Scaling layer does not scale alpha!

[WallyZ]

I'm trying to scale a layer (smaller) and the scale tool correctly resizes the image but the alpha (checker board) does not scale with it.

It creates a new floating selection (transformation) layer and I don't know what this is!

I have then tried to Image->Fit_Canvas_To_Layers but that doesn't change anything.

Not sure how to re-scale my image and alpha together.