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Chamber and committees

Meeting date: Wednesday, February 8, 2017

Meeting of the Parliament 08 February 2017

Agenda: Portfolio Question Time, Jobcentre Plus Network, Business Motion, Parliamentary Bureau Motions, Decision Time, Trident (Case for Non-renewal)


Contents


Portfolio Question Time


Economy, Jobs and Fair Work


Economic Performance

1. Annie Wells (Glasgow) (Con)

To ask the Scottish Government how it measures economic performance. (S5O-00639)

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

The Scottish Government uses the national performance framework and Scotland performs to help to monitor and assess Scotland’s overall economic performance. Those contain indicators that assess Scotland’s performance across a number of dimensions, including economic growth, productivity and participation in the labour market.

The Scottish Government is committed to improving Scotland’s economic performance. Scotland’s economic strategy sets out our framework for doing so, based on the twin objectives of boosting competitiveness and tackling inequality.

Annie Wells

In its latest Scotland performs document, which was published alongside the draft budget, the Scottish Government was found to be stagnating or getting worse in 46 out of the 47 key indicators that it set itself. Does the cabinet secretary consider that to be a success? If not, can he explain to members the reasons for the abysmal performance?

Keith Brown

It is nice to hear the Conservatives talking so positively, as always, about Scotland’s economy. Annie Wells could have pointed out that the employment rate of 73.6 per cent for quarter 3 of 2016 was the second-highest across all United Kingdom countries. She could also have pointed out that the total income that was received by Scottish households increased over that period. The ratio of the income of the top 10 per cent compared to that of the bottom 40 per cent increased from 112 to 115. She could have pointed out, too, that the gender pay gap was 6.2 per cent, which is a decrease of 1.48 percentage points, or she could even have pointed out that the value of Scottish exports increased by 3.6 per cent over that for 2014. That was an increase of 4.4 per cent in relation to exports to the rest of the UK and 4.4 per cent in relation to the rest of the European Union—and there was a 3.4 per cent increase in those to elsewhere. Those are very positive figures, but I acknowledge that there are others that are challenging.

However, it is only fair to recognise two important facts. First, there are positive figures and, secondly, another Government is active in the Scottish economy. We have heard for a long time from the Conservatives that we must use the new powers that we are getting, but the UK Government had those powers before we did. What did it to do with them?

Jackie Baillie (Dumbarton) (Lab)

I will focus on one target that the Scottish Government has adopted, which is that productivity should move from the third quartile to the first quartile by 2017 compared to other Organisation for Economic Co-operation and Development countries. I understand that that target has been missed, that we remain in the third quartile and that we have fallen from 18th to 19th place. Why has the Scottish Government failed to meet that target?

Keith Brown

What Jackie Baillie said is perfectly true in that we have remained in the third quartile and have not gone into the first quartile. I have mentioned that a number of times in the chamber, in particular in relation to the review that we are currently conducting of our enterprise and skills organisations However, it would have been useful if Jackie Baillie had acknowledged that there has been a 4.4 per cent increase in productivity in Scotland but no increase whatsoever in the rest of the UK.

Missing the target is not good enough and, in such a circumstance, we have to look at what we are currently doing. That is exactly what we are doing in our review of the enterprise and skills agencies and in relation to the £500 million Scottish growth scheme that will help to drive increased productivity, competitiveness and internationalisation.


Marine Energy Development

2. Ben Macpherson (Edinburgh Northern and Leith) (SNP)

To ask the Scottish Government what action it is taking to assist marine energy developers. (S5O-00640)

The Minister for Business, Innovation and Energy (Paul Wheelhouse)

The Scottish Government and its enterprise agencies continue to offer significant support to the marine energy sector in Scotland. The renewable energy investment fund and wave energy Scotland initiatives alone have so far provided £57 million to wave and tidal projects.

The decision by the UK Government in November 2016 that it would not be providing ring-fenced support for wave and tidal technologies in the second contracts for difference allocation round came as a blow to many marine energy developers. Following the announcement, I convened a round-table discussion with industry representatives and UK Government officials, to understand industry priorities. I reiterated the Scottish Government’s strong commitment to the development of a successful marine energy industry and to maintaining our current global lead.

Scottish ministers will continue to use the powers that we have to support the growth of the sector, and we are willing to work with the UK Government and industry to explore possible solutions. I have proposed that Scotland hosts a new working group to replace the UK Government’s defunct marine energy programme board, in order to find a way forward. Work is currently under way to agree the remit, membership and terms of reference of the new group.

