Financial Powers (Scottish Parliament)
The next item of business is a debate on motion S2M-5055, in the name of Jim Mather, on the financial powers of the Parliament. I advise members that we are behind the clock and that speaking times will be enforced.
I note the absence of any Executive presence for this debate. No minister is here. We saw the Executive trying to keep the Howat review under wraps, but I had hoped that the Executive might not want to keep the most important debate in Scotland under wraps.
Many debates in this chamber end with somebody saying, "That was an interesting debate." I confidently predict that somebody today will say that about this debate. Although the motion is simple and straightforward, it is important and it has to be accepted if Scotland and this Parliament are to be credible at home and abroad. At home, we have to be credible with people who have legitimate aspirations for a much better life for themselves and their families. Abroad, we have to be credible with our ex-pats, many of whom could return; with potential customers, who need to see us being more competitive; and with competitors, who would rejoice if we were less than competitive.
Will the member give way?
I would like to make some progress first.
More and more people are realising that it is difficult to compete and prosper when we have no economic powers. However, virtually everybody of good will realises that it would be infinitely worse if our Parliament were unwilling to debate economic powers fully and openly, or to consider all the options. If we were unwilling to do that, we would become an irrelevance and a laughing stock, and we would send out damaging signals. In other words, it is vital that the Parliament facilitates an open and honest exchange of views, encouraging the widest possible participation in the process. If we do otherwise, we will indicate our lack of willingness to learn from outside and our rejection of the need to review evidence and deliver evidence-led policy that has logic and a good track record at its core.
The member indicated a desire to learn from other countries. I wonder whether he can name a single country that has adopted fiscal autonomy.
Navarre, the Basque Country, the Isle of Man and the Channel Islands. Scotland, uniquely, has a system that damages its people; we need to learn from those other countries. This Parliament risks being party to the unhealthy closing down of debate by vested interests that would freeze-frame Scotland at the very time when other Governments and peoples are moving forward and changing their nations for the better.
I suggest to Ms Alexander that rejecting the motion would be inconsistent with what she suggests in her book "Chasing the Tartan Tiger"—that the only obstacles to Scotland making progress are people who are not open to radical ideas. The motion should be endorsed by all who have spoken in favour of our having more powers—including Lord Vallance, Henry McLeish, Michael Portillo and many others who will be watching this debate, such as Lord Steel.
I will take an intervention from Jeremy Purvis.
The member mentions Lord Vallance. Does he know that Lord Vallance, as a member of the Steel commission, absolutely rejected fiscal autonomy and independence? He favoured fiscal federalism.
Mr Purvis may have read the motion or he may not. The motion calls for a debate. I respect Lord Vallance's views and I respect Jeremy Purvis's views; I want a debate. Indeed, more than 80 per cent of the people of Scotland want this matter to be debated and voted on. Even back in August 2004, 46 per cent of the business community were patently up for the debate, with 26 per cent being neutral.
Recently, there has been a spate of reports—from Experian, David Bell, Sir Donald Mackay, Fabian Zuleeg, Professor Ronald MacDonald and Professor Brian Ashcroft. The debate is taking place outside this chamber. Very few people want to close down the debate. Well, perhaps there is one—Iain McMillan—but we have to ask him, "Who would benefit from taking a position that was blind to the experience of Ireland and Norway and which flew in the face of the needs of all aspirational Scots and all those who wish to protect jobs and increase living standards?"
I suggest that Gerald Warner might take that view.
I will be supporting this welcome motion, but will the member confirm that fiscal autonomy—even full fiscal autonomy—does not mean independence?
It would be a step on the road, and I repeat to Mr Purvis that the motion is about having a debate, scrutinising all the options, considering the legitimate ones and looking objectively at problems. We ask for nothing more.
Unlike some, we want a constructive debate. We are not alone in that. The editorial of The Scotsman yesterday called for a constructive debate. Such a debate would expose the arid and damaging negativity of the fear, uncertainty and doubt that we will hear when the Labour benches are repopulated and when ministers turn up. Their attitude encourages procrastination, the loss of opportunities, the diminishing of life chances and further damage to the social fabric of this country.
Failure to engage fully in this debate is a failure of leadership—indeed, it is the antithesis of leadership. There has been a suggestion that we will be in for 30, 40 or 50 years of constitutional wrangling. Oh really? That was not the experience of, for example, tiny Montenegro, which went from a declaration of independence to United Nations recognition in 32 working days. It is also not the experience of many other countries, or of countless corporate demergers and management buyouts.
In Scotland, we start from a neat position. People here have the incentive of already owning their proportionate share of United Kingdom plc. Our demerger is therefore available with no purchase price. That is not insignificant—but, beyond that, the people do not want wrangling. They want results; they want progress; they want us to converge on the higher living standards that have been achieved elsewhere; but, more than anything, they want a debate. We have to satisfy that rational and reasonable request. That will mean a clear identification of the problem, an evaluation of all the options and an avoidance of Scotland becoming just a branch not only of the UK economy but of the United States' software industry, Irish property portfolios, Icelandic retail conglomerates, Irish airlines and Norwegian salmon farming interests.
Who else would duck a debate on strategy? No other country, no viable company and no committed public sector organisation.
I move the reasonable proposition in my name,
That the Parliament recognises the need for an open, inclusive and objective debate about the financial powers that it requires to have in order to maximise accountability, efficient government, economic growth, public services, infrastructure development and good social outcomes in Scotland and further encourages the business community, the trade unions, the public sector, the voluntary sector, academia and wider civic Scotland to participate in this debate, the objective of which must be to make Scotland a more prosperous country, able to deliver social justice to its people.
While the Scottish National Party tries to ensure that the Parliament endlessly debates its powers, Labour is using them to grow our economy and to deliver prosperity for our nation.
The SNP wants to debate fiscal autonomy not because it would be best for Scotland's economy but because of the SNP's desire for independence. That was made clear in Jim Mather's response to Brian Monteith. This is not a new discussion but the same old debate. The SNP supposedly wants an open and objective debate, but it has afforded just over an hour's debating time to the issue. It is no wonder that it does not want to subject its fiscal autonomy plans to any real scrutiny because, for SNP members, the debate is not about what works. They do not want an objective debate; they have already made up their minds on fiscal autonomy because they want independence. Although we welcome the debate, those are the real terms of the debate for the SNP.
