S6W-27615

Asked by: Sweeney, Paul (Scottish Labour - Glasgow)

Question

To ask the Scottish Government what its response is to reported figures from the Organisation for Economic Co-operation and Development (OECD) stating that companies in China receive nine times more government support, such as subsidies and tax breaks, than their counterparts in OECD countries such as the UK, and what measures it will take to improve such support for companies in Scotland.

Answered by Forbes, Kate

Subsidies can make an invaluable contribution to businesses. However, if they are misused or overused, it can lead to undesirable outcomes. This is why Scottish Government subsidies are allocated in line with the Subsidy Control Act 2022. The OECD themselves highlight this in their analysis, Measuring Industrial Subsidies, from January 2024 as an important key message; “while subsidies can be helpful in addressing emergencies or market failures, they can also undermine fair competition and lead other countries to respond in kind, to the detriment of consumers, taxpayers and governments with fewer resources, and ultimately undermining public support for an integrated global economy”.

It is unhelpful to compare subsidies in the Scottish economy with that in China, which operates a post-communist, state-driven model which is very different than most other economies, with high levels of state intervention in the economy, and currently facing its own significant economic challenges, including high levels of debt in its state-owned enterprises.

The First Minister and I have been clear in our message to businesses in Scotland and potential investors; Scotland is open for business and open for investment and we will do everything we can to ensure that is the case.

We have allocated over £307 million to our enterprise agencies in 2024-25. Scottish Enterprise, Highlands and Islands Enterprise and South of Scotland Enterprise have a key role to play in unlocking the full economic potential of their regions and providing support to businesses - through advice and information, investment and access to business premises. The Scottish National Investment Bank provides long-term investments for businesses, projects and communities, including both debt and equity, and on 20 May I announced a £5 million package of support measures for start-up tech businesses that will create conditions to encourage more investment into Scotland. These measures will form the next step in providing one of the most comprehensive government-backed support networks in Europe.

Mentions:
1: Mackay, Rona (SNP - Strathkelvin and Bearsden) How do those measures differ from those used by the UK Department for Work and Pensions? - Speech Link
2: Chapman, Maggie (Green - North East Scotland) and benefits ambitions in Scotland have a quite different foundation from those elsewhere on these islands - Speech Link
3: McLennan, Paul (SNP - East Lothian) nearly £600 million in affordable homes across Scotland, including through the demand-led rural and islands - Speech Link
4: Gibson, Kenneth (SNP - Cunninghame North) Trust have highlighted issues with accessing the affordable housing supply programme and the rural and islands - Speech Link
5: McLennan, Paul (SNP - East Lothian) The £30 million rural and islands housing fund can also support delivery of high-quality homes, which - Speech Link

Mentions:
1: Dey, Graeme (SNP - Angus South) I have also met—not specifically on that college, but on the University of the Highlands and Islands - Speech Link
2: Mackay, Rona (SNP - Strathkelvin and Bearsden) Will the minister outline how the UK Government’s financial decisions have impacted on Scotland’s public - Speech Link

Mentions:
1: Hyslop, Fiona (SNP - Linlithgow) The draft “Islands Connectivity Plan—Strategic Approach” paper, which was published for consultation - Speech Link
2: Grant, Rhoda (Lab - Highlands and Islands) also confirm that the people of Orkney and Shetland will enjoy the same subsidies as people on other islands - Speech Link
3: Hyslop, Fiona (SNP - Linlithgow) Indeed, as part of its agreements with the European Union, the UK Government was to continue to have - Speech Link
4: McAllan, Màiri (SNP - Clydesdale) moving to net zero and how our ability to make the required investments is being undermined by the UK - Speech Link
5: Robertson, Angus (SNP - Edinburgh Central) We continue to call on the United Kingdom Government to undertake a full UK-wide public inquiry into - Speech Link