Economy
Good morning. The first item of business is a debate on motion S3M-7159, in the name of Jeremy Purvis, on the Scottish economy.
09:15
Although Scotland faces considerable economic challenges, there are also huge opportunities if we can match our ambitions to them. Although Scotland has some of the best entrepreneurs and industrialists in the world, it still does not have enough. Although some of the most exciting research being carried out anywhere in the world is being produced in Scotland, we need to create an environment in which we can produce more of it; and although we have one of the best education systems, it lets down too many young people who subsequently do not play a part in the economy.
We have an aim and ambition for Scotland to be the world’s most innovative and entrepreneurial economy. That can be achieved with the private sector’s participation, the United Kingdom Government’s support and—most critical—a Scottish Government’s leadership. After closely examining the various policy options that Governments have taken in Scotland since the 1970s and having spent the past year speaking to businesses in all sectors throughout the country, I and my colleagues have reached certain conclusions. We have outlined our thinking in a paper, the conclusions of which have been shaped to reflect those businesses’ views, concerns and needs.
Scotland is and will remain a tiny economy in a fast-growing world, but we can play a disproportionately large role in supporting economic growth and ensuring that such growth is socially and environmentally sustainable. Not only do we want Scotland at the end of the decade to be the most innovative and entrepreneurial place in which to work and start up businesses, we want our businesses to be exporting more and to be more involved in the global economy. Although we have some outstanding exporting businesses, we want those exports to expand by at least 50 per cent in value over the next parliamentary session and, indeed, to double over the next decade. The global economy is changing fast and we need to keep up.
The very first commercial text message was sent the year that I left school; today, more texts will be sent and received than there are people in the world. This year, the number of young people entering undergraduate courses in China will be greater than Scotland’s entire population. In Scotland, one in two young people go into higher education after leaving school; however, in India, the number is one in 1,000, and we know the potential for growth in that economy.
The question is whether our public sector bodies are taking the right approach to reach the goals. We think not. When it came to office, the Scottish Government stated its intention of streamlining Scotland’s economic development framework. Regrettably, it did not put in place any benchmarking to demonstrate whether such a move would actually increase growth. The smart, successful Scotland policy and the framework for economic development in Scotland have been succeeded by the Government’s economic and skills strategies; the restructuring of Scottish Enterprise has led to the abolition of local enterprise companies and the creation of six new operational areas with advisory rather than non-executive boards; and business gateway functions have been transferred to local government. VisitScotland’s operational areas have been realigned with the six Scottish Enterprise areas, while Skills Development Scotland has organised itself into operational areas that are not, however, coterminous with the SE or VisitScotland areas. Moreover, Creative Scotland has been established as the central lead development body for the creative industries.
One witness at an evidence-taking session on the creative industries by the Education, Lifelong Learning and Culture Committee in March 2008 called the new structure
“a bit of a mess. There could be blurred lines between who does what and it would be time-consuming trying to track down who does what. It does not sound great. Going through a central body that calls in specialist skills when necessary seems to be a more straightforward and clearer structure.”—[Official Report, Education, Lifelong Learning and Culture Committee, 19 March 2008; c 789-90.]
In its most recent skills strategy document, the Government itself states:
“Too many employers, particularly SMEs, are frustrated by the complexity they encounter in accessing the right information about skills at the right time in the right format. It can be difficult for employers to know where to start looking for information without a prior detailed knowledge of the institutional landscape.”
That was the same policy that the Government implemented after £16 million of set-up costs.
All that runs contrary to the Scottish Government’s assurances that the structure is “more focused”—indeed, that is the substance of its amendment this morning—and there is uncertainty over the operations of SDS, whose delivery of skills and training support lacks coherence. It was established before the Government’s skills strategy was introduced, and it remains unclear whether the strategy is shaping the agency or whether the agency is reshaping the strategy.
The First Minister was an MP when the Scottish Development Agency was changed to Scottish Enterprise, and I found the criticisms that he made in various parliamentary debates at the time very interesting.
In his motion, the member refers to
“a single body to offer equity finance ... and a single promotional, marketing and inward investment body”
and to the need
“to reform the enterprise bodies”.
Does he plan to get rid of Highlands and Islands Enterprise by merging it with SE?
I will come to that, but I will say now that we propose the creation of a Highlands development bank.
As I say, Alex Salmond’s criticisms in 1990 of a centralised approach to skills are interesting. He said that skills priorities
“are more likely to be identified in the same way that local enterprise trusts identify them at the moment—at a really localised level with detailed knowledge of the local economy. We could have kept the best aspects of the SDA and its structure as well as integrating the training requirements.”—[Official Report, House of Commons, 9 January 1990; Vol 164, c 888.]
I agree with that view, and I regret to say that the current situation does not provide the same level of support.
The recent review of local authority economic development activity for the Scottish local authorities economic development group stated that although local authorities are now responsible for much more economic development support there is major variation in staffing, activity, reporting and investment and highlighted the lack of national guidance to provide either a consistent approach to the delivery of service or consistent baseline data on economic activity, quality standards or professional capacity. In its conclusion, the report says:
“The key issue is therefore to consider if the time is right for a radical overhaul of local economic development in Scotland—a new local agenda?”
That is the question that we need to answer. After discussing the matter with and listening to businesses, we have concluded that as well as shaping a new local agenda we must ensure that the right national framework—elements of which Dave Thompson touched on in his intervention—is also in place.
Many good sustainable businesses, including some in the textile industry in my constituency and across Scotland, have gone under in the past 18 months because of difficulties in securing finance.
I believe that a number of things outlined in the member’s paper have merit, but does he genuinely believe that his solution of creating a new Government department, bodies called finance Scotland and Scotland international, a Highland development bank and 13 regional banks, and maintaining Creative Scotland and the Scottish Further and Higher Education Funding Council is really as simple and as clean as he suggests?
Yes, it is. At the moment, Scottish Enterprise, VisitScotland, the Scottish Futures Trust and a number of other organisations all provide services, and businesses are struggling to identify which is the right resource. We have identified the two main challenges: to find the right national bodies to drive forward a national agenda and to find the right approach for a local and regional economy. With regard to the latter, we believe that there should be one body—a development bank—in each region to bring together tourism, business support and lending and skills. As a result, we will not have Skills Development Scotland, which is funded by the Scottish funding council; we will not have Scottish Enterprise; and we will not have the involvement of Government officials. We propose to create the kind of one-stop shop that many local businesses have told us that they desperately need.
As for the national framework that Dave Thompson asked about, we believe that Scotland needs a body that would offer equity finance and support for business lending and step in at times of commercial market failure. In our view, it is right to have the equity team of Scottish Enterprise and the advisory component of the Scottish Futures Trust brought together into one body, finance Scotland, a single agency that would be established to be self-financing but underwritten by Government. Finance Scotland would also advise on and co-ordinate national infrastructure and advise the local development banks on financing projects and delivery. The Scottish Futures Trust would be scrapped, saving considerable resource and providing much better support and investment for business.
We believe that there should be a promotional body for Scotland, but we do not believe that there should be three: the Scottish Government, Scottish Development International and the national marketing body, VisitScotland. We believe that a single body should be given challenging functions and should incorporate leading business leaders into its direction. We believe that Scotland international—a single body, not three—would be better placed to offer support for businesses that want to expand and to attract investment into the economy.
We propose the establishment of regional development banks. As I have indicated, they would have the function of promoting the region in which they operate and, as such, would be responsible for constituting regional tourism policy and delivering it. The Scottish Enterprise regions would be wound up, and VisitScotland regions would be replaced by the banks, bringing a number of bodies into one body.
Regional development banks would also have the function of creating skills and training policies and, through the colleges in the region, delivering them. They would be composed of local authorities, colleges and universities, with representation for community planning partners and business leaders. That would bring a number of current bodies into one.
The bank would be capitalised by partnering with a private sector partner, looking at the best practice internationally of the Canadian Business Development Bank and the Austrian tourism development bank. Within the UK, we have the example of Banking on Essex.
It is interesting to hear the proposals spelled out. Has the member looked at the transitional arrangements: how the transition would work, who would be involved and what that would cost?
Yes, we have. In a recent television debate with me, the Minister for Housing and Communities said something very perceptive. He indicated that there would require to be an enterprise bill next year. We would propose such a bill, and we hope that the Parliament would consider it.
We believe that our approaches can be developed and we can constitute regional development banks as they stand, but they would be much more effective if we wound up the national bodies. The Government has indicated that, if there is the desire and leadership is provided, changes can be made, but we believe that there should be statutory changes, which would allow the Parliament and others both to be consulted and to scrutinise the proposals properly. We recognise that the changes would be major.
The regional development banks could also provide the support that businesses need, rather than simply the advice and support that the enterprise network shapes. Last year, I took a textile industry group to see the Minister for Enterprise, Energy and Tourism. With the minister were four officials, from the Scottish Government, Skills Development Scotland and Scottish Enterprise. The business needed support for sample books, which were one of its biggest outlays. The business subsequently went into administration. It could not get any financial support from the private sector because the commercial banks were not touching the textile sector, but it could get support from the enterprise networks to meet 50 per cent of the costs of a marketing strategy. The business wanted to know whether it could use what the Government would be prepared to spend on a marketing strategy on providing sample books. That was not possible because it did not fit the enterprise framework products.
Dave Thompson mentioned the Highlands. We have looked at Highlands development over the years, and we believe that the Highlands as a growing economy can grow faster. A Highlands development bank would be a natural fit with what Highlands and Islands Enterprise is currently doing well: bringing together communities, skills, training and businesses and offering support to businesses with much greater flexibility than we see in the enterprise network in the lowlands area of Scotland. In fact, we have learned much from the Highlands to replicate in other parts of Scotland.
There are more than £1 billion of council reserves, sitting in investment banks across Scotland, plus the considerable reserves of housing associations, universities and other public bodies. We are not using those reserves creatively enough and, although I understand that this will be a challenge for councils, we propose to use that money more creatively to guarantee support for businesses—support shaped around the needs of the businesses, not determined by the shape of the enterprise body’s products.
For the first time, we propose having business leaders directly elected to be part of the development banks, with the assumption that they will provide the chairs of the banks. Frameworks already exist for businesses to select their own priorities through business improvement districts, and the same model can be used to enable businesses to elect business leaders on to development banks.
These are major changes, but they are shaped by the need to step up to the major challenges that we face in the global economy. The world is moving and changing fast, and the pace of change is accelerating. If we set the goal for Scotland to be the most innovative and entrepreneurial country in the world, it must have the most innovative and entrepreneurial public sector. We believe that the proposed changes would start that process. I have pleasure in moving the motion in my name.
I move,
That the Parliament believes that creating jobs and strengthening the economy is central to Scotland’s future prosperity; further believes that for Scotland to meet a goal of being one of the most innovative and entrepreneurial economies in the world it needs to reform the enterprise bodies; considers that a network of regional development banks, bringing together business support, lending and grant making, skills and training support and destination management, would be an effective way to support jobs and economic growth across Scotland; further considers that Scotland should have a single body to offer equity finance support for businesses and a single promotional, marketing and inward investment body, and believes that this would create a framework for success in the long term to help more businesses grow and to stimulate innovation and entrepreneurialism over the next decade.
09:31
I welcome the opportunity to discuss the Scottish economy. Members will know that, since coming to power, the Scottish Government has placed the economy at the heart of everything we do. Our guiding principles are those of the Government’s economic strategy—a bold vision for the future of Scotland that has directed the focus of Government and public services towards increasing sustainable economic growth. That purpose was right in 2007, and it is even more right now, given the crisis in the finance sector.
In addressing the purpose, we have put in place a transparent framework to inform our decisions through the Council of Economic Advisers, the national economic forum and the strategic forum. We have brought together businesses, trade unions, Government, the wider public sector and world-leading economists to build momentum behind our economic strategy and to bring about an increased understanding of the challenges that face Scotland. We have fostered the debate at sector and community level by getting out to talk to people and, most important, to listen to people.
Those steps have been severely tested. The challenge of turning around a Scottish economy that has underperformed for decades has been intensified by a massive failure in regulation and economic stewardship, an international financial crisis, and the resultant global downturn. It has been the deepest recession in recent memory, and it has been felt by all economies, large and small.
The Scottish economy endured five quarters of falling output and witnessed a sharp rise in unemployment as firms reacted to the collapse in demand, cruelly exposing the fact that successive Governments and a lack of economic powers have made Scotland a branch economy with too few head offices and too many vulnerable branch operations.
Will the minister explain why unemployment figures in Scotland were ahead of those for the United Kingdom and are now behind them?