Absolutely. We want independence. That is a perfectly honourable position to take. Why will the Labour Party not support a referendum and allow the people to make that choice?
The people have made that choice in every Scottish election. The choice will be put before the Scottish people again at next year's elections. We will willingly take the debate to the Scottish people and look forward to doing so. Every time that the SNP's independence plans are put to a real test, the Scottish people reject them.
Those who want a genuine debate on fiscal autonomy must realise what the SNP seeks from the debate. I find it extraordinary that the Liberals want a whole new constitutional convention after just two sessions of the Parliament. I believe that people would prefer us to focus our energies on using the substantial powers of devolution.
Does Mr Baker recall that the Scottish Constitutional Convention recommended that a second constitutional convention should be convened after the first session of the new Scottish Parliament?
My view is that it is too early to convene another convention after just two sessions of the first Parliament that we have had in 300 years.
No one should be distracted from the fact that devolution means that we already have autonomy over our budget and economic strategy. I reject the viewpoint that, without fiscal autonomy, we are somehow unaccountable for what we spend. Ministers are accountable every week in this Parliament for the budget that they spend. We know that we need to get our budget right because not to do so would have serious implications for crucial areas of public spending. We already have the power to implement our own economic strategy for Scotland.
To reject the nationalists' plans, sketchy though they are, is not to ignore the issues, which is what the Tories claim while they try to obfuscate the fact that they disagree with their think-tank's report. The case that we make is that it would be ludicrous to change the constitution for the sake of change when the current system is working for Scotland. While other countries across Europe and throughout the world have slipped in and out of recession, we have enjoyed 20 quarters of consistent growth, record levels of employment and an employment rate that is above the UK rate. Scottish gross domestic product is on course for further growth. Why should we put such progress at risk? A protracted debate on fiscal autonomy might be of interest to some economists and political commentators, but what really matters for the people of Scotland is what this Parliament does to benefit them and their families.
Those economists who argue for fiscal autonomy because they hope that it will deliver a right-wing, low-tax, low-spend Scottish economy will be sadly let down by the SNP. Despite the best efforts of Jim Mather and Fergus Ewing, the SNP still promotes costly policies such as scrapping all graduate debt, which would cost many more millions than the SNP has budgeted for. Given such policies, the SNP cannot be trusted with devolution, let alone extra powers.
What matters to the people of Scotland is not the constitution but jobs, homes and investment in their communities and public services. Working in partnership with Westminster and as part of the strong UK economy that Gordon Brown has created, we have had record levels of jobs, record levels of investment in schools and hospitals and—a crucial issue for our economy—record spending on universities and colleges.
Will the member give way?
I would give way, but so little time has been allowed for the debate that I am unable to do so.
That record has enabled us to have an effective policy of our own that is contributing to higher levels of economic growth. That is the "union dividend" of which the First Minister is right to speak. Why should we risk that for the sake of a change whose aim is not to improve devolution or Scotland's economy but to meet the goals of a discredited and distasteful political ideology? In Labour, we prefer to act to bring greater prosperity to the people of Scotland.
Why should we have a fake debate on fiscal autonomy when we can get on with the real job of growing the economy and improving people's lives? That is what Labour has done and will continue to do.
I move amendment S2M-5055.3, to leave out from "recognises" to end and insert:
"believes that the arguments for further fiscal autonomy are being used as a cover for the debate on independence; calls on those MSPs who support a separate Scotland to give an honest explanation of what a separate Scotland would mean for our economy, and further believes that we should continue to use the powers of the Scottish Parliament to deliver better health, education, lower crime and economic growth."
This morning's debate is not a debate about the powers of this Parliament; it is a debate about having a debate about the powers of this Parliament. I would have thought that, although we might want to spend more than an hour and a quarter debating what the proposed additional powers might be, debating whether we ought to have a debate on that subject should be easily accomplished in the time that has been allocated today. On the face of it, the amendment in my name might appear to aim to change significantly the motion in the name of Jim Mather, but it would in fact broaden his motion. If we are to have a debate on the powers of the Parliament, we should not restrict that to merely the financial but consider the non-financial aspects as well.
We should also recognise, as my amendment does explicitly, that we can have that debate without in any way, shape or form prejudicing the integrity of the United Kingdom. I understand where the nationalists will come from when they contribute to that debate but, equally, the unionist parties in the Parliament will put forward a unionist perspective. Those of us who believe in the strength of the United Kingdom have nothing to be scared of in debating the subject. If the union is as strong as I believe it to be, it can easily withstand a vigorous debate on the subject.
The key question to consider in framing the debate is how we make the Scottish Parliament and Scottish Government more effective and more accountable. This morning's first debate will surely tell anyone who wishes to scrutinise the Scottish Government that there is a real need to make it more accountable. Perhaps the First Minister's logic is that the Government's problems of accountability are due to the incompetence of his ministers. Perhaps that is why he sees no need to debate the subject and why he has set his face against even discussing it.
I have some sympathy with part of Richard Baker's argument. We should use the powers that we have as effectively as we can and we should consider how we could use our current powers to grow the economy and to deliver improved public services. However, doing that does not preclude consideration of whether those powers are sufficient and whether they could be changed. It is ridiculous to suggest that the Scotland Act 1998 is absolutely perfect. After all, did not Donald Dewar say that devolution was a process rather than an event?
Derek Brownlee said that we should use the powers that we currently have. Can he confirm whether the Conservative party is in favour of using the existing tax-varying powers?
We may make our views clear in September 2007 so as not to prejudice the outcome of any current process. [Laughter.] After all, I am sure that Mr Rumbles, like us, would not want any wild misunderstandings.
The other reason why we should not be afraid of a debate is that debate on increased powers for the Scottish Parliament often takes place at a very abstract level. If the issue is to be taken seriously, we need to get down to specifics. Fiscal autonomy means different things to different people. If tax powers were to be devolved, we would need to look closely at the interaction between those powers and the increased complexity that might arise for individuals and businesses. None of those decisions should be made by one party or decided overnight. That is why it is entirely appropriate to seek an open and inclusive debate, as my amendment suggests.
