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Meeting of the Parliament

Meeting date: Wednesday, January 18, 2023


Portfolio Question Time

Covid-19 Recovery and Parliamentary Business

The Deputy Presiding Officer (Liam McArthur)

Good afternoon. The first item of business is portfolio question time. We start with questions on Covid-19 recovery and parliamentary business. I remind members that questions 1 and 3 are grouped together. I will take any supplementary questions on those after both have been answered. As ever, if anybody wishes to ask a supplementary question, I invite them to press their request-to-speak button during the relevant question.

Low-income Households (Improved Financial Security)

1. Claire Baker (Mid Scotland and Fife) (Lab)

To ask the Scottish Government how it is measuring progress on its Covid recovery strategy commitment to improve financial security for low-income households. (S6O-01772)

The Deputy First Minister and Cabinet Secretary for Covid Recovery (John Swinney)

The Scottish Government has identified a range of high-level indicators that will help to measure progress towards achieving the individual outcomes in the Covid recovery strategy. The majority of our outcome indicators are drawn from population surveys or large administrative data sets that report annually and which are more measurable than the outcomes themselves. We are working to identify additional intermediate indicators that report more frequently and can therefore identify and influence real-time trends.

Claire Baker

In October 2021, the Covid recovery strategy set out a number of actions to address financial security for low-income households in the following 12 to 18 months, including the second benefit take-up strategy. The annual report that was published in October showed that take-up of the job start payment remains far too low at only 29 per cent, with that rate being attributed to low awareness of the benefit and a lack of clarity around eligibility. There are also concerns that people leaving school are unable to access that support. Will the cabinet secretary advise what action is under way to ensure that young people on low incomes who are moving into work directly from school or following a period of sustained unemployment are getting the support that they are entitled to?

John Swinney

I accept Claire Baker’s point that one of the challenges is to ensure that people fully utilise the benefits to which they are entitled at the moment in life that they are entitled to them. We take a number of steps—my colleague the Minister for Social Security and Local Government has set out some of that information to the Parliament previously—to raise awareness of individual benefits and maximise take-up. That is our intention, and it is our desire to ensure that that is the case. Awareness-raising measures will be taken, and we will obviously look very carefully at the effectiveness of those. The Government’s marketing strategies generally result in good engagement and participation, but I will look specifically at Claire Baker’s points to identify whether we need to take further action to raise awareness and boost participation.

Low-income Households (Support)

3. Marie McNair (Clydebank and Milngavie) (SNP)

To ask the Scottish Government, in light of a new report by the Resolution Foundation stating that the average household will be £2,100 worse off by the end of next financial year, how ministers across Government are working to prioritise support for low-income households, as set out in its Covid Recovery Strategy. (S6O-01774)

The Deputy First Minister and Cabinet Secretary for Covid Recovery (John Swinney)

The Scottish Government is prioritising funding to help household finances across Scotland. We are taking action to increase financial security for low-income households, and the emergency budget review confirmed a range of additional support in response to the cost crisis. That includes increasing the Scottish child payment to £25 per week, doubling the fuel and security fund to £20 million and providing local authorities with additional funding for discretionary housing payments. In total, the Scottish Government has allocated around £3 billion this financial year to contribute to mitigating the increased cost crisis. More than £1 billion of that support is available only in Scotland, with the remainder being more generous than that provided elsewhere in the United Kingdom.

Marie McNair

I thank the Deputy First Minister for that answer and his long-standing recognition of the impact that the pandemic has had on low-income households. Rightly, the Covid recovery strategy has a focus on groups that are more likely to experience low income. One such group is families with three or more children, and it is correctly acknowledged that our Scottish child payment will be of assistance to such families. However, does the Deputy First Minister acknowledge that the UK Government’s two-child policy, with its abhorrent rape clause, hinders our efforts and shows that increased powers in social security are necessary to maximise the support that we give to those families?

John Swinney

Marie McNair is absolutely correct that the two-child limit can have significant and negative effects on household income, which is why the Scottish Government has not adopted that approach in relation to the Scottish child payment. Therefore, eligible families with more than two children are able to access the Scottish child payment.

We are taking measures that challenge and try to tackle the effect of measures taken by the UK Government that make our challenge even greater as we work to reduce child poverty in Scotland. Our measures are having a beneficial effect on child poverty levels in Scotland, and we will continue with that relentless focus to support families to boost their household incomes.

Paul Sweeney (Glasgow) (Lab)

Following a Glasgow City Council decision last week on community grant funds, a number of organisations, some of which provide mental health support and access to food, are facing funding cuts or even closure. Given the bleak outlook for households, as highlighted by Marie McNair, will the Government ensure that organisations in Glasgow and elsewhere that provide such lifeline support will not be forced to pull out of communities or close when those communities face such hardship?

John Swinney

A range of organisations provide valuable and vital support to individuals in our communities, and the Government wants to maximise support to those organisations. I accept that all public organisations face significant financial challenges as they wrestle with the cost crisis, and I was candid about that to the Parliament when I set out the budget in December. However, if we all maintain a focus on supporting the people who are in greatest need, we can do as much as possible to address the financial hardship that those individuals face.