Ben Macpherson

I share the minister’s concerns about the UK Government’s CFD allocations. The minister is aware of Nova Innovation in my constituency. Could the minister update me on the assistance that the Scottish Government is providing to find a site for the deployment of Nova Innovation’s next phase of world-leading tidal energy devices, which will provide numerous employment opportunities and contribute significantly to our having a low-carbon economy by 2050?

Paul Wheelhouse

I recognise that Nova Innovation is a very forward-thinking company that has done excellent work of late, and has had a successful year. I understand the technical parameters of the site that Nova Innovation is looking for, but for reasons of commercial confidentiality, I will not go into detail here. An enhanced account team approach is being used to engage with Nova Innovation. That approach pulls together the perspectives of Scottish Enterprise’s company growth and REIF—renewable energy investment fund—teams and Highlands and Islands Enterprise’s water team.

There is a proposal by SE and HIE to review all the available sites that can accommodate wave and tidal projects up to 2022, which will include currently owned sites and potential smaller-scale community sites. A meeting was arranged with officials to discuss that with the Crown Estate on 1 February but, due to illness of one of the attendees, the meeting will take place on Monday 13 February.

Maurice Golden (West Scotland) (Con)

Scottish Enterprise lost more than £30 million of public funding when two wave power companies went into liquidation. What steps has the Scottish National Party Government taken to ensure that lessons were learned and that investment in wave power delivers good value for money?

Paul Wheelhouse

I recognise Maurice Golden’s genuine interest in the issue, but it is somewhat rich of him to ask that because the UK Government is responsible for some of the parlous conditions that the wave-energy sector has faced in Scotland. If he is sincere in his wishes, and I believe that he is, he needs to make representations to UK ministers, and to follow the Scottish Government’s lead in urging Greg Clark to provide a route to market and sincere support for our wave and tidal energy. Only the Scottish Government is stepping in to help that industry at the moment; the UK Government is doing next to nothing to support a vital industry for our islands.

Liam McArthur (Orkney Islands) (LD)

I would echo much of the sentiment that the minister expressed. In relation to supporting innovation, has there been any progress in discussions with the UK Government about setting up a CFD pot for innovation, including for wave and tidal power, but perhaps also for storage technologies that could benefit from support at this critical time?

Paul Wheelhouse

I know that Liam McArthur has a strong and long-standing interest in that issue, which severely affects his constituency. We are in continuing dialogue with the Department for Business, Energy and Industrial Strategy and with UK Government ministers on that. We will see whether any opportunities arise out of the UK industrial strategy, given that one of the challenge pots relates to energy projects. Centres of excellence such as EMEC—the European Marine Energy Centre—are world leading, so we hope that UK Government ministers will support a strong bid from the Scottish industry for funding for innovation in the sector. We live in hope that we will see some form of support for wave and tidal technologies, but that will depend on decisions that are made by UK ministers.


NCR (Potential Redundancies)

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

To ask the Scottish Government what support it can offer the employees of NCR in Dundee who are facing potential redundancy. (S5O-00641)

The Minister for Business, Innovation and Energy (Paul Wheelhouse)

I understand that NCR has commenced consultation of its employees regarding the company’s future restructuring plans. We have contacted NCR to offer support for any employees who might face redundancy through our partnership action for continuing employment—PACE—initiative. The company has stated that it will make contact to discuss PACE support, depending on the outcome of the consultation, and I do not want to prejudge the consultation.

Through providing skills development and employability support, PACE aims to minimise the time that individuals who are affected by redundancy are out of work. PACE has an excellent record in achieving positive outcomes for those who are affected by redundancy.

As the member would expect, Scottish Enterprise stands ready to work with NCR management to safeguard employment at the Dundee site.

Bill Bowman

Over the past few weeks, news has been reported of other redundancies and relocations in Dundee, and it is a worrying time for the people concerned. Following yesterday’s news that the city has the lowest employment rate of any city in the United Kingdom, what support can the Scottish Government offer the city of Dundee to help to boost job creation?

Paul Wheelhouse

Companies such as NCR, Tokheim and Michelin Tyre have been success stories for Dundee, and we have provided funding support to key employers in Dundee through the Scottish Enterprise account management process in order to ensure that we have targeted help for companies as they grow or as they take on new market challenges. I assure Bill Bowman and other members who have an interest in the economy of Dundee that the Scottish Government is very sincere about supplying support to key employers in the area. Whether it is skills support or support for export development of the kind that the cabinet secretary outlined in his earlier answer on the Scottish growth scheme, we always try to support companies in local economies, such as Dundee’s, to succeed and thrive. I take such matters very seriously. If examples of them arise, PACE and our wider Scottish Government family of enterprise and skills agencies are there to intervene and help.


