Plenary, 01 Apr 2004

Meeting date: Thursday, April 1, 2004

Official Report 946KB pdf

---

First Minister's Question Time

---

Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Scottish Executive's Cabinet. (S2F-784)

At the next meeting of the Cabinet, we will discuss taking forward the partnership agreement to build a better Scotland.

Does the First Minister believe that it is undesirable to resist the loss of Scottish corporate headquarters?

The retention of Scottish corporate headquarters in Scotland is, in my view, extremely important for the Scottish economy, for the confidence of Scotland and for the confidence of our financial services sector. That is why it is particularly important for us to maintain the close links that we have, not just with Standard Life, in the context of yesterday's announcement, but with the Royal Bank of Scotland and HBOS. In doing that, we need to ensure that we create the kind of environment in which those companies want not only to keep their corporate headquarters in Scotland, but to expand their operations. That is exactly what we seek to achieve.

I am a bit surprised by the First Minister's answer. I refer him to a document published by his Government, which provides

"the overarching vision of the Scottish Executive"

and is entitled "The Way Forward: Framework for Economic Development in Scotland". In the section dealing with key principles, it states:

"It is … undesirable … to resist the loss of Scottish corporate headquarters."

Can the First Minister explain why his Government believes that it is undesirable to fight to keep corporate headquarters in Scotland? What is he going to do to change the Government's economic strategy to prepare us for the difficulties that we now face?

If there is a document that says that, it is wrong. If that document is the "Framework for Economic Development in Scotland", I am glad that we are updating it. If that document was agreed by the Cabinet in which I served before I was First Minister and I saw that sentence before it was published, I assure Mr Swinney that I would deeply regret that.

I want this chamber and Scotland to be in no doubt that the primary objective of the regular meetings that I have had with the six main companies in Scotland that have their corporate headquarters in this country, and with those in other key sectors, such as the power sector and the food and drink sector, which lead the way for Scotland in their areas of business throughout the world, has been to ensure not only that they keep jobs in Scotland and remain profitable companies, but that they have their corporate headquarters in Scotland.

We cannot legislate to ensure that individual private companies keep their corporate headquarters in Scotland but we can fight to retain them and ensure that we create the right conditions to make that possible. That is why we need to have a strong, stable United Kingdom economy and, in Scotland, the best skills and infrastructure. Mr Swinney's plans for so-called financial independence for Scotland would destroy that regulatory framework and drive those corporate headquarters out of Scotland as quickly as they could go.

I do not know whether the First Minister has been reading the newspapers, but he might like to know that the Liberal Democrats also believe in fiscal independence for the people of Scotland. It is not just me who is leading the way with these innovative arguments. However, let us leave the misdirection of the First Minister's answer and get back to the core of the serious issue that I have raised.

As he always does when there is a problem with the documents that the Government produces, the First Minister has distanced himself from the document that we are talking about. He does that on all sorts of issues, but we should return to the detail of the matter. The "Framework for Economic Development in Scotland" was produced when he was a member of the Cabinet. On 6 November 2003, when he was the First Minister, the Scottish Executive issued a statement that said:

"Scottish Ministers believe that the principles of FEDS remain the right ones for economic development in Scotland, and that there is no need to re-write or re-invent any of its fundamental principles."

One of its fundamental principles is that it is

"undesirable … to resist the loss of Scottish corporate headquarters".

All the rhetoric from the First Minister is fine. All the brave talk about defending the competitive position of Scottish companies is all very well. What matters is what the Government is doing to safeguard the position of those companies. Why does the First Minister not accept that there is a genuine competitive threat to the financial services sector in Scotland and that, unless the Scottish Parliament has the ability to put our country at a competitive advantage, we will lose out in that competition? Will the First Minister accept that there is now a compelling need for the Parliament to have the powers to safeguard the future of our financial services sector?

If Mr Swinney quotes accurately from that document that was published in 2000, then it is clear that that document is wrong. Although Mr Swinney might have a smart moment today—quoting a sentence out of context—and might enjoy that point, I tell him that all the evidence shows that this is a serious situation. Some 1,000 job losses at Standard Life were announced yesterday. We have a long-term fight on our hands to retain the corporate headquarters of that company in Scotland. The making of trivial, cheap points in the chamber does not help that case at all.

