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Chamber and committees

Meeting date: Wednesday, March 29, 2017

Meeting of the Parliament 29 March 2017

Agenda: Portfolio Question Time, Education, SinoFortone and China Railway No 3 Engineering Group Memorandum of Understanding, Business Motion, Parliamentary Bureau Motions, Decision Time, Rotary Clubs (Champions of Change Awards)


Contents


Portfolio Question Time


Finance and the Constitution


Independence Referendum (Assessment of Support)

1. Lewis Macdonald (North East Scotland) (Lab)

To ask the Scottish Government what assessment it has carried out of public support for a second referendum on Scotland leaving the United Kingdom. (S5O-00828)

The Minister for UK Negotiations on Scotland’s Place in Europe (Michael Russell)

The current Scottish Government was elected last year with the largest ever constituency vote since the beginning of devolution on a clear manifesto pledge that

“the Scottish Parliament should have the right to hold another referendum ... if there is a significant and material change in the circumstances that prevailed in 2014, such as Scotland being taken out of the EU against our will.”

That specific “material change” is now taking place. We believe that the people of Scotland should have the final choice over their future once the terms of Brexit are clear.

Lewis Macdonald

I take it from that answer that the Government has carried out no assessment of public attitudes on this matter since the Brexit referendum on 23 June. Has the minister considered the opinion poll evidence, which Professor John Curtice summed up in a blog on 2 March? That evidence is that Scottish voters are overwhelmingly opposed to a second independence referendum before the final outcome of Brexit negotiations is clear. Does the minister agree that the priority for the Scottish Government for the next two years should be to protect Scotland’s vital interests in those negotiations and to secure the repatriation of powers over devolved areas from Brussels to Holyrood rather than to promote a further referendum that the Scottish people do not want?

Michael Russell

Those two objectives are not mutually contradictory, of course. Indeed, this very day, I received a letter from David Davis that looks forward to working together on some of the issues that lie ahead. Lewis Macdonald is wrong about that matter and about the opinion poll evidence, which shows a split of about 50:50 in those circumstances. Very clear indications of public support are often available in the opinion polls. I draw attention to the opinion polls that show that the Labour Party is in third place in Scotland. That is an indication of the public support for Lewis Macdonald, his point of view and the Labour Party.

Lewis Macdonald

On a point of order, Presiding Officer. I assume that Mr Russell has inadvertently confused my question about support for holding a referendum with a different question about support for independence. Will he correct the record at this point?

The Presiding Officer (Ken Macintosh)

That is not a point of order, Mr Macdonald, but I am sure that the point has been noted by the minister.

Gillian Martin (Aberdeenshire East) (SNP)

Does the minister think that it is a little bit hypocritical for both of the main Opposition parties to tell us to spend parliamentary time discussing health and education and then, at the very first opportunity, to use portfolio question time to talk about independence?

Michael Russell

That is an acute point, as ever, from Gillian Martin, and I have to make the point, of course, that the Scottish Government will—[Laughter.]

The Presiding Officer

It is all very amusing, but I call for order, please.

Michael Russell

It is quite clear that some people are easily amused.

The Government uses its parliamentary time to further the interests of Scotland in many different ways. That is shown by its record of achievement over the past 10 years, which is considerable and growing. I know that that makes Opposition parties uncomfortable, but the Scottish National Party has been efficient and effective in government, and it will continue to be so. The leader of the Opposition—whoever the Opposition is these days; there seems to be only a united Opposition—and, indeed, the Prime Minister should get back to their day jobs and start to concentrate on the real issues that face Scotland, such as being dragged out of Europe against our will.

Adam Tomkins (Glasgow) (Con)

If I may ask a supplementary question about the constitution in portfolio question time on the constitution, it has been said that

“To propose another referendum in the next parliament without strong evidence that a significant number of those who voted No have changed their minds would be wrong and we won’t do it”;

and,

“If I, the SNP, those who believe in independence, can’t shift opinion from September 2014, we won’t earn the right to ask the question again”.

Both of those statements are direct quotations from the First Minister. Was she wrong? If she was not wrong, why have ministers changed their minds?

Michael Russell

The member knows very well that the manifesto on which the First Minister, I and everyone on this side of the chamber stood—I read it out in my original answer, to which the member was clearly not listening—says:

“the Scottish Parliament should have the right to hold another referendum ... if there is a significant and material change in the circumstances that prevailed in 2014 such as Scotland being taken out of the EU against our will.”