Tay Cities Deal (Angus)

4. Graeme Dey (Angus South) (SNP)

To ask the Scottish Government how Angus will benefit from the Tay cities deal. (S5O-00642)

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

I am delighted by the strategic partnership working across four councils that is clearly reflected in the Tay cities region deal proposal. Just last week, I had the opportunity to meet the chief executive of Angus Council and others to hear first-hand about their emerging city region deal proposals. I also had the pleasure of hearing how Angus sees its role in contributing to, and benefiting from, sustainable inclusive economic growth, through that collaborative approach.

Graeme Dey

The cabinet secretary will be aware of proposals in the city deal to establish in Arbroath an east of Scotland hub of the proposed national manufacturing institute of Scotland. The aims of that are to increase investment and innovation, encourage greater internationalisation of Angus and Tayside’s engineering and advanced manufacturing sector, upskill the existing workforce and create more apprenticeships. Does the cabinet secretary agree that that has the potential to give the town and the wider region a significant economic boost and is worthy of being pursued?

Keith Brown

There are some very interesting proposals—not least in terms of the life sciences’ relationship with the University of Dundee and its success in that area, and in terms of other interests in Angus.

Generally, the proposals are very much in harmony with the significant developing proposals for the national manufacturing institute of Scotland, which has the potential to support step changes in the efficiency and productivity of Scotland’s manufacturing sector. Decisions on its establishment and location will depend on the business case, which will be published later this year. Wherever the constituent parts of the institute are located, we are determined that it will be for the benefit of the whole of Scotland.

Jenny Gilruth (Mid Fife and Glenrothes) (SNP)

How will Mid Fife and Glenrothes benefit from the Tay and Edinburgh city deals respectively?

Keith Brown

Jenny Gilruth’s question highlights a very unusual point, which is that Fife Council is a partner in two potential city deals. We clearly welcome regional partners working together with others on long-term strategic proposals that seek to deliver inclusive economic growth. It is natural that Mid Fife and Glenrothes should look to Edinburgh and Dundee as major centres of employment. We are very comfortable to see Fife working as part of both those city regions, as proposals are developed.

The Presiding Officer (Ken Macintosh)

Question 5 has not been lodged.


Export Statistics

6. Anas Sarwar (Glasgow) (Lab)

To ask the Scottish Government what its response is to the recently published report, “Export Statistics Scotland 2015”. (S5O-00644)

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

The Scottish Government welcomes the latest export figures for Scotland. They show that, despite challenging times for the global economy, our total international exports, excluding oil and gas, increased by £1 billion in one year. We are working with our partners to deliver Scotland’s trade and investment strategy in order to further improve our exporting performance and to ensure that we are seen to be an outward-facing nation that is open for business.

Anas Sarwar

I am pleased to hear that the cabinet secretary accepts and welcomes the findings of “Export Statistics Scotland 2015”. The report finds that 63 per cent of Scotland’s exports go to the rest of the United Kingdom and that 16 per cent of our exports go to other parts of the European Union. Will the minister therefore explain his economic incoherence and why he believes that our reaction to leaving the EU single market is to have another referendum and attempt to leave Scotland’s biggest and most important market: the UK, which is four times the size of the EU single market? Does that not expose the fact that the cabinet secretary is looking not for economic coherence but for grudge and grievance and to leave the UK? [Interruption.]

Keith Brown

The applause from members on the Conservative benches tells its own story. Yesterday, we saw political incoherence when three of the Labour Party’s members voted to withdraw from the EU market. I do not know why Anas Sarwar wants to support the withdrawal from the EU market.

We do not believe that we should withdraw from the EU market. We think that it is an extremely important market—it is eight times the size of the UK market. We also believe that we should continue and expand our growth in the rest of the UK. Interestingly, the rest of the UK exports more into Scotland than we export to the rest of the UK. It is an extremely important market and only a fool would want that choice to be made. We think that we should continue to export to both and we should increase our exports. As I said in response to Jackie Baillie’s question, our efforts are designed to achieve further exports. What would be the motivation for somebody to promote or talk up a trade war between Scotland and the UK? I will leave that to the economic incoherence of Anas Sarwar. We want to trade with everybody and do more of it.

Ivan McKee (Glasgow Provan) (SNP)

I remind members of my role as the parliamentary liaison officer to the Cabinet Secretary for Economy, Jobs and Fair Work.