There is a fundamental difference between those Liberal Democrats who support some additional taxation powers for Scotland and Mr Swinney. Mr Swinney does not support fiscal autonomy for Scotland—he supports independence for Scotland. The first thing that would happen if Scotland were to have its own employment regime, its own fiscal regime and the higher taxes and cuts in public expenditure that would result from SNP plans is that those corporate headquarters would go—and Mr Swinney knows that. That is why his party hides its policy dishonestly behind a smokescreen of fiscal autonomy.

We need to ensure not only that we have that competitive edge in Scotland, but that we have it off the back of a strong, stable United Kingdom economy that is stronger and more stable than any of our competitors' economics. Here in Scotland, the skills that are available and the growth of our financial services sector still compete well, not only with the rest of Europe, but with the rest of the world. We will continue to promote that.

Standard Life faces demutualisation because of decisions taken by the UK Financial Services Authority that undermined the position of that company. The First Minister presides over an economic strategy that says that it would be

"undesirable … to resist the loss of Scottish corporate headquarters".

Why does the First Minister not stop ranting and raving to the Parliament and start delivering protection for the Scottish economy?

Mr Swinney is keen on quoting documents, so I will quote what he said yesterday:

"other countries are increasing employment in the sector by aggressively using … powers".—[Official Report, 31 March 2004; c 7278-9.]

He implied that we in Scotland are not. I hear his members saying that that is true. Today they seek to run down the financial services sector in Scotland. The truth is that Ireland, the country that is most often cited by the nationalist party, has seen its financial sector employment grow at half the rate of the Scottish financial services sector over the past six years. Employment in the Scottish financial services sector is growing at twice the rate of that in Ireland. That is something that we should be proud of, that we should promote and not run down. We all know that how that rate will grow is by ensuring that Scotland remains—not just becomes—the place in all Europe with the most financial services-related graduates, with the best skills mix and where American companies have increased their investment in our financial services sector by 50 per cent in recent years. In US Banker magazine last year, American experts said:

"Scotland is generating the same kind of excitement as Dublin did a while back. It's the new Ireland."

That is where we want to be—not where Mr Swinney is—and that is where we will get to.

---

Prime Minister (Meetings)

To ask the First Minister when he next plans to meet the Prime Minister and what issues he intends to discuss. (S2F-787)

I have no immediate plans to meet the Prime Minister.

I hope that when the First Minister and the Prime Minister next meet they compare notes on the subject of inquiries. That is something about which the Prime Minister knows a thing or two.

Will the First Minister tell us what contact he or his office has had with the BBC during the past six months to persuade it to co-operate fully with the Fraser inquiry? How many meetings have been held and how many nice letters have been written, and to what end?

The First Minister will know that the Fraser inquiry expressed its disappointment at the outcome of yesterday's vote in Parliament. In the light of that, and of the First Minister's repeated pledges fully to support the inquiry, what does the First Minister intend to do to ensure that Lord Fraser is given access to the interview tapes on terms that are acceptable to the inquiry, rather than on terms that are dictated by the BBC?

In relation to contact, not just between my office and the BBC, but between the Executive and the BBC during recent months, I am not aware that any meetings have taken place and I am not aware of any written correspondence, but there have been several attempts by senior officials in the Executive to persuade both the BBC and those who are responsible for the inquiry to get together and resolve that particular disagreement. I thought that that was in the interests of the inquiry and that it was certainly the will of the Parliament, as yesterday's vote showed, and as a result I have sanctioned occasional—and sometimes regular—contact with both parties to try to ensure that they come together.

I am not just disappointed, but angry that that has not come about. I believe very strongly in the position that the Parliament took yesterday. I believe that the Conservative motion was a danger to democracy: for politicians to instruct independent broadcasters to provide information to them would be a dangerous step too far, except in really exceptional circumstances. I believe very strongly that the will of the Parliament, as it was clearly expressed yesterday—I remind Mr McLetchie that the Conservatives voted against it—is that the BBC should co-operate with the inquiry and allow Lord Fraser to see the tapes. That will should now be implemented by the BBC in Scotland. The BBC is damaging its own reputation by its failure to do that and it needs to co-operate—and co-operate quickly.