The Lib Dems and Labour have set out their positions in their amendments and we will do so in due course. However, I see nothing for a unionist or Conservative to fear in having a debate on this subject.
I move amendment S2M-5055.1, leave out from "powers" to end and insert:
"and non-financial powers that it requires to have in order to maximise accountability, efficient government, economic growth, public services, infrastructure development and good social outcomes in Scotland and further encourages the business community, the trade unions, the public sector, the voluntary sector, academia and wider civic Scotland to participate in this debate, the objective of which must be to make Scotland a more prosperous country, able to deliver social justice to its people, and notes that a more effective and accountable devolved Scottish Parliament would strengthen the United Kingdom."
There is no doubting that Jim Mather is a reasonable man. In this Parliament, in December 2003, he outlined the SNP's position of wanting a debate about fiscal autonomy and the powers of the Parliament. However, he has given no explanation today of why the SNP motion is so coy on independence, which is not mentioned. It is time, as the SNP says, for a debate. However, when my party proposed a second constitutional convention as the vehicle for such a debate, the idea was rubbished by Alex Salmond. He told me that the SNP will not take part because it has its own independence convention—the convention of odds and sods of Scottish politics—and a closed mind to any alternative.
The SNP does not want a debate—it wants separation. Why does it not say that? Why does it not lodge a motion that says what it really wants? Its policy is to hold a referendum in the next session—why does it not say that? Recently we saw what happened when the independent governor of the Bank of England joined the debate about the union and the economy—the SNP jumped on him. It said that it was an outrage and a disgrace for him to open his mouth. The same party wants to set up a council of economic advisers in Scotland. Its meetings will be absolutely boring, as only those who favour separation will be asked to take part and they will be able to give only one type of advice—the advice that Mr Mather wants to hear.
However, all may not be lost—there is a chink of hope for Mr Mather. I understand that the proofs of Mr Russell's new book were returned to him with paragraphs annotated with the Salmond code. Some—not many—were annotated with "RH", for relatively harmless. A few more had "D", for dangerous. However, the book was peppered with "VD"—very dangerous. I wonder which of Mr Russell's recommendations concerned the SNP so much. Perhaps it was his recommendation of "the new union". In that new union, the British Government ruling Scotland would have only the minor powers of foreign affairs and military control. Oh yes—the Queen would also be retained. I suspect that when Mr Mather called for a debate about the constitution and the Parliament's powers, he did not expect such an enthusiastic response from the putative future SNP minister for unionist affairs. I never realised that the referendum that the SNP proposes would not consist of a single question but would be multiple choice, and that people would be asked whether they wanted independence with or without the British Army and with or without the Queen.
If the SNP is hiding its true colours this morning, is there a real debate to be had about the powers of the Parliament, financial and legislative, to which Mr Brownlee referred? The answer is yes. That will not be helped if the next decade is taken up by a debate about separation, but there should be an inclusive approach.
Does the present devolution settlement accord with the Liberal Democrat idea of fiscal federalism? If it does not, what other powers should the Parliament have to meet the criteria that the Liberals have set down?
The answer is no. That is why, two years ago, the Liberal Democrats established the Steel commission. As Duncan Hamilton said in The Scotsman in March, its report put
"the Lib Dems at the front of the debate with a clear position on federalism."
Liberal Democrats argue not only that the Parliament could have more powers, but that it should have them. However, we reject the stepping-stone to independence of fiscal autonomy and support the principles of fiscal federalism. Broadly, the Parliament should have tax-varying powers for the money that it spends, so that there is credibility in our debates not only about how the Parliament spends money but about how it raises it.
Credibility is sorely lacking in the SNP. Last year it put forward what it described as the most comprehensive economic reason for independence, but since the Parliament was established it has not produced one alternative budget.
Will the member give way?
I am afraid that I do not have time.
The SNP has not presented costed policies on pensions or higher education, but only recently the shadow minister for social justice said that there should be no border raids by English sick people coming to our hospitals. Mr Mather wants credibility, but for that he must start at home.
I move amendment S2M-5055.2, to leave out from "recognises" to end and insert:
"believes that the Scottish Parliament needs significant new powers that follow federal principles; calls for a significant increase in the taxation powers of the Parliament in order to improve competitiveness and accountability, increase transparency, encourage more efficient allocation of resources and allow the Parliament to have greater fiscal levers to influence the direction of the Scottish economy; notes that full fiscal autonomy does not exist in any developed economy in the world and rejects the argument for such autonomy as a cloak for independence which would damage Scotland and our economy; calls for the establishment of a second constitutional convention during the next session of the Parliament to improve the home rule settlement in order to deliver real benefits to the people of Scotland; calls on all political parties and civic Scotland to participate in the new convention; believes that the new convention should also consider the case for additional legislative powers for Scotland and new procedures to improve joint working between the Scottish and UK Parliaments, and calls for the new legislative and fiscal powers of the Scottish Parliament to be enshrined in a written constitution for the United Kingdom."
I am delighted that the Liberal Democrats and the Conservatives have engaged in the debate and have made use of the fact that an open motion is before us that allows members whose views are different from those of the SNP to feel comfortable about doing that. However, I am really disappointed that a young man, with a young family, who is clearly committed to Scotland, sees nothing better for the future than the status quo. That is a deeply conservative position, of which many of the forebears of those who are involved in the Labour movement would be deeply ashamed.
What is wrong with sticking with the status quo when it delivers a strong Scotland that has consistent economic growth, provides jobs and has record investment in public services?
I understand that economic growth is a high priority for the Government. Scotland had average annual growth of 1.8 per cent over the 25-year period from 1979 to 2004, but UK average annual growth was 2.3 per cent. That is the benefit of being in the union—the union dividend is that Scotland loses out. Small European Union countries had an average annual growth rate of 3.1 per cent, and Ireland had a growth rate of 5.2 per cent. I would much rather be in the position of small European Union countries such as Ireland than in Scotland's position within the United Kingdom, or even in the position of the United Kingdom as a whole. Success lies elsewhere. The deeply conservative position that new Labour has adopted is holding our country back.