The member has clearly seen what has been taking place today. He has clearly seen the attitude of the Prime Minister. In all those circumstances, that manifesto commitment has been fulfilled and will be followed.

Secondly, I make the point that it is a dangerous position for any Opposition to believe that it can veto a majority in the Parliament that is based on a manifesto commitment. That is not democracy, and those who choose to depart from that cannot, by definition, be democrats.


Local Government Budgets (South Scotland)

2. Claudia Beamish (South Scotland) (Lab)

To ask the Scottish Government what its response is to concerns that reductions to local government budgets will have a negative impact on local services in South Scotland. (S5O-00829)

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

Scotland’s local authorities will have an extra £383 million to support local services in 2017-18, which represents an increase of 3.7 per cent compared to this year. That should have a positive impact on local services all over Scotland, including South Scotland.

Claudia Beamish

The sorts of cuts to our services that are coming from the Scottish Government are mind-boggling, frankly. The Scottish Government has cut hundreds of millions of pounds from local services since 2011. What assessment has been done of the impact on third sector organisations whose funding has been reduced as a result of budget cuts? In my region, the Lanarkshire carers centre has approached me about its funding position.

The Minister for Employability and Training (Jamie Hepburn)

It has approached me too, and North Lanarkshire Council is freezing the council tax when it has been asking to increase it.

Claudia Beamish

The carers centre has great concerns, actually. Perhaps the minister would like to hear the question.

The Presiding Officer

Order. Minister, speak through the chair, please.

Claudia Beamish

NHS Lanarkshire, which is a contributor to the centre, has confirmed to me that it is unable to continue to top up the centre’s funding, as it has previously done. Funding for 2016-17 will be honoured, but the situation beyond that is uncertain. In addition, as Scottish Government money in relation to carers is announced on an annual basis, long-term planning is challenging. Similar issues have been raised by Borders Voluntary Care Voice. What assessment has been done of the impact of Scottish Government cuts on local services, and particularly on the third sector?

Derek Mackay

I tried to make the point to Claudia Beamish, and for the benefit of the chamber, too, that we have actually increased the resources for local services. I have checked all the local authorities in the South Scotland region in relation to the point that I have made about local services, which includes the issue of health and social care integration. Each one of the local authorities that I have examined will have an increase in its total funding—I say that separating out health and social care.

I see that Claudia Beamish is shaking her head, so I will give the figures for each council. Dumfries and Galloway Council will have an increase of 4.1 per cent; East Ayrshire Council will have an increase of 4.9 per cent; East Lothian Council will have an increase of 5.3 per cent; Midlothian Council will have an increase of 4.2 per cent; Scottish Borders Council will have an increase of 5 per cent; South Ayrshire Council will have an increase of 3.8 per cent; and South Lanarkshire Council will have an increase of 2.7 per cent.

How those resources are spent is a matter for local choice. However, the budget has approved specific sums to tackle, for example, attainment. In relation to the third sector, I have gone out of my way to try to protect third sector functions and budgets through the course of the budget.

Of course, there will be analysis of the impacts of our spending decisions. However, I ask members to reflect once again on the fact that we have increased—with the help of the support and co-operation of the Greens—the total resource that is available to local government in what was quite a challenging settlement.

I acknowledge the partnership arrangements that we have. No local authority rejected the financial settlement that I gave to it. I worked constructively with the Convention of Scottish Local Authorities, which recognised the movement on the part of the Government. Alongside all that, local authorities had the ability to raise the council tax by up to 3 per cent. Some chose to do that and others did not. Perhaps Claudia Beamish could ask some local authorities why they did not choose to increase the council tax in order to invest in exactly the kind of services that Claudia Beamish says she is concerned about.

Rachael Hamilton (South Scotland) (Con)

The south of Scotland is crying out for funds to improve its roads. Recently, I wrote to Scottish Borders Council and was told:

“there is a long list of identified projects, many of which are classed as high priority ... Unfortunately, over recent years, the priorities from other sectors ... have meant a significant downturn in the number of road improvements being undertaken.”

The situation has been exacerbated by reducing revenue budgets and a deteriorating asset base that leads to an increasingly high percentage of investment going on maintaining the existing asset rather than on improvements. When will the Scottish Government adequately support our local authorities to improve our local roads?