The catastrophe of a Government in Westminster that totally failed to manage the economy and regulate things allowed people to privatise profits and socialise losses. It created the cascade that underpinned the problem that Scotland has of being a branch economy with a lack of economic powers.
Mr Mather talks about a branch economy, but a significant part of the problem was the Royal Bank of Scotland. That was not exactly a branch economy problem, was it? It was the question of a small country and a very large bank.
The Bank of Scotland is a UK bank, operating in a UK climate and regulated by the UK, and it was too big to fail for the UK, for America and for Europe. That is the reality of the situation, which is one that we will deal with.
The lessons that we learn from the financial crisis are important. They include the confirmation of the need for economic powers, a clear understanding of the mistakes and successes of other small countries, and the insights that we have gained about the regulatory framework for our financial sector. We now know that the domestic and international regulatory framework was insufficient to protect the financial sector and the wider economy from excessive risk taking and moral hazards. It was the failings of the UK Government’s regulatory framework that allowed our UK-based banks to be so exposed to the international financial crisis.
Will the minister take an intervention?
I have taken enough; I am moving on.
We are now seeing the measures put in place to prevent a recurrence, and I welcome the recent international agreement to raise capital ratios for banks and the changes to the UK’s financial regulatory framework. We must now ensure that we never again suffer a financial crisis on this scale and that we prevent the repetition of such catastrophic impacts on the real economy and the people who drive that economy.
The recession has also highlighted the failure of the UK Government to properly manage the macroeconomic environment for not just the UK, but Scotland. We are now paying for that mismanagement. The UK coalition Government’s comprehensive spending review heralds the deepest and most severe cuts in public spending since the 1940s. More fundamentally, the recession has thrown the spotlight on the deficiencies of the current constitutional set-up. The main policy levers to stimulate the Scottish economy during an economic downturn remain in Westminster. The key elements of the tax system, macroeconomic policy and, crucially, the ability to borrow are not options that are open to the Scottish Government. Without those, the Scottish Parliament cannot set the optimal macroeconomic policy for Scotland. That is the single biggest reason why, historically, the UK economy has tended to grow faster than the Scottish economy.
The situation simply must be addressed, as many commentators have said. In The Guardian recently, Simon Jenkins told us that we have been prevented by Westminster from getting the major advantages of being a small country and have got all the vices of a large country. The dangers of inaction are now stark and clear. The current budgetary situation is a salutary reminder of the need for urgent reform. Scotland must never again face years of sustained cuts to our public services. This is a time for the Scottish Parliament to reflect on the future and the responsibilities that it wants to take.
Faced with those unprecedented challenges, Scotland has an opportunity to take a different path, whereby the Scottish Parliament and the Scottish Government take much greater responsibility for the key financial decisions that affect Scotland. Full financial responsibility would give this Parliament the key fiscal and economic levers to promote growth in Scotland and use the proceeds to invest in Scotland’s public finances. The achievement of Scotland’s full economic potential rests on our greater access to those economic levers as an independent country.
The minister is talking about the measures that he would take if he had full financial powers. In making the Scottish economy more competitive, would they lead, in the short term, to a reduction in tax revenues? How would he ensure that public services were not slashed as a result?
The basic assumption that Scotland is not a bankable proposition is absolutely ludicrous. Here we are, a country with all the key attributes for a successful 21st century—energy, water, food production and smart people—and the infrastructure that modern economies need to move forward.
Does the Government have any observations to make on the proposals that I outlined to the Parliament this morning, or is it the Government’s proposition that anything that can be done in the enterprise networks is utterly irrelevant because we can be successful only if we are independent?
The Government has and always has had an open mind. We welcome any debate, but the member’s proposal has such radical implications that it requires much more debate and much more confidence to be gained from the wider community out there if we are to take it on.
Meanwhile, the Government has acted at an early stage to bolster the economy and has put in place an economic recovery plan. We have provided 40,000 training opportunities, including 20,000 modern apprenticeships and 5,000 new flexible training opportunities this year alone. We are pressing the curriculum for excellence through the schools, and we are tackling the issues of poor health that impact on people in the workplace in order to maximise participation in the workplace. We have accelerated our capital spending to provide the stimulus that is needed to keep things going in difficult times, and we have modernised the planning process. We have set the lowest ever national poundage for business rates, and we have implemented the small business bonus scheme. The Liberal Democrats propose reforms to Scotland’s enterprise agencies, but we have already reformed Scotland’s enterprise support, ensuring that our enterprise agencies can support high-growth businesses and address the on-going constraints on finance for Scottish businesses.
Those combined actions, and the new levels of cohesion that we have worked hard to create in Scotland, have helped to mitigate the scale of the recession in Scotland and have ensured that we are well placed to benefit from the global recovery. The recession in Scotland was shorter and shallower than the UK’s, and the recovery accelerated in quarter 2 of 2010 with growth of 1.3 per cent—the fastest quarterly growth since 2006.
What about quarter 3?
We will focus on quarter 3 in a moment.
The Government is aligned with our jobs and communities, moving forward to build the education and skills that we require. We are pressing forward with innovation in our industries and making sure, through the Scottish loan fund and pressure for new inward investment, that we create the right climate in Scotland to move forward.
The reforms that Jeremy Purvis suggests—the network of regional development banks, a single body to offer financial support for businesses and a single inward investment body—are running ahead of the analysis and debate. I am open to the debate going forward, but in facing the deepest cuts in a generation we need the Parliament to get behind the Government’s economic agenda and recognise that the core problem is the need to gain the economic powers to put Scotland on a proper footing and create the virtuous circle that will allow successes in Scotland to be banked in Scotland. If Mr Purvis is serious about his proposals, he might talk to Ronald MacDonald, who made a similar proposition on fiscal federalism back in 2004 but has now recanted in favour of full independence, knowing that that has the integrity to drive forward the model and produce the long-term changes that we require to create a resilient Scotland, rather than changes that give us something that is half baked and a poison pill.
I move amendment S3M-7519.2, to leave out from “reform” to end and insert:
“build sustainable economic recovery; notes the work already undertaken by the Scottish Government on reforming the Enterprise networks and decluttering the delivery landscape, reducing duplication and driving up effectiveness and efficiency; further notes the ongoing Inquiry by the Economy, Enterprise and Tourism Committee on the Enterprise Network and the contribution it is making, and calls on the Scottish Government to consider its conclusions.”
09:41
There is quite a contrast between the sensible amendment lodged in the name of Jim Mather, the Minister for Enterprise, Energy and Tourism, and the speech that he has just given. I am left to conclude that he pulled the wrong speech out of his briefcase this morning and delivered the one marked “SNP Conference”.
We welcome the opportunity to debate the Scottish economy and I thank the Liberal Democrats for lodging the motion and publishing the paper that Mr Purvis wrote. As I said in my earlier intervention, various parts of the paper are of merit, but it will be clear from our amendment where we stand in relation to the broad thrust of his proposals.
I am the first speaker in the debate who is a member of the Economy, Energy and Tourism Committee. I reviewed all the evidence that was submitted to the committee in the course of its inquiry and I listened to all the arguments that were put to us by the business community in relation to the enterprise networks. I will, therefore, focus the bulk of my remarks on that.
On the major reform that has been proposed by Mr Purvis and the Liberal Democrats, I will read out three quotes that were submitted to the committee. The first quote comes from the representative of the Federation of Small Businesses who gave evidence to us in September. He stated:
“I do not think that there is a case for major structural reform or for ripping things up and starting again—precisely the opposite, given some of the difficulties that we have experienced during the transition period.”—[Official Report, Economy, Energy and Tourism Committee, 22 September 2010; c 4030.]
A week later, Alasdair Northrop, the editor of Scottish Business Insider magazine and Business7, stated:
“Today, I will argue that it is more important than ever to have agencies such as Scottish Enterprise and Highlands and Islands Enterprise”.—[Official Report, Economy, Energy and Tourism Committee, 29 September 2010; c 4082.]
On 22 September—the same day on which we heard from the Federation of Small Businesses—the Scottish Chambers of Commerce said:
“Business would certainly not welcome the wholesale changing of things every three or four years. Instead, we need to look at how we can evolve and improve the current system and plug any gaps in it to ensure that businesses receive the support that they need.”—[Official Report, Economy, Energy and Tourism Committee, 22 September 2010; c 4032.]
There was a strong feeling among the businesses and agencies that gave evidence to the committee that we certainly should not be ripping things up and that we ought to be—as the Scottish Chambers of Commerce stated—improving the current system and plugging the gaps. Therefore, I feel that the Lib Dem motion has failed to capture the mood of the business community and fundamentally—certainly at this time—gets it wrong. Having read the paper, I am not persuaded that the proposed system would be less complex. That is what I asked Mr Purvis in my intervention. I watched the clock, and it took him four minutes to explain how the new system would be simpler than the one that we have. On the basis of that and the response that he gave, full as it was, it is difficult to argue that the proposed changes would be simpler.
I worry about the amount of time that businesses, business leaders and politicians would spend changing things, reviewing things and ironing out the details if the proposal were to go ahead, particularly through primary legislation. That is time that could have been spent trying to get our economy back on track.
Is the Conservative party not attracted to the idea of a one-stop shop for regional help and development?
Most businesses understand most of the architecture out there quite well. The difficulty with the proposal that Mike Rumbles supports is that it is not really a one-stop shop. It would involve the creation of a new Government department and of bodies such as finance Scotland and Scotland international. I do not think that, in essence, that represents a one-stop shop. Of course, the idea of a one-stop shop is attractive but, having read the paper in full, I am not convinced that the proposals would create that.
Will the member give way?
I want to make some progress.
I want to focus on how we can evolve and improve the current system, as the Scottish Chambers of Commerce said.
The evidence that was put to our committee clearly shows that there is a gap in the middle, so to speak. There is a perception that the business gateway deals only with start-ups and that Scottish Enterprise is interested only in the 2,000 or so account-managed companies. That leaves companies in the middle feeling that they are not getting a fair deal.
We cannot help everybody and we must not spread the resources too thinly, but there is merit in providing some changes to the business gateway. When the contracts are renegotiated in 2012, they should be changed so that credit is given for not only starting businesses up or moving them into being VAT registered, but providing help to businesses that are not start-ups but are in temporary need because of cash-flow difficulties or some other such temporary problem. There probably also need to be changes to ensure that Scottish Enterprise provides more help to businesses that are in the middle—not on a one-to-one basis, which would be impossible, but by providing more online support and, perhaps, working in tandem with business organisations to run more events, so that people feel that Scottish Enterprise is doing something for them, even if they are not getting account-managed support.
There must be a stronger focus on internationalisation. Scottish Development International is in effect tasked with two things: inward investment, and exports and international trade. I think that it has done a pretty good job on inward investment. Over the past decade or two, we have punched above our weight in that regard, but well below our weight on exports and international trade. Over the past 10 years or so, the value of our exports has fallen from £17 billion to £15 billion. We are the only part of the United Kingdom whose exports have fallen in cash terms. I will repeat a statistic that was given to the committee and which I have mentioned in this chamber on several occasions, because it really stuck with me. Some 8 per cent of all VAT-registered companies in the UK are headquartered in Scotland, but we have only 5 per cent of the exporting companies. We punch well below our weight in that regard. SDI must be charged with focusing a bit more on exporting and internationalisation. We must also review the smart exporter initiative, which was a good initiative that was run jointly by the business organisations and Government, in order to ensure that it enables more Scottish companies to trade internationally, so that we can have an export-led recovery.
I thank the member for mentioning the smart exporter programme. Does he recognise that the previous policy of foreign direct inward investment in the area of information technology has backfired in Scotland, causing an export problem? Would he, like me, welcome the chance to have a new beginning and to reinvent exporting across the wider spectrum of businesses in Scotland, including the professions, in order to help young businesses move forward and consider that proposition?
I am not precisely sure what the minister means by reinventing exporting, but anything that improves the lot of the companies that currently export goods is important. In particular, anything that increases the number of companies that are exporting is to be welcomed. If that is what he means, I would be interested in discussing the matter with him.
We must also consider our start-up rate, which has been poor over the long term. Over the next couple of years, spending on economic development by local authorities should continue. There is a danger that economic development spending will be squeezed because that is seen by the Government as being less painful in the short term.
Will the member give way?
I am sorry, but I must ask Mr Brown to conclude now.
What do we want our agencies to do over the next few years? Do we want them to spend all their time on internal matters, ironing out details and creating yet more changes, or do we want the current organisations to have a relentless focus on jobs, growth and recovery? The latter should be the priority.
I move amendment S3M-7519.2.1, to insert at end:
“; calls on the Scottish Government to pay particular focus to improving Scotland’s record on exporting and internationalisation of businesses, and also calls on the Scottish Government to focus on improving the business start-up rate.”