Mr Baker is a young man who is clearly committed to Scotland; he has stood for election and has contributed here. However, I accept his position if he does not want to make progress for his country.
The member mentioned competitiveness, and Mr Mather often quotes the world competitiveness scoreboard. Can the member explain why Scotland is above the Czech Republic, Catalonia, France, Spain, the Slovak Republic, Hungary, Portugal, Slovenia, Lombardy and Italy on that independent scoreboard?
The relative position is important. Whereas the countries to which Mr Purvis refers are making progress, Scotland's relative position is in continual decline, because we have no real powers to make changes. That is the union dividend.
Is it only about the money? Should not something about the soul of Scotland be encompassed in today's motion?
I am more than happy to recognise that there is more to life than money, but today's debate is about how we create a country that is prosperous so that we can deliver the social justice that most members want. I recognise that as a country we have an identifiable culture that needs to be supported, but today's debate is about fiscal independence.
Ah!
It is about independence—it provides us with an opportunity to debate fiscal autonomy.
We have a totally distorted economy. We have some major world-class businesses, but we do not have the same range of businesses that exists elsewhere in the world. We have giants such as the Royal Bank of Scotland and HBOS; medium-sized companies such as Scottish and Southern Energy, Scottish Power and Scottish and Newcastle; growing businesses such as our bus companies FirstGroup and Stagecoach; and significant relatively new companies such as the Wood Group, the Abbot Group and Production Services Network. However, we do not have the same range of companies that one would find in a normal economy in a normal country. That is why we need to have levers of power over our fiscal environment that will enable us to make the economy grow.
I am all in favour of having a public debate on extending the powers of the Parliament. The Parliament's complete lack of powers and how it will become a grown-up Parliament should be a matter of public debate. We have Mickey Mouse powers that are not much better than the powers of the average regional council of the past. Those who are running scared of having more financial powers should recall that the average US state has 10 times more economic power than the Scottish Parliament. It has tax-raising powers and the power to set a minimum wage, keeps the vast majority of its taxes and pays back money to the central Government. Catalunya and the Basque Country in Spain have control of 90 per cent of the taxes that they raise. The powers that they have—not just economically, but politically—go as far as possible, short of independence, whereas we get a block grant.
The motion is pretty wishy-washy. In a week in which 51 per cent of Scotland's population has indicated that it supports independence, a parliamentary debate about fiscal autonomy and financial powers is yesterday's news. I cannae see thousands of people taking to the streets with banners demanding more fiscal powers. If we are to mobilise public support in debate, we have to make it clear that independence is about not just economics, but political power.
If I were a cynic—which I am not; I am an idealist—I would say that the motion is much more about courting a coalition with the Liberal Democrats and Brian Monteith. Indeed, if David Cameron gets his way, the nationalists might even seek a coalition with those on the Tory benches. I simply cannot believe the poverty of the terms of the motion.
Let us have a debate on the Parliament's powers; let us discuss having control of our own resources such as North sea gas and oil to ensure that that wealth is not sucked out of Scotland; and let us talk about the imposition of nuclear power stations and the way in which our taxes have been used to fund a war that most Scots oppose. Let us do all that, because those are the issues that will inspire and mobilise people to get into halls and debate Scotland's future. I hope that—in fact, I am confident that—the independence convention will start that debate in this country.
The Scottish Socialist Party is in favour of an independent socialist Scotland. However, at the moment, it appears that the SNP is running away from that debate. Independence is its main policy; it should come out fighting on it. I am not the nationalists' electoral organiser and I am not suggesting what the SNP's election strategy should be, but this motion is very timid. We should build on the fact that a majority of people support independence. Yes, we should raise our own taxes; control economic ownership; be able to set the minimum wage in this country; and have control over welfare and other benefits. We should emulate countries such as Norway, Finland and Sweden, which have the best welfare provision and the lowest levels of child poverty. As only independence will allow us to redistribute wealth, we should inspire the country to take part in that debate in the run-up to next election and put members on the Executive benches on the defensive.
Once again, the SNP has trotted out Mr Mather as the siren voice of soft porn nationalism, seeking to seduce us into a debate on the Parliament's financial powers when, in fact, his colleagues have no intention whatever of conducting the debate in the terms of the motion.
Frances Curran is absolutely right: this motion is SNP-lite. On the face of it, the blustering bravehearts have been transformed into wee, cowran, tim'rous beasties—but is it a ploy, or is it for real?
Will the member give way?
Mr Mather will get his chance.
The key question for the SNP is: what powers, short of those of an independent sovereign country, is it prepared to settle for? Is it prepared to accept that some powers and responsibilities should remain with the British state? If the answer from Mr Mather and the rest of the SNP is, "No—it's independence and nothing less", Mr Mather is floating a false prospectus. He does not want an
"open … and objective debate on the financial powers"
of a devolved Parliament within the United Kingdom; instead, he wants to debate independence.
What we want is progress, progress, progress. As for the nationalists being fearties, I wonder whether Mr McLetchie sees the great irony in the fact that while Ian Paisley and Gerry Adams are making common cause about corporation tax in Northern Ireland, the Liberal Democrat and Labour benches are unwilling even to have a proper debate on those and other issues.
I do not think that Ian Paisley and Gerry Adams would agree that Northern Ireland should be extracted from the UK, which is, of course, the SNP's core principle with regard to Scotland.
The debate on the Parliament's financial powers is plagued by lack of precision in the language in which it is conducted, so I want to be clear: a country cannot have fiscal autonomy unless it is independent. No other country, province or state in the world that is part of a larger sovereign nation levies all the taxes within its borders and then contributes a share to a common pool of finance service.
What about the Isle of Man?
That is a constitutional anomaly. Does the SNP really aspire to make Scotland like the Isle of Man? If so, I find that pathetic. For a start, I am not aware that the Isle of Man is in the United Nations, which I believe is another SNP aspiration.
