create high-skilled, highly paid jobs for the people who may be displaced.

Jamie Hepburn

Jackie Baillie may have asked the cabinet secretary, but I will answer the question, if she does not mind.

I recognise the points that she has made and I hope that the answers that I have given thus far give a sense of the importance that we attach to that area. I have referred to the fact that our labour market strategy explicitly recognises the challenges that automation may bring. That is why we have established the strategic labour market group, which includes many representatives from industry who are willing to engage and discuss with anyone their perspectives on those matters.

We need a workforce that is adaptable, flexible and ready to respond to the challenging opportunities that are ahead. We are taking that work forward through initiatives such as our developing the young workforce strategy and the strategy for science, technology, engineering and mathematics that we have laid out. We will continue in that work.

Kenneth Gibson (Cunninghame North) (SNP)

The physicist Stephen Hawking has said that the emergence of artificial intelligence could be

“the worst event in the history of our civilisation”.

Professor Kevin Warwick of Coventry University has tested network AI systems that cannot be switched off if they go rogue, which would be a particular problem for military applications for which AI is currently being developed. The Tesla car maker and space pioneer Elon Musk has asserted that AI is

“as big a threat to humanity as climate change or nuclear war”.

Those views may well be alarmist, but what safeguards are being developed with regard to artificial intelligence here in Scotland?

Jamie Hepburn

Far be it from me to disagree with Stephen Hawking, but Kenneth Gibson is correct in saying that those views may be somewhat alarmist. However, I recognise that concern and it is incumbent on us not only to consider the potential impact on the labour market but to hear those concerns. We will work in conjunction with industry and academia to gain a full understanding of future technologies and to make informed judgments about the move to greater automation in the labour market and the introduction of artificial intelligence.


Hard Brexit (Impact on Economy)

6. Ash Denham (Edinburgh Eastern) (SNP)

To ask the Scottish Government what impact a hard Brexit will have on the Scottish economy. (S5O-01759)

The Cabinet Secretary for Economy, Jobs and Fair Work (Keith Brown)

On 15 January 2018, the Scottish Government published “Scotland’s Place in Europe: People, Jobs and Investment”, which assesses the implications for Scotland’s economy if the United Kingdom exits the European Union. The analysis in that document indicates that a hard Brexit could lead to a loss of up to 8.5 per cent of gross domestic product in Scotland, or £12.7 billion in 2016 terms, by 2030. That is equivalent to £2,300 per individual.

Outside the EU, continued membership of the European single market and customs union is the least worst option for Scotland and the rest of the UK. As we move into the crucial second phase of the negotiations, it is time for the UK Government to start putting jobs and living standards first.

Ash Denham

What is the Scottish Government’s reaction to Downing Street’s statement that the UK is categorically leaving the customs union?

Keith Brown

On the one hand, it shows utter disrespect to the devolved Administrations, which, by all conventions, should have been involved in discussions before such a statement was made. Being outside the customs union will create barriers to trade for businesses across the UK. That is why the Scottish Government has consistently made the case that maintaining our membership of the European single market and the customs union is essential to the prosperity of Scottish firms and the Scottish economy.

I thank Ash Denham for asking the question in the first place. It is a question that we will never hear from the Conservatives, or indeed from Richard Leonard, although we might hear it from Jackie Baillie on occasion.


Finance and the Constitution

The Presiding Officer

Question 1 has been withdrawn.


European Union Continuity Bill

2. Patrick Harvie (Glasgow) (Green)

To ask the Scottish Government what would be involved in an EU continuity bill, in the event that the Parliament does not give legislative consent to the European Union (Withdrawal) Bill. (S5O-01765)

The Deputy First Minister and Cabinet Secretary for Education and Skills (John Swinney)

All parties in Parliament have agreed with the Finance and Constitution Committee that the European Union (Withdrawal) Bill is incompatible with the devolution settlement in Scotland and with the committee’s conclusion that Parliament should not give legislative consent to that bill as currently drafted. In those circumstances, the Government has a responsibility to prepare so that, under any scenario, there is a legislative framework in place for protecting Scotland’s system of laws from the disruption of the UK’s withdrawal from the EU. Michael Russell and Joe FitzPatrick set out those plans in their letter to the Presiding Officer of 10 January.

Patrick Harvie

I note the Scottish Government’s openness to the possibility that agreement can be reached on changes to the European Union (Withdrawal) Bill, however unlikely that prospect seems to be. However, Michael Russell, the minister responsible, has told the Finance and Constitution Committee that a continuity bill has already been drafted and given to the Presiding Officer. It is clearly not possible for that bill to be published until the Presiding Officer has made a ruling. If we are to take seriously Mr Russell’s commitment to maximum scrutiny, surely the Scottish Government could publish at least a discussion paper on the possible contents of such a bill, given that we are not going to be able to have any kind of meaningful public consultation on such a huge and far-reaching piece of legislation as the withdrawal bill.