Derek Mackay

I point out to the member that the Government increased the provision in the Scottish budget for roads maintenance while the Conservatives voted against the budget, so it is rich for the Conservatives to say that. It is at least with some credibility—maybe not in the case of every local authority—that the Labour Party can argue that it wanted extra investment in public services, because it proposed to put up all levels of tax, including basic-rate tax. That is not a choice that we made, but it is at least with some credibility that the Labour Party can say that it wanted to invest those increased taxes in more public services. However, the Conservatives proposed tax cuts for the rich—the richest individuals and businesses and the richest in terms of house values and the land and buildings transaction tax. Therefore the Tories cannot speak with any credibility when they call for extra resources to be put into local services, especially when they opposed the increased budgets that the Government proposed—particularly for maintenance and investment, which Rachael Hamilton asked me about.


Glasgow City Council (Budget Allocations Assessment)

3. Johann Lamont (Glasgow) (Lab)

To ask the Scottish Government what assessment it has made of the local government budget allocation to Glasgow City Council since 2007. (S5O-00830)

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

All of Scotland’s 32 local authorities have received their fair formula share of the funds that are provided through the annual local government finance settlement, as agreed with the Convention of Scottish Local Authorities. Glasgow City Council will continue to receive the highest level of local government funding per head of all wholly mainland Scottish councils in 2017-18.

Johann Lamont

I thank the cabinet secretary for that response. The cabinet secretary is, of course, aware that his Government has cut Glasgow’s budget by £377 million since 2007. Does he recognise the important work of Glasgow’s Labour council in doing its best to protect front-line services, leading the way in supporting childcare and apprenticeships, and making Glasgow a leading centre for business, tourism and sport? Does the cabinet secretary further acknowledge the critical role of Glasgow to the economy of Scotland? In that circumstance, does he therefore regret the opportunities that are being lost, the families who are unsupported and the economy benefit that is being lost directly through his Government’s choice? That is the price that is to be paid by every Glaswegian for the cabinet secretary’s choice to cut, rather than to fund, services.

Derek Mackay

I will begin by acknowledging some of those points. Some of the actions that have been identified I welcome, as Glasgow City Council addresses key issues in the city. I would welcome any administration’s focus on such issues. There are areas in which there has been good partnership working between the Scottish Government and Glasgow City Council. I was also signatory, on behalf of the Government, to the Glasgow city region deal proposition. There are many areas on which we have been able to work in partnership with the council. We have not found agreement in every area, but we have in many areas together undertaken partnership and shared endeavour—not least in respect of deprivation, inequality and the need for further economic development and partnership.

It would be wrong to suggest that the overall spending power of Glasgow City Council has decreased. Again, as a consequence of the budget, Glasgow City Council’s overall increase in spending power to support local authority services in 2017-18 will amount to more than £45 million, which is a 3.3 per cent increase. [Interruption.] I hear Johann Lamont complaining about the settlement, but I say gently that it is a matter for local authorities if they want to suggest changes to the distribution formula. I am open to discussion on that via the Convention of Scottish Local Authorities.

However, today is a day of exits, so I remind the Labour Party that Glasgow City Council’s Labour administration walked away from COSLA. Surely it is in the interests of all the people of the city for the council to participate in COSLA, which negotiates with Government on matters including finance, the budget, the settlement and distribution thereof. I therefore encourage the Labour Party to think very deeply about its position, as we approach local government elections, and about local government being—to be frank—stronger if all 32 local authorities are willing to engage with us in partnership.

Once again, I say that Glasgow City Council’s settlement has increased, that we have strong partnership working on areas of joint endeavour, and that the city region deal is all about economic development. I encourage the Labour Party to think about its engagement with COSLA going forward, so that we can have further discussions about distribution.

Finally, I say again that, just as the Tories opposed increased investment in roads maintenance and then called for more, the Labour Party asked for increased investment in attainment—which is really important for education and tackling the attainment gap in Glasgow—but voted against it when push came to shove at stage 3 of the Budget (Scotland) Bill.

John Mason (Glasgow Shettleston) (SNP)

When I look at the per capita budget allocations, and take away the three island authorities, I see that the three—[Interruption.] I will carry on if Johann Lamont will allow me to.

I see that the three authorities with the greatest shares per head are Glasgow City Council, Inverclyde Council and West Dunbartonshire Council. That strikes me as being a good thing, because the authorities in the west of Scotland have great needs. Will the Government commit to continuing to fund such needy authorities well, as it has been doing?