09:50
At first glance, the debate might seem to be simply an opportunity for my friend Jeremy Purvis to gain more publicity for his 47-page document, which I believe he launched at his party’s conference earlier this year. On one point, we are certainly in agreement: creating jobs and strengthening the economy are central to Scotland's future prosperity. However, I am not convinced that the creation of regional development banks will facilitate that, although I listened with interest to what Mr Purvis had to say. My colleague, Lewis Macdonald, will discuss some of that later.
It cannot be denied that the forecast for Scotland's economic growth does not make especially good reading. We have debated the facts on many occasions. Only this week, the Ernst & Young ITEM club predicted that Scotland would have a “slow grind” to recovery, with growth of 1.1 per cent anticipated this year, rising to 2.2 per cent next year. The same ITEM club report also highlights the fact that nearly a quarter of Scotland's local authorities will be among the hardest hit in the UK by spending cuts, due to the number of public sector jobs in their areas, current levels of unemployment, the degree to which their local economies depend on public sector procurement and the lack of skills among the working population. Its forecast matches previous forecasts, including those of the respected Fraser of Allander institute. The scale of the problem is not unknown to us.
If the aim of the current Scottish Government is sustainable economic growth, I suggest that deciding to cut the enterprise, tourism and transport budgets seems to be a backward step. That applies not only to this budget; the Government did the same thing last year, when Scotland had the highest-ever amount at its disposal, including an extra £1 billion from various sources.
Mr Mather and the SNP can make all the claims they want to make about the lack of fiscal levers, but what has the SNP achieved for the growth of the Scottish economy with the levers that this Parliament does have? The grand and overblown promises from the First Minister about copying the Republic of Ireland and creating another Celtic tiger have proved to be about as reliable as many of the SNP’s other promises.
Let us consider the economy. At present, 21,070 individuals in Scotland have been claiming jobseekers allowance for over a year, which represents a rise of well over 100 per cent on pre-recession levels. SNP members might not like to hear it, but the Salmond slump is real—it is not a myth. Figures from the Scottish Trades Union Congress showed that, in January 2008, 9,110 people had been claiming jobseekers allowance for over a year. We all know that there is no magic wand, but when we hear that the ratio of jobseekers allowance claimants to Jobcentre Plus-advertised vacancies is 7:1, we can understand the scale of the problem. That is why we on this side of the chamber believe that it is essential that the Scottish Government maintains the levels of investment in skills training and in ensuring that every school leaver has a job, a training place or a university or college place. The demographics of Scotland mean that it is essential that all of our young people can contribute to the wider Scottish economy instead of being a drain on it.
Earlier this week, my colleague Andy Kerr and I met representatives from across the private, public and third sectors to discuss Mr Kerr’s proposals to create a Scottish future jobs fund if we are elected to government next year. That is not pie in the sky or a national conversation about nothing; it is about creating a Scottish solution to a real Scottish problem.
Labour is not prepared to sit back and watch Scotland’s youth—or, indeed, anyone of working age—being consigned to the scrapheap as a consequence of the economic policies of the Con-Dems in London and the lack of economic policy direction from Edinburgh. The case for action to tackle youth unemployment is becoming more urgent by the day. Yesterday, the Scottish Government’s own figures revealed that the proportion of school leavers entering employment has sunk to levels that have not been seen since the previous Tory Government. Only 18.5 per cent of 2009-10 school leavers entered employment, which was a fall from 25.3 per cent in 2007-08. The number of young Scots who are not in work, education or training programmes has soared from 31,000 to 36,000 in the past year. That is the biggest increase in any single year since devolution.
To help the economy grow, we need action—not words or documents. The Scottish future jobs fund would create 10,000 jobs or training opportunities for young people. We need to guarantee an apprenticeship for every qualified young person who wants one, and we need to provide a place in education, training, work or volunteering to all 16 to 18-year-olds.
We all know that finding those jobs will not be easy, but preparing people for employment and giving them the skills to go into the workforce is a vital step in the right direction, as is offering retraining to those who have lost jobs. We must talk to large and small businesses about the types of jobs that they have to offer, the skills that they require from those whom they seek to recruit and the incentives that would help them to recruit.
The Liberal Democrats propose to wind up Skills Development Scotland, which costs too much and does not deliver enough for skills in Scotland, and to devolve the ability to deliver to Scotland’s network of fantastic colleges, which will provide many more places. Would the Labour Party be minded to support that proposal?
I agree with Mr Purvis on one aspect: I do not think that Skills Development Scotland is delivering what it was supposed to. The jury is still out on what its future holds. Improving the skills and productivity of Scotland’s workforce is vital to creating and maintaining jobs and growing the Scottish economy. However, I am not persuaded that breaking down all the public bodies that are charged with economic growth and redesigning them along the lines that Mr Purvis describes will do the trick, although I will bear in mind what he has just said about Skills Development Scotland.
I am certainly not persuaded that cutting the budgets of key economic drivers such as our enterprise organisation and its inward investment arm, cutting the budget of the tourism organisation, cutting grants for industry, technology and innovation, or cutting the housing and regeneration budget will do anything to contribute to Scotland’s economic growth. However, there is still time for the SNP to think again.
According to Mr Mather this morning, the answer to all of Scotland’s ills is for it to become independent. That is a strange policy to have when the popularity of independence is declining—it is sadly not declining as fast as we would like to see the snow outside declining, but there is still time.
Perhaps when we see the SNP’s direction of travel and when—and if—the Cabinet Secretary for Finance and Sustainable Growth produces indicative budget figures up to 2015 as the Parliament has asked him to do, we will know whether the SNP is interested in Scotland’s economic wellbeing or in its own narrow political interest.
I move amendment S3M-7519.1, to leave out from first “further” to end and insert:
“; notes that the Scottish Government chose to cut the budgets of enterprise and tourism this year even though the Scottish budget was going up; notes that Scotland’s unemployment levels are now higher than that of the UK; calls on members to support a Scottish future jobs fund to help young people get in to work, and calls on the UK Government to base the green investment bank in Edinburgh.”
We come to the open debate. We have a little time—actually, quite a lot of time—in hand this morning.
09:58
It has been an interesting morning. I can see, having heard the details of the SNP amendment, why Gavin Brown is slightly embarrassed to have suggested an addendum to it. I had always thought that Gavin Brown understood better our need to be able to sustain borrowing, and that he understood that we, as a United Kingdom, were the only people who could possibly bail out the Royal Bank of Scotland. However, he seems to have joined the Jim Mather school of thought, which believes the country might just have gone bust.
Jim Mather spoke eloquently on fiscal matters, but was entirely silent on monetary matters. Perhaps that was because he did not want to explain to us that Scotland would have gone bust if it had been independent at the time of the Royal Bank of Scotland and HBOS collapse.
Will the member give way?
Yes. I would be delighted to hear just how bust the country will be.
Ross Finnie’s view presupposes that we would have been as cavalier about regulation as was the triumvirate of the Financial Services Authority, the Treasury and the Bank of England, which were all asleep on the job.
They may have fallen asleep on the job, but they were still operating under the current rules, which have not been diluted by a light-touch regime such as the SNP has advocated for the past five years. The minister criticises the rules, but if they were bad, members should think about how much worse they would have been under the SNP’s light-touch regime. I am glad that the minister mentioned that, and that he is now taking—
Will the member take an intervention?
No. The prospect of the SNP’s light-touch regime is bad enough without having Rob Gibson explain it to me further. That is really too horrible to contemplate. The SNP wants a light-touch regime, but we are against that.
This morning’s debate is about a serious issue, which Gavin Brown identified. The current arrangements have one merit, which is that the minister made clear when he came to power that he wanted a more direct central focus for the economic strategy. We do not demur from that view, but we believe that there are, throughout Scotland, issues of a more regional nature and sectoral issues that demonstrate part of the gap to which Gavin Brown alluded.
Our arrangements for dealing with start-ups and the arrangements in relation to the managed accounts—as Gavin Brown described them—of the enterprise network are not uniform. There is a huge gulf in the middle with regard to small and medium-sized businesses that are actively seeking support in one way or another.
It is interesting to note that no Government or political party has given serious thought to interfering with the arrangements that apply in the Highlands and Islands, which is because those arrangements have been successful. It is interesting that that model—
Will the member take an intervention?
Will the member take an intervention?
I want to develop the point.
That model has come closer to introducing a social element into the thinking. We have created a difficulty by getting rid of the enterprise network throughout Scotland, in that we now do not have people who are finely tuned in to the different natures of the sectors or to the various regional differences.
In the West of Scotland we mercifully still have the urban regeneration companies, although their timeline is perhaps somewhat limited. They are the only organisations that are currently engaged in stimulating the economies in areas where there are serious structural defects. There is no point in trying to pretend that central management by Scottish Enterprise has ever successfully addressed the issue of those separate and very different regional structural defects, which exist not only in the West of Scotland but in other parts of the economy.
The Liberal Democrats suggest this morning that we must acknowledge that the gap is complex, and accept that it is worthy of a different solution for the future. It would not matter whether a proposal for change came from the Conservative party or the Labour Party; one would almost put money on the Federation of Small Businesses and the Scottish Chambers of Commerce—although I do not know whether the editor of Scottish Business Insider would be wholly consistent—telling us that they do not want any real change.
They will, of course, write articles and tell us that they want to address the market failures that are occurring in sectors throughout Scotland. They will also tell us vociferously that they want to address the market failures in the sectors that need more support. I am therefore not sure that we can simply dismiss—in fact, I am clear that we cannot dismiss—the suggestion that we remodel the economic delivery mechanisms in order to fine tune them to deal with the sectoral and regional variations that must be addressed.
Is it fine tuning that is required, or do we need to rip things up and start again from scratch?
There are fundamental differences to be addressed. If we want to reflect the different requirements throughout Scotland and within the different sectors, we must have a structure on the ground that will deliver that. We do not believe that the current structures do that.
The minister and others mentioned the need to sustain the involvement of local government in the development process. At the moment, local authorities find that difficult because they are not well equipped to be part of the process. Indeed, many of them would agree that they do not wish to do the work on their own, and that the absence of a local or regional structure in which they can play their part makes it difficult.
Although Gavin Brown was reluctant to accept the point, Jeremy Purvis made it clear in answer to his question that there would not be a huge clutter as a consequence of the proposal. Specific bodies would be responsible for specific tasks and, more important, the proposal gives wider recognition to the regional and structural variations in the economy. Our proposal is a rational one; it recognises the existence of a gap and it recognises that our funding mechanisms on a banking level and an investment level have to be more informed by local circumstances. That is one of the few ways in which we can address some of the historical structural economic defects in the Scottish economy.
10:06
I am pleased to take part in a debate about the Scottish economy and the structures that should support it. The fact that the Economy, Energy and Tourism Committee has been investigating the problems of importing and exporting and the enterprise networks has a major bearing on the debate. As the SNP’s amendment states, we should look at the outcome when the committee publishes its report on the inquiry into the enterprise networks, which we will debate later in the session. That will allow us to debate an overview that has been agreed across the parties.
Looking at the national and local levels, which we have to do to see the whole structure, we first of all have to think about what lies underneath. Does Jeremy Purvis understand what the country is actually like? He talked about Scotland having a “tiny” economy. I would like to take him back to a remark that was made by James Hunter, who is the former chair of HIE and a commentator on economic matters. He said that, in 1895, Ullapool and Seattle were both fishing villages on the north-west coasts of their countries. I would like to add another one—Stavanger. It, too, was a small port and fishing village. The difference is that it now has different means to develop the assets that the minister, Jim Mather, mentioned—energy, food, water and smart people. We have all those things, too, but we lack one of the powers that those places have to change things. In a place such as Seattle, there is a regional government—a state government—and there is also very local government. We just do not have that in Scotland, and even under the Calman proposals we will not have the powers that the state of Oregon has—if that is the correct state.
It is Washington.
Is it? Well, whichever state Seattle is in, the point stands.
Like those other places, we also have ambitious entrepreneurs. Interestingly, most of them back full fiscal autonomy with a Government that can borrow, develop things, and punch above its weight in the world. We can take a small economy, or a “tiny” one as Jeremy Purvis called it—
Will the member take an intervention?
I am sorry, but I will not at the moment. I will develop the point, and then I will let Jeremy Purvis in.
The debate is characterised by a lack of ambition in a proposal to shuffle the cards in the pack rather than to look at delivering a better overall picture at local and national levels. What bothers me is that that lack of ambition is tied up with the ability to tie the hands of the Scottish Government through the Calman toils that we are about to enter. We must recognise that, in a small economy, we need the freedoms that the people of Seattle and the people of Stavanger have. Jeremy Purvis is not prepared to give us those. The point that was made by James Hunter is most useful.