For Scotland’s economy to thrive and prosper, we need to grow exports to all our markets. Anyone who presents a false choice between exporting to the UK market as an alternative to the EU market fails to understand business or politics and does a great disserve to Scottish business through their lack of ambition for our economy. Does the cabinet secretary agree that the proposals contained in the Scottish Government’s document “Scotland’s Place in Europe” would enable Scotland to continue to trade with the UK and the EU single markets on the same terms as we do today, and that it offers businesses in the rest of the UK the opportunity to trade with the EU on favourable terms by basing themselves in Scotland? That is a win-win for all concerned.

Keith Brown

First, it is refreshing to hear members diligently recording their interests when they are speaking. That is a lesson that could be learned by other members.

I reject any suggestion that Scotland should face a choice between trading with the rest of the UK and trading with the EU. The Conservatives’ position is preposterous. Theresa May says, “We want to trade with everybody but, in certain circumstances, we will not trade with Scotland,” and the Labour Party has unfortunately bought into that nonsense. There is no reason why Scotland should not increase its exports, as it has been doing. There has been a 4.4 per cent increase in relation to the rest of the UK, and the same in relation to the rest of the EU.

We might think that the Labour Party would want to welcome that, but instead we hear the same old thing—talking Scotland down. We will continue to promote Scotland and to increase exports, and Labour members can continue to talk Scotland down.

Dean Lockhart (Mid Scotland and Fife) (Con)

In yesterday’s debate, the Scottish Government told us that there will be a hard Brexit, resulting in a customs border between the UK and the EU. If that is true, what side of that customs border does Mr Brown want Scotland to be on? Does he want to be on the UK domestic market side, which accounts for two-thirds of our domestic trade, or does he want to be on the European side, which accounts for 16 per cent of our exports? He cannot have both. Based on his own analysis that there is going to be a customs border and on feedback from senior EU officials, he cannot have both. Which is it?

Keith Brown

If the Conservative Party’s message is that we cannot have both, could it at least be honest with the people of Ireland and Northern Ireland? That is not what the Conservatives are saying to those people. They are explicitly being told that they can have both, so what is so different about the island of Ireland and Northern Ireland?

Of course we can have both. We have said that we would prefer the UK to stay in the single market. If it does not want to do that, that is the UK’s decision. We want to stay in the single market. It is only the Tories who are talking about erecting borders. Theresa May said:

“We want to buy your goods and services, sell you ours, trade with you as freely as possible, and work with one another to make sure we are all safer, more secure and more prosperous”.

The Scottish Government is looking after the interests of the people of Scotland and I suggest that the Scottish Tories could learn a lesson and do the same thing.

The Presiding Officer

Question 7 was not lodged.


“Report on the Economic Impact of Leaving the European Union”

8. John Mason (Glasgow Shettleston) (SNP)

To ask the Scottish Government what its response is to the Economy, Jobs and Fair Work Committee’s “Report on the Economic Impact of Leaving the European Union”. (S5O-00646)

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

The Scottish Government welcomes the committee’s report on the economic impact of leaving the EU and in particular notes its recommendations and conclusions.

We have been clear about the risks that Brexit poses to the economy. That is why in recent months we have announced steps to invest an additional £100 million in capital projects in the current financial year to help stimulate growth. We are also establishing a new £500 million Scottish growth scheme to support small and medium-sized enterprises in particular, and we are taking forward a range of measures through the budget.

The Scottish Government has always been clear that remaining in Europe is the best option for our future. In December, we published a detailed set of proposals in “Scotland’s Place in Europe”, our plan for dealing with the consequences of Brexit. The plan outlines our proposal that, first and foremost, the United Kingdom Government should negotiate for the UK as a whole to retain single market membership but that, if the United Kingdom Government will not do that, as the Prime Minister has indeed indicated, we urge the United Kingdom Government to put forward a differentiated approach so that Scotland can stay within the EU.

John Mason

Did the cabinet secretary notice in the report the committee’s concern, reflecting the concerns of a lot of witnesses, about the dangers that are presented by the possibility that EU workers will no longer be able to come to Scotland to work? We heard concerns to that effect from Walker’s Shortbread, Angus Soft Fruits, Denholm Seafood, Scottish Leather Group, Scottish Engineering and Scottish Care, all of which were concerned about not having workers from the EU.

Keith Brown

I am concerned about that issue. I suggest that there are sectors in addition to those that John Mason mentioned that share those concerns. Earlier today, I had a meeting with a number of substantial insurance companies that are extremely concerned about the issue. Of course, the higher education sector is also extremely concerned.

The 181,000 EU citizens who have chosen to make their home in Scotland enrich our culture and also strengthen our society and boost our economy. As the committee’s report makes clear, those workers make a vital contribution across a range of sectors. That is why the Scottish Government is exploring all possible avenues by which Scotland can retain the benefits of EU membership, for which Scotland voted.