Derek Mackay

It is important to recognise that there are different elements of local government funding, which is complex in nature. Fundamentally, the needs-based assessment is a feature that has been agreed with local government through COSLA. It distributes funding on the basis of need, which is why local authorities such as Glasgow are at the upper end in terms of resource. It is important to tackle need and ensure that level of redistribution.

The Labour Party is not consistent on the issue. In Aberdeen City Council, the Labour finance convener, Willie Young, says that Aberdeen has been ripped off and that its money has been sent to places like Glasgow. In Glasgow, the Labour Party says that its money has been sent elsewhere. In truth, the formula is, although it may not be perfect, the best that we have. I am willing to engage with local authorities, but I believe in using a needs-based assessment to ensure that resources are directed on the basis of need.


Digital Strategy

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

To ask the Scottish Government how its national digital strategy will impact on the Motherwell and Wishaw constituency. (S5O-00831)

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

The document “Realising Scotland’s full potential in a digital world: A Digital Strategy for Scotland”, which was published on 22 March, is a strategy for all of Scotland that aims to build a vibrant, inclusive and outward-looking nation with a successful digital economy, comprehensive access to connectivity and an education system that is focused on digital skills.

Clare Adamson

Motherwell and Wishaw faces unique post-industrial challenges. However, we have a wonderful college in New College Lanarkshire, and we have one of the biggest brownfield sites in Europe. What investment potential does the cabinet secretary envisage for Motherwell and Wishaw under the new strategy?

Derek Mackay

The digital strategy covers a number of areas including skills, connectivity and the potential for growth in employment. On a physical level, we have ambitious targets for meeting the connectivity challenge. In areas of deprivation and dereliction, the digital strategy should tie up with other strategies and initiatives, including the vacant and derelict land fund, to bring together the softer interventions that we are making through actual physical structure. There are resources available to North Lanarkshire Council to enable it to invest in those sites, and I commend the work that New College Lanarkshire is doing. Education, the potential that exists with regard to skills, and the new funding that was announced as part of the strategy should all come together to help areas such as Clare Adamson’s constituency.


Digital Scotland (Investment)

5. Graeme Dey (Angus South) (SNP)

To ask the Scottish Government what the impact will be of the Cabinet Secretary for Finance and the Constitution’s recent announcement of £15.6 million being reinvested back into the digital Scotland programme. (S5O-00832)

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

An additional 17,000 homes and businesses across 27 local authorities will benefit from fibre broadband as a result of the £15.6 million gainshare investment that is being made through the digital Scotland contract that covers the rest-of-Scotland region. That is in addition to the £2.2 million of gainshare funding that was announced last year by Highlands and Islands Enterprise, which will deliver fibre broadband connectivity to an additional 1,800 premises across the Highlands and Islands.

Graeme Dey

When announcing the additional funding, the cabinet secretary said that it would focus in particular on maximising the number of premises that have access to speeds of greater than 24 megabits per second, with funding being targeted at areas—including Angus—that have the lowest-speed coverage. Are there any specific plans as yet for my Angus South constituency? Is the Scottish Government prepared to work in collaboration with Angus Council on that?

Derek Mackay

Yes—I believe that there is potential to do that. We have set ambitious targets that include 100 per cent coverage of homes and businesses by 2021, and we are very much on track to achieve the milestones within that target.

The particular initiative to which Graeme Dey referred should benefit an additional 500 premises in Angus, and it should ensure that we roll out superfast broadband to meet that particular challenge. It will increase superfast broadband coverage in Angus to 91.2 per cent by the end of the digital Scotland roll-out, after which we will move to the much more ambitious target of 100 per cent coverage.

Jamie Greene (West Scotland) (Con)

Can the cabinet secretary clarify a point about the additional funding? Is not it the case that the money is actually the result of a clawback clause in the contract with BT, rather than its being new additional money that is being provided by the Scottish Government?

Derek Mackay

I did not say that it was Scottish Government money. I made it clear in my original announcement that it is part of the contract with BT, and that where BT has been involved in an area and hits certain targets, money is provided and then released, and that there is then dialogue about how it will be distributed.

I am highlighting how that is benefiting communities that otherwise would not have that connectivity. I welcome the approach and the intervention, and I have tried to raise awareness of it. I appreciate members asking questions about it, and I encourage members who are interested to look at the website www.scotlandsuperfast.com. To put the matter in context, I say that that is just one of our many interventions to meet our target of 100 per cent coverage by the end of this session of Parliament. I fully accept that new technologies and different ways of procuring services will be needed in order to reach that ambitious target—and it is just one target.