No Parliament that is wholly responsible for raising all taxes will willingly surrender to another body the right to determine how a major part of those taxes are spent. A debate on fiscal autonomy is a debate on independence—and nothing less.
For all unionists, the real debate should be about fiscal federalism—or, if one prefers, fiscal devolution. The UK now has a quasi-federal system of government in which powers and responsibilities are attributed between the national UK Government and subordinate bodies such as this Parliament and the Assemblies in Northern Ireland and Wales. One finds the same division of responsibilities in more fully fledged and long-standing federal systems such as those in the United States, Canada, Germany and Australia. US states and Canadian provinces have greater powers to raise taxes to finance expenditure than we have. However, in other cases—such as the German Länder, whose financial system is similar to ours—those financial powers are not so great. As a result, in any discussion about a federal system of government in the UK, it is quite legitimate to debate whether we should have more or fewer tax-raising powers. One might well conclude from that debate that we should have more powers. However, as Derek Brownlee pointed out, none of that does violence to the concept of the UK any more than it would do violence to the concept of Canada or Germany as sovereign states.
It is worth observing that, even in the federal states or provinces that have more financial responsibility than we have, the taxes that they raise do not cover their total expenditure. In all such systems, the federal Government still has to give the states or provinces substantial grants. In that respect, if we did not have a Barnett formula, we would have to invent one.
Years ago, at election time, I met a prominent nationalist who was giving out leaflets. He was very unhappy. He did not like that fact that the leaflet promoted the idea that, under independence, Scotland would be economically far better off—not because he did not necessarily believe in it, but because that was not the reason why he was a nationalist. For him, it was a matter of principle; he wanted an independent Scotland, better off or not. It was what Margo MacDonald called the soul of Scotland argument.
I disagreed with his viewpoint, because I felt that it was wrong-headed and showed a lack of understanding of Scotland and the union. However, I respected it, because it was—and remains—an honest nationalist position.
Will the member explain what he means a little more? Why does he think that it is wrong-headed to have a soulful connection to independence but not to unionism?
I do not think that there is anything wrong with having such a connection. I felt that the view was wrong-headed because it did not make good political sense. However, as I said, I respected it.
The problem is that such a position did not work for the nationalists, and they are now trying to move on from that honest nationalist stance to put forward what I would call a dishonest economic argument. Jim Mather is trying to persuade us that Scotland would be better off if it left the union. That is what this debate is about, and it is simply not true.
I object to the motion in two very obvious ways. First, it calls for an "objective debate". David McLetchie and others are right to point out that this debate is not honest or objective; it is about putting forward a preordained agenda to take Scotland out of the UK and all that goes with that.
Will the member give way?
No; in a debate such as this, I do not have time to give way.
Linked to that, Jim Mather's motion sets out an aspiration
"to make Scotland a more prosperous country"
with more "social justice". Of course, by definition, we all want that. However, it is inaccurate to suggest that moving towards independence will make Scotland better off.
In saying that, I am not being anti-Scottish. I believe in having a soul for Scotland, so to speak. I am not even saying that we could not run our own affairs: of course we could. What I want is pro-Scottish and is best for the country.
I will give an example from close to home. Many people fought long and hard to ensure that shipbuilding survived on the Clyde. We have achieved that. When we go to the BAE Systems yard the mood is more optimistic, among both management and men, than it has been in many a long day. There is work for the foreseeable future and there are new apprentices, new equipment and new life. What does that come from? It comes from a UK Government placing orders, which, for obvious reasons, cannot be placed elsewhere. Any honest person knows that those yards could not survive and compete in a cheap labour market without those orders. If the SNP takes Scotland where it wants to take it, the yards that we have fought for will close.
An industrialist, speaking from the comfort of silicon valley, said this week that if we had more fiscal power a by-product would be "recession"—that word might be theoretical for someone who lives where he lives, but for the people at the front line it is not a theory but a fear.
If people want independence for emotional reasons—for reasons of the soul—so be it, but please, Jim Mather, do not pretend that it will make us better off.
I make it clear to Gordon Jackson that I am a head-and-heart nationalist. I am proud to be one and have been one for 35 years and more.
I will speak to the terms of the motion and address whether, without increased financial powers, we can improve social inclusion and reduce poverty in Scotland. We are discussing the matter seven years after the creation of this Parliament, in which good people all round the chamber support the eradication of child poverty and improving standards of living.
Dealing with health matters is often a poverty issue, dealing with the failure to achieve at school is often a poverty issue and dealing with low-level crime is often a poverty issue. Can the Parliament, whoever is in power, really tackle those issues without greater financial powers? It is probably a truism to say that poverty is a complex, multifaceted problem; the same is true of its solutions. The issue for the Parliament is whether we have the tools to provide those solutions.
I will mention some aspects of the problem. I have taken the facts from figures published by the Joseph Rowntree Foundation and the Child Poverty Action Group, which have acted as my databases. Forty per cent of Scottish households have an income of £20,000 or less; 18 per cent have an income between £10,000 and £5,000; and 3 per cent exist on £3,000. As for individuals, three quarters of Scots have an annual income of £20,000 or less; nearly a quarter have an income of £10,000 to £5,000; and 20 per cent live on £5,000 or less. That is the reality for people. Those figures come from the Joseph Rowntree Foundation.
What does that mean for Scotland's people and their health? One in four of our children lives in poverty and the figure is three times higher if someone is from a single-parent family. We all want poverty to be eradicated, but how can we achieve that with what we have in our hands now?
We have all moved on as MSPs in the past seven years and we know what we are dealing with. I say to Richard Baker that the number of working-age adults without dependant children who are in income poverty in Scotland has increased from 300,000 to 400,000 since the mid-1990s.
Does Christine Grahame acknowledge that there is no restriction of any kind on how the Scottish Executive spends the entire £25 billion that is available to it, whether the money is spent on tackling poverty or on anything else? In the SNP's most recent budget—of course, we get such figures from the SNP only when the oil price is high—it acknowledges a non-oil deficit in excess of £10 billion this year.
We cannot begin to deal with the issues in Scotland while we are not in the position to deal with tax and benefits, which are at the basis of most poverty issues, but we have to deal with the social fallout.