The Scottish Parliament’s Culture, Tourism, Europe and External Relations Committee has also noted the important contribution of EU migrants to Scotland and has called for Scotland to be allowed its own separate immigration deal after Brexit. I call on the United Kingdom Government and the Conservative Party in this place to at least say that all EU citizens in Scotland should be given a guarantee that their place in Scotland is secure.

Richard Leonard (Central Scotland) (Lab)

When the cabinet secretary gave evidence to the Economy, Jobs and Fair Work Committee, he said:

“We have responded to the situation, but we have not changed the economic strategy.”—[Official Report, Economy, Jobs and Fair Work Committee, 29 November 2016; c 34.]

The committee’s unanimous finding, set out in paragraph 147 of the report, is that:

“In light of evidence heard by the Committee on the changing economic landscape following the decision to leave the EU, we recommend that the Scottish Government’s economic strategy should be reviewed.”

Will the cabinet secretary now institute a review of his Government’s economic strategy?

Keith Brown

Richard Leonard neglects to mention something else that I said at the committee, which was that the actions that we take and the initiatives that we are involved in will of course have to respond to the change in circumstance. However, I think that an economic strategy that seeks to promote inclusive and sustainable growth is the right one for Scotland. That was examined during the course of the enterprise and skills review.

We are doubling the number of Scottish Development International representatives across the European Union, increasing the number of offices that we have and increasing the trade promotion activity that we take part in, not least through the establishment of the board of trade. Of course we will respond differently to the circumstances, but the economic strategy is the right one.


Finance and the Constitution


Non-domestic Rates (Support for Businesses)

1. Daniel Johnson (Edinburgh Southern) (Lab)

To ask the Scottish Government what action it will take to support businesses that will see their non-domestic rates bills increase from April 2017. (S5O-00649)

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

The Scottish Government has set out a highly competitive non-domestic rates package as part of the 2017-18 budget. That includes reducing the rates poundage by 3.7 per cent to 46.6p, expanding the small business bonus scheme so that it lifts 100,000 properties out of rates altogether and raising the threshold for the large business supplement so that fewer than 10 per cent of properties pay it.

We are not insisting on a revenue-neutral revaluation, which would have meant setting a higher poundage, and we are not proposing a nationwide transitional relief scheme, as such a scheme would mean many smaller businesses funding reductions for a few large utility companies. However councils can use powers that were granted under the Community Empowerment (Scotland) Act 2015 to apply further rates reductions locally, separate from the Government-funded reliefs that I have just touched upon.

Daniel Johnson

In other parts of the United Kingdom, Governments are putting in place transitional measures to support companies that are seeing their rates bills rise. However, the cabinet secretary will not do the same for Scotland, calling transitional arrangements a “blunt instrument”, as he did in committee this morning. That will be no help to the City nursery in my constituency, whose rates evaluation will go from £38,000 to £64,000, with costs likely to be passed on to parents, resulting in increasing childcare costs. Indeed, bills are set to rise by 64 per cent for nurseries across Edinburgh, including 38 nurseries whose bills will more than double. Will the cabinet secretary rethink his approach on transitional relief?

Derek Mackay

This is an important issue and Mr Johnson puts a fair question in raising individual circumstances. However, I believe that the issue must be put into context if we are to understand why a transitional rates relief scheme is not appropriate.

Of course, the decisions of assessors are independent, and, as such, the rating evaluations will have been independent of Government. Some values will have increased; some will have decreased. Those for whom they increase can appeal.

It would be wrong to suggest that we are increasing business rates. We are not; we are actually reducing business rates by about 3.7 per cent by not insisting on a revenue-neutral revaluation. If I had insisted on an increase, that would have meant higher bills. Taking together all the decisions around the changes to the small business bonus, the large business supplement and the poundage, the Government is forgoing £155 million that we could have received if I had not taken those decisions.

Further, the national package of rates relief is £600 million. Specifically on transitional rates relief, I say again that if we had gone ahead with a transitional relief scheme—whether to do so is the Government’s choice and happens automatically south of the border—many businesses across Scotland would have paid business rates that were artificially higher to compensate mainly big utility companies but also some others.

I feel that the balance is fair and proportionate and ensures that many businesses that are entitled to rates relief and to their rates going down actually see that happen. As a consequence of our decisions, more than 70 per cent of Scottish properties will pay the same or less than they do currently. In addition to all the national reliefs that I have described, the Ken Barclay review will consider all the issues in relation to business rates. I am interested in the methodology of some of the determinations around that.