I have never pretended that the money was Scottish Government money, although there is Scottish Government involvement in the contracts, as I am happy to confirm to Jamie Greene.


Economy, Jobs and Fair Work


Coatbridge and Chryston (Jobs and Economy)

1. Fulton MacGregor (Coatbridge and Chryston) (SNP)

To ask the Scottish Government what action it is taking to boost the economy and create jobs in Coatbridge and Chryston. (S5O-00838)

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

Our enterprise and skills agencies are working to deliver sustainable and inclusive economic growth across Scotland, including in towns such as Coatbridge and Chryston, by promoting Scotland as an attractive place for business and innovation and through our substantial investment in infrastructure, regeneration, skills, internationalisation and business support. The Scottish Investment Bank has also directly supported eight investment projects in North Lanarkshire, while Scottish Enterprise currently account-manages 167 companies in the local authority area, and BioCity at Newhouse was designated as a life sciences enterprise area in April 2016.

The competitiveness of Coatbridge and Chryston as a business location will be enhanced by the £500 million upgrade to the M8, M73 and M74, which will reduce traffic congestion. The Scottish Government has also delivered a highly competitive business environment with a reduced poundage on business rates. Premises with a rateable value under £15,000 will now qualify for 100 per cent business rates relief through the small business bonus policy, and those with a rateable value between £15,000 and £18,000 will benefit from a 25 per cent discount on rates.

Fulton MacGregor

Coatbridge town centre has suffered multiple setbacks recently, including the closure of two banks, the proposed closure of the Department for Work and Pensions processing unit and major fires in some of the empty buildings. People are rightly concerned about the future of their main street. Having hosted a well-attended public meeting recently, I am in the process of establishing a steering group, involving residents and businesses, to create and implement a plan to improve the town centre. Would the minister be willing to meet the steering group to discuss how the Scottish Government can support the regeneration of Coatbridge town centre and create more jobs locally?

Paul Wheelhouse

On the latter point, I would certainly be happy to meet Mr MacGregor’s constituents to discuss how we can support regeneration in the community. I commend the efforts that I have seen elsewhere in Scotland where similar initiatives are taking a grass-roots approach to developing a vision for communities and have been very successful not only in developing a plan that the local authority can take forward but in helping to support subsequent funding applications for good causes to the lottery and other bodies to support local projects. I will provide Mr MacGregor with further detail about those initiatives.

The Government has also taken forward the town centre first principle with local government, trying to encourage public authorities, when making investment decisions or securing private sector investment in town centres, to identify whether the town centre is the best location first, and to look at peripheral areas only thereafter, to try to drive more footfall into our town centres and to support local businesses. I am happy to meet the member and his constituents and to provide further details.

Richard Leonard (Central Scotland) (Lab)

The minister will be aware of representations that I have made to save the jobs at the Tannoy factory in Coatbridge. The GMB union, the workforce and Scottish Enterprise have been actively working to secure those jobs for Lanarkshire, but too often they have been kept in the dark by the owner of the factory, based in the Philippines. Despite their valiant efforts, many of the workers are facing redundancy at the end of this week. Even at this stage, I ask the Cabinet Secretary for Economy, Jobs and Fair Work himself to make personal, direct contact with and representations to the owner of the company in Manila.

Paul Wheelhouse

I assure Mr Leonard that I, on behalf of the Government, have been actively involved in looking at the Tannoy case, as has the cabinet secretary. Obviously we are very concerned about the loss of any jobs. I can reassure the member that the company has been engaging with the Government and with Scottish Enterprise on proposals to develop new capacity in relation to a specific project, the details of which I am not at liberty to disclose, and that we are hopeful that some jobs will be retained in the area.

I can investigate the matter of communication with the trade union. Obviously, that is not entirely within our gift, but we will certainly encourage the company, if we can, to engage with the trade union. Clearly, we want to ensure that those who are affected are kept informed of what is happening.

I reassure the member that encouraging discussions are taking place on retaining some employment in the area.


Music Industry (Economic Contribution)

2. Tom Arthur (Renfrewshire South) (SNP)

I refer members to my entry in the register of interests and to my professional background in music.