Let us look at structures for a moment. Jeremy Purvis gave the most interesting explanation that what we need in the Highlands is a bank. Yes—of course we need banks, but there are already banks. One of the questions is whether we are a statist country. Do things always have to be led by the public services or are we increasingly looking for the commercial sector to support such things, given the right financial structures? As John McFall pointed out, what we had was not a light touch but a soft touch under the British regulation of money. I am afraid that Ross Finnie and other people had better start to remember the difference. We can be smart in how we organise such things.
We must consider how we should proceed. The Economy, Energy and Tourism Committee has recognised that Scottish Development International has a job to do as part of the process of promoting exports. The chambers of commerce, the Scottish Council for Development and Industry and so on are also taking part in that work. It is not a case of just one body doing it, and it is not necessarily a question of saying that the bodies do not work. In the committee’s report, we describe the Heineken model, whereby bodies provide services that are not already provided by others.
The committee is now considering the enterprise networks. Strengthening communities is one of the functions of Highlands and Islands Enterprise, and a similar function is desperately needed in many parts of the Scottish Enterprise area. Increasingly, the evidence shows that not just firms but whole communities feel ignored. I hope that we will be able to address that. We can help by providing support, not just by providing loans through a bank. Such support is a state function that fills the gap and reduces the inequalities that have grown up over many years.
To talk about banks for a moment, where does the green investment bank fit into the picture that Jeremy Purvis painted? That is an interesting question. Thinking about our current crisis, the enterprise networks tell us that, in order to create jobs, we have to major in renewables in both the SE and the HIE areas. We are promised a green investment bank with our money being seeded into it in four years. Why cannot we have it now? In practical terms, why does not Jeremy Purvis address the fact that, if we could add to the £400 million that is available to Scottish Enterprise and HIE this year the £191 million in the fossil fuel levy, and use that money to support renewables investment, skills development and so on, we could see a transformation rather than a delay in taking the work forward? The argument that Jeremy Purvis is putting is a form of delay in dealing with the issues that we face, because we are discussing structures and not reality.
I am not entirely sure whether the member is supporting or opposing devolution to the Highlands through an economic development body that takes the strengths of HIE but has devolved responsibility for skills, training and tourism and the ability to invest and provide grants and loans for businesses. I would have thought that he would welcome that proposition.
The bank that Mr Purvis is talking about would not have the powers that HIE already has. A bank to back it up does not need to be part of the investment structure. We should recognise that the debate is an attempt to divert us from thinking about the realities in Scotland to shuffling the cards in the pack. Looking at structures rather than reality is holding Scotland back, and this debate is holding us back from discussing the fundamentals of the economy. That is why the motion is fundamentally wrong.
10:13
It appears that the saying “Another Thursday, another economy debate” is coming true, but I commend the Liberal Democrats for choosing yet another economy debate as it is also true that, unless we grow the Scottish economy, neither the Scottish Government nor local authorities will have the financial resources to provide the services that we believe benefit our communities.
I will come back to the issue of the enterprise bodies, but first I want to comment on two of the most important sectors in the Scottish economy: construction, with particular reference to housing, and retail. Like a number of other MSPs, I recently attended the business in the Parliament conference. In the workshop that I attended, one of the main issues was how the various economic and enterprise agencies support businesses. There was particular concern that the focus is often on new businesses rather than on stabilising and supporting current business.
That could be a concern in the Scottish construction industry, which has suffered significantly in the economic downturn. In 2009, output fell by £1.7 billion and direct employment by 42,000. There has been a slight upturn this year, led mainly by the public sector. Public housing output is up by 25 per cent, but that is before we see the effects of a cut in the affordable housing investment programme this year of £204 million. Unfortunately, last week the Cabinet Secretary for Finance and Sustainable Growth announced a further cut of £94 million. When is the Scottish Government going to acknowledge the front funding of new house building by housing associations and start to pay it back?
Last week’s housing statistics showed an increase in the number of new council houses of more than 100 per cent, which is welcome. However, that is still only 866 houses. Across all housing sectors, there was a 2 per cent fall, which is nowhere near the 35,000 houses that the Scottish Government asked for.
Will the member tell us when the Labour Party will bring forward its amendments to the draft budget bill?
We will do so when we have a debate on the draft budget bill.
The Scottish Government has spoken about levering in other resources, but has not said from where. The local authority might find itself constrained by the 1 per cent increase in borrowing from the Public Works Loan Board, and housing associations have seen housing association grant cut and private borrowing is more difficult. Already, last week’s housing statistics showed the second-lowest number of housing starts since 1981. In the early 1990s, house building was seen as one of the major routes out of the recession. It could be again, but not if we do not invest in it. The Scottish Government needs to promote the right conditions for the private sector. One idea that I have constantly asked the Scottish Government to look at is an infrastructure fund. I apologise to Mr Mather that I have not yet managed to meet him to discuss such a fund, but I tell him that I would forego the meeting if he wanted to just get on and do it.
The construction industry could be a great source of jobs, including apprenticeships. I understand that the capital budget has been cut by the Con-Dem Government, but the Scottish Government needs to prioritise and new-build housing should be given a greater priority.
Perhaps I have this wrong, but I thought that the current UK Government had reduced the capital budget by the same amount as the Labour Party had proposed but with one difference: the reduction was £2 billion less.
The Government has reduced the capital budget and that is the issue.
That brings me on to retail. Having worked in retail in Edinburgh and Glasgow, I know about the support that it gives to our tourism trade. Retail employs close to 250,000 staff across Scotland and contributes to economic growth and regeneration locally and nationally, but it is not immune to the harsh economic climate. The latest figures from the Scottish Retail Consortium-KPMG Scottish retail sales monitor show a clear fall of 1.8 per cent in like-for-like sales in October. Even in food sales, that number is close to zero, so any increase in burdens on the sector would need to be thought through carefully.
Imagine retailers’ surprise when Mr Swinney announced that the Scottish Government was to increase business rates that are paid by the largest retail properties in the country. At the Local Government and Communities Committee yesterday, Mr Swinney acknowledged that he had had no discussions with the retailers about that move. The industry has said that it is particularly concerned about the lack of detail. Will the measure be targeted at large stores, supermarkets, out-of-town shopping centres or at all three? Yesterday, Mr Swinney seemed to imply that it would be based on square footage. If so, what will be the cut-off point?
The Scottish Government has indicated that there are two reasons for the measure. The first is to increase public resources, but if it holds back further investment, will it not be reducing taxes from another angle? The second reason is an apparent desire to redress the balance between town centres and large supermarkets and out-of-town retail parks. Does that mean that the money that will be raised will be ring fenced and reinvested in traditional town centres? Members will acknowledge that I have always been a big supporter of traditional town centres and sometimes a little critical of the Government’s inaction. However, I know that shoppers want choice and some large supermarkets are in town centres.
My biggest concern about the proposal is the impact that it might have on jobs. Retailers are still taking on new people and I understand that ministers might have looked at the profits of the likes of Tesco and thought, “We should have a share of that.” I only hope that it does not turn out to be a gamble that rebounds on the Scottish Government, and that affected retailers do not decide to open stores in other parts of the UK while Scotland loses out on those jobs.
The Scottish economy is on a knife edge, so the Government needs to support the industries that we have. Construction and retail could provide more jobs. People in work are able to spend and so the economy grows. I support David Whitton’s amendment that calls for a Scottish future jobs fund. Construction and retail are just the kind of industries in which our young people could find employment. I sincerely hope that the Scottish Government will support our amendment.
10:21
I welcome this debate because it is imperative that the Scottish economy moves forward to create employment opportunities, improve skills, increase the internationalisation of business and, in general, make the Scottish economic product the most innovative that it can be.
There will be much that members across the chamber can agree on, as well as the usual party politicking that divides us. Nonetheless, I am sure that we can all agree with the famous political phrase, “It’s the economy, stupid.” That needs to be paramount in all our minds.
The Lib Dems have every right to promote their policies, whether I agree with them or not, but I find it strange that they are pursuing their policy on yet more reorganisation of the enterprise agencies while we on the Economy, Energy and Tourism Committee are undertaking an inquiry into the same agencies.
If that is the member’s major criticism, will he explain why there is the Christie commission?
It was not actually a major criticism, if I may develop the point.
The Lib Dems do not need to take any cognisance of the Economy, Energy and Tourism Committee and our deliberations because they are not in a position of power. They do not have to listen to anything that comes out of the committee. However, I would have thought that the evidence that we have heard up until now and which we will hear during budget scrutiny would be of use to the whole political process and to all parties in the Parliament. I hope that all parties keep an open mind instead of closing off potential opportunities that arise in evidence.
The committee has not completed its inquiry and no report has yet been published, so I cannot predict what it will say. One thing that is evident is that there should be no further changes to the enterprise agencies so soon after 2007. We have debated that point already this morning and Gavin Brown commented on it.
Does Stuart McMillan believe that the Scottish Government has got it exactly right on the enterprise agencies or is it that we have to watch the disadvantage of change?
I was just coming to that point. The evidence suggests that there needs to be some tweaking, partly because the process is still fairly new. The chief executive of Skills Development Scotland admitted to the committee that lessons need to be learned and that the process is not perfect. He also said that the agencies have been fully operational for only a short time, so why scrap them now and try to do something brand new?
Yesterday in the Economy, Energy and Tourism Committee, we heard some more interesting evidence. Unprompted, we heard that one thing that would make a massive difference to the Scottish economy would be for the fossil fuel levy to be allocated to Scotland immediately. The opportunity to boost the renewables sector in Scotland is vast and the feeling from both Scottish Enterprise and HIE was that it should happen now instead of waiting for the creation of the green investment bank. I am sure that all the parties in the Parliament want Scotland to deliver on its renewables potential. We have a wonderful opportunity to harness a sustainable energy future. The sooner we further progress that, the better. Throughout the country, we have the opportunity to create employment and to revitalise economies and communities. Let us stop limiting our potential and get the renewables boon moving.
Jeremy Purvis touched on the importance of education in our economy. The Economy, Energy and Tourism Committee has heard of the importance of foreign students coming to Scotland and the additional money that that brings into the economy. There is the knock-on effect of additional tourism from family and friends coming to visit a student here or the foreign national returning to Scotland for a vacation after graduation.
Irrespective of that, education is vital to our economic position and our economic growth prospects. With that in mind, I question the Lib Dems and their Conservative colleagues in the Westminster Parliament on their proposal to raise tuition fees to up to £9,000 south of the border.
Does Stuart McMillan have similar concerns about his Administration’s plan to cut the budget for universities? Universities Scotland has said that only the number of fees-only students can be increased to maintain the number of students. That is the point on which he seems to criticise other Governments.
The direct effect of tuition fees of up to £9,000 for students in England and the knock-on effect on Scotland will be terrible—it will certainly be terrible for the Scottish economy. We in the Parliament would be foolish to think that such fees will not have a knock-on effect on the Scottish economy, although they will not have a direct effect on Scottish students.
What would happen to the number of people in Scotland who could study in a Scottish university if Scottish universities had an influx of students from south of the border who could not afford to pay up to £9,000 in tuition fees or who did not want to pay those extortionate fees? Such an influx would make it more difficult for Scottish students to go to university here. If fewer Scottish students went to university, surely that would make the situation more challenging for the Scottish economy in the future—not to mention the life chances of the potential students.
Increasing tuition fees will have a devastating effect on students, particularly those from less well-off backgrounds. In effect, it could punish people for being poor. I do not think that that is what the Lib Dems want. If the reports are true, the minister responsible—Vince Cable—might even vote against his own proposal. Some people would think that that was political opportunism in the extreme. Forcing through such massive changes on students will have a knock-on effect on Scotland, the Scottish economy and Scottish students.
A week is a long time in politics. I sincerely hope that the Lib Dems and the Tories will have a change of heart and will drop the education tax bombshell but, given the announcement last night that the vote will be brought forward to next Thursday, I have my doubts. Scottish students will suffer as a consequence.
I hope that the Lib Dems will have a change of heart on several matters—their apparent narrow focus on enterprise, on which their minds are made up; their long-grass position on the fossil fuel levy; and their punishment of poor students. I will therefore back the amendment in Jim Mather’s name and reject the Lib Dems’ motion.
10:28
Creating jobs and strengthening the economy are laudable aims. Jeremy Purvis proposes that the way to achieve those aims is through wholesale restructuring of the public sector agencies that are tasked with supporting economic growth. The core of his plan is that councils and perhaps housing associations and universities should bank with a new Government agency that is partnered with a commercial bank, which would use their deposits to lend money to businesses that could not raise the finance that they need from the conventional banking sector.