Seven of the Child Poverty Action Group's 10 steps to a society that is free of child poverty relate to reserved matters. If we listen to people who tell us about the difficulty that they have in moving out of poverty, they inevitably refer to the benefits trap and not having access to education because they do not have funding for transport. We want to deal with all those issues. There is something dishonest in the arguments we hear today that suggest that the SNP's proposal is simply a camouflage for independence. Of course it is not: none of us in the SNP has ever said anything other than that we want independence. I am opening up for consideration the question whether anyone in the chamber seriously believes that we can tackle child poverty and the poverty of low-income families without having our hands on the real tools of tax, benefits and the ability to provide decent, well-paid jobs.
I begin on a wee note of sympathy for the Scottish National Party. It seems, given the initial howls from members of the parties in the Executive, that the SNP is damned if it lodges a motion with words such as "autonomy" and "independence" in its title and damned if it does not. I welcome the motion, which calls for an open and inclusive debate. That is a far cry from the words of Mr McConnell, who seemed to imply that we should close down debate on the existing settlement for years—perhaps even for decades.
Jim Mather is right: years after the political decision was made by the Scottish public to create this Parliament, the debate is going on outside Parliament about how to fund the institutions of Scottish governance. I am sure that members will be aware of the many recent publications on the subject. It would be absurd if Parliament, which should be the foremost institution of Scottish public life—I think that it is confidently growing into that role—was to decline to take part in the debate. The SNP motion is in some senses a self-fulfilling one: it calls for a debate and, lo, it begins.
My small criticism is about an aspect of the motion that might merely be an oversight. Although the SNP seeks an inclusive debate, it has included in the motion a specific policy goal that not all parties can sign up to. Greens believe that, as Edward Abbey wrote, maximising economic
"Growth for the sake of growth is the ideology of the cancer cell."
In the wake of the Stern warnings on climate change, we should be willing now more than ever to face up to the reality that chasing the myth of everlasting economic growth on a planet of finite resources will do for us in the end.
However, the commitment in the motion to maximising growth is merely one aspect of the debate that is being called for, so on this occasion I will overlook it to support the substance of the motion, which is the proposal that we should all—unionist or nationalist; pro-independence or pro-devolution—be willing to engage in the debate rather than defer it, as Mr McConnell has suggested, perhaps for many years.
As for Mr Baker's amendment to the effect
"that we should continue to use the powers of the Scottish Parliament"
to benefit the people of Scotland, as long as we are limited to those powers, who could disagree? We should indeed use them to improve the lives of people in Scotland. I could even support Mr Baker's appeal for those of us who support independence to give an honest explanation—although I might be bolder and call it a vision—of what an independent Scotland would mean. I could support that appeal if I did not think that we were already doing that.
Greens have certainly been clear that our support for independence is not motivated by flag or by patriotic fervour, nor is it based on the events of hundreds of years ago or the politics of identity. It is grounded on the belief that a country the size of Scotland is, if it is independent, more capable of rising to the one overriding challenge that faces all Governments in the 21st century, which is to find prosperity and quality of life after carbon, after cheap energy and without continuing to fritter away the world's ecological capital. Sadly, Mr Baker is still proposing a narrower vision of a Government that must exist by the permission of another and live by handout.
Will the member take an intervention?
I am sorry—I do not have time.
Perhaps the most depressing aspect of Richard Baker's amendment is that he is not, even as a committed devolutionist, willing to debate openly the future of this institution.
The Conservative and Liberal amendments have much to commend them, but Mr Brownlee struck the progressive tone more successfully in his speech than did Mr Purvis in his. Mr Purvis rounded only on the SNP, despite the fact that the Labour amendment seeks to close down the debate.
The choice is before us on independence as well as on fiscal powers. Greens will make the case in the coming months, as will other parties, but it is depressing that the Labour Party asks us to close down debate on important issues that face Scotland.
I have always believed in the principle of fiscal autonomy, but I came to the first debate this morning with an open mind. However, after hearing the Executive's illogical statements about the Howat review of the Executive's budget, I am more convinced than ever that we must have full control of tax raising and expenditure in Scotland and be free from the cold and controlling hand of Westminster.
Many members of Parliament in England accuse us of receiving an unfair share of the country's wealth through the Barnett formula: nothing could be further from the truth. Richard Baker's assertion that fiscal autonomy would be a shortcut to independence is well wide of the mark. The Scottish Senior Citizens Unity Party is in favour of Scotland remaining within the union, but with full fiscal autonomy, which would make us far more able to institute an all-out attack on poverty in all its forms in Scotland.
The eradication of pensioner poverty would be our number 1 priority. Pensioners are utterly neglected and some 21 per cent of us live in poverty. That is not my statistic, but the Government's. In the 21st century, in the fifth most successful economy in the world, the fact that we have pensioner poverty is an abysmal disaster and it is unacceptable. It is unfortunate that not many members of the Government are in the chamber to hear me say that.
Contrary to what Gordon Jackson said, it would be possible for Scotland to enjoy fiscal autonomy while remaining in the union; indeed, fiscal autonomy would be the biggest possible setback to the campaign for all-out independence, because if we controlled our finances there would be no need for independence and the independence campaign would belong on the periphery of reality. If we remained in the union and big departments such as the war department—
The war department?
Well—whatever we want to call it. We could draw up a contract with the department: it could do what it liked on the military side of things and we could settle our share of the bill by demanding an exorbitant rent for the use of Faslane. That would balance things out.
When Westminster realises that fiscal autonomy for Scotland would be the biggest possible setback to the independence campaign, we will achieve fiscal autonomy. Until that happens, we are stuck with what we have got and we must put up with poor pensions, child poverty and all the rest of it. It would be nice to address those issues off our own bats, in our own country and without outside interference.
In about six months we will celebrate the 300th anniversary of the treaty of union between Scotland and England. The next elections to the Scottish Parliament will take place within days of that anniversary and it seems that the pre-election campaign is shaping up to be a contest about the future of Scotland, with calls for further devolution and more responsibilities for the Scottish Parliament on one side and calls for independence on the other.