To ask the Scottish Government what assessment it has made of the economic contribution of the music industry. (S5O-00839)

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

The music industry in Scotland is a key part of our thriving creative industries sector. Scottish Government growth sector statistics show that, in 2014, the music industry in Scotland had a turnover of £27.9 million and a gross value added of £15.5 million. Moreover, UK Music’s report “Wish You Were Here 2016” showed that music festivals and live concerts attracted 928,000 music tourists to Scotland in 2015. Those visitors generated £295 million for the local economy and helped to sustain 3,230 full-time jobs across the nation.

Tom Arthur

The overwhelming majority of musicians are self-employed, and the emerging phenomena of the precariat and the gig economy are conditions long known to people operating in music. In light of the cabinet secretary’s answer, does he agree that it is vital that we continue to nurture musical talent in Scotland and to provide the support and mentoring that are needed to encourage young people to pursue a career in the growing and ever more exciting music industries?

Keith Brown

I agree with the member. It is true that we have to make more of the contribution that the creative arts make to the economy—we need to increase that contribution and recognise the current contribution. It is important that we support people to learn music and to pursue musical careers. We do that through the youth music initiative, which since 2007 has received funding of £109 million and is delivered by Creative Scotland. The youth music initiative provides a range of music-making opportunities for young people of all ages. It gives them a chance to try new music-making activities in their area to begin their musical journey or to build on their existing experiences. Earlier this month, the Cabinet Secretary for Culture, Tourism and External Affairs spoke at a Scottish music industry day at the University of Glasgow to promote career opportunities in the industry.

Maurice Golden (West Scotland) (Con)

We should be rightly proud of new and emerging talent such as my constituents the Ayoub Sisters, who were recently nominated for the Young Scot award and who will perform in Parliament later this year. They have some great songs, and they are well worth a listen. What steps is the Scottish Government taking to support a broad range of musical talent and genres in order to help to grow the economy?

Keith Brown

I look forward to the performance that the member refers to, which I am sure will be excellent. On other support that the Scottish Government can provide, we have the regularly funded music portfolio. Our thinking has been framed by a 10-year plan, the music sector review and the music companion piece. I agree with Maurice Golden that there is some huge talent that we should support. I have to say that, in my household, I actively support a budding musician—and he takes a lot of support; although, to be fair, he also works part time at Asda to help to sustain himself.

Ireland has a very vibrant live music scene and, in recent years, I have seen—I do not know whether Maurice Golden agrees—much more of that taking place in Scotland. It is to be encouraged, and perhaps the best way that we can encourage it is by each of us attending events and supporting the artists who are involved in them.


Economic Support (Dingwall)

3. David Stewart (Highlands and Islands) (Lab)

To ask the Scottish Government what action it is taking to support Dingwall’s economy. (S5O-00840)

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

Dingwall is in Highlands and Islands Enterprise’s inner Moray Firth area and businesses and communities in Dingwall can access the full range of support from Highlands and Islands Enterprise. Since 2013, HIE has invested around £1 million in companies in the Dingwall area to support 219 full-time-equivalent jobs and to safeguard 106 full-time-equivalent jobs in a range of sectors. Over the same period, HIE has also provided a £2.46 million research and development grant and £90,000 of SMART: Scotland support for Inside Biometrics, which is a Dingwall-based company.

David Stewart

The minister will be familiar with the award-winning Inside Biometrics facility in Dingwall, which is developing its innovative KEYA Smart product, which will be life changing for people with diabetes. The company is looking to expand production capacity, which might create a substantial number of new jobs, and it is looking for further advice, guidance and assistance from the Scottish Government for that major and significant expansion. Will the minister agree to meet me to help to bring the project to fruition?

Paul Wheelhouse

I recognise that Dave Stewart takes a strong interest in this issue. Inside Biometrics is account-managed by HIE, which is closely engaged with it and has provided financial and advisory assistance to support it to grow its business. I recognise that Inside Biometrics is an excellent, award-winning company. HIE has already provided it with a £2.5 million research and development grant, which I mentioned in my original answer.

I am aware that Inside Biometrics has plans to expand its operations in Scotland. Indeed, I was contacted by Selly Saini, the owner, following the life sciences awards to which Dave Stewart referred, at which the company was an award winner. Officials at HIE remain closely engaged with the company to explore every option and to help to support its growth.

I visited the company last year and was hugely impressed by its technology, and I have accepted an invitation to meet its representatives in the near future to discuss how the Scottish Government can continue to support the company with its development plans. I am, of course, happy to meet Mr Stewart to discuss anything that he suggests we can help the company with.