Mr Purvis mentioned the experience of Essex County Council, which a year ago set up a bank that was then described as the first council-run bank in more than 30 years. The purpose of Banking on Essex is to provide funding when commercial banks choose not to do so, which appears to be part of the plan that Mr Purvis has proposed today. However, at least some people in Essex hold that the model does not work. Earlier this year, the Daily Mirror quoted a local councillor who said:
“After all the hype and publicity everyone hoped the fund would provide much-needed support. But it would appear that borrowing from Banking on Essex has been as hard as getting cash from other banks.”
I am fully aware of all the reports and of the internal auditing, which highlighted many of the difficulties in Essex. That is why we do not want to adopt that model, although we have examined it, as we have considered the Business Development Bank of Canada, the Austrian tourism development bank and the south of Scotland loan fund, which is now self-financing. We have concluded that we can take from the best and not adopt simply one model for Scotland.
I am glad that Mr Purvis takes that view. The quote that I read out from the Daily Mirror was from a Liberal Democrat county councillor, David Kendall, who clearly concluded that the model in Essex did not work.
What Jeremy Purvis proposes is far more ambitious than simply a council-run bank. The planned regional development banks would not only recycle local taxpayers’ money into businesses that were struggling with the credit crunch but take over many functions of Scottish Enterprise, Highlands and Islands Enterprise, VisitScotland and Skills Development Scotland. Such banks would control a range of hugely important public policy areas from business support to tourism, skills and training.
Ownership and control are critical to the proposal. Jeremy Purvis suggests that initial capitalisation of a regional development bank would be provided by local authority deposits and reserves, but that
“a contract would be tendered out to a private bank for the management of the Bank’s lending services.”
That private partner could buy up to 50 per cent ownership of the regional development bank. When bankers’ popularity is perhaps at an all-time low, that proposal seems to empower bankers to take more risks with public money than they are prepared to take with their own.
The proposal for private control of public assets goes further. The regional development banks’ boards and management would be made up of council representatives, principals of universities and colleges and local business representatives. The business representatives would be elected by other businesses in the area. Mr Purvis suggests
“that there is a presumption that the chair of the Bank is an elected business leader.”
The plan for creating jobs and strengthening the economy is to plough local authority deposits into a regional bank that is led by a private business leader and managed by a commercial bank and to give those people a deciding voice on public policies on business support, tourism and meeting skills needs.
Public-private partnerships can work. In principle, there is nothing wrong with public and private partners agreeing to work together to increase wealth on the basis of shared and managed risk and mutual benefit. However, serious questions must be asked about the plan. My local council—Aberdeen City Council—provides a warning of what Liberal Democrat notions of public-private partnership can look like in practice if they go wrong.
A month ago, Aberdeen City Council’s enterprise, planning and infrastructure committee decided to press ahead with setting up a city development company to take over control of a wide range of council-owned assets and which will be a form of public-private partnership, as a regional development bank would be. The public sector will sign over to the company for five years taxpayer-owned assets that are worth millions of pounds, such as Union Terrace gardens, and will hold only a minority of seats on the board. As far as I can ascertain, the private sector will bring no assets and no capital but will hold a majority of seats. I quote:
“A private-sector representative would act as chairman and have the casting vote on any contentious issues.”
That sounds familiar in the context of Mr Purvis’s paper. The council’s inability to explain its model of public-private partnership is a warning that the devil might be in the detail of any such plans.
What Lewis Macdonald outlines is not a million miles away from what Glasgow City Council has done in the spread of its public buildings and assets, which I have recently seen for myself. He must be aware of local authorities’ discussions with Airdrie Savings Bank and credit unions about a similar model to the one that I have examined, which involves using public money plus the best of private and co-operative services to create development banks.
As I said a moment ago, the difficulty is not with the principle but whether trust is retained and people understand fully what is being proposed.
When Aberdeen City Council produced its paper last month, it said that Scottish Enterprise would have a seat on the board of the proposed company. When I asked John Swinney about that, it was clear that he had had no conversations with the council on that. I now suspect that even Scottish Enterprise has not been asked about taking a seat on the board. Councillors from the administration parties decided at a meeting to write to me to explain why the proposal was not privatisation—that is their word, not mine—but I am afraid that I still await their explanation.
Aberdeen City Council’s administration lost what trust it had from many citizens earlier this year when it chose to disregard public opinion on city-centre regeneration. When the Liberal Democrats fight next year’s election, they will no doubt be asked about Jeremy Purvis’s plan for regional development banks. They will be asked about their plan to abolish Highlands and Islands Enterprise and about how they plan to promote visits to Scotland from within the British Isles, in light of their plan to abolish VisitScotland. They will also be asked about their record in power—whether at Westminster or in Aberdeen: how they have handled assets; and, in the case of Aberdeen, their proposal to abdicate their responsibility, as elected local representatives, for the government of the local area to an unaccountable private sector quango.
While it was perfectly reasonable for Mr Purvis to secure the debate, in developing his proposition he needs to be careful that he bears in mind that example and the need for trust in any public-private partnership. He must be careful that he does not make the mistakes that some of his colleagues have made elsewhere.
10:35
Like other members, I have read Jeremy Purvis’s paper, “Making Scotland the Most Innovative and Entrepreneurial Economy in the World”. I have some sympathy with its aspirations and the aspirations that Mr Purvis has espoused today. I am grateful for the historical aspect to the paper, which discusses the enterprise networks over the years. It reminded me about the previous, cluttered landscape that was difficult to work one’s way around. One thing that the SNP Government should be commended for is that it has hugely simplified that landscape.
I was particularly interested in certain parts of the paper. Mr Purvis wants us to consider an innovation-driven economy, in which
“new ideas and skills ... emphasise the high end of the value chain, rather than replication.”
We could all get behind that idea and there are examples of how we can move forward on that, such as renewables, which Stuart McMillan mentioned. I would cite biotechnology as a cutting-edge industry in Scotland, for example Controlled Therapeutics in East Kilbride, which makes medical products. The company has been a great success story, having won export awards and a Queen’s award for enterprise. We have to celebrate our achievements rather than talking ourselves down all the time.
I recently chaired an event about exporting architectural skills. Scotland’s architects and engineers are working all over the world. Some have done so with the help of SDI but many have gone out there and done it on their own. We have the entrepreneurs and the innovation-driven trailblazers.
I was interested in the section in the paper about science. That ties in with the Government’s science strategy. There are issues in the paper with which we are all in accord and that we can take forward.
Debates such as this are good because we get to bang on about things that really matter to us. I have managed to find a reference in Mr Purvis’s paper to something that I care hugely about, which is languages. Jeremy Purvis is right when he says:
“Language skills are crucial to the competitiveness of Scotland.”
I am glad that we have strategies in place to improve Scotland’s language skills—strategies that can be backed by everyone.
Ross Finnie talked about small and medium-sized enterprises, which comprise 95 per cent of businesses in this country, and about business start-ups. It is true that Scotland’s record on business start-ups has not been great, pre and post-recession and, indeed, pre-SNP. The SNP is improving things. The small business bonus scheme has helped businesses to survive the desperate times that mismanagement of the UK economy has brought upon them and will help them to thrive when they have a chance to get out from under the cloud.
Leaving some disposable income in the pockets of Scotland’s council tax payers has helped, as have social benefits. The policy of freezing the council tax has meant that more money circulates in Scotland’s economy, giving it a boost. I contend that those and other policies of the Scottish Government have helped the economic recovery programme. They have helped the Scottish economy to survive and have been innovative in themselves.
We can use Government to improve the economy but we could do a lot more with full economic powers. Imagine how much more we could do if the Secretary of State for Scotland had decided to put the findings of the Steel commission rather than of Calman up for consideration as the basis for the Scotland Bill. A debate on that is taking place next week so today I will only repeat what I have said before, which is that it is my firm, unshakeable belief that the Scottish Government should have substantial authority over the levers of power that most affect the Scottish economy: infrastructure; education and skills; business regulation; and taxation. Of course, only the first two are under Scottish control. As the Steel commission said,
“there is a need for Scotland to have its hands more effectively on these four key levers and be able to pull all of them together.”
As Robert Brown and I were members of the Steel commission, I am curious about what the member is saying. Does she now support the findings of the Steel commission? At the time of publication, they were rubbished by the SNP.
I am surprised at the backtracking of the Lib Dems, who are willing to compromise the further powers recommended by the Steel commission to go with a Liberal Democrat Secretary of State for Scotland who is tying in with the Tories for something much less.
Jeremy Purvis’s paper talked about privatising Scottish Water. Like Murdo Fraser, Mr Purvis calls it mutualisation, although I have concerns that the end result is the same. The latest version of the statement of funding policy published alongside the UK budget talks about how
“Government may take into account proceeds from the sales of ... assets in setting its grant to the devolved administrations when capital receipts are realised as a result of privatisation of a public sector trading body or a major change in the role of the public sector”.
In such circumstances, it says,
“Treasury Ministers reserve the right to reduce the grant to the devolved administration to reflect receipts.”
I wonder whether Mr Purvis, in his closing remarks, could reassure us that he has considered that fully and discussed it with his UK counterparts.
Would it not be more appropriate for the Scottish Government to discuss it with the Treasury? Is that not exactly the point that the SFT made in its paper, which considered not privatisation but a different model, too?
The Scottish Government is constantly in discussion with the Treasury over such issues. Mr Purvis put in his paper—reflected in the motion—that he believes that that is the way forward, so I would ask him whether he has had such discussions and whether he can give us some comfort that he is not merely signing away one of Scotland’s assets.
I have some other issues with the proposal from Jeremy Purvis. Where would the boundaries of the regional development banks lie? I have concerns about expecting one body to control grant funding, lending, skills and training and destination management for all businesses in an area. I worry about bureaucracy.
Although I do not agree with everything that Jeremy Purvis has said on the issue, he has put ideas forward and I hope that they will be taken into account by Campbell Christie’s commission. The debate is worth while.
10:43
I am happy to contribute to this important debate. It is the second week in a row that I have been involved in a debate on the economy, which in itself is hugely unusual. The issue of what we can do to support the Scottish economy, create jobs and generate economic growth is a critical one.
I start with a confession. Unlike Linda Fabiani, I have not managed to read Jeremy Purvis’s 47-page document. However, given the stimulating pitch that he provided, I can assure him that it will move to the top of my to-do list as soon as I leave the chamber.
I was interested to listen to Jeremy Purvis’s critique and to his proposals for the infrastructure to create a stronger economy. There is a danger of being blinded by the science and losing the purpose of the debate. We can have a long, thorough discussion about the infrastructure but perhaps miss why we want to get that infrastructure right. I am concerned that we may focus on structures and lose the opportunity to reflect on how we might support individuals, the private sector and voluntary organisations to create economic opportunities. In stimulating innovation and entrepreneurship, we need to think not just about the process but about people.
The issue of social entrepreneurship—the idea that there are different models for how people can contribute to the economy—is critical. We need to feed that in to any debate about infrastructure and its purpose.
I recognise the fundamental point that we need to get the infrastructure right to will the means to the ends that we seek. Government has to assert that it is an active agent; it is not enough for it to stand by. It is not enough for the Scottish Government to claim that it is doing things; it must focus on delivery.
I was rather depressed by an intervention from Mr Mather on the facts of the economy, in which he seemed to retrench further into the SNP comfort zone of explaining why the Government cannot do things and what is not its fault. Instead of doing that, ministers should be grasping the levers that are available to them and focusing on their responsibilities.
Will the member give way?
After I have made the point. The minister may want to respond to it, too.
The minister said that the Scottish Government is committed to a transparent process. When will we get the conclusion of the Cabinet Secretary for Finance and Sustainable Growth’s reflections on the significant vote last Thursday in which the chamber agreed that local authorities, public bodies and voluntary sector organisations in Scotland need spending plans for the next four years, just as bodies across the whole of the United Kingdom do?
Will the member reflect on and consider the extent to which Westminster under Labour was an active agent in the disaster that we all face? I refer to the failure of the banking system and the cuts that are now ensuing in Scotland.
I certainly want to put on record the fact that the Labour Government saved the banks and made a significant contribution to the Scottish economy as a consequence.
The fact of the matter is that having four-year plans is not an academic process. We need answers. People are making decisions now, and making them in the dark. As the Convention of Scottish Local Authorities indicated, as a consequence of that, unnecessary cuts may be made. The voluntary groups that I met yesterday told me that they are in exactly that position. They are losing people because their staff do not know what the future holds and so are looking for other jobs, which leads to an increase in recruitment costs, a loss of capacity and weakened service delivery. We need a Government response to that.