I identified the Community Empowerment (Scotland) Act 2015 because I think it is right that councils feel empowered to use that act to apply local reliefs that may be right for local circumstances. Perth and Kinross Council has already used the power, and councils now have additional resources from the stage 1 budget. I will continue to engage with business.

I apologise for the length of that answer, Presiding Officer, but I believe that the question is a very important and fair one, and businesses should hear about some of the support that is available to help them through what will be, for some of them, quite a difficult time. However, I think that when the matter is set in context all members can see why I have arrived at my decisions.

Gillian Martin (Aberdeenshire East) (SNP)

How many more businesses will benefit from different forms of rates relief this year compared with last year?

Derek Mackay

As I touched on in my previous, detailed answer, more than half of all businesses will pay no rates whatever and, for the first time, more than 100,000 businesses will be exempt from business rates as a consequence of the small business bonus.

On the large business supplement, 8,000 businesses will be taken out of that rate as a consequence of our changing the threshold to £51,000.

Ross Thomson (North East Scotland) (Con)

I declare an interest, as a current and serving councillor on Aberdeen City Council.

Given that the First Minister has refused to meet council leaders and businesses in Aberdeen today, can the cabinet secretary update the Parliament on the discussions that he has had with Aberdeen City Council and with the spotlight group, which has raised the serious concerns of local businesses about the damage that will be caused to the regional economy by the rise in business rates?

Derek Mackay

I hope that Ross Thomson reflects on the information that I have just given the Parliament on the national situation. I am absolutely engaged with Aberdeen City Council, Aberdeenshire Council and Aberdeen & Grampian Chamber of Commerce. What has been described as a fiery meeting was actually a very constructive and helpful one.

Businesses in the region asked the Scottish Government and local authorities to work together on the issue, and that is absolutely what I have done. I have worked across party lines, engaging with the administrations of Aberdeen City Council and Aberdeenshire Council to explain the national situation and to share information—as I have just done—while empowering them and giving them the support that they require to design an appropriate local relief scheme. They have received that very positively.

Let us set aside the political point scoring. There is a window of opportunity to work together to put an adequate scheme in place in advance of the next financial year. I am confident that both councils are working on such a scheme. My latest understanding is that Aberdeenshire may well be able to provide a scheme before the city council can, but I am advised that both councils are working on the issue.

Liam McArthur (Orkney Islands) (LD)

The cabinet secretary may have seen the announcement from Scottish Renewables that a number of small renewables projects are set to see rates rises of up to 650 per cent, putting into doubt future investment in a number of smaller hydro, wind and solar projects. Can he provide an assurance that he is discussing with his ministerial colleague Paul Wheelhouse the point that such rate rises must not cut across the objectives that we all want to be met in delivering on the climate change plan and the energy strategy?

Derek Mackay

I accept that point. There has been an expansion in rural rates relief and the small business bonus scheme, and there are advantages around community ownership, but the Minister for Business, Innovation and Energy and I are continuing to discuss and engage on that specific issue. I am interested in how local relief schemes may be deployed to help individual projects. All of that is still under active consideration.


Educational Attainment Funding (North Ayrshire)

2. Kenneth Gibson (Cunninghame North) (SNP)

To ask the Scottish Government how much additional funding it will provide to North Ayrshire Council in 2017-18 to improve educational attainment. (S5O-00650)

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

North Ayrshire Council is one of nine Scottish attainment challenge authorities, and it received more than £3.5 million for 2016-17 to deliver an authority-wide plan that is focused on improving literacy, numeracy and health and wellbeing across the area’s primary and secondary schools. Scottish attainment challenge authority plans for 2017-18 will be commissioned this month, and funding decisions will be made following a process of formal review of the plans. In addition, as the Deputy First Minister announced last week, schools in North Ayrshire will directly receive a total of £4,392,000 in 2017-18 through the pupil equity fund.

Kenneth Gibson

Does the cabinet secretary agree that those additional resources will give headteachers greater flexibility to improve literacy, numeracy and health and wellbeing for pupils, especially in some of our most deprived communities?

Derek Mackay

I absolutely agree. Some people have criticised the Government for our new departure in giving resources directly to headteachers and schools, but the transformation is very welcome and should help us to address the poverty-related attainment gap.


Public Bodies (Debt)

3. Jenny Marra (North East Scotland) (Lab)

To ask the Scottish Government what its position is on waiving debt that is owed to it by public bodies in financial crisis. (S5O-00651)

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

The Scottish Government sets out in the Scottish public finance manual the conditions in which lending money is appropriate and the factors that are to be taken into account when it is considering the waiving of debts. The key consideration for the Scottish Government is always the economical, efficient and effective stewardship of taxpayers’ money.