Consumer Confidence

4. Brian Whittle (South Scotland) (Con)

To ask the Scottish Government what its response is to the latest Fraser of Allander Institute Economic Commentary, which warns that indicators of Scottish consumer confidence are more negative than for the United Kingdom as whole. (S5O-00841)

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

The latest Fraser of Allander Institute Economic Commentary provides a timely update on the Scottish economy. The report shows that, as Brian Whittle said, consumer sentiment has weakened in Scotland, but it has also weakened in the United Kingdom since the European Union referendum. The findings highlight the risks to Scotland’s economic outlook following the EU referendum as heightened uncertainty and rising inflation are forecast to weigh on household incomes and consumption. By far the biggest threat to Scotland’s economy is a hard Brexit, which, according to the Fraser of Allander institute, threatens to cost our economy around £11 billion a year by 2030 and to cost the country 80,000 jobs over a decade.

Brian Whittle

Perhaps the cabinet secretary can explain why the Scottish economy is lagging behind the UK economy on a range of economic indicators. We have lower employment, higher inactivity, lower consumer confidence, lower annual pay growth, lower productivity and lower growth in gross domestic product. Why is Scotland falling behind under the party that claimed to be “stronger for Scotland”? I wonder whether something is distracting the Government from the day job.

Keith Brown

The member will of course be aware of the impact of the price of oil on the Scottish economy and the fact that it would have a disproportionate effect on the Scottish economy as opposed to the wider UK economy. The member asked what my response is. My response is to go out and try to attract more jobs, because that is very important for the Scottish economy. I saw that 300 new jobs in digital solutions and risk management were announced today by Genpact for its new European centre in Glasgow following a contribution by Scottish Enterprise. It is extremely important that we try to attract more such jobs; indeed, that is part of my job title.

The member mentioned different economic indicators. There are other indicators that tell a different story. We in Scotland have the second-lowest level of youth unemployment in Europe; only Germany has a better outcome. We also have very good numbers on female employment, and the same unemployment rate, despite the oil impact, as the rest of the UK. That shows real progress.

The member mentioned confidence. Today’s edition of The Times mentions the Scottish technology industry survey, in which 78 per cent of respondents said that they were optimistic or very optimistic for this year. We should try, difficult though it might be, to accentuate the positive and see the things that we are doing well. Of course we should note the challenges, but we should try to do more of what we are doing well. That is the best response that we can have to the economic challenges that Brexit presents for us.

Kenneth Gibson (Cunninghame North) (SNP)

Being part of the UK has not done much for Scottish national self-confidence over generations. Can the cabinet secretary tell us what the impact of the alleged union dividend has been on Scotland, given that since 1900 we have had the lowest rate of population growth of any country on earth?

Keith Brown

I would tell Kenneth Gibson that if I was able to identify a union dividend, but I am afraid that I cannot see a union dividend. More than that, there is the price of the union, if we think about the huge recession that we went through, which was caused by failures of the banking and financial system under the UK. Of course there were global elements to that, but there is no question but that the regulation of the banking system was inept and it was crucial that the UK looked after that.

The consequences of that recession for Scotland, by which I mean individuals and companies in Scotland, were huge. The UK has to accept its share of the responsibility, as I am accepting the Scottish Government’s share of the responsibility for the condition of the Scottish economy. After all, it was a Conservative MSP who said that the UK still holds all the major levers of the Scottish economy, so the UK has to take responsibility for that.

Jackie Baillie (Dumbarton) (Lab)

Is it not the truth that the same Fraser of Allander report noted that

“a second independence referendum is likely to act as a further headwind for many businesses and potential investors”?

Is it not also the truth that the UK market is worth four times that of Europe to the Scottish economy, so the impact of independence has the potential to be much greater than that of leaving the European Union?

Keith Brown

It is true to say that the Fraser of Allander institute identifies and quantifies the effects of a hard Brexit as the loss of £11 billion a year by 2030 and of 80,000 jobs over a decade. It is interesting that Jackie Baillie decided not to mention that when the report that she cites, and the institute that she refers to, says that those will be the impacts. There has not been a word from Labour about those huge impacts on the Scottish economy.

On the recession that we have just come through, it was the Scottish Government’s actions in investing in public infrastructure works that helped to mitigate the worst effects and helped us to recover more quickly. [Interruption.]