John Swinney

I am sure that Mr Harvie will understand that the Government has to follow the arrangements put in place by Parliament for the Presiding Officer’s proper consideration of bills, and that is exactly what we have done in these circumstances.

To help Mr Harvie in relation to the contents of the continuity bill, Mr Russell has set out clearly to the committee the provisions that would be necessary in such a bill. As I said in my original answer, they would seek to put a framework in place to protect our system of laws from disruption as a consequence of the UK’s withdrawal from the European Union.

We will consider Mr Harvie’s point about any dialogue. Mr Russell has made it clear to the committee that the Government wants there to be maximum possible scrutiny of the bill in the circumstances that prevail. We will have to consider that point in the context of the wider discussions that we have with the UK Government around the amendment to the European Union (Withdrawal) Bill.

Adam Tomkins (Glasgow) (Con)

I thank Patrick Harvie for bringing this matter to the attention of the chamber. It is an exceptionally important one.

Given that the United Kingdom Government has repeatedly committed to amend the European Union (Withdrawal) Bill to meet the concerns of the Scottish and Welsh Governments—concerns that the Scottish Conservatives have shared—and given that negotiations between the United Kingdom Government and the devolved Administrations on this matter are proceeding and are making progress, does the cabinet secretary not agree that introducing a continuity bill in this Parliament at the moment would be unnecessary, premature and unwise?

John Swinney

I encourage Mr Tomkins to reflect on the circumstances and scenario that I put to Parliament in my original answer to Mr Harvie. I said that, as things stand—and Mr Tomkins is a signatory to this—the Finance and Constitution Committee has indicated that it cannot give legislative consent to the European Union (Withdrawal) Bill.

I am party to the negotiations with the United Kingdom Government, and I have to say that I have a less optimistic assessment of where we are than the one that Mr Tomkins has given to Parliament today. Mr Tomkins will know that I am very familiar with negotiations with the United Kingdom Government and with coming to agreements on such points, and I am far from optimistic about where we are placed.

In such circumstances, the Government in Scotland has a duty to make the arrangements that we have made. We are not doing anything prematurely. We are doing things to ensure that we can have a protective framework of stability around legislation in Scotland if we are unable to give legislative consent to the bill. As things stand, the Scottish Government remains unable to give legislative consent to the European Union (Withdrawal) Bill.

Bruce Crawford (Stirling) (SNP)

I am also grateful to Patrick Harvie for asking his question today. Does the cabinet secretary agree that the ball is in the court of the United Kingdom Government to respond in the way that the Welsh and Scottish Governments and Parliaments, and indeed the Conservative Party and the Labour Party in this Parliament, want it to respond?

Does the cabinet secretary also agree that this is quite a clear issue to be resolved—either people believe in the devolution settlement or they do not—and that it is time that the UK Government expressed in a proper way that it believes in that settlement?

John Swinney

The very sharp issue that we are confronting is whether the European Union (Withdrawal) Bill will be compatible with the devolved settlement. That is the hard test that must be resolved by the negotiations in which we are currently involved.

That view has been expressed very powerfully in the House of Lords by Lord Hope, who has given a very clear assessment of the legislative difficulties that this Parliament would face in signing up to the European Union (Withdrawal) Bill as it is currently constituted. He has given to the United Kingdom Government a very clear direction as to what amendment has to be made to make the bill compatible with the devolved settlement.

I agree with Mr Crawford that that is the sharp issue that the UK Government has to resolve, because however much we might wish to get to a point of agreement, we cannot get to an agreement that jeopardises the integrity of the devolved settlement, which was legislated for in 1998, was subsequently amended and has served this country well.


Scottish Growth Scheme

3. Liam Kerr (North East Scotland) (Con)

To ask the Scottish Government how much financial assistance has been given to businesses through the Scottish growth scheme, and whether this was in the form of loans, guarantees, equity or another form of assistance. (S5O-01766)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

Under the Scottish growth scheme, Scottish Enterprise continues to assist companies that are looking to secure investment from the Scottish European growth co-investment programme.

In the meantime, a total of £25.7 million in equity funding has been agreed and invested in 28 companies under the new and additional resources that have been provided to the existing small and medium-sized enterprises holding fund. We expect to utilise further European structural funds to expand and enhance the SME holding fund under the Scottish growth scheme in 2018. That funding will support microfinance, debt and equity investment.

