Covid-19: Support for Scottish Businesses

Scotland – in the House of Commons on 10th March 2021.

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Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan

What assessment he has made of the effectiveness of economic support for Scottish businesses during the covid-19 outbreak.

Photo of Alister Jack Alister Jack The Secretary of State for Scotland

Last week’s Budget provides continued UK-wide support and security to manage the ongoing impacts of covid-19. One in three jobs in Scotland have been supported by the UK Government’s unprecedented employment support package. Scottish businesses have benefited from more than £3.5 billion of loans and support, driven by UK Government schemes. We have also provided a much-needed boost by extending the reduction of VAT for our tourism and hospitality sectors.

Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan

Does my right hon. Friend agree that the benefits of the Union of four nations have really come to the fore over the last 12 months, in that the strength of the UK Government’s balance sheet has meant not only that families, businesses and individuals in all parts of the UK have been able to benefit from that strength, but that the devolved Administrations have received the resources that they need to support people in all parts of the country?

Photo of Alister Jack Alister Jack The Secretary of State for Scotland

My right hon. Friend is absolutely correct and, more importantly, the majority of people in Scotland agree with him. Not only did they emphatically reject independence in 2014, but the most recent opinion polls show that they have realised that neither the Scottish National party nor its leader can be trusted, and that independence would make everyone in Scotland significantly worse off.

Photo of Ian Murray Ian Murray Shadow Secretary of State for Scotland

I am sure that the Secretary of State would like to join me—I am sure he accidentally omitted it—in congratulating Anas Sarwar on becoming leader of the Scottish Labour party, the very first ethnic minority leader of any UK political party. I am sure that his positivity and optimism will transform Scotland when compared with what we have at the moment.

Business covid support in Scotland has been sporadic at best, and I hope that the Government will tell us how we will get a full transparent audit from the Scottish Government, following the Audit Scotland report last week that estimated that £2.7 billion was unspent, not including the £1.2 billion from last week’s Budget. Every penny needs to be spent now.

This Government talk a lot, as we have heard already, about a post-covid levelling-up green agenda, yet they are pursuing a policy in offshore renewables that benefits its business solely in the south-east of England. The Government’s fourth contracts for difference auction at the end of this year actively disadvantages viable Scottish offshore renewable projects, as the Department for Business, Energy and Industrial Strategy includes out-of-date and expensive transmission charges in auction bids. What is the Secretary of State doing to ensure that the Government ditch this unfair renewables policy that advantages south-east England at the expense and detriment of perfectly viable offshore renewables projects off our Scottish coasts?

Photo of Alister Jack Alister Jack The Secretary of State for Scotland

May I begin by agreeing with the hon. Gentleman in welcoming Anas Sarwar as leader of the Scottish Labour party? I also completely agree with the hon. Gentleman that we need more transparency on the spending of the £9.6 billion of covid support and business support that the Scottish Government have received. On the transmission issue, as he will know, by law, transmission charging is a matter for Ofgem, which is an independent regulator. However, Ofgem is currently considering some aspects of the transmission charging arrangements through its access and forward-looking charges review, and I encourage all Scottish generators to engage with that review at the earliest opportunity.

Photo of Ian Murray Ian Murray Shadow Secretary of State for Scotland

I accept the Secretary of State’s answer, but it will disadvantage projects. BEIS has said that it will not change the auction requirements and, therefore, unless the wind blows in the south-east estuary of England, renewables, including in Scotland, will be significantly disadvantaged.

Given the mess that the Scottish Government are making of business and industry in Scotland, from steel to airports, to ferries, to aluminium smelters, I hope that the UK Government deliver on their promise to protect the Scottish financial services sector post-covid and post-Brexit. Financial services have done very well from Brexit, as long as they are in Amsterdam or Frankfurt. In Scotland, the sector employs 162,000 people and is nearly 10% of the Scottish economy, but despite its importance, it was not included in the Brexit deal at all. Will the Secretary of State guarantee today that the sector will get a much needed post-covid boost by ensuring that the memorandum of understanding on financial services, which is due to be signed in a matter of days with the EU, gives this critical industry the equivalence and access to EU markets that it was promised by this Government?

Photo of Alister Jack Alister Jack The Secretary of State for Scotland

The UK and the EU have agreed in a joint declaration to establish structured regulatory co-operation for the financial services industry. A memorandum of undertaking will be agreed in discussions between us and the EU to establish a framework. Those discussions are currently ongoing at official level, but as with the Brexit negotiations, we cannot give a running commentary.