13.06.12: Renewables targets
At the Economy, Energy and Tourism Committee, John Park (Mid Scotland and Fife) (Lab) asked members of the Office of the Gas and Electricity Markets about the investment necessary to meet targets set by the Scottish and UK Governments over the next decade and security of supply.
Ian Marlee, head of Ofgem’s transmission team, said: “Our role involves trying to ensure that there are no undue barriers to investment. Before 2004, we had a price control regime that made it difficult for new investment to be made until the end of a price control period. In 2004, we introduced our transmission investment for renewable generation programme. We then updated that for the last price control period in our transmission intensive investment programme, and now, under RIIO, we will have strategic wider works.
“That puts in place a process whereby companies can come to us and say that there is a needs case for building the transmission lines. There are developers that are at the right stage to come forward and say: ‘Please, can you invest in the network so that it’s ready for our project?’ We have therefore put in place flexible arrangements to facilitate that.”
Regarding Ofgem’s Project Transmit, Marlee said: “Again, we have been trying to ensure that there is no undue barrier for renewables by ensuring that companies pay only a costreflective charge for access to the network.”
Park said: “When we talk about the renewables targets, we talk much more about an industry. The Scottish Government is talking about the reindustrialisation of Scotland and all the employment opportunities that will come from that. Have you a view on the skills challenges that will arise? If so, have you concerns to highlight about issues that would inhibit the Scottish Government in meeting the targets? What interventions by the Scottish Government would help to meet the targets?”
Marlee responded: “To be honest, those questions are probably best asked of the companies. We look at companies’ plans when we provide for them. There is a big need for a step up in investment. We have provided £2.3bn in the baseline for the Scottish transmission owner companies for RIIO-T1 revenue which covers from 2013 to 2021, plus up to an additional £3.7bn. That is a massive step up in the investment that those companies will make. When we looked at the plans, we asked the companies questions about their operating expenditure. However, it is for the companies to ensure that they skill up for delivering against the outputs that they will be required to deliver over the period that I mentioned.”
Kezia Dugdale (Lothian) (Lab) asked the First Minister how many new jobs have been created as a result of the Modern Apprenticeship programme.
Alex Salmond said that as of 31 March this year, there were 35,262 apprentices in training, of whom 21,931 were aged between 16 and 19.
Dugdale said: “The people of Scotland were led to believe by the First Minister that the 25,000 apprenticeships were created to help the 100,000 young Scots who are out of work, but now we know that at least 10,000 of those went to folk who were already well established in jobs. On an issue as important as this, why cannot he just be straight with people?”
Salmond responded: “Over the past few days, I have watched Kezia Dugdale engage in what I think has been one of the most disreputable campaigns against Modern Apprenticeships in Scotland. At the heart of her new-found complaint – the rules on the matter have not changed from when the Labour Party was in office – is her belief that there are far too many people on the Modern Apprenticeship scheme who have been in jobs for six months or longer.
“Let us remember that the number of Modern Apprenticeships in Scotland has almost doubled since this party took office in 2007. If we look at 16 to 24-year-old apprentices, who predominate in the Modern Apprenticeship programme, we see that the proportion of them who had been in employment for more than six months was 23 per cent. That means that 80 per cent were new workers going into apprenticeships in the 16 to 24 age group.
“What was the figure when the Labour Party was in office in 2006? It was 49 per cent. In other words, when Labour was in power, with a reduced number of apprenticeships, half of the young people had been in a job for six months or longer. That figure has now been reduced to 23 per cent.”
In a statement to Parliament, Finance Secretary John Swinney said an organisation will be established to oversee the collection of new taxes in Scotland and pledged that it would be cheaper to run than HM Revenue and Customs.
Revenue Scotland will be set up this year and will be up and running by 2015, when the Scottish Government gets new taxation powers. As part of the changes already approved in the Scotland Act, the UK Government is handing over responsibility for taxes on the sale or leasing of land and buildings and the disposal of waste by landfill. Revenue Scotland will administer the Scottish versions of stamp duty and landfill tax that will be introduced.
It will work with Registers of Scotland and the Scottish Environmental Protection Agency to collect the new charges, as these organisations already have a role in this. While Scotland will also get new powers over income tax in 2016, the Scotland Act has already set out that this will be collected by HMRC, meaning Revenue Scotland will play no part.
Swinney said: “Through Revenue Scotland we will serve the needs of the people of Scotland at a lower cost than the UK set-up and we will deliver a better system more in line with Scotland’s needs.’’ The cost for HMRC to administer the existing charges on behalf of the Scottish Government up to the end of March 2020 would be around £22.2m but the cost of the new system would be just over £16.7m, he said.
Swinney also launched a consultation on a land buildings transaction tax, intended as a replacement for stamp duty. The Scottish Government’s preference was for a “progressive system of taxation where the amount paid is more closely related to the value of the property and, therefore, to the ability of the individual to pay’’, he said. The Government will also carry out a consultation on a replacement for landfill tax in the autumn.
Labour’s Ken Macintosh said the statement provided “very little on what most people want to know: whether the new taxes are going to be higher or lower than before. The Scottish Government has said it wishes to cut corporation tax, over which it has no control, and yet it doesn’t tell us what it intends to do over the taxes for which it has full responsibility.”
Swinney responded that there were nearly three years to go before the taxes were devolved to Scotland: “It would not make sense, nor would it be the practice of any other government, to consult now on tax rates that will apply so far in the future,” he said.
Revenue Scotland was dismissed as a “quango” by Tory Gavin Brown and Liberal Democrat leader Willie Rennie. Green MSP Patrick Harvie said the creation of Revenue Scotland was “an ideal opportunity for Scotland to make clear its intention to weed out tax dodgers”.
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