Of course, the First Minister is not telling me anything that I do not already know or have not been calling for during the past six to eight months.

I am somewhat surprised at the limited nature of the contact between the Executive and the BBC, given the importance of the issue and the pledges that the First Minister has repeatedly made to the Parliament about the conduct of the inquiry. I remind the First Minister that on 19 June 2003 he told the Parliament:

"If, when the Parliament reviews Lord Fraser's report, it wants to take action to supplement Lord Fraser's interventions and assessment of any non-co-operation, it"—

that is, the Parliament—

"has the powers to do so."—[Official Report, 19 June 2003; c 952-53.]

Are the powers to which the First Minister referred on 19 June the same powers under section 23 of the Scotland Act 1998 that he and his colleagues now find so unacceptable and yesterday voted against using, on a matter of so-called principle? If the BBC is judged by Lord Fraser to have failed to co-operate satisfactorily with his inquiry, will the First Minister continue to oppose the use of those powers?

First, I remind Mr McLetchie—because none of us should ever forget this—that the position that I have just outlined and that the Parliament supported yesterday is not the position that he has been calling for in recent weeks. He has been calling on the Parliament to instruct the BBC to hand over confidential tapes to politicians so that politicians can decide what to do with them.

That would be dangerous in a democracy. The worst memories of Thatcherism recall such a scenario. In the new democracy in Scotland we should stand firm against such a populist—in Mr McLetchie's mind—but entirely unthinking use of an important power. It is one thing for this Parliament to have a power, but another thing for it to use it wisely. I hope that this Parliament will use its powers wisely. If it ever uses the power in section 23 of the Scotland Act 1998, it must use it with great care and attention, and with the absolute principle in mind that a precedent created here could be far more dangerous further down the line in someone else's hands.

What is the answer to the question? I repeat: if the BBC is judged by Lord Fraser to have failed to co-operate satisfactorily with his inquiry, will the First Minister still oppose the use of powers that are available to this Parliament? Will he still do that—yes or no?

I think that I made my position very clear: any use of those powers at any stage should be considered very carefully by this Parliament. Unlike Mr McLetchie and one or two other members in the chamber—who should think very carefully about how they conduct themselves in this whole process—I have said consistently, since the beginning of the inquiry, that none of us should prejudge the inquiry's outcome. We should support Lord Fraser in his attempts to ensure that he gets all the facts into his report and that he gets the right analysis that allows us to learn the right lessons for the future. He continues to have my full support in trying to achieve that. I am not going to prejudge him, pre-empt him or try to influence him at this stage.

We have an urgent constituency question. I call Dennis Canavan.

In view of the fact that the Mayflower Corporation went into administration yesterday with a resultant threat to around 1,000 jobs in my constituency, will the First Minister contact the administrator and any prospective buyer to see what the Scottish Executive can offer by way of assistance or advice? When I meet management and trade union representatives at TransBus International tomorrow morning, can I convey to them an assurance that the First Minister will do everything possible to try to save the jobs of the workers at Falkirk and Larbert, who make such an important contribution, not just to the local economy but to the economy of Scotland as a whole?

I would want Dennis Canavan to convey my absolute support to the work force, which does not deserve to be affected by the way in which this company has apparently been managed over recent times. The work force has converted the company from what was part of the old bus system in Scotland into a modern international company that sells an excellent product at a competitive rate on the worldwide market. The company is a successful part of the Scottish manufacturing industry today and we need every part of that manufacturing industry that we have. We will give every support that we can, and we will make every intervention that we can, to ensure the continued viability and success of the work that takes place on the site.

I understand that Deloitte & Touche has been appointed as the administrator. We are already making contact with Deloitte & Touche to offer any assistance.

---

Gangmasters

To ask the First Minister what action is being taken to ensure that the activities of gangmasters are properly regulated. (S2F-795)

We co-operate with the actions of the different United Kingdom Government departments that take the lead in this area. We are currently participating in discussions at a UK level to address the issue of tightening controls over gangmasters. We support in principle legislative proposals requiring gangmasters to be licensed.