I am interested in the reforms that Jeremy Purvis outlined. I appreciate the importance of Government agencies in supporting the economy and Co-operative Development Scotland, which was set up by the former Scottish Executive, has an important role to play in that. We need to review its activities and consider the opportunities that it could create for co-operative businesses across a whole range of areas. Doing that would reinforce our ambitions for this country. I welcome the minister's views on the direction of travel for Co-operative Development Scotland.
I am hugely frustrated by the changes that have already been made to the purpose of Scottish Enterprise, which no longer has a role in people or place. Any future plans for our infrastructure must have that. I recall asking a Scottish Enterprise official what Scottish Enterprise could do to support economic generation activity in my community, where few people start up businesses and more people are likely to be unemployed. When I asked what Scottish Enterprise was doing to create local lobs or to recognise the barriers to people in my constituency—including people with disabilities and the disadvantaged—getting into work, the answer was, “Nothing. That is not our job.” The current strategy for Scottish Enterprise represents an absolutely failed strategy. It spends a lot but has no role in local communities. That needs to be changed.
Supporting specialist sectors and big and highly profitable businesses to bring in work should be tested as an approach. We are all aware of the small and medium-sized business argument that we get a far greater return in economic activity and employment opportunities if investment is directed at them. The most significant businesses in my constituency are housing associations and housing co-ops. The lack of information from the Government on its spending plans, combined with cuts to the housing and regeneration budgets, are creating a destabilising effect for those critical community anchors and generators of economic opportunity, a situation that must apply across the country.
In its economic enterprise budget strategy, the Government needs to understand the disproportionate impact of its decisions on particular groups. I will highlight two: women and school leavers. On average, women make up 70 per cent of the local authority workforce. In the health service, the evidence is that women predominate in jobs that are more likely to be lost. The Cabinet Secretary for Finance and Sustainable Growth is asking for pay restraint, but he will not will the means for local government to protect low-paid women workers who earn under £21,000. My colleague, David Whitton, highlighted the disturbing situation of school leavers going into employment, the figure for which is lower than at any time since 1992-93. We also see the continuing trend of vulnerable school leavers being less successful in securing work. Any strategy around infrastructure and enterprise has to find a way of releasing that potential and addressing the lack of opportunity across our communities. That is why I believe that Labour’s proposed Scottish future jobs fund is so important.
We must reflect on whether the commitments on infrastructure bodies are being delivered in the real world. A couple of weeks ago, in response to a question from Iain Gray, the First Minister spoke about his commitment to apprenticeships. Within an hour, I had received a phone call from someone in my constituency who a month ago, three and a half years into his apprenticeship, had been laid off and told that no one could help him. There has to be a commitment to infrastructure engaging in the real world and taking things forward.
I would welcome the Scottish Government’s response on all those critical areas, including how its equality duties are shaping choices. Those duties are about not just describing the impact on groups but changing choices to ensure that they are fair. In particular, will the minister comment on the fact that, at UK level, the Government has not enacted the socioeconomic duty? Will the Government ensure that, in the spending plans that it takes forward, the socioeconomic duty is a central part of its approach to the structure—whatever we come up with—for enterprise, employment and creating economic opportunity that will address the needs of people who are economically disadvantaged?
10:51
I welcome today’s debate and the opportunity that it gives the chamber to focus on Scotland’s economy. Although many of the powers that affect it are held at Westminster, Scotland’s economy is dealt with merely as a fringe issue in that chamber—[Interruption.]
Mr FitzPatrick, that noise is not happening by accident.
I do not think that it is my phone that is causing it, Presiding Officer.
I think that it is.
I will put it away.
The Liberal Democrats have put forward some genuinely interesting proposals in their motion, but they need to be considered as part of a much wider look at public services. I hope that Mr Purvis will submit his paper to the Christie commission for detailed examination. That would enable the document to be considered in the wider look into the public services that Campbell Christie is taking forward.
Although the Liberal Democrat paper contains a few interesting ideas, the party misses the point when it comes to the Scottish Futures Trust. With a budget of £3.2 million, the SFT delivered benefits for the public sector of £114 million in the 2009-10 financial year. That is a 35-fold return on investment for the Scottish public. That value for the Scottish purse is set to continue in the years ahead, with the SFT’s corporate plan for 2009 to 2014 setting a minimum target of a £7 benefit for every £1 spent over that period.
Will the Scottish Futures Trust be referred to the Christie commission?
I think that there is no limit to the width of issues that Campbell Christie can look at. We need to take a wide look at where we are going.
Scrapping the Scottish Futures Trust and replacing it with the Liberals’ favoured option of finance Scotland makes no sense other than as a piece of politicking. Doing that would put at risk projects such as the £1.25 billion schools for the future programme that is delivering 55 schools across Scotland, including the rebuild of Harris academy in my constituency. The education establishment in Dundee was absolutely delighted to have the intervention of the Scottish Futures Trust, which ensured that the proposals for Harris academy are now far more ambitious than had been thought possible originally. The SFT has added real value to a project that is very important to that long-standing school in my constituency. In coming to a decision on the Scottish Futures Trust, I urge my Liberal colleagues to listen to the facts, not the grumblings from the Labour benches.
As we have heard, Scotland’s economy is still in a delicate state, but we are making progress. By using the limited powers at his disposal, the Cabinet Secretary for Finance and Sustainable Growth is endeavouring to make the most of our shrinking block grant. However, until we have the same fiscal responsibilities that every other normal nation has, it is inevitable that we will remain hamstrung in our efforts to grow the Scottish economy.
I have raised the comparison that I am about to make in the chamber before, so it will not surprise members that I do so again. The computer games industry is a prime example of why we in Scotland are missing out as a consequence of economic policy that must benefit the UK as a whole rather than Scotland. The industry has been highly successful in Scotland over the past two decades and is disproportionately important to the Scottish economy, with 10 per cent of the total UK industry based in Dundee. Evidence strongly suggests that, without tax relief on games development, we are in danger of losing our market share to countries such as France and Canada, which offer tax breaks.
Is it not within John Swinney’s power as Scotland’s finance minister to use business rates to give the industry some assistance?
The computer games industry has asked for clearly targeted support for the development of computer games. The argument has been put forward by the whole industry, which is asking for UK-based taxes to be used to support it. The evidence suggests that a tax break would increase the Exchequer’s take. Without it, there is a serious danger that we will lose both money and jobs, which is a particular shame.
Tax breaks for the computer games industry would be self-funding, protecting existing jobs and generating new graduate jobs and extra investment for our economy. However, despite the sector’s importance to the economy, not £1 of tax relief has ever been paid out, in spite of the good words that we heard from the previous Labour Government towards the end of its term.
The computer games industry in Dundee is supported by the Scottish Government in those areas where it has a remit. In particular, the Scottish Government has ensured that the industry has the best graduates in the world. Graduates from the University of Abertay Dundee are so good and well trained that companies from across the globe, especially Canada, come to Dundee to cherry pick some of the best people in the business. We need to ensure that that talent remains in Scotland and Dundee.
Members may not be surprised to hear that I also have a particular interest in the life sciences sector, which is important to Dundee and to Scotland. The news that the UK Government is to go ahead with plans for a patent box is welcome. Scotland is truly a global leader in life sciences. I hope that the sector-specific tax break for pharmaceuticals and the biotechnology industry will have a positive effect on investment in Scotland. It is important that, when people get it right, we acknowledge that.
However, the current constitutional set-up means that sometimes people get it right and sometimes they get it wrong. We need a constitutional set-up that ensures that we make the decisions and that those decisions are always made in the interests of Scotland. The solution is straightforward: the best basis on which to make decisions for the Scottish economy is for those decisions to be made in Scotland, with Scottish interests at the forefront, rather than as an afterthought. Full fiscal powers for the Scottish Parliament would ensure that we developed Scottish solutions to Scottish problems. We look forward to the day when the Parliament has all the powers that are necessary successfully to manage and support Scotland’s economy.
Dundee used to be known as the city of the three Js: jute, jam and journalism. It is now becoming known as the city of the three Gs. I have already mentioned two of those: genes and games. The third potential G for Dundee is green jobs. We desperately need the UK Government to release our fossil fuel levy money so that it can be invested in Scotland right now.
10:58
I thank Jeremy Purvis for producing his document. Like Johann Lamont, I will put it beside the other voluminous books that I must read over the next few months. However, I wonder whether it is a negotiating counter should there be any electoral changes come May 2011, because the Liberal Democrats are famous for negotiations that involve 48-page documents and predetermined views on how they should move forward.
My colleagues have touched on some specific issues, but it is important for me to respond to some of the things that I have heard in today’s debate. When I was a little kid, I was always terrified when my mother said that there was an elephant in the room. I am quite terrified this morning, because it sounds as if there are two elephants in the room. One is the elephant of the wider UK economy and the strategy that the coalition Government has adopted. The second is the position that Jim Mather, the minister with responsibility for the economy in Scotland, has taken.
I will deal first with the coalition Government. Recently the cartoonist Martin Rowson created a wonderful image of Nick Clegg, David Cameron and George Osborne looking at an Enigma machine and hitting it with a hammer, just to see what might happen. In a sense, that is how they are handling this country’s economy. They do not have a plan B, should things not go right, and have a predetermined view of why we have arrived at this situation—a view that directly contradicts much of the assessment that international economists have made. In Scotland, as well as in other parts of the United Kingdom, we now face substantial changes in public investment that will have a serious effect on the wider economy. Those changes are predicated on the view that the private sector will fill the gap. Again, no serious group of economists has indicated that that will happen. The coalition Government has adopted a high-risk strategy.
Does the member accept that, during the previous period of public sector employment contraction in the early to mid-1990s, the private sector created many more jobs than were lost in the public sector? Within the UK, there is exactly the evidence that the member seeks.
Joseph Stiglitz has said:
“The best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997.”
More critically, during the 1990s there was not the global economic recession that has been identified in the past couple of years. I disagree with the member, as the preconditions are markedly different.
The other elephant in the room is what I used to know as a kid as the get-out-of-jail-free card. That was deployed by Jim Mather, who argued that things would be different if only we had more fiscal powers; I think that he referred to the optimal fiscal model. He also mentioned
“excessive risk taking and moral hazards”.
Some of the models that the Scottish Government has identified in recent years took substantial risks. One website—the reference will probably need to be removed by a junior member of staff at the end of today’s debate—still highlights Ireland as the model for economic development. That fails to recognise the difference between the preconditions in Ireland and those in Scotland.
In an sense, I am reminded of the debates that I used to have when I was 17 or 18 and was exploring political ideas. I would bump into various folk on the far left, who would say, “We have never really had real, actual socialism, because no one has quite tried it yet.” Today’s debate is much the same.
I may have used this comparison before, but I am reminded of the wee cartoon in which a wee guy goes into a room and asks a bookseller, “Where are the books on socialism?” The bookseller replies, “Where they have always been, son—just round the corner.” That is a bit like the debate that we are having with SNP members, who say, “If only we had full fiscal powers, if only Calman were not inadequate, if only other people would really listen to us, we would really drive forward.”
Today Jeremy Purvis and my Labour colleagues have indicated that there are powers that the Scottish Government can use and actions that it can take now that would make a real difference.
Joe FitzPatrick complained that we did not have the powers to help the games industry in Dundee. When I intervened to say that John Swinney has devolved powers over business rates, from which he could exempt the games industry, Joe FitzPatrick did not respond. Is Frank McAveety not making the point that the SNP is just girning?
I would like to amplify that point, but I invite Jim Mather to comment first.
I put on record the fact that Mr McAveety is in a state of grace, as he was the one Labour member to support the establishment of a cross-party group on more financial powers for the Scottish Parliament. I treat that action with great respect. He has put himself into a state of grace, whereas others have painted themselves into a corner.
I am happy to confirm that; I had better not use the word “secret”, as I know that the First Minister and the Cabinet Secretary for Education and Lifelong Learning were a wee bit upset about that yesterday. It is a matter of public record.
That touches on a fundamental issue that was echoed in yesterday’s proceedings and is part of today’s debate. The debate is not solely about the either/or of absolutes at either end. The big debate in Scotland is about how we move forward to having more powers that are appropriate to and determined in Scotland, in the sense that they will make a real difference. Last week, we had the misfortune of the Cabinet Secretary for Finance and Sustainable Growth having to apologise for not exercising a power that was available to the Parliament. We have many opportunities to address such issues.
