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Scotland’s Economy

Volume 728: debated on Wednesday 22 February 2023

Like many countries around the world, the UK has been buffeted by global economic headwinds driving high inflation and slowing growth, but we have taken decisive action to protect households and businesses. The Government know there is more to do, which is why the Prime Minister has pledged to halve inflation this year, deliver sustainable growth and start reducing debt.

We know that a stronger economy begins in the heart of our communities, but local authorities across Scotland have been forced to cut back on essential services and consider up to 7,000 job losses or hikes in council tax because of the impossible situation in which the Scottish Government have put them. Does the Secretary of State think that Scottish people should have to pay more for poor-quality services?

The hon. Lady makes a good point. The Scottish Government have received a block grant settlement this year of £41.6 billion—the highest in real terms since devolution began. Their behaviour towards local authorities completely contrasts with that of the UK Government. We are working with Scottish councils, delivering funding directly to them to help them with the projects that matter the most to their people. I would say that that is real devolution, not SNP centralisation.

The Scottish Government’s delayed and botched deposit return scheme has turned into total chaos: businesses want to redesign it to make it work; the public do not know about it; and MSPs want it delayed again. The scheme has been a shambles from day one, with a former SNP Minister describing it as “the Titanic heading for an iceberg”. Does the Minister agree that this process needs urgent reform, and will he encourage his Cabinet colleagues to make sure that any UK-wide scheme learns from the pitfalls of the Scottish Government process?

Yes. I have had legitimate concerns raised with me by businesses across Scotland and by stakeholder groups and I have urged the Scottish Government to pause the scheme. There is no doubt in my mind that the scheme is not just bad for businesses, but bad for stakeholders and consumers. Anecdotally, Aldi will sell 12 bottles of Scottish water for £1.59. Under this scheme, that will become £3.99. If that is not inflationary, if that is not adding to people’s cost of living, I do not know what is. Furthermore, we have not been asked for an exemption for this under the rules of the UK Internal Market Act 2020 by the Scottish Government—no request for an exemption has come. The exemption bar is very high indeed, otherwise what is the point of the UKIM?