Legislation on Sex Buyers (Parliamentary Time)

2. Bill Kidd (Glasgow Anniesland) (SNP)

To ask the Scottish Government whether the Minister for Parliamentary Business plans to propose the scheduling of time to consider legislation to end sex buyers’ legal impunity as part of the business for the current parliamentary year. (S6O-01773)

The Minister for Parliamentary Business (George Adam)

Details of future legislation will be announced in the programme for government in the normal way. Our policy in relation to prostitution, which includes considerations around the purchase of sex, is currently being taken forward through a framework for Scotland, which will seek to challenge men’s demand for prostitution and support the people who are impacted.

Bill Kidd

Yesterday, the cross-party group on human trafficking heard from Valiant Richey, the Organization for Security and Co-operation in Europe’s special representative and co-ordinator for combating trafficking in human beings. Mr Richey emphasised that full criminalisation of the purchase of sex is by far the most effective legislative approach to tackling human trafficking for sexual exploitation.

Given that the unrelenting sexual exploitation of women and children continues and that we have power to effect real change in the matter, does the minister agree that that devolved matter should be treated with urgency in this parliamentary session and that space should be made for further parliamentary engagement?

George Adam

I agree with Bill Kidd that it is an extremely important issue. Last December, as part of the 16 days of activism to end violence against women and girls, the Parliament reaffirmed that there is no place for sexual exploitation in Scotland.

I am currently working with ministers to agree the upcoming legislative programme, and I assure Mr Kidd that the Parliament will continue to be kept informed by the lead minister as that work progresses.

Rhoda Grant (Highlands and Islands) (Lab)

From last night’s cross-party group on human trafficking, it was clear that countries that do not hold sex buyers accountable for their abuse are attractive destinations for traffickers. We also heard from Mr Richey about the clear targeting of Ukrainian refugees by traffickers and exploiters for the sex industry, which makes the issue even more urgent.

I ask for clear timescales for when legislation to hold sex buyers to account will be introduced. In the meantime, what steps is the Scottish Government taking to protect Ukrainian refugees and other vulnerable groups?

George Adam

As I said to Mr Kidd, I understand how important the issue is, and how we move forward with it is extremely important. As I also mentioned, we are currently working towards the legislative programme for year 3. Discussions are going on with other ministers with regard to that. I will ensure that the questions that have been asked are brought up when I have my bilateral meeting with ministers for the relevant portfolio.

Question 4 is from Natalie Don, who joins us remotely.

Covid-19 Recovery Strategy (Inflation)

4. Natalie Don (Renfrewshire North and West) (SNP)

To ask the Scottish Government what assessment it has made of the impact that rising inflation could have on its ability to deliver on the priority outcomes set out in the Covid recovery strategy. (S6O-01775)

The Deputy First Minister and Cabinet Secretary for Covid Recovery (John Swinney)

The financial situation, including high levels of inflation, is particularly challenging, given the absence of fiscal powers to compensate for those factors. The Scottish Government has prioritised spending that supports the people who need it most, guided in part by the principles of the Covid recovery strategy. Last year’s emergency budget review and the 2023-24 budget provide funding that helps families, backs business and protects the delivery of public services. The Scottish Government is committed to making progress towards the shared Covid recovery strategy outcomes in partnership with local government and other partners and will continue to prioritise spending that is targeted to support the people who are in most need.

Natalie Don

One of the key priorities in the recovery strategy is financial security for low-income households. This morning, it was announced that inflation is still at an eye-watering 10.5 per cent, which is five times higher than the Chancellor of the Exchequer’s target. The price of basic food items, such as milk and cheese, has increased by up to 46 per cent.

Does the Deputy First Minister agree that our ability to deliver on the Covid recovery outcomes is being made much more difficult by the Tories’ economic incompetence?

John Swinney

In the budget statement in December, I was explicit with the Parliament on the scale of the challenge that is posed by the economic turbulence that has been experienced since the start of the war in Ukraine, which has been exacerbated by the twin effects of Brexit and the aftermath of the ludicrous mini-budget in early September.

The very high level of inflation that we currently face in our economy, along with the fact that there is even more acute pressure on low-income households because the price of many of the foodstuffs on which those households depend has increased disproportionately and by more than the headline rate of inflation, are issues of significant challenge. That is why the Government has prioritised the increase in the Scottish child payment to the extent that it has. It is also why I announced an uprating of the benefits that are under our control by 10.1 per cent. We want to do all that we can to address the difficult circumstances that low-income households face.

Question 5 was not lodged.

Covid-19 Infection Rates (Recovery Strategy Review)

6. Katy Clark (West Scotland) (Lab)

To ask the Scottish Government whether it will review its Covid recovery strategy in light of rising Covid-19 infection rates. (S6O-01777)

The Deputy First Minister and Cabinet Secretary for Covid Recovery (John Swinney)

The Covid recovery strategy focuses on reducing systemic inequalities and reforming public services. The Scottish Government remains committed to that work, so there are no plans to review the strategy.