Jackie Baillie

He is choking on his words.

Keith Brown

Those actions are important to sustaining the economy and it would be useful if members could acknowledge that. It would also be useful if the Labour Party could acknowledge the serious effect of Brexit—£11 billion a year and 80,000 jobs—which it has failed to do on many occasions up to now.

Dean Lockhart (Mid Scotland and Fife) (Con)

The cabinet secretary asked about the union dividend. I point him to the Scottish Government’s own Government expenditure and revenue Scotland numbers that last year showed a £15 billion union dividend.

The Fraser of Allander institute highlights that, since the SNP came to power, Scotland’s economy has grown by an average of 0.7 per cent per year during the past 10 years. That is less than a third of Scotland’s long-term economic growth. That underperformance is nothing to do with oil and nothing to do with Brexit. Does the cabinet secretary think that such underperformance over 10 years of SNP Government is acceptable?

Keith Brown

I can imagine businesses outwith the chamber listening to someone who is talking about economics say that the rate of growth in Scotland has got nothing to do with oil. They must wonder how we even start to respond to a point like that.

It is quite obvious to me that there is not the basic understanding of the Scottish economy implicit in the question. It is also true that I did not raise the issue of the union dividend; somebody else raised it and I responded to that point in the way that I did.

It is important to make sure that we do the right things through the economy. Martin Gilbert of Aberdeen Asset Management said that we should look through the fog to see where the opportunities are.

I will just mention the 300 new jobs that are coming to Glasgow, which received not a word of joy or congratulations from any of the Opposition parties. They have also not said a word about the increased confidence in the Scottish technology industry survey. Those are important for Scotland. As I have said many times, we have to recognise the challenges of productivity, internationalisation and exports. I recognise those challenges and am trying to take action to address them. Surely some of the Opposition parties could acknowledge the strengths of the Scottish economy, even if it is just to encourage them, so that we can all get the benefit of increased economy activity in Scotland.

Mike Rumbles (North East Scotland) (LD)

The minister said that he could not identify any union dividend. Could he identify a union dividend—in his case in the Royal Marines and, in my case, the Army—for the protection of the whole of the United Kingdom together? Does he accept that there is a union dividend in our approach to defence?

The Presiding Officer

It is sort of related, cabinet secretary. Briefly, please.

Keith Brown

Once again, I just cannot understand the lack of information or experience. If we look at the defence footprint of Scotland in recent years—

Mike Rumbles

Oh for goodness’ sake!

Keith Brown

Well, maybe Mr Rumbles does not think that it is relevant. We have seen regiments on front-line service being merged, people being handed their P45 when they are on active service, basing cuts, and reducing numbers in Scotland. The member would know that if he talked to the local authorities that are trying to wrestle with the latest round of basing cuts, such as those at Fort George, or Glencorse, a barracks that has had millions of pounds of investment but is going to be closed.

The lack of knowledge in Mike Rumbles’s question shows that he has no understanding of defence activities in Scotland. Before he asks another question like that, perhaps he should do a bit of homework.


Scottish Investment Bank (Meetings)

5. Richard Leonard (Central Scotland) (Lab)

To ask the Scottish Government when it last met representatives of the Scottish Investment Bank. (S5O-00842)

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

The Scottish Investment Bank is a division of Scottish Enterprise; officials from the Scottish Government met representatives of the Scottish Investment Bank on Monday 20 March.

Richard Leonard

What guidance has the Scottish Government issued to the Scottish Investment Bank on requirements that need to be satisfied for lending to companies or taking out equity stakes in companies regarding its stated goal of inclusive growth, and thus good trade union and industrial relations, the standard of employment contracts and the gender pay gap?

Keith Brown

The Scottish Investment Bank, as I have said, is an arm of Scottish Enterprise and it is fully apprised of the ambitions and standards that the Scottish Government would like to see encouraged. The Scottish Investment Bank has invested £52.4 million in 133 Scottish companies, helped companies to leverage £277 million of private investment and invested £12.2 million in 13 small and medium-sized enterprises through the Scottish loan fund, which is available to start-up, early stage and expanding businesses. The aims of the Scottish Government on the gender pay gap and inclusive growth, where everybody gets a chance to share in the opportunities for growth, are embedded in the work that Scottish Enterprise does and it is well aware of the Scottish Government’s standards and conditions in those regards.

The Presiding Officer

Thank you. I apologise to the members who waited patiently and whom we did not reach.