All the evidence from the Scottish public suggests that there is a certain amount of dissatisfaction with the current devolution settlement. There is a groundswell of public opinion that Parliament does not yet have sufficient powers to enable it to do its job properly and that the current situation, in which Parliament is entirely reliant on handouts from Westminster, is unsustainable. If the Scottish Parliament is to mature, it needs greater responsibility for its finances. We have an immature budget process in which the Minister for Finance and Public Service Reform announces spending plans during the budget debate but does not identify any means of raising the money—or part of it—because he is not required to do so.
Liberal Democrats call for a significant increase in the taxation powers and responsibilities of the Scottish Parliament—the report of the Steel commission leads the way in that regard. We need greater fiscal levers if we are to influence the direction of the Scottish economy, further improve competitiveness and accountability and allocate resources more efficiently.
Jim Mather wants a debate on financial powers, but during his speech he admitted that increased financial powers would be
"a step on the road"
to independence.
Richard Baker said that we should use the powers that we have, but is the Labour Party willing to use Parliament's tax-varying power? It has steadfastly refused to do so.
That approach was agreed by my party and Mike Rumbles's party; it is in the partnership agreement.
It was put there by the Labour Party.
Like Richard Baker, Derek Brownlee said that we should use the powers that we have, but he refused to say whether the Conservative party would be willing to use Parliament's tax-varying powers. That is because the Conservatives cannot make up their minds and are completely divided on the issue. After all, it has taken seven and a half years for them to come round to accepting the existence of the Scottish Parliament.
Will the member give way?
I am sorry—I do not have time.
Brian Adam was right to point out how conservative the Labour Party's position is. The Labour Party is the only party in Scotland that is stuck in the "no change" groove.
Only by giving Parliament serious and mature tax-varying powers and through willingness to use them can we ensure responsibility in Government. The Liberal Democrats believe that the Scottish people want a mature and more financially responsible Parliament. The Scottish people want their representatives—us—to spend their money wisely and to take responsibility for raising most of that money. We therefore need to reform the Scotland Act 1998 and allow Scotland's Parliament the proper financial powers to effect real change.
Our first First Minister, Donald Dewar, often said that devolution is a process, not an event. I urge members to support the Liberal Democrat amendment at decision time.
Jim Mather put what appeared to be a reasonable case reasonably, but as I listened to him I wondered what lay behind his speech. Gordon Jackson was correct when he said that people in Scotland regard the SNP as a party of independence. I do not agree with the SNP on independence, but to believe in independence is to take a perfectly honourable position, which is worthy of respect.
However, if there is not quite a conspiracy of silence on the SNP benches, there is a deliberate tactic to play down the independence issue. Alex Neil will no doubt frighten the horses in his summing-up speech, but every SNP member who has spoken has avoided the issue like the plague.
Will the member give way?
I am sorry, but I have only four minutes.
I compare and contrast the dry fiscal reasonableness of Jim Mather and Fergus Ewing with the high-spending philosophy of Linda Fabiani and Christine Grahame. It is inevitable that I must agree with Richard Baker to some extent: the SNP is the party of high spend.
In anticipation that support for the independence argument might be canvassed during the debate and because I was wondering whether there might be something of which I was not aware, I did some research. I logged on to the SNP's website, where a series of questions are posed. The first question, "Why independence?" is followed by the heading, "Why Scotland needs to become independent". The answer is:
"There are currently no items in this folder."
I then wondered what the SNP says about finance. Under the heading "What Independence will mean for your finances", the website states:
"There are currently no items in this folder."
I went on to Scotland's oil and how that will impact on the economy. The website told me that
"Scotland is very well placed to be a powerhouse economy, with a wealth of natural resource and an educated workforce",
but under that, it states:
"There are currently no items in this folder."
Under the heading "How Scotland can become independent"—yes; members have got it—it states:
"There are currently no items in this folder."
Scotland will not become independent, because the people of Scotland are not going to cast away all the benefits of a union that has stood them in such good stead for hundreds of years.
Some members made interesting speeches. I have a lot of respect for Jim Mather—he knows what he is talking about when it comes to money, until he gets on to the independence kick, although he was certainly not for doing that today. However, in response to an intervention, he gave the show away when he more or less admitted that the context of the motion was a gradualist approach to independence. Frankly, that is not acceptable.
Several issues have been raised on which there are questions that must be answered. The Conservatives have never taken the view that the Scotland Act 1998 is preserved in aspic or set in tablets of stone. Of course devolution is a dynamic process and must be examined. At the end of the day, the decision may well be that no change will be made, but that does not prevent us from having the discussion and argument.
It is the small things that give members away. Jeremy Purvis's amendment talks about home rule being adjusted
"to deliver real benefits to the people of Scotland".
That is surely a tacit admission that the Executive, of which Mr Purvis's party is part, has manifestly failed. That amendment is certainly not acceptable. The only amendment that makes sense is Derek Brownlee's, which states that the argument should take place in a reasoned manner but stresses that under absolutely no circumstances should that process be seen as doing anything other than strengthening the union.
As this is an SNP debate six months before an election, the SNP should, as a minimum, have clarified what Scotland's principal Opposition party believes about the future financing of Scotland. It is somewhat bizarre that, after touting fiscal autonomy as its flagship policy for more than five years, the SNP cannot even bring itself to mention it in the motion or to tell us how it will work. To be fair to the SNP, by definition, every single independent country raises and spends its own taxes—they all have fiscal autonomy. However, as others have said, no devolved or federal nation has adopted fiscal autonomy to finance its constituent parts. Why? It is because the very reason for being part of a larger state is to share risk, resources and revenues. When I asked Jim Mather for examples of fiscal autonomy, he cited Navarre, the Basque Country, Montenegro and the Channel Islands. Those are hardly the fastest-growing parts of their respective states, but let us leave that aside. All those jurisdictions have fiscal decentralisation and share risk, resources and revenues with the centre; none has fiscal autonomy.
There is an article by somebody who is very close to home in today's edition of The Scotsman calling for efficient government. Most people realise that efficient government can be achieved only when there is a closely linked virtuous circle between wise spending and Government revenues. How will we get efficient government in Scotland in the fiscal vacuum that Wendy Alexander wishes to create for it?