The Scottish Government remains alert to the on-going threat that is posed by Covid-19. Public Health Scotland has worked in collaboration with the Scottish Government, local government and other partners to meet the commitment in “COVID-19: Scotland’s Strategic Framework Update” to develop and publish an outbreak management plan. We continue to utilise that, to apply careful judgment and to take all relevant factors into account to ensure that responses are appropriately targeted and the necessary resources are prioritised to deal with the effects of the rising Covid-19 infection rates.

Katy Clark

The Scottish Government’s ending of free testing last April has led to some of the poorest people in society being priced out of accessing lateral flow tests, which now cost an average of £9 for a pack of five. That decision is at odds with the Covid-19 recovery strategy’s aim of supporting low-income households. Given the current high Covid rates, will the Scottish Government review its strategy and explore the feasibility of reintroducing free tests?

John Swinney

The Government has taken a range of measures to ensure that we have the available intelligence to support us in the management of the Covid-19 pandemic. Given that the rate is currently estimated to be approximately one in 25, we face a significant challenge. Such issues are regularly reviewed by the Cabinet and the ministerial group on health issues, which is chaired by the Cabinet Secretary for Health and Social Care, and in the resilience discussions that are chaired by the First Minister, which are taking place on a weekly basis.

I completely understand the point that Katy Clark puts to me, and I understand and accept its significance. However, in the absence of consequential funding from the United Kingdom Government to provide for the approach that she would like us to adopt, we would have to consider funding that approach from the existing resources that are available to the national health service in Scotland. As Katy Clark will know, we have taken significant decisions to boost the funding that is available to the health service by increasing tax for higher earners in the next financial year, but we would have to wrestle with the matter that she raises as part of the overall financing of our public services.

I will consider further the issue that Katy Clark puts to me, because it is a serious issue. I assure her that such questions will be regularly considered as part of the work of the management groups that I mentioned, which are looking at the effect of the pandemic on our public services.

Murdo Fraser (Mid Scotland and Fife) (Con)

An important tool in tackling rising Covid infection rates is the booster vaccination programme that is currently being rolled out. I have been contacted by several constituents who are in the over-50 age group who have not received appointment letters for a booster vaccination. Although they are able to access drop-in vaccination centres, which are a welcome resource, having the prompt reminder of an appointment letter is often what encourages people to attend. Does the Deputy First Minister know how widespread that issue is? What more might be done to ensure that over-50s and those in other vulnerable groups are reminded of the need to get a booster?

John Swinney

I reassure Mr Fraser that the uptake rates are really quite high: they are in excess of 70 per cent of the eligible population. I have in my mind 77 per cent. I do not have the number in front of me, but I will have it tomorrow morning, when I am at the COVID-19 Recovery Committee, so I shall perhaps be able to give Mr Fraser a more definitive answer at that time.

The level of vaccination uptake is really quite high. We have taken an approach to awareness raising that is designed to maximise the participation in the programme—at this stage, there is a very high level of uptake—and we should continue to do that.

The drop-in facilities that are available are handy and convenient for people, but I will consider further the point that Mr Fraser puts to me about written communication, because it is in all our interests to have a highly vaccinated population.

Covid-19 Recovery (Cross-Government Planning)

To ask the Scottish Government whether it will provide an update on its longer-term, cross-Government plan for Covid-19 recovery. (S6O-01778)

The Deputy First Minister and Cabinet Secretary for Covid Recovery (John Swinney)

The Covid recovery strategy contains more than 70 actions that will support people across Scotland, and particularly those most affected during the pandemic. It focuses on increasing financial security for low-income households, enhancing the wellbeing of children and young people, and creating good green jobs and fair work.

I co-chair the Covid recovery strategy programme board, alongside the president of the Convention of Scottish Local Authorities. Together with partners, we oversee recovery activity, and, at our meeting in September, attendees noted that the expectations of the Covid recovery strategy programme were being delivered. The board will meet again next week, and minutes are published on the Scottish Government website.

Annabelle Ewing

I note the 70 actions in the recovery strategy. On the important issue of Covid booster vaccination, can the Deputy First Minister advise what the current thinking is about a further programme of such booster vaccinations later this year and, indeed, in years to come?

John Swinney

Annabelle Ewing raises an important issue. As I rehearsed in my answer to Murdo Fraser, it is important to encourage uptake of the vaccination programme, and we are encouraged by the level of uptake that we are seeing. I would encourage anybody who is in the eligible population groups but who has not been vaccinated to take up the opportunity of that vaccination.

Our approach to vaccination is based on the clinical advice of the Joint Committee on Vaccination and Immunisation. I would expect the JCVI to consider the question that Annabelle Ewing puts to me about the provision of further booster vaccinations in 2023 or in later years and provide advice to the Government. Obviously, we stand ready to implement that advice.

I reiterate that, in the interim, the winter 2022 booster programme campaign remains open until the end of March. Appointments are still available, and I encourage anyone who is eligible and is yet to be vaccinated to come forward.

Government Business (Update)

8. Donald Cameron (Highlands and Islands) (Con)

To ask the Scottish Government whether it will provide an update on what Government business it plans to bring forward for the current parliamentary year. (S6O-01779)

The Minister for Parliamentary Business (George Adam)

Proposals for Government business in Parliament are agreed by the Scottish Cabinet, subject to consideration by the Parliamentary Bureau and, in turn, approval by the Parliament. As the year progresses and things move on, that will be the process.