The First Minister will be aware of recent arrests made by Grampian police in Aberdeen and Fraserburgh as a result of investigations into illegal activities by gangmasters. Does the First Minister agree that, although some businesses, including fish processing businesses, have genuine recruitment problems, resorting to the use of illegal labour is not the answer? Does he agree that the measures proposed in Jim Sheridan's private member's bill at Westminster represent a significant step forward in regulating the work of gangmasters and does he agree that, although we welcome people coming to this country legally to work, those who are brought here illegally are too often being exploited for the benefit of unscrupulous gangmasters?

We should certainly come down very hard on those who are employing people who are here illegally and are exploiting them in the process. The recent actions of UK Government departments and those responsible for pursuing those involved in such exploitation have our full support. The Executive is also involved, and where its departments can assist with that, they do so. For example, when complaints are made about agricultural wages and the exploitation of agricultural workers under those systems, our inspectors consider the circumstances and take action if required. The Executive will continue to work closely with UK Government departments on that, and it will co-operate with plans for legislation.

Have discussions been held with industry interests, such as organisations representing fish processors, to give them guidance on employing staff through agencies and on ensuring that those arrangements are legal and that the agencies are held accountable? What discussions has the First Minister had with his counterparts in Westminster to achieve that end?

There have recently been a number of discussions with those who represent the fish processing industry. I believe that, at about this time last year, there was a proposal for some financial support from the Government for the industry to attract more migrant labour. As a result of state aid rules, we were unable to provide that support, but the industry was able to secure support from the Sea Fish Industry Authority. The agencies that work with the industry, and the Government, are in regular contact with the industry. We would wish to give the industry every assistance in doing the right thing, and ensuring that people who come from abroad to work legally in this country are paid proper rates, are treated properly and are not exploited by intermediaries.

Gangmasters are not the only people who are in the business of exploiting vulnerable foreign workers. Is the First Minister aware of the situation at Monaghan Middlebrook Mushrooms at Drem, where local employees have been squeezed out and replaced by foreign workers, who are supposedly on the national minimum wage, but who have money deducted for accommodation and transport? Will the First Minister ensure that the Scottish Agricultural Wages Board intervenes to protect east European workers from exploitation and to safeguard the jobs of local staff? Will he support the efforts of the Transport and General Workers Union to represent all the workers at Monaghan Middlebrook Mushrooms?

The Executive would certainly want to monitor any situation that was being drawn to its attention. If members are aware of specific instances in which there are accusations of exploitation that are not already being tackled, they should write to me, to Ross Finnie or to Allan Wilson, to ensure that action is taken. However, the Executive prefers that the introduction of new labour from overseas is not at the expense of local people as a result of how the new labour is exploited. The best protection that people can have in those circumstances is the protection of their trade union.

---

Hepatitis C (Ex Gratia Payments)

To ask the First Minister whether people who contracted hepatitis C through contaminated blood products will have to waive their right to legal action in order to receive an ex gratia payment. (S2F-803)

No, they will not. People who receive awards from the Skipton fund will not be required to sign such a waiver.

I very much welcome that response. However, what is the status of the Scottish Executive briefing paper that is referred to in a Sunday newspaper? The briefing paper reads:

"People who receive payments under the scheme will be asked to sign an undertaking not to institute proceedings against the NHS or ministers in relation to their having been infected with hepatitis C from blood, blood products or tissue received from the NHS before September 1991".

Given the alarm among those who have contracted hepatitis C, what action will the Executive take to reassure them that they will not be debarred from seeking compensation through the courts?

The best action to take is the action that I have just announced, which is to ensure that people will not be required to sign a waiver. Following discussions yesterday, the Minister for Health and Community Care and I have agreed to withdraw that particular document and to ensure that new guidance is circulated to those affected. Members from all parties will be pleased to know that there will be no requirement on anybody to receive the compensation, and no requirement for them to sign a waiver.

---

European Union Constitution<br />(Fisheries Management)

To ask the First Minister how the Scottish Executive will ensure that the new European Union constitution will allow proper regional fisheries management. (S2F-800)

Regional fisheries management is already developing under the common fisheries policy and does not need a specific provision in the new EU constitution to do so. The Executive and the UK Government are committed to developing regional management, and I would like to see the North sea regional advisory council taking a lead in showing the way forward for the common fisheries policy.