Jenny Marra

As the cabinet secretary will know, NHS Tayside has said that its debt due to the Scottish Government this year will total £36 million. Is NHS Tayside the only national health service board that is in debt to the Government? If not, does it have the largest debt? What are the implications of waiving the debt, and might his Government consider doing that?

Derek Mackay

NHS Tayside, like any public body, has an obligation to live within its means, and we expect the board to take action to do so. There are brokerage arrangements in place and the repayment of brokerage will be agreed over the lifetime of the arrangement on a timeline that provides stability for NHS Tayside and is fair and consistent across the NHS in Scotland.

Murdo Fraser (Mid Scotland and Fife) (Con)

NHS Tayside has admitted that it needs to find £214 million in savings over the next five years just to break even. What assurance can the cabinet secretary give my constituents that they will not see any diminution in front-line services as a result of the desperate financial situation that has been allowed to develop in NHS Tayside?

Derek Mackay

Murdo Fraser might want to tell his constituents that he voted against more money for the health service, as he was trying to secure tax cuts for the rich and the reintroduction of prescription charges at the same time as this Government was investing in front-line NHS services and enhancing support for social care and for general practitioners and other professionals. As the member would expect, we will engage with NHS Tayside to ensure that it is in a strong position, and we will give the board support to get through this period.


Scottish Fiscal Commission

4. Monica Lennon (Central Scotland) (Lab)

To ask the Scottish Government when the Cabinet Secretary for Finance and the Constitution last spoke with the Scottish Fiscal Commission. (S5O-00652)

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

I held a meeting with Lady Rice, the chair of the Scottish Fiscal Commission, and commissioner Campbell Leith on 9 December 2016, at which the commission presented the findings of its scrutiny of the forecasts that underpin the Scottish Government’s draft budget for 2017-18. In addition, I spoke to Lady Rice by telephone on Friday 27 January this year.

Monica Lennon

This week, the Fraser of Allander institute raised concerns about the way in which the so-called additional money that was announced in last week’s budget was found in such a short space of time following the publication of the draft budget. The institute also raised some important issues with regard to the overall budget process and options for reform.

The regulations to expand the functions of the Scottish Fiscal Commission are due to come into force in April 2017. What assurances can the cabinet secretary give that Parliament will receive forecasts in sufficient time to ensure that members can provide proper scrutiny of future budget processes?

Derek Mackay

I agree that we need to review the processes of the Parliament. That is why I absolutely supported the budget review group. I think that a number of processes are worthy of revision partly because of how the functions of the Parliament have changed—the new powers—and partly because of the timescale for the chancellor’s statement. The budget process is undoubtedly complex. I think all members recognise that and that we should all reflect on that together.

The Scottish Fiscal Commission has confirmed to me that the assessments that we have made are reasonable to inform our budget position, and it has not complained to me about a lack of time to do its work. I look forward to the commission moving to its statutory function this year.

I say again that I am embracing the review with an open mind, as I think all members should do, so that we can arrive at a better process for our budget. I am happy to engage with political parties on that.


Small Business Bonus Scheme

5. Ruth Maguire (Cunninghame South) (SNP)

To ask the Scottish Government how many businesses will receive support from the expansion of the small business bonus scheme. (S5O-00653)

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

As I mentioned earlier, more than 100,000 properties will be lifted out of non-domestic rates for 2017-18, due to expansion of the small business bonus scheme.

Ruth Maguire

What other policies are in place to give small and medium-sized enterprises a competitive advantage?

Derek Mackay

The Cabinet Secretary for Economy, Jobs and Fair Work has mentioned the Scottish growth scheme. There is also further advice and support, improved access to finance, help for exports and support for innovation and entrepreneurship. There is also the prospect of the workforce development fund that Mr Hepburn is taking forward.

Jackie Baillie (Dumbarton) (Lab)

For those not in the small business bonus scheme, times are tough. England and Wales have transitional relief schemes; Scotland had a relief scheme for every previous revaluation. Contrary to what the cabinet secretary just said, it is not just the utilities that are affected. We have heard of nurseries and tourism businesses that are affected and hotels in my constituency that will need to pay off staff. If we bring him examples of where there is a real impact, can I urge the cabinet secretary to consider transitional relief?

Derek Mackay

I hate to embarrass Jackie Baillie by pointing out her inaccuracies, but last time there was a revaluation, there was not a transitional rates relief scheme either, because of the assessment of who would be the winners and the losers. [Interruption.] Jackie Baillie was not factually correct, but she can keep heckling me if she likes.