Donald Cameron

There are increasing concerns that the Scottish Parliament’s processes are inadequate when it comes to scrutiny of the Executive’s legislation. For that reason, I intend to introduce a member’s bill on parliamentary reform. I take this opportunity to invite the Scottish Government to work constructively with me on that project. In the first instance, will the minister meet me so that we can discuss those issues together?

George Adam

Although I do not agree with some of the points that the member has made, I am quite happy to meet him to discuss things.

I will give some examples of times when there seemed to be an idea that we do not get time to scrutinise legislation here. When we had the recent Gender Recognition Reform (Scotland) Bill, the Government listened to the relevant committee’s concerns and agreed to propose a deadline on the understanding that additional time would be agreed if an unexpectedly large number of amendments were lodged. On the National Care Service (Scotland) Bill, the Parliamentary Bureau agreed a longer stage 1 deadline following feedback from the committees. On the Hunting with Dogs (Scotland) Bill, the Rural Affairs, Islands and Natural Environment Committee recently requested that stage 2 be extended by one week—in effect, creating a stage 2.5—and we revised the deadline in order to do that.

I believe that, on the whole, we do work with those members in Opposition and with the committee system to ensure that there is scrutiny of the Scottish Government.

Beatrice Wishart (Shetland Islands) (LD)

On the subject of fixed links, during the 2021 Scottish Parliament campaign, the First Minister told local media in Shetland that she was

“not just open to but actually quite enthusiastic about seeing if we could make the case for that”.

However, the Scottish Government has not scheduled a debate on the matter yet. Will the minister contemplate scheduling a debate on fixed links and tunnels so that the case can be made to help to reverse depopulation and save costs in the long term for internal ferry replacement?

George Adam

I take on board what Ms Wishart has said. My answer would normally be that the member should speak to her business manager, but I will make a special allowance in her case. I will bring the matter up with the bureau and will appeal to it myself.

That concludes portfolio questions on Covid recovery and parliamentary business.

Finance and the Economy

The Deputy Presiding Officer

We move to the next portfolio, which is finance and the economy. I encourage members who wish to ask a supplementary to press their request-to-speak buttons during the relevant question. There is an awful lot of interest in this series of questions, so I make a plea for brevity in questions and responses.

Business Rates Relief (Hospitality Businesses)

1. Annie Wells (Glasgow) (Con)

To ask the Scottish Government whether it will provide all hospitality businesses with 75 per cent business rates relief in 2023-24. (S6O-01780)

The Minister for Public Finance, Planning and Community Wealth (Tom Arthur)

Having set out a strong non-domestic rates package in the draft budget, the Scottish Government has no current plans to introduce any further reliefs. As a result of that package, around half the properties in the retail, hospitality and leisure sectors in Scotland will already pay no rates in 2023-24 due to the most generous small business relief in the United Kingdom.

The budget statement also delivered the number 1 ask of the business community by freezing the poundage, delivering the lowest poundage in the UK for the fifth year in a row.

Annie Wells

Next year, hospitality businesses in Wales and in the south will receive 75 per cent business rates relief. However, Scottish hospitality businesses are getting no extra relief from the Scottish National Party. One hundred thousand Scottish businesses are being short-changed; they are missing out on more than £200 million of support. How will our economy recover when Scottish businesses are worse off than companies in the rest of the UK?

Tom Arthur

As I outlined in my original answer to Ms Wells, we already provide the most generous package of rates relief for businesses anywhere in the UK and are freezing the poundage, making it the lowest rate for the fifth year in a row.

The reality is that we have to take decisions in the round when setting our budget, and any additional revenue to be supplied for rates relief would have to come from a corresponding decrease in another area of Government funding. If Ms Wells wishes to see a reduction in a particular area of funding in order to support non-domestic rates relief, I am happy to have that discussion.

There are a number of supplementaries. I want to get them all in, but they will have to be brief, as will the responses.

Kenneth Gibson (Cunninghame North) (SNP)

I welcome the decision to freeze the rates poundage, forgoing £308 million of income while ensuring that 100,000 businesses pay no rates at all. How much would it cost to provide 75 per cent rates relief for all hospitality businesses? Has Ms Wells or any other Tory MSP suggested from where in the Scottish budget those resources should be found or whether taxes should be increased to pay for such a relief?

Tom Arthur

It would cost an estimated £85 million to provide hospitality properties with 75 per cent non-domestic rates relief capped at £110,000 per business in 2023-24.

As I mentioned in my answer to Annie Wells, under our package of reliefs, which is worth an estimated £744 million, around half the properties in the retail, hospitality and leisure sectors will benefit from 100 per cent small business bonus scheme relief in 2023-23.

As I said, if any party wants to enhance the package of reliefs that is on offer in the budget, I would welcome hearing their alternative, fully funded proposals.

Daniel Johnson (Edinburgh Southern) (Lab)

We know that retail businesses pay a fifth of non-domestic rates when they account for only 10 per cent of the economy. Short of a discount, does the minister agree that there is a case for rebalancing and recalibrating what sectors pay based on their economic contribution?

