To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues regarding the economic impact of any increased taxation by United Kingdom, Scottish and local governments on people and businesses across the Highlands and Islands. (S6O-04870)

Ministers have regular discussions with their colleagues on a range of issues that have an economic impact, including growth and taxation.

In relation to recent tax rises, of most concern to us is the additional burden created by the UK Government’s decision to change employer national insurance rates and thresholds. Undoubtedly, that is having an impact on businesses in the Highlands and Islands and across Scotland. The UK Government’s own economic impact assessment confirmed that the changes will result in lower employment and higher costs for businesses across the UK.

Businesses across my region are facing growing pressures on their bottom line, with increased energy costs, regulation and tax Bills. Meanwhile, their customers’ spend is impacted by cost of living issues as well as on-going increases in their own taxes, most notably council tax.

In Orkney, two popular local hospitality businesses announced before the summer that they were closing their doors, while others that I spoke to during my summer tour of the Highlands and Islands made it clear: they are not sure, even with the huge effort and sacrifices that owners and staff often make, that their businesses are sustainable in the long term. They do not feel that the Scottish Government—or, for that matter, the UK Government or local government—truly understands the crisis that is facing our restaurants, pubs and bars, nor the devastating impact of the policies being wrought on the sector. Does the Minister recognise their concerns? If he does, what will the Scottish Government do to better support our hospitality businesses?

As a member who represents a Constituency that lies in Mr Halcro Johnston’s region, I am very familiar with some of the issues and concerns of my local businesses. Those concerns are reflected throughout the Highlands and Islands and, indeed, in many parts of Scotland. I recognise the pressures that many businesses, particularly smaller ones, face at the moment. The First Minister and the Scottish Chambers of Commerce have made representations to the UK Government on its forthcoming budget, to ensure that measures come out of that to alleviate the massive pressures on businesses.

The businesses that I speak to are talking mostly about national insurance contributions, VAT, tourism and a range of other issues that are the responsibility of the UK Government. We in Scotland must pay attention to those pressures and take them into account, as must local authorities in their decisions in the coming months.

The Deputy First Minister highlighted some exciting statistics about the new businesses being created in Scotland, with record-breaking increases in the first six months of this year compared with the first six months of last year, and a pleasant surprise from those statistics was that the sector with the biggest representation in that increase in new businesses was hospitality. Clearly, the situation is patchy across the country. In saying that, I am not talking down the pressures that the hospitality sector is facing in a variety of areas—I speak to those businesses very regularly. Indeed, I want to congratulate The Pier, a new cafe in the hospitality sector in Lossiemouth, which has opened in the past couple of months. There are new businesses out there that are doing a great job against very tough backdrops, and we should congratulate them on their resilience.

Spiralling energy costs and Labour’s national insurance hike are squeezing the public sector and businesses alike and limiting their ability to grow and invest. Does the Minister agree that Labour must urgently abandon that tax on jobs? Can he say any more about the support that the Scottish Government is offering to businesses in Scotland’s Highlands and Islands?

I join Emma Roddick in her appeal to the UK Labour Government, which, when it was first elected, said that it had a growth mission but went on to introduce an increase in tax for businesses that is causing real problems. If I had a pound for every time a business raised that issue with me, I would be a very rich person.

The national insurance rise is a huge issue that is of equivalent importance to the energy issue. It is perhaps the biggest issue that is being raised by businesses—especially small businesses—throughout Scotland at the moment. I appeal to the Labour Party to take that on board in the forthcoming budget. The NI increase is crippling businesses the length and breadth of Scotland. We have had rising energy costs when we were promised lower energy costs, and rising business costs when we were promised a growth mission.

Question 6 comes from Tim Eagle, who joins us remotely.