Essentially, Jackie Baillie’s question was whether, if she brings me further information, I will look at options. Of course I will. I am a very engaging cabinet secretary. I like working with people to find solutions. My solutions nationally include lowering the poundage, expanding small business bonuses, taking more people out of the large business supplement and advising people how to appeal—if that is the appropriate thing to do—reducing the tax take by not insisting on a revenue-neutral revaluation, and supporting local authorities to implement local rates relief schemes, where that is appropriate.

I say to Jackie Baillie and a number of Labour authorities around the country that they should look seriously at the extra resources that local authorities now have—the empowerment and the enablement that exist—and, if it is appropriate to have a further local rates relief scheme, those authorities should implement it, rather than simply carping from the sidelines. They have a responsibility to support businesses, and they should take it, as I have done nationally.

If we had just implemented a national transitional rates relief scheme, it would have meant many people’s bills being held artificially high to pay for others, particularly the big utility firms. The Opposition needs to know its facts on this very significant matter.

Emma Harper (South Scotland) (SNP)

The small business bonus scheme is particularly valuable in rural areas, where there are more small and medium sized businesses. What impact could the rural rates relief have in Dumfries and Galloway?

Derek Mackay

As well as the range of reliefs that I have touched on, I wanted to match the rural rates relief that was being offered south of the border, so that we could catch as many as possible and give maximum support. That was the intention of matching rural rates relief with the position south of the border. It puts us in a position where, especially for smaller businesses, we have the most competitive rates relief regime across these islands.


Funding Allocations (Rural Deprivation)

6. Richard Lochhead (Moray) (SNP)

To ask the Scottish Government how rural deprivation is taken into account in its funding allocations. (S5O-00654)

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

The Scottish Government recognises the importance of delivering services for rural areas, which is clearly reflected as a priority in the programme for government. In particular, the indicators that are used for the allocation of funding to national health service boards and local authorities take account of rural deprivation. For example, morbidity and life circumstances are a component of the formula that is used for allocating funding to NHS boards, and that component adjusts for deprivation. It is calculated for small area populations of between 500 and 1,000 residents and is therefore able to identify pockets of deprivation in rural as well as urban areas. The formula also takes account of the higher costs of delivering services in rural and remote areas.

Richard Lochhead

I commend the additional focus on tackling poverty and inequalities in Scotland, which have been exacerbated by Tory Government policy, according to the Resolution Foundation report that was published last week. However, the cabinet secretary is aware that rural deprivation can be challenging to identify. There is increased targeting by the Scottish Government with a focus on the data zones in the 15 per cent most deprived areas under the Scottish index of multiple deprivation, but Moray and other areas do not qualify to be in the most deprived 15 per cent. Can I have an assurance that a safety mechanism is in place that identifies rural deprivation? At times, it is difficult to identify and measure, but it must be addressed in the same way as deprivation in other communities.

Derek Mackay

I believe that there are such mechanisms and safeguards, such as through the local government finance methodology and through the attainment fund for schools. The coverage of that fund to tackle inequality has reached every local authority in Scotland.

Douglas Ross (Highlands and Islands) (Con)

Audit Scotland has reported that many people in Moray are classified as being deprived in terms of their ability to access services. What is the Scottish Government doing to address that issue?

Derek Mackay

It is fair to raise the issue of eligibility. There was a time—before this Administration—when funds were targeted on an area-by-area basis, according to postcode, and only in areas of multiple deprivation, so people could be poor and potentially eligible but live in the wrong areas to get support and access to services. We changed that in many of our funding streams so that more support is targeted based on eligibility—that is, whether the person is less well off and should be entitled to services, rather than whether they live in a certain postcode area. That is a good practical example of how Governments change policy to genuinely target need rather than just taking a data-zone approach. There has to be a balance of targeted interventions and universality where eligibility is taken into account.

Jenny Marra (North East Scotland) (Lab)

On a point of order, Presiding Officer. The cabinet secretary might consider himself to be engaging, but he failed miserably to engage with any of the four brief points in my supplementary question. I would like to ask your advice. What is the point of supplementary questions in Parliament if the minister simply answers again the question that was lodged?

I remind Derek Mackay that my questions were as follows. Is NHS Tayside’s debt to the Scottish Government the largest debt? What are the implications of waiving the debt? Will the Government consider doing that? Is NHS Tayside the only board in Scotland that has such a debt to the Government? If the cabinet secretary cannot answer those questions in Parliament, maybe he will be kind enough to write to me and engage with the points then.

The Presiding Officer

That was not a point of order. However, Ms Marra has made her point, and I am sure that she is perfectly capable of lodging written questions or putting questions in a letter to the cabinet secretary, who will consider them.