We get efficiency by good government and good politics.
Let me return to fiscal autonomy. As Brian Adam made clear, fiscal autonomy is a financing system for independence. As I think David McLetchie pointed out, that is why we cannot find a single paragraph on the SNP's website about how its flagship policy will work. The debate has been important in that the only conclusion that one can draw from it is that fiscal autonomy is officially dead as an SNP flagship policy. Members heard it here first: fiscal autonomy is dead and has been consigned to the cluttered graveyard of discarded dead economic policies.
Fiscal autonomy is going the way of the oil fund, which was the SNP's centrepiece in 2003, but which is no more and did not even rate a mention in the budget discussion this year. In 1999, we had the penny for Scotland, which is gone but perhaps not forgotten. In 1997, the SNP tried to balance the books by claiming that an independent Scotland would inherit none of the national debt. All those policies are discredited and dead and all of them have been ditched because of their lack of plausibility.
The SNP knows that the Scots do not want to hand over all their public services, including the entire health, education and police services, to the mercy of a financing system about which the SNP cannot even provide a motion, never mind a one-page guide. That is not serious politics. We speak today not in some seminar room; this is a Parliament with a responsibility to the people to sustain their livelihoods and preserve their services. The people of Scotland deserve better. Let us forget the deception and start providing some detail.
The debate has been interesting and we have learned some things: we have learned that Bill Aitken does not know how to use the internet and that Wendy Alexander has not read the motion. The words "fiscal autonomy" do not appear in the motion—we talk about "fiscal powers". I will make it absolutely clear to Gordon Jackson, so that there is no dubiety whatever: I am a heart-and-soul nationalist; I am a cultural nationalist; I am a political nationalist; I am an economic nationalist; and I am a moral nationalist.
Will the member take an intervention?
I will, in a minute.
I want my country to be able to say that we are not participating in an illegal war in Iraq or anywhere else. I want my country to be able to say that we are not having Trident or son of Trident. I do not want to say to the people of England, as the First Minister did, "The reason we want to stey in the union wi you is so that we can dump our nuclear waste on English soil."
I will let in Bristow Muldoon, but before I do, I congratulate him on his new appointment as an attack dog. Let us find out—is he is a Rottweiler or is he a poodle?
I thank Mr Neil for his good grace in giving way. He declared himself to be an economic nationalist. Given that the SNP stands on a policy of separatism, will Mr Neil set out what currency an independent Scotland would have if the SNP lost a referendum on the euro and which way he would vote in such a referendum?
All I can say is that Bristow Muldoon is the only poodle whose hair disnae curl. The answer to the question is easy-peasy. Our position is very clear: when Scotland becomes independent, and during that process, we will retain the pound sterling. If, after independence, the Scottish people want Scotland to go into the euro, that will be a matter for the Scottish people. Why cannot the Labour Party trust the people? It is their decision.
What is interesting about the question and, indeed, what is interesting about all the speeches that we have heard from the unionist parties this morning, is that they have all forgotten about the much bigger union of which we are a member. We are no longer just a member of the union with Britain; we are also supposed to be part of the European Union. How is it logical and sensible for Ireland to be a nation state member, and for Austria, Portugal, Luxembourg, Sweden and all the other successful small countries to be members of the EU but not for Scotland to be a member? There is no answer to that question.
I say to the attack dogs—to the poodles, because the Rottweiler, Duncan McNeil, has left the chamber—that what matters is the European dimension. That is what makes independence not just desirable but absolutely essential. What we are dealing with this morning is the non-settled will of the Scottish people because it is clear from the poll that was published yesterday that they no longer regard devolution as their settled will.
Is not it illogical to want independence from Westminster but not independence from Brussels, where some 70 to 80 per cent of the laws of our land are framed and passed?
It is precisely because of the transfer of power from London to Brussels that we should relocate our external representation from London to Brussels. We do not hear the Irish saying that they are going to give up their independence and let London represent them in Brussels. Wee Ireland—whose population was about half the size of Scotland's at one time—has done much more in the European Union than big Britain has ever done.
I will let Jeremy Purvis in. His main criticism of our proposed council of economic advisers is that it would be "boring". All I can say is that Jeremy will recognise boring when he sees it. [Laughter.]
My question is about Mr Mather's virtuous circle, which I am sure Mr Neil supports. Is the virtuous circle to transfer control from London to Brussels? I thought that the SNP wanted control here, in Edinburgh.
That was a devastating intervention—absolutely devastating. The reality is that, over the past 40 years, power has shifted from London to Brussels. There is no reserved power in Westminster that could not be better exercised from Holyrood.
I agree with the first point that Richard Baker made in his speech. The main issues are jobs, housing and the standard of living. That is why we need independence. The economic consequences of the union have been disastrous for too many of our people. Let us compare child poverty in Scotland, where a quarter of our children are living in poverty despite all the resources that we have, with Denmark—a country that has practically no resources—where the figure is less than 2 per cent. Let us consider also the level of pensioner poverty in countries such as Finland, Norway and Austria. It is minuscule. Compare that to the fact that a fifth of our pensioners live on or near the poverty line.
We have had 10 years of a Labour Government—it calls itself a Labour Government—yet, according to all the recent reports, the distribution of income and wealth in this country is getting more unfair and the level of poverty is rising all the time.
Will the member give way?
I will let Wendy Alexander in. Let me tell members about Wendy Alexander, in case they did not see her on "Newsnight" the other night. At 11 o'clock, she came on saying that, if we have independence, there will be 10 years of disruption and chaos.
Very briefly, Mr Neil.
At 5 past 11, it was up to 20 years. By quarter past 11, it was up to 60 years.
You have 30 seconds, Mr Neil.
All I can say is that I am glad that BBC2 does not have adverts. By the end of the adverts, it would have been up to 100 years. [Laughter.]
We close there.
On a point of order, Presiding Officer. The member accepted my intervention but then did not let me make my point.
I am sorry, but I did not hear that. We will return to that once we have consulted.