Liam Kerr

When the Scottish National Party Government unveiled the Scottish growth scheme 18 months ago, it was hailed as a £500 million vote of confidence in the Scottish economy, which was to be made up of loans and guarantees. The scheme is now in the form of equity sold by business, and only a fraction of the £500 million assistance has been made available to businesses in Scotland. Will the cabinet secretary confirm when the balance of the £500 million will be made available?

Derek Mackay

In fairness, that commitment was made to provide support that would be spent over a number of years. Some deals will take time to conclude, because investor collaboration will be required as well. It is not simply a case of people applying for half a billion pounds’ worth of support, although the commitment is absolutely still there.

We have been able to be quite adept in adapting some of the support around what is required in relation to commercial financing. I have worked with the banks and the British Business Bank on that, to ensure that we can provide additionality rather than substitute finance. In that regard, we have worked with other partners and the enterprise agency to ensure that there is a range of support so that we can absolutely deliver on that financial commitment. It will involve a variety of measures, from equity to loans and guarantees. We had envisaged more use of guarantees, but there seems to be more interest around other areas.

That said, we are, of course, progressing the plans around the Scottish national investment bank and other new measures that will enable us to support businesses. My colleague Keith Brown and his ministerial colleagues will enjoy the 64 per cent uplift in the economy portfolio in terms of spending and use of financial transactions.

I say again that some of these deals will take some time to crystallise, as other investors are involved. However, the support is there, and we will work very hard to promote the range of schemes under that umbrella so that we can support our commercial and business community.


Budget (Contribution to Tackling Child Poverty)

4. Elaine Smith (Central Scotland) (Lab)

To ask the Scottish Government what discussions the finance secretary has had with the Cabinet Secretary for Communities, Social Security and Equalities regarding how the 2018-19 budget can contribute to tackling child poverty. (S5O-01767)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

I meet all members of the Cabinet regularly to discuss how best to use the budget to deliver the Scottish Government’s priorities of tackling inequalities and creating a prosperous and fairer Scotland.

The draft budget sets out a number of measures to tackle child poverty, which include establishing a £50 million tackling child poverty fund; £8 million to fund the baby box; investment of £243 million towards providing expanded childcare; and supporting local authorities through, for example, the attainment Scotland fund, as part of our £750 million commitment to attainment over this session of Parliament. There is further housing investment, as well. The first delivery plan due under the Child Poverty (Scotland) Act 2017, which is to be published by April, will set out a range of action that will be taken in this session to make progress towards our ambitious targets to reduce child poverty.

Elaine Smith

Is the cabinet secretary aware of the findings of the Child Poverty Action Group that tell us that raising child benefit by £5 a week, which Scottish Labour supports, would lift 30,000 children out of poverty? Since the Scottish Government has not included plans to do that in its 2018-19 budget, how specifically is the Scottish Government going to lift 30,000 children out of poverty?

Derek Mackay

I thought that I had set out in my first answer some of the actions that we are taking in that regard. Further to that, there will be another £100 million of welfare mitigation. I hear the point that is made about top-ups to child benefit. We have asked the poverty and inequality commission to provide advice on the suitability and sustainability of using the power to do that. As it stands, the policy is estimated to cost around £250 million every year and, as we understand it, only £3 out of every £10 would go to households that are in poverty. That is exactly why we have asked for more information on that policy and for it to be explored.

I do not think that a member of the Labour Party can talk with any credibility about an alternative budget when we realise that its revenue-raising proposals would not raise the revenue suggested.


Income Tax Increase (North Ayrshire)

5. Jamie Greene (West Scotland) (Con)

To ask the Scottish Government how many people in North Ayrshire will see their income tax increase in 2018-19. (S5O-01768)

The Cabinet Secretary for Finance and the Constitution (Derek Mackay)

Scottish income tax data and forecasts are not produced for local authority areas. Overall, however, 70 per cent of Scottish taxpayers will pay less income tax in 2018-19 than they did this year, for a given income. Nobody earning less than £33,000 will pay more income tax next year.

Jamie Greene

In the absence of any answer, perhaps I can help the cabinet secretary out. Analysis of his tax plans shows that up to 24,000 hard-working people in North Ayrshire will see their income tax rise this year. Contrary to what the First Minister said last week, they are far from Scotland’s richest and wealthiest. In fact, many will be deeply disappointed by this. Given that local Scottish National Party constituency MSPs were elected in 2016 on a specific manifesto promise not to increase income tax, do the cabinet secretary and his colleagues owe people an apology for breaking that promise?