Tom Arthur

As the member is aware, the process of setting the rateable value is carried out independently by the Scottish assessors. However, the point that he touches on is one that I appreciate is a broader concern for members about how non-domestic rates operate, namely the lack of a correlation between the rateable value and the economic performance of a business. That prompts the question of fundamental non-domestic rates relief reform and non-domestic rates reform more generally.

This is a complex area, but I am happy to discuss it with members. My door is always open to any member who wishes to discuss such matters in more detail.

Beatrice Wishart (Shetland Islands) (LD)

Hospitality businesses in Shetland were grateful for the support that was given to them during the Covid pandemic, but many now feel left behind. What more can the minister do to help island businesses through this difficult winter?

Tom Arthur

We provide a range of support through the relief packages that we provide via the non-domestic rates system, including rural rates relief. We have to take decisions in the round. The package of support that we provide on non-domestic rates, which applies Scotland-wide, is the most generous in the United Kingdom. As I said in response to other members’ questions, if members have specific proposals for reform of non-domestic rates, I am happy to discuss them. If there are specific reliefs that they would like to see, I would welcome a conversation, but it has to come with fully funded and costed proposals.

Katy Clark (West Scotland) (Lab)

Unite the union’s get me home safely campaign calls on councils to make free safe transport home for late-night workers a requirement for new and extended alcohol licences, and some councils such as North Ayrshire Council and East Dunbartonshire Council have backed the campaign. Will the Scottish Government explore making the provision of safe transport home for late-night workers a condition of future support for hospitality businesses?

Tom Arthur

The issue of conditionality around rates relief has been raised in a number of different contexts. There are complexities to that, but I would be happy to discuss the issue with the member in more detail if she would like.

Oil and Gas Exploration

2. Sandesh Gulhane (Glasgow) (Con)

I apologise for arriving during the session.

To ask the Scottish Government whether it has fully considered the economic consequences of its presumption against new oil and gas exploration, both to workers within the industry and to the wider Scottish economy as a whole. (S6O-01781)

The Minister for Just Transition, Employment and Fair Work (Richard Lochhead)

The oil and gas sector and its highly skilled workforce have long been at the forefront of energy innovation and have an important role to play in Scotland’s energy transition. However, as we all know, the North Sea basin is mature, and production will inevitably decline.

The draft energy strategy and just transition plan draw on established industry data and independent work commissioned from consultants that analyses the energy and economic contributions of the North Sea and the wider oil and gas sector in Scotland, and includes production forecasts, the expected growth of Scotland’s low-carbon energy sectors and the impact of the energy transition on employment and the wider economy. As a responsible Government, we have set out a pathway to ensure a fair and just transition—any other approach would serve only to put jobs and our economy at risk.

Sandesh Gulhane

The oil and gas communities of the north-east of Scotland will be devastated at the disregard shown to them by the Scottish National Party Government. The sector is highly important to our economy, and even in our just transition away from fossil fuels, which is estimated to take 25 years or more, it will be a necessary component of our on-going energy infrastructure. Does the cabinet secretary accept that halting oil and gas production would increase our reliance on foreign imports of oil and gas and prop up questionable regimes, which would only amplify and relocate the greenhouse emissions that we seek to reduce as well as damage domestic job creation?

Richard Lochhead

This question is about future exploration, not existing oil and gas production, as the member suggests. By 2035, production in the North Sea will be around a third of 1999 levels, and it will be less than 3 per cent of the 1990 peak by 2050. We have a duty, which the energy strategy fulfils by looking to the 2030s and 2040s and the need of future generations for energy and jobs, to look at what we can do to make sure that we meet our responsibilities as a country and do not focus only on today’s headlines.

Research from Robert Gordon University and other institutions estimates that the number of low-carbon jobs will rise from 19,000 in 2019 to 77,000 by 2050, which means that there will be an increase in energy-related jobs in north-east Scotland and elsewhere. As someone who represents a constituency with many oil and gas jobs in it, and who spends a lot of time in north-east Scotland because of my ministerial responsibilities, I am very familiar with the views of those in the oil and gas sector and with the fact that oil and gas majors are investing heavily in, and are very committed to, the energy transition.

The Scottish Tory party has to make up its mind: if it wants a transition, what does it want to transition to? We want to transition to clean energy for Scotland and to tackle climate change.

Answers need to be slightly briefer.

Audrey Nicoll (Aberdeen South and North Kincardine) (SNP)

During last week’s Prime Minister’s questions, Rishi Sunak committed to supporting the north-east energy sector. Does the minister agree that the Prime Minister should put his money where his mouth is by matching the Scottish Government’s £500 million just transition fund, and that he should stop delaying investment into the Acorn carbon capture and storage project, which has been left completely in the lurch?

Richard Lochhead

Those were very good points. The United Kingdom Government—which has extracted more than £300 billion from the North Sea—should match the Scottish Government’s £500 million for the north-east of Scotland and Moray just transition fund. The previous question was about the economic assessment of our energy plans, and I would like to know what the UK Government’s economic assessment was that led to its refusal to take forward the Acorn project, which would create up to 20,000 new jobs in Scotland, many of which would be in north-east Scotland.