I am conscious of the fact that I am running out of time, but I would like to comment on the Labour amendment. I welcome Labour’s commitment to work with local authorities to make economic development a statutory responsibility. Having spent a period of time as a local councillor, I know that many of the drivers for change in the city of Glasgow in the past 25 years have come because of local initiative. Glasgow’s use of cultural involvement and activity in the late 1980s made a real difference not just to the city’s confidence but to its sense of wellbeing. It also generated economic benefit. That is the sort of model that we should be examining.
I welcome the paper by Jeremy Purvis, at least for stimulating the debate, and I look forward to a more honest debate about the powers that this Parliament can properly exercise.
11:05
The motion before us is a very interesting one, and I am delighted that the Lib Dems are finally starting to put forward policy ideas. We have spent only three and a half years in this place listening to Opposition debates that are devoid of policy, but it feels much longer.
Jeremy Purvis has obviously given some serious thought to the issues that he explores in the policy paper on which today’s motion is based, and he has to be commended for that. There is much on which we can agree. Few of us in the chamber would disagree with the desire to increase the number of business start-ups, for example, or to green up Scotland’s business sector. However, there is a prevailing sense throughout the paper that although Jeremy Purvis believes that he has come up with all sorts of new and innovative ideas, he has not necessarily taken the time to look and find out that a lot of what he talks about is happening already.
To give just one example, on page 22 the paper discusses the role of Scotland’s colleges in driving economic growth, correctly pointing out that
“Investing in training and skills makes a real difference.”
Indeed it does, which is why the SNP Government has not only invested record sums in further education but worked with Scotland’s colleges to ensure that they have been able to respond quickly to the challenges that have been presented by the economic downturn—a task that colleges have performed admirably. Additional resources were targeted last year at colleges in the local authority areas that experienced the greatest increases in unemployment and where the rate of unemployment among young people rose the most. The SNP has enabled further education colleges to realise their potential as drivers of economic recovery as they have never been able to do before, with the necessary flexibility to respond to the needs of their own regions as well as to provide support to our national economic recovery.
In my own area, Central Scotland, where the number of young people attending college has grown enormously in recent years, the FE colleges have grasped that agenda. Motherwell, Coatbridge, Cumbernauld and South Lanarkshire Colleges have worked together to take on new courses that will allow them to play their part in addressing the particularly harsh impact that the economic crisis has had in Lanarkshire.
It is not that Jeremy Purvis’s ideas are all wrong; it is just that, to a large extent, he has arrived a bit late at a party that is already in full swing.
I was agreeing with what the member was saying right up until that last point. The paper acknowledges the fantastic work that colleges are doing, but its proposals would give them the ability to do a lot more. Bringing into SDS and devolving to colleges a lot more power and the ability to do more work would represent a step change up. That is why Scotland’s Colleges has welcomed the proposals.
That is a commendable idea. As I said earlier, however, colleges are already working very well with SDS in delivering what Jeremy Purvis has been talking about. Again, perhaps he did not get the invitation to the party.
As the Minister for Enterprise, Energy and Tourism has made clear, much of what Jeremy Purvis has proposed is unnecessary and potentially destabilises on-going work. Part of it does not look at all radical to me; it looks like a reorganisation. Retain this, don’t retain that, shift this bit here, shunt that function over there—it is a moving of desks and a changing of names. Look below the surface of the various new bodies and agency titles and, as Rob Gibson said, it is more like an administrative shuffling of the pack than a genuinely bold policy idea.
I seemed to remember that the Lib Dems had a different position for the election in 2007, so I went back and had a look at their manifesto. There is a whole section in it on Scottish Enterprise. Page 24 has quite a lot of interesting information, including:
“government should give strong support to the business leaders who invest their time, knowledge and expertise at all levels in Scottish Enterprise”.
That is interesting in itself, but there is a better bit, which says:
“Those who say the enterprise agencies must be scrapped or slashed must explain how they will deliver their functions in skills and training, in investment in industry, in regeneration. Too often other parties call for changes without saying what new bodies they will set up to take over, or complain vociferously if Enterprise agencies suggest cutbacks or changes to the service. We will be consistent.”
Consistent, indeed.
Does the member not realise that the enterprise agency that we were talking about then included local enterprise companies, which had local decision-making powers and were able to react in local areas? We were talking about saving them from being scrapped—and, of course, they were scrapped, as soon as the SNP formed the Administration.
My colleague must remember that the two previous Ministers for Enterprise and Lifelong Learning, Jim Wallace and Nicol Stephen, left a mess that Jim Mather had to tidy up.
Gavin Brown has talked a number of times this morning about ripping things up and starting again. That reminded me of a great Orange Juice song written by Edwyn Collins. The bit that keeps playing through my head is:
“I hope to God you’re not as dumb as you make out
I hope to God”.
Another commitment in the Lib Dems manifesto in 2007 was to create a new quango in the shape of an investment and innovation agency. Those commitments seem to run counter to the intent of the motion that is before us today.
Of course, I am not saying that reorganisations do not ever have a place, and the streamlining of the cluttered enterprise and skills landscape that the SNP undertook when it entered government was much needed. However, it has been barely three years since the Scottish Government’s reforms of the enterprise and skills landscape took place, and for Jeremy Purvis to propose further reorganisation now feels more like doing something for the sake of it rather than an effective policy platform to achieve our shared aim of strengthening the Scottish economy.
The opening clause of Jeremy Purvis’s motion is:
“That the Parliament believes that creating jobs and strengthening the economy is central to Scotland’s future prosperity”.
I could not agree more with that. I would argue, though, that a more effective way to achieve that aim is to support the people whose job it is to build sustainable economic recovery by doing just that.
We come now to the winding-up speeches. We have used up all the slack during the debate, so the closing speakers should stick to their time limits. Derek Brownlee has six minutes.
11:12
I take the opportunity to say something that I have never had the chance to say during my five years in Parliament: Mike Rumbles made a fair point. I am glad that he is here to hear that. In relation to the point that he made to Joe FitzPatrick about business rates, it is absolutely within the Scottish Government’s competence and ability to offer incentives to sectors. It did so for the renewables sector, and I am aware of no reason why it could not do the same, if it chose, for a sector such as the games industry.
Mr Brownlee appreciates that it is also within the competence of the UK Government to provide support to the games industry. Can he explain to the Parliament why the incoming UK Government decided to abandon that proposal?
My understanding is that the incoming UK Government found that the proposals that had been made by the previous UK Government were poorly targeted and ineffectual. We can have a long debate about fiscal policy, but we will not take lectures on it from the Labour Party.
There is a broader point on which we should reflect in any debate on the economy, and both the SNP and the Labour Party have touched on it: the extent to which the Scottish Government can actually influence economic performance in Scotland. The Labour Party has effectively put forward the position that the Scottish Government is responsible for a slump; the Scottish nationalists have effectively proposed that the SNP Government has somehow mitigated the recession, which is less severe. Those are both extreme propositions.
A word of caution: the main factors that drive the performance of the Scottish economy are surely those relating to the base rate that is set by the Bank of England; the exchange rate, over which the Scottish Government has no control; and access to finance from the banking sector. I suggest that those are all equally important as, if not more important than, the ability of the Scottish Government to use its activities to influence the economy.
I take issue with the part of the Liberal Democrats motion that says:
“for Scotland to meet a goal of being one of the most innovative and entrepreneurial economies in the world it needs to reform the enterprise bodies”.
The goal is absolutely fine, but to suggest that reform of the enterprise agencies is a necessary precursor to pursuing that goal is not necessarily where I would place the issue.
Does the member recognise the correlation between head offices, research and development and innovation?
There is a fair point there about the importance of head offices in driving economic impact. Undoubtedly, that is also the case for innovation.
The points that Gavin Brown made in the Conservative amendment about the need to support exports and internationalisation and to improve the business start-up rate relate not to problems that are new or limited to the SNP Government and the previous Administration but to problems that go back a long time and will not be solved easily. However, they are surely core issues that must be fixed.
The structure that the Liberal Democrats proposed would, in effect, lead to a situation in which we had 13 separate skills strategies for Scotland. The suggestion that the SFT should somehow be merged into a business support role is flawed, because it blurs the role of the SFT, which in my view should be about effective procurement and helping taxpayers to get value for money.
I understand the point that the member is making. However, there are currently 32 skills strategies, in the context of the single outcome agreements. We are saying that strategies should be combined, that there should be fewer of them, and that the bodies that deliver them should be empowered to do so at LEC area level and in the Highlands. I am talking about colleges and local authorities, with business input. Rather than have a number of national quangos cluttering the area—
You have had long enough, Mr Purvis.
There is a reasonable point to be made about localisation, but 13 skills strategies seems to be significantly too many.
We have questions about the detail of the Liberal Democrats’ proposals, which I do not think have been answered in the debate. If the Liberal Democrats were to be in a position to implement their proposals next May, how long would it take to legislate for and establish regional development banks? How long would it be before banks could begin lending? How much lending could be achieved each year? What would the length of loans be? What rate of default would be appropriate?
Is it credible to suggest, as the Liberal Democrats seemed to do, that short-term deposits from local councils—we heard the example of Scottish Borders Council and the Icelandic banks—could be used to capitalise long-term lending, if indeed that is the proposal? There is also a serious issue to do with the appropriate default rate that a council could accept for money that would otherwise be in reserve and available to it for later years.
The minister set out a long list of things that he would like to do if he had more powers. The Scottish Government is getting itself into a terrible tangle over fiscal policy. I am a believer in the Laffer curve; I think that over time lower taxes lead to higher revenue. However, no one would suggest that in the short to medium term there is not a reduction in revenues, which will lead to lower spending. The Scottish Government cannot accept that, because it is making a political point in its opposition to lower spending by the UK Government, and because SNP members regularly troop to the Parliament to defend the economic policies of Venezuela and Cuba. I worry about what the SNP’s position on the economy will be when Mr Mather departs from the Parliament and leaves us in the hands of the people on the left of his party.
Fiona Hyslop expressed concern yesterday about the volatility of income tax, but other taxes over which the SNP wants control are equally, if not more, volatile. Consistency from the SNP as well as from the Liberal Democrats would be welcome.
11:18
We have had an interesting debate. The rare appearance of Mr Mather to lead a debate was welcome, but then he launched into an astonishing attack on the handling of the economy by UK Governments past and present—I do not know whether that was because he speaks to the Parliament so rarely.
Mr Mather talked about the failure of regulation, but his First Minister has talked about an independent Scotland having a lighter touch. Indeed, some SNP supporters would go further and turn Scotland into some kind of tax haven, perhaps similar to the Cayman Islands. Included in that number might be members of the Council of Economic Advisers, which is chaired by Sir George Mathewson, who in a previous life was chief executive and chairman of the Royal Bank of Scotland. RBS was then, as it is now, based in Scotland, with its headquarters at Gogarburn, but according to Mr Mather our economic decline is the fault of RBS being a UK bank that is regulated by the UK. It would be interesting to know whether that is Sir George’s view. Perhaps Sir George has shared that view with Mr Mather at one of the dinner parties that the Council of Economic Advisers has had.
The minister said he has an open mind. I am sure that he does, given his vast amount of reading and accumulation of knowledge. It is unfortunate for the Parliament that he has a closed mind when it comes to independence for Scotland, which he thinks is the cure for all Scotland’s ills. I disagree with him on that. Support for the policy is in decline, and if he does not believe me he should look at the most recent opinion poll.
Will the member take an intervention?
I always take interventions from Jim Mather.
How might Mr Whitton explain the lower number of head offices in Scotland, and the lower spend on research and development and the fewer business start-ups that are a function of that? We have fewer offices, less R and D, fewer spin-outs, a smaller service sector and more young people are leaving to go elsewhere. The population and growth numbers back that up.
How, then, does Mr Mather explain what on earth he has been doing for the past three years, because the numbers have declined even in that period?
Mr Purvis’s paper is worthy of consideration and investigation, and it is clear that he put a lot of work into it. However, it is a bit strange that his policy did not get more support from back benchers in his own party. I was a little disappointed that Mr Smith, the convener of the Economy, Energy and Tourism Committee, did not take part in the debate, given that the committee has been investigating the subject. Be that as it may, we are willing to consider Mr Purvis’s proposals, as Mr Macdonald said, although we do not think that he has got everything right.
Of course, we do not think that the current SNP Government has got its policy right, either. How can we be serious about having sustainable economic growth as our number 1 priority when decision after decision has undermined that objective? In my earlier speech, I detailed the reductions in the budgets for enterprise, innovation, tourism, housing and regeneration.