Derek Mackay

We will invest more in public services, and we will turn a Tory real-terms cut to resource budgets into growth—including growth for the health service. Jamie Greene is one of those politicians who consistently demand that more money be spent in their regions but who want to raise less at the same time. Incidentally, the median salary in North Ayrshire is £23,352, which shows that—just as in the rest of the country—the majority of taxpayers there will pay less, not more, under the tax plans that I have proposed. Some of the money from the tax changes will be invested in local government. Overall, local government nationwide will benefit from the deal with the Greens to the tune of £150 million. North Ayrshire, which the member mentioned, will get £4.2 million extra, and that was opposed by Jamie Greene.

Ivan McKee (Glasgow Provan) (SNP)

I was going to ask the cabinet secretary how many people in my constituency of Glasgow Provan will see their income tax reduced as a consequence of the budget, but clearly we do not have the data available at constituency level. However, I expect that there will be far more winners than losers. Does the cabinet secretary agree that injecting cash into lower-income households will have a far greater economic multiplier effect as a consequence of such households having a higher propensity to consume, thus helping to grow the Scottish economy?

Derek Mackay

I agree. The Scottish Fiscal Commission has provided evidence on that, and we also produced modelling for the discussion paper last year, so I think that that is correct. Incidentally, the issue with data is not the Scottish Government’s doing. Her Majesty’s Revenue and Customs collects income tax in Scotland, so if members want to see data enhancements, it will be for HMRC to provide analysis by either constituency or local authority.

James Kelly (Glasgow) (Lab)

Figures from the recent end child poverty coalition report reveal that, in North Ayrshire, nearly 30 per cent of children live in poverty, with the figure being as high as 36 per cent in the Irvine West ward. Does the cabinet secretary agree that such figures are unacceptable? Rather than rhyming off a list of excuses as to why he cannot take action on child benefit, should he not seriously look at how to use the powers of the Parliament to alleviate those concerning figures?

Derek Mackay

No, I do not think that those levels of poverty are acceptable, which is why we are taking a range of actions to tackle them. We could do even more if we had welfare powers that we do not have. The Labour Party was not particularly supportive of getting those powers over the decades in which it had the opportunity to do so.

I say again that the alternative budget that was put forward by the Labour Party is totally incredible. It does not stack up, it does not raise revenue and it calls on us to use powers and mechanisms that are not currently in place. Let us unite around tackling poverty, but let us do so in a credible way, which is exactly what the Government proposes to do.


Brexit Final Terms (Referendum)

6. Alex Cole-Hamilton (Edinburgh Western) (LD)

To ask the Scottish Government what its response is to the recent Guardian/ICM survey, which suggests that 69 per cent of people in Scotland support a referendum on the final terms of Brexit. (S5O-01769)

The Deputy First Minister and Cabinet Secretary for Education and Skills (John Swinney)

The Guardian/ICM survey provides further evidence that most voters in Scotland want to remain in the European Union. The Scottish Government recognises the arguments in favour of a second EU referendum, although it is not currently Government policy. The Scottish Government believes that it is vital that devolved Administrations are involved in the negotiations between the United Kingdom and the EU to ensure that the interests of Scotland are protected.

Alex Cole-Hamilton

For 18 months, I have heard the Scottish Government demand that the democratic will of nearly 70 per cent of the people of this country be recognised in the conduct of Brexit negotiations, yet it is completely silent in representing the views of the nearly 70 per cent of Scots who now support a referendum on the final terms of a Brexit deal. Does the cabinet secretary accept that, for every day that goes by when his Government refuses to join calls for a referendum on the final deal, a day is lost in efforts to offer the British people the opportunity to reverse one of the most calamitous decisions in the history of these islands?

John Swinney

I agree with Mr Cole-Hamilton about the calamitous nature of the EU exit decision. The Scottish Government is working very hard to try to influence the decisions that are taken by the UK Government on its negotiating position in that respect. There are two important dimensions to that. The first has been the evidence and arguments that the Scottish Government has marshalled to support continued membership of the single market and the customs union, for which, in my opinion, it has made an unanswerable case that has been cast aside by the illogical decisions of the UK Government.

Secondly, we have been trying to ensure that the UK Government fulfils the commitment that it made in the establishment of the joint ministerial committee on European Union negotiations that the devolved Administrations would be actively involved in the negotiation of the UK position. That has not happened and, indeed, UK ministers will be meeting today to try to arrive at a final UK position. Not just the Scottish Government but the devolved Administrations as a whole have not been involved in the process. If the UK Government wants to be taken seriously about the conduct of the negotiations, it should respect the agreements that it has signed up to and ensure that the devolved Administrations are fully involved.