Brexit (Impact on Economy)

To ask the Scottish Government what the continuing impact of Brexit is on Scotland’s key economic sectors. (S6O-01782)

The Minister for Business, Trade, Tourism and Enterprise (Ivan McKee)

It is now clear that Brexit is holding back our public services and scarring our economy. Leaving the European Union has made it harder to recruit doctors and nurses for our national health service, for example. The latest research by the Nuffield Trust shows that, without Brexit, the United Kingdom would have had 4,000 more specialist doctors from the EU.

Meanwhile, the exports of some Scottish industries have plummeted due to Brexit trade barriers. Just look at fruit and vegetables, where EU exports have been slashed by one half since 2019. That said, the Scottish Government will continue to support our businesses through our export growth plan, which will enable Scotland’s export performance to outpace the UK’s. Our international goods exports were up by 16.7 per cent in 2022 compared to the first nine months of 2019, while UK figures were up by only 2.4 per cent.

Fiona Hyslop

Does the minister agree that Brexit was never a one-off event and that it is having a continuous negative effect on our economy, with no apparent positives?

Businesses that export are more likely to pursue innovations, so, with Scottish exporters continuing to face growing challenges in trading with countries in the EU, the continuing effect of Brexit will also impact on innovations in our economy for the future. Does the minister agree that the longer Scottish businesses remain out of the EU, the more damage Brexit will bring to Scotland’s economy and that the only political route to the full benefit of trading in the single market—with the Labour party and the Liberal Democrats now embracing Brexit—is Scotland becoming an independent state and joining the EU?

Ivan McKee

As the member correctly identified, Scotland’s economy will continue to suffer while we remain outside the European single market because of a hard Brexit that we did not vote for. Only through the full powers of independence will Scotland replicate the success of comparable countries that are more prosperous, more productive and fairer than the UK.

Tay Cities Deal

To ask the Scottish Government whether it will provide an update on any investment arising from the Tay cities deal. (S6O-01783)

The Deputy First Minister and Cabinet Secretary for Covid Recovery (John Swinney)

The Tay cities region deal has had a successful first two years since it was signed, in December 2020, with more than £70 million of Government funding already having been received by regional partners. The partnership is currently preparing its latest annual report, which will outline the achievements to the end of September last year, and we anticipate that it will include the securing of over £120 million of investment into the region.

Joe FitzPatrick

The Tay cities deal is delivering vital support to the region’s economy in these challenging times by supporting skills development, providing training and job opportunities and driving additional investment into the area. Can the cabinet secretary say more about investments in Dundee specifically and how those are helping to support local employment and drive innovation?

John Swinney

Dundee, which is in Mr FitzPatrick’s constituency, has benefited significantly from the Tay cities deal. The universities are benefiting, with £25 million from the Scottish Government going towards enhanced infrastructure for life sciences innovation at the University of Dundee as well as support for the refurbishment that led to the cyberQuarter development at Abertay University. That development opened in June last year and aims to support 150 businesses in the cyber security sector, which is absolutely vital given the developments in the global economy.

Not quite in Mr FitzPatrick’s constituency but at the other end of the city, the investment from the Scottish Government in the Michelin Scotland Innovation Parc is significant in supporting the development of new opportunities. If Mr FitzPatrick will forgive me, I will also mention the James Hutton Institute, in my constituency, which is close to the boundary with the city of Dundee. The developments there are welcome into the bargain.

Murdo Fraser (Mid Scotland and Fife) (Con)

I agree with Mr FitzPatrick about the value of the Tay cities deal. In line with the rest of the developed world, we have seen substantial construction price inflation over the two years since the deal was signed. When I visited the James Hutton Institute in December, it raised with me the issue of whether the funds that had been allocated in the deal would now cover the construction costs of the welcome major infrastructure build that the institute now has to commit to. Has the Scottish Government done any work on whether the funds that were allocated in 2020 will now be sufficient to meet those increased costs?

John Swinney

I raised that point in my budget statement to Parliament in December, because the issues that Mr Fraser correctly highlights will undoubtedly put pressure on these long-term projects. Projects that, for example, had an estimated cost in the benign climate of 2020 are now in a significantly different position because of the effect of hyperinflation.

We hope that there will be reductions in inflation, but I have to say quite openly to Parliament that there will be challenges around uprating projects that have been affected by inflationary cost. It is a problem that we are wrestling with right across Government. We will do our level best to address that in the capital programme, to ensure that projects can be taken forward. However, there will be strains in city deals, which are long-term growth deals, because of the effect of inflation.

Willie Rennie (North East Fife) (LD)

St Andrews university has delivered its part of the Tay cities deal at its new Eden campus in Guardbridge, and it is bursting with ideas about what to do next. It wants to crack on with the next phase of the deal. Has the minister had discussions with the United Kingdom Government about that next phase? If not, will he start such discussions?

John Swinney

We are certainly open to further discussions on these questions. I compliment the University of St Andrews on the development in Guardbridge. I drove past it the other week, on my way to St Andrews, and it is looking good. It is a significant enhancement of the area and a sustainable proposition.