Given that the Prime Minister's strategy unit and the Royal Society of Edinburgh's report on its inquiry into the future of the Scottish fishing industry endorsed devolving decision making to regional management bodies as the right way forward in delivering a sustainable future for our fishing industry, what will the Executive's next steps be to deliver that objective?

We are pressing first of all for the early establishment of the North sea regional advisory council and, as a result of that, we will press for further regional management measures in the period ahead. In Scotland, we can take a lead on the issue and show that regional management is the way forward inside the common fisheries policy. We will not stand on the sidelines and advocate illegal action, but will get involved in the process of democratising the common fisheries policy and establishing proper regional management in the North sea and elsewhere, because the other fisheries in Europe would also benefit from it. We will lead on that and lead in Europe, not stand on the sidelines.

Given that the treaties of accession state that there should be equal access to a common resource for the fishermen of all member states, and that the Treaty of Amsterdam specifically rules out any decentralisation of power from Brussels back to the member states, will the First Minister accept that the only way to achieve regional management is by amending the treaties? Will he further accept that if such changes are achievable, it is equally achievable to secure treaty changes to allow the UK to regain national control of its own waters?

Mr Brocklebank makes those points, but we want to go further than he wants to go: we do not want to decentralise EU fisheries policy so that decisions about the North sea are made in London; we want those decisions to be made here in Scotland in conjunction with our partners in the North sea. Mr Brocklebank might want to get some change in a treaty somewhere to give more power to the UK and less power to the EU, but we want a reasonable international fisheries policy and we want it to be managed in Scotland with our partners in the North sea and elsewhere. That is our policy, and we will fight for that over the years to come. We have already taken the first steps down that road, and if Mr Brocklebank got off the sidelines and gave us a hand occasionally, we might get further.

---

Smoking

To ask the First Minister whether there will be any further restrictions on smoking in light of responses to the consultation on smoking in public places. (S2F-799)

The consultation on smoking in public places will, not surprisingly, inform our decisions on the extent of any new smoke-free areas.

Does the First Minister agree that the recently produced community health profiles make grim reading on smoking-related diseases and that the introduction of legally enforceable restrictions would be one way of improving life expectancy in our most deprived communities?

I have no doubt that the introduction of smoke-free areas in some public places, on some forms of transport and in places of recreation, such as cinemas, over the past 20 years has contributed to the declining number of people who smoke and has therefore contributed to the declining number of people in Scotland who find themselves with some forms of cancer. That is why our anti-smoking action plan is important.

We want to make further radical progress on that matter. The introduction of further smoke-free areas will be an important component of that, and the lessons that are learned from Ireland will help to inform those decisions. The consultation in Scotland on how far we can go in practice in introducing further smoke-free areas will also be an important part of that process, and I hope, via ministers, to make further announcements to the Parliament on that in the course of the next year.

In the past week, two surveys have shown that support for a ban on smoking in public places is running at between two thirds and three quarters in the Scottish population. All around the world, smoking bans are being successfully introduced and enforced. Figures that were published this week show that, contrary to the misinformation that was put out by the pro-smoking lobby, business in New York's bars and restaurants has increased by 9 per cent since the introduction of a smoking ban. Given all that, does the First Minister still hold to the view that he expressed in January that a ban on smoking in public places in Scotland is unworkable and impractical, or does he now accept that prohibiting smoking in certain public places is the right thing to do?

Stewart Maxwell and I may be getting closer by the day. At the end of his question, he said that banning smoking in some public places may be the right thing to do. I have no doubt that it would be the right thing to do. We need to make the right decision about how far to go with such measures. That is why we must have a consultation and why we must examine the international examples. We need to ensure that the trend that Scotland is pursuing continues in years to come. Scotland has significantly fewer smokers than it had 20 years ago and significantly fewer people contracting some cancers as a result. We want to ensure that those figures are far lower 20 years from now.

I inform members that, after due consideration, I have decided to take at
3 pm today an emergency question from Richard Lochhead on changes to the December fisheries agreement. A revised daily business list will be published to inform members of the question.

Meeting suspended.

On resuming—