There has also been slavish opposition to the use of private finance to fund capital infrastructure projects, which has caused the pipeline of work to dry up. However, proposals in the budget for next year represent a complete U-turn, albeit belated. According to the budget documents, the Scottish Futures Trust, which Mr FitzPatrick mentioned, will use the non-profit-distributing model, which I think that I am right in saying is part of the public-private partnership family. Perhaps Mr Mather will confirm that we are also to have the design, build, finance and maintain model for hub projects, which sounds to me like PPP. It is too little, too late for the 40,000 construction workers who lost their jobs while Alex Salmond, John Swinney and the SNP defended the Scottish Futures Trust, which until its Damascene conversion was advising local government on how to manage and procure rather than coming up with a new finance model to get construction workers back on the nation’s building sites.
I really think that the member might celebrate the fact that Scotland has learned through the SFT and will never again do what it did with Hairmyres hospital, when one hospital was built for the price of two.
It is interesting that every time that we talk about PPP, someone mentions Hairmyres hospital, but there is never any mention of the many PPP projects since then that have delivered value for money. In my constituency, six brand new secondary schools opened last year, which were delivered on time and on budget and are good value for the local taxpayers in my area—[Interruption.] I beg your pardon?
Is that what you are saying?
Let us not have conversations.
There was a sedentary intervention from Mr McMillan, who seems to think that he knows something about my constituency. I am sad to say that he is wrong, just as he is wrong on the PPP schools projects.
We welcome the fact that the Con-Dem Government is going ahead with Labour’s proposals for a green investment bank, but we note that it does not intend to introduce the bank until 2013-14. Only last week, Danny Alexander, the Chief Secretary to the Treasury, visited Holyrood and met the Finance Committee. When he was asked whether he supported our view that the green investment bank should be based in Edinburgh, he urged us to keep campaigning. His approach contrasts with that of his colleague the Secretary of State for Scotland, Michael Moore, who declined to offer support when he was asked the same question. We will continue to fight to have the bank based here.
We have heard many promises from the SNP, most of which have been broken. We must get our economy back on track, to ensure that the young people who leave our schools and colleges have a job to go to.
11:24
I start by delineating some of the areas of agreement in the debate, of which there were a substantial number. There was broad agreement that we can and must do better, that we can and should export more and that we need a structure that provides support for business, which is probably segmented into support for large growing companies, mid-range growing companies and small start-ups. There was also broad agreement that we need a banking system that provides transaction services for business and private individuals, provides access to small-scale borrowing to keep the economy going, and—this is fundamental—has local presence. Those are the fundamentals.
The Liberals have brought forward a useful debate that at least brings forward a proposal that is open to analysis and discussion. That is perhaps in stark contrast to the blank-sheet-of-paper approach to policy formulation that the Labour Party takes.
Jeremy Purvis correctly said that the Scottish economy is a tiny economy in a fast-growing world. I do not think that that is beyond a fact—it is simply true—and it highlights an important thing. Tiny and small economies take an approach that is different from that which has to be taken in large economies. Small economies can be fleet of foot and can respond more rapidly to changes and opportunities.
Jeremy Purvis suggested that we should see exports rise by 50 per cent over the next session and by 100 per cent over the next 10 years. We all wish that parameter to move ahead over those periods of time. He also mentioned China and India. It is likely that they will be partners for us rather than competitors. That is an important point. Small countries do not operate in isolation from the broader world economy or from the major and growing players in the world. That is why it is so important that Government ministers have spent time in China and India with Scottish companies that are successfully exploiting the opportunities in those countries.
Will the minister help us by defining the extent to which the Scottish economy is distinct from the UK economy, particularly in light of the Irish experience?
It is clear that the Scottish economy is different from the UK economy in a number of respects. It is also different from the Welsh economy. Compared with the Scottish economy, a much more substantial proportion of the Welsh economy is involved in manufacturing. The Scottish economy has particular strengths in intellectual endeavours—in training and education—and, as a result, many of our universities set up outposts in other parts of the world. We do not have to be there to deliver there. There are differences in the Scottish economy, which is precisely why we need a different approach. If we had a wider range of powers, we could do even more than we currently do.
Let us consider the proposals that the Liberals have put in front of us. Some people have read those proposals and some, rather than reading them, have relied on gossip from others. If each of us took a couple of pages of the document, we would be able to read its 47 pages quite quickly. In certain respects, there is muddle in the present iteration of Mr Purvis’s proposals, but he has made proposals that pose the right questions.
Mr Purvis has talked about the difficulties in securing finance. It is fundamentally correct that there are difficulties in doing that. He has identified that a network of 13 regional banks would be the answer to those difficulties, and his motion mentions
“a single body to offer equity finance support for businesses and a single promotional, marketing and inward investment body”.
As politicians, we love to tinker with such things and we love to introduce legislation—it is fun and gives us a sense of achievement—but it does not necessarily influence the outside world in any way. However, it keeps us employed.
Mr Purvis made the important point that all of that would be self-financing, but underwritten by the Government. That is fair enough as far as it goes, but, of course, things would not be taken off the Government’s balance sheet. Liabilities would remain for the Government and, if things were not properly managed, private companies would be able to play fast and loose with public money. There is an opportunity to develop that point further. I invite Mr Purvis to consider doing so, not necessarily today, but in the future. There is a genuine difficulty that we need to consider.
I caution the minister that the model that I have used is, by and large, operating in the south of Scotland loan scheme, which has been in operation and self-financing for a number of years. I think that the Government entirely supports it.
I hope that members will not think that I shot Mr Purvis’s proposal out of the water absolutely. That was not my intention.
Let me make a broad general point. All the parties that are represented in the chamber are minorities. Minority Governments must lay out their fundamental goals, but they should work within the long-term grain of strategies. Those strategies may have been inherited from previous Administrations, and it is likely that, in a chamber of minorities, we will all have contributed to such strategies. There is certainly something in that.
Will the minister give way?
I am really out of time for dealing with the points that I have to deal with.
There is a divergence between the principles that have been espoused and the proposals that have been made.
Rob Gibson talked about Stavanger, Seattle and Ullapool. Ullapool has changed a little bit, but not much; Stavanger and Seattle have changed.
Mary Mulligan made a very amusing speech, although I am not sure that she meant to be so amusing. She referred to housing. The previous Labour Administration built six council houses. She talked about the previous UK Government’s capital reduction and criticised it, and she said that food sales are close to zero. The rumbling sound was obviously the sound of empty stomachs around the chamber. She also talked about ring fencing of the tax on supermarkets, although I think that she meant hypothecation.
Lewis Macdonald said that the popularity of bankers is at an all-time low. Those who have looked at my register of interests will realise that I have moved from banking to politics in an attempt to improve my reputation. That has worked, which is very good. He also talked about the proposed company in Aberdeen. The important point is that with limited liability companies, that is just what we get.
Joe FitzPatrick referred to the three Gs of Dundee and showed that there are local opportunities that we all have to take.
Let me say finally that the amendment—
I am afraid that the minister’s time is up.
11:32
I welcome the tone in which the motion has been debated by many members across the chamber, who have closely considered Jeremy Purvis’s propositions. His pamphlet is on his website. Given the increasing interest that there appears to be in it, it is a pity that it is free to download. It is obvious that it would have gone to the top of the bestsellers list, as Johann Lamont and Frank McAveety got to grips with it.
Stewart Stevenson made an interesting point at the end of his speech, which I will build on. He talked about a chamber of minorities and the need for a strategy that moves us forward. There have, no doubt, been differences between different Governments’ strategies. That good proposition should be central to our approach to the matter. No party that is represented in the chamber has a monopoly of wisdom on these matters or a monopoly of good ideas. Nevertheless, I think that the Liberal Democrats have put forward a number of ideas that are worthy of serious consideration.
Our central proposition is the importance of strengthening the Scottish economy—not least in order to provide jobs and opportunities for all our citizens—the importance of Scotland becoming more entrepreneurial and innovative, and the importance of wealth creation as the key to both public and private good in our country. Achieving those things is an aspiration at the heart of what Liberal Democrats believe, but I think that members across the chamber share it. We have heard comments about that. I welcome Stewart Stevenson’s comment that Jeremy Purvis began by posing the right question. That is a useful start.
The public debate, which is vital, is about the public structures and supports that best drive that aspiration. There is an element of paradox in that the Scottish Government appears to be timid about looking at the structures in the enterprise, tourism and innovation world, whereas its back benchers in particular and the party in general want to dismantle the whole of the United Kingdom and fiddle about with the structures in that regard. That seems to me to be much more fundamental fiddling than what is proposed in Jeremy Purvis’s pamphlet.
Earlier this week, the Scotland Bill was launched. That bill is important to the accountability and increased responsibility of the Scottish Parliament. It will give the Scottish Parliament much greater financial and fiscal powers for a purpose. As Frank McAveety rightly said, those powers are appropriate to strengthen our ability to support the growth of our economy in partnership with the United Kingdom Government, councils and other players.
In that context, the changes are particularly important to Scotland, because our domestic market remains heavily intertwined with the UK market generally. That was the point of my intervention on Stewart Stevenson earlier. Our country does not want or need the damaging economic circumstances that have descended on the Republic of Ireland, which requires an injection of £87 billion to rescue it.
The member asked a question of my colleague Stewart Stevenson regarding the differences between the economies. The Irish did not have the opportunity to do quantitative easing. We have had quantitative easing and have therefore weakened our currency and our position in the long term.
There are several wider debates. I do not want to go too far in that direction, but I want to deal head on with the independence proposition. It is worth saying that, if Scotland had been independent prior to the onset of the recession, Scottish tax income across all taxes would have dropped by £2.5 billion. Under independence, the Scottish Government would have lost £4 billion from corporation tax because of the difficulties with the Royal Bank of Scotland alone. It is important that ministers remember that context when they try to put across the proposition that Scotland, under independence, could have all the benefits of increased taxes and all the goodies that ministers think would come, but in some way would not have to pay the bill for that. There needs to be a bit of balance in the debate.
The debate has focused on the enterprise, banking and promotional bodies, and several constructive proposals have been made. Somebody rightly said that structures are a means to an end, which I accept entirely, but we have to ask whether the structures are right. I say again that the criticism comes from a Government that changed structures and emasculated Scottish Enterprise when it took office. That body has suffered what might be described as death by a thousand mind maps, and it seems to have lost a degree of its sense of purpose and direction.
Fantasy.
I accept that it is not a very good joke.
It was Whittonesque.
Nevertheless, it is true that, as Jeremy Purvis points out in his pamphlet, as a result of the changes to Scottish Enterprise, for every £2 spent by our economic development quangos, £1 is spent on staffing, accommodation and administration. That serious issue must be dealt with.
Several other issues have been raised. One is the question of what the right national and regional bodies are. Undoubtedly, that is the correct question to ask, and several answers have been proposed. There is an element of bringing back into play the more localised approach that Liberal Democrats have traditionally supported and which to a large extent was taken away by the changes that the SNP Government made in 2007.
Gavin Brown talked about the importance of exports, and I agree with him on that. Joe FitzPatrick talked about several individual issues in Dundee relating to the life sciences industry and others.
In his opening speech, Jim Mather referred to a branch economy. He is on rather weak ground in that connection, because in fact we have headquarters here. Among others, there are the headquarters of the Royal Bank of Scotland, not the Bank of Scotland—I think that the minister misheard me earlier. The minister must take on board the issue of how an independent Scotland would have dealt with a bank the size of the Royal Bank of Scotland, headquartered in Scotland, getting into difficulties.
The member presupposes that Scotland would have been as incompetent as Ireland and the UK in financial management and that it would not have been in the least bit like Norway.
That is not what the SNP used to say about Ireland, is it? That is an interesting admission from Mr Mather.
I was grateful for the welcome for our proposals from a number of members. Lewis Macdonald said that he had no difficulty with the principles, but had several issues on the details. We are more than happy to debate detail. That is important in taking matters forward. Our contribution has been important in trying to open up the debate and to consider different models of dealing with the issues. The proposal is not, as one member suggested, to abolish Highlands and Islands Enterprise; it is to expand and build on it and to give it additional powers.
There are existing models. Like Jeremy Purvis, I have visited the Glasgow City Council organisation that supports the IT structures and manages the property portfolio in Glasgow. That model is similar to the one in Aberdeen that Lewis Macdonald described, which seems to work extremely well.
Reference has been made to the Christie commission and the Economy, Energy and Tourism Committee. The issues that have been raised are important, but they should not hold up the development of debate and discussion on the matter.
On the ideas that Jeremy Purvis has mustered, the questions that Liberal Democrats have posed today and will pose during the election to come are the important ones. We have made a significant contribution to the debate. It must be shaped as a positive and constructive debate, because Scotland can afford nothing less.