We have not had discussions with the UK Government about a further round of city deals. On Friday, Mr McKee will be signing the islands deal in Liam McArthur’s constituency—I mention that because Liam McArthur is currently in the Presiding Officer’s chair. The islands deal is the latest of the deals involving the islands communities. However, we are happy to have further discussions with the UK Government on these questions.

Mr McKee will be afforded a warm welcome when he arrives.

Financial Policy (Decision Making)

To ask the Scottish Government how it takes the complexity of human behaviour into account during financial policy decision making. (S6O-01784)

The Minister for Public Finance, Planning and Community Wealth (Tom Arthur)

The Scottish Government is aware of the risks and benefits arising from behavioural responses to policy proposals, and we actively work with stakeholders such as HM Revenue and Customs to monitor and continually improve the evidence base, to help to inform policy development. The Scottish Fiscal Commission is responsible for producing independent forecasts of devolved tax and social security spending for the Scottish budget and for making judgments about the scale of any behavioural responses and their fiscal implications in those forecasts.

Michelle Thomson

The minister will be aware that the Finance and Public Administration Committee has launched an inquiry into approaches to decision making in the Government. One key aspect is fully understanding how to assess risk. Does the Scottish Government have an established approach to the disaggregation of risk? If so, can the minister outline its principles?

Tom Arthur

I recognise and welcome the committee’s work in that particular area and, indeed, its continuing interest in the area when I appear before the committee. I am sure that the inquiry will make a valuable contribution to the subject, including in the area of risk management.

The Scottish Government has a robust risk management framework to support the identification, assessment, management and reporting of risks during the development and delivery of policy within each portfolio and across Government, which helps to promote best practice. The framework aligns to the principles of risk management as they are outlined in the Scottish public finance manual, which is publicly available.

Liz Smith (Mid Scotland and Fife) (Con)

At the same committee meeting, the minister said, in answer to a question from John Mason, that he understands the importance of the private rented sector for the mobility of the working population. What is the Scottish Government going to do to address the concerns of landlord associations and some local authorities that the proposed increase in the tax on the additional dwelling supplement, which comes at the same time as the rent freeze, will cause some landlords to exit the market, thereby threatening the supply of private rented accommodation, which is crucial to the economy, especially in rural areas?

As briefly as possible, please, minister.

Tom Arthur

As I set out at some length during the committee meeting yesterday, we take decisions on fiscal policy in the round. The policy intention behind the additional dwelling supplement is clear: it is to provide support for first-time buyers, but it also has the clear objective of raising revenue.

On the specific point about local government, the issues there and the current lack of parity with registered social landlords are being considered through the ADS review. I will be in a position to update the Parliament on the outcome of that review soon.

Amazon (Gourock Site Closure)

6. Neil Bibby (West Scotland) (Lab)

To ask the Scottish Government whether it will provide an update on its response to the announcement from Amazon that it is to close its Gourock site. (S6O-01785)

The Minister for Business, Trade, Tourism and Enterprise (Ivan McKee)

I spoke with Amazon last week but was very disappointed that there was no clarity on its rationale for the potential closure of its site in Gourock. I have since written to Amazon’s US headquarters to seek further clarification on those points and to seek a conversation with the people who are behind the company’s operational decision. I have had a response from Amazon in the United Kingdom and I am about to reply to it, because, to my mind, it did not go far enough with the information that it provided. It is vital that we access the detail in order to explore all viable options and to seek an alternative outcome to its decision to close the site. During the meeting, I urged Amazon to engage with local trade unions and, at my request, the company has agreed to engage with the Inverclyde task force in order to better understand the potential impact that the planned closure will have on the local economy.

Neil Bibby

I thank the minister for his answer and his recent updates. To support the workforce, I hope that he will continue to urge Amazon to think again and that he will seriously explore options with the company to relocate locally if the current site is deemed unsuitable, working alongside the GMB and the council.

I know that the minister is a member of the Inverclyde socio-economic task force and that he understands the long-standing challenges that that community faces. However, already this year, 300 jobs look set to go at Amazon. Ports on the Clyde have lost out on freeport status to the east and north, which has undermined their competitiveness, and Inverclyde Council faces a £6 million black hole in its budget, raising the prospect of more job losses. Given all of that, does the minister share my concern that the Inverclyde economy is being undermined? What action will the Government take to support the local economy and to ensure that the area gets a fair deal?

Ivan McKee

We are focused on all parts of Scotland in making sure that we maximise our potential. As the member knows, I engage closely with members and others in Inverclyde, and I am looking forward to the next task force meeting on Monday next week, which I will be attending in person, where I will take forward discussions on how we can work together to make sure that the full potential of the economy in Inverclyde is maximised. There is a range of support available, including city region deal projects and other projects that the Scottish Government supports and funds, for the development of the local economy.

Budget 2023-24

7. Jamie Halcro Johnston (Highlands and Islands) (Con)

To ask the Scottish Government what its response is to the comments by the Scottish Chambers of Commerce regarding the budget 2023-24 that it represents “a clear disadvantage for Scotland’s businesses and workers”. (S6O-01786)

The Deputy First Minister and Cabinet Secretary for Covid Recovery (John Swinney)

I do not agree with that assessment. In arriving at our income tax policy for 2023-24, we have sought to carefully balance the need to raise revenue with the impact on households, businesses and the wider economy at the current time. The majority of people in Scotland will still pay less income tax than they would if they lived elsewhere in the United Kingdom, and our income tax policy will enable us to make additional investment in the national health service by exceeding the health resource Barnett consequentials from the UK Government. In addition, Scotland offers the most comprehensive social contract in any part of the UK, making Scotland an attractive place in which to live, work, study and do business.

Jamie Halcro Johnston

As I highlighted to the cabinet secretary at the Economy and Fair Work Committee this morning, the tourism and hospitality sectors are facing severe pressure at the moment, but the budget provides little comfort.

As Annie Wells suggested, businesses in the sector south of the border will receive a 75 per cent discount on their rates next year, while—despite receiving hundreds of millions of pounds of Barnett consequentials to deliver the same—the Scottish Government has chosen not to do that. The Scottish Beer and Pub Association says that that puts Scottish pubs at a “significant disadvantage”; the Scottish Hospitality Group said that the budget offered “nowhere near enough to see the sector through” and that “many small businesses won’t survive”; and the Scottish Tourism Alliance expressed the disappointment of its members and warned that 23 per cent of Scotland’s tourism businesses were in “survival mode”.

If the cabinet secretary will not offer the same arrangement to Scotland’s sector, will he at least lobby his ministerial colleagues to roll back some of the extra unnecessary regulatory burdens, such as the delayed short-term lets licensing and deposit return schemes, that it intends to push on this already struggling sector?

John Swinney

In a sense, Jamie Halcro Johnston answers his own question. The Government has already delayed the introduction of the short-term licensing scheme to provide more time for the sector to adjust to it.

Earlier in the session, in response to Annie Wells, the Minister for Public Finance, Planning and Community Wealth set out the fact that about half of the retail, tourism and hospitality businesses will benefit from 100 per cent rates relief because Scotland has a different small business bonus scheme from that which operates in the rest of the United Kingdom. Rather than just tell us that we should replicate what goes on in England, Jamie Halcro Johnston should think about the fact that, if we did so, lots of companies would have to start paying business rates, and he is not suggesting that that should happen.

Finally—this is the real point—according to the figures that Mr Arthur put on the record, Jamie Halcro Johnston is asking me to commit to spending another £78 million on business rates relief. If he wants me to spend that money on that, he has to have the honesty to come to Parliament and explain where the money is coming from. Already, his colleagues are opposing the tax changes that I have made, which is another £125 million or so that they have to find.

The Conservatives cannot come here and ask me to spend more money when they cannot tell me where the money is coming from.

I am determined to get the final question in.

Glasgow Economy (Business Support)

8. Pam Duncan-Glancy (Glasgow) (Lab)

To ask the Scottish Government what steps it will take to support businesses in key sectors of Glasgow’s economy. (S6O-01787)

The Minister for Business, Trade, Tourism and Enterprise (Ivan McKee)

The Scottish budget 2023-24 will deliver the lowest non-domestic rates poundage in the United Kingdom for the fifth year in a row and maintains a package of reliefs worth an estimated £744 million, which will benefit many Glasgow businesses.

In addition, Scotland’s industry leadership groups have played an important part in developing sectoral recovery plans. The ILG chairs’ round table facilitates cross-industry conversations and actions, focusing on areas of greatest strategic importance for industry, and many of those sectors are represented across Glasgow’s wide and diverse economy.

Scottish Enterprise has invested £25 million in the Glasgow city innovation district as a founding member of Clyde Gateway urban regeneration company.

Pam Duncan-Glancy

One sector that has not been mentioned is Glasgow’s black cab sector.

Black cab drivers in Glasgow have been given until June this year to meet low-emission zone targets. Most cannot afford £61,000 for a new car that would comply with the requirements, and, on Friday, the Energy Saving Trust said that there was no money left for grants to retrofit vehicles, and it stopped accepting applications as of yesterday.

Given that the deadline to meet low-emission zone standards is June, how on earth are those drivers expected to meet the requirements? Will the Scottish Government commit to providing more financial support and grants in order to prevent major job losses in the black cab trade in Glasgow?

As briefly as possible, minister.

Ivan McKee

Since 2019, the Scottish Government has made £7.2 million available to support LEZ funding for small businesses, including taxi operators, and households. There is support available for retrofit of existing vehicles, and the Scottish Government is offering grant funding of up to 80 per cent of the associated capital costs, which is the most generous offer of its kind in the United Kingdom. This year has seen record numbers of taxis being retrofitted as a consequence of that.

Grant funding is available that provides more than £2,000 for any vehicle that is disposed of. That funding is available to microbusinesses, and taxi companies comprise the most applications for that in the past financial year.

Further, Glasgow City Council has a discretionary mechanism for eligible taxi operators to receive a temporary exemption to the LEZ beyond the enforcement date of June this year, which will give taxi operators additional time to comply.

I am happy to discuss any other points with the member and to raise those with Glasgow City Council.

The Deputy Presiding Officer

With apologies to the members whom I was not able to call for supplementary questions, I make the plea that the scripted responses from ministers need to be shorter in order to allow more supplementaries.

Before we move to the next item of business, there will be a brief pause to allow members on the front benches to change.