Plenary, 03 Jun 2004

Meeting date: Thursday, June 3, 2004

Official Report 771KB pdf

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Economy (Highlands and Islands)

Good morning. The first item of business is a debate on motion S2M-1395, in the name of Jim Wallace, on the economy of the Highlands and Islands, and three amendments to the motion.

I welcome the opportunity to focus on the economy of the Highlands and Islands; indeed, I think that we can rightly describe it as a success.

I am conscious that on several occasions in the Scottish Grand Committee of the House of Commons I either introduced or took part in debates on the Highlands and Islands. I see that Mrs Ewing is nodding; no doubt she also remembers those debates well. It is important that the Scottish Parliament debates the economy of a region that contributes much to Scotland and that the Parliament considers how we can build on the growth that has taken place in recent times and how we will address the challenges that face us.

In any debate on the Highlands and Islands, people often think of the many centuries of history when the area was scarred by the clearances and by the fact that so many other parts of the United Kingdom wrote off the contribution that the Highlands and Islands could make to national wealth. It is also fair to say that in the second half of the last century, with the development of the hydro schemes and the creation of the Highlands and Islands Development Board—which became Highlands and Islands Enterprise—we started to turn around the economic fortunes of the Highlands and Islands.

In contrast with that past, today I am happy to put on the record again our acknowledgement that our remote and rural communities are an important and integral part of Scotland and have a significant contribution to make to our economic prosperity and our social and cultural life. We must value our rural areas and build on their traditional strengths, while taking full advantage of the opportunities in the modern economy.

As I have said many times, economic growth is the Executive's top priority. In many respects, it could be claimed that the economy of the Highlands and Islands has outperformed that of Scotland in recent years. Employment is higher and unemployment lower. The region has an employment rate of 81 per cent—a full 7 percentage points higher than the equivalent Scottish rate. The unemployment rate is below the Scottish rate of 3.6 per cent and has fallen faster in the Highlands and Island during the past year than it has in Scotland as a whole.

Does the minister realise that although employment has risen, the average wage in the Highlands and Islands is well below the Scottish average and is 17 per cent less than the UK average? That should be addressed, because people in my constituency are concerned about the low levels of wages.

The point that Mrs Ewing makes is correct. However, employment figures in the Highlands and Islands show a higher percentage of part-time employees, which might be a contributing factor to the figures on wages. Traditionally, wage rates in the tourism and hospitality industry have been lower and if we want tourism to develop, the industry must have a proper career structure that will encourage young people to come into it. Wage rates and salaries must reflect that the industry is a worth while one for young people to go into.

Emigration is no longer the main trend. The Registrar General's estimate of the 2003 population, which was published last week, showed an increase of almost 900 over the previous year, consisting mainly of people who came to live and work in the area. It is not simply a question of Inverness booming and the rest of the area declining; during the 90s, for example, there was an increase in the number of people living in communities such as Skye, where dynamism is clearly evident.

However, we still face important geographical challenges.

Will the minister take an intervention?

I will finish my point first.

The population in some parts of the region continues to fall. The forecast is for a greater fall in the working age population by 2018 in the Highlands and Islands than in Scotland as a whole. Other issues and challenges go with that, such as affordable housing, which Lewis Macdonald will deal with when he participates later in the debate.

I acknowledge much of what the minister says about the Highlands and Islands, but given the booming economy, can he outline the social and economic criteria that were used in the dispersal of Scottish Natural Heritage jobs to Inverness?

There are several criteria, which Tavish Scott, as the minister responsible for the relocation, has set out to Parliament and its committees. We believe that it is right to distribute those jobs and relocate them to Inverness. From her question, I am not quite sure whether Mrs Scanlon approves of all those jobs coming to Inverness.

In pursuing our objectives for economic growth there can be no single template. There is a common strategy but it must be interpreted in the light of local circumstances. I believe that Highlands and Islands Enterprise and its network of local enterprise companies provide the right mechanism to deliver economic development activities in the region. They continue to be instrumental in the economic renaissance, delivering results by following our smart, successful Scotland strategy.

I will consider the three strands of that strategy and their relevance to the Highlands and Islands. The first strand is that of growing businesses. Research shows that the most dynamic and competitive economies produce the greatest number of new businesses. In the Highlands and Islands, more new businesses are created each year per head of population, and businesses are more likely to survive in the region. In the first quarter of this year, 536 new businesses opened, representing a 33 per cent increase on the corresponding quarter in 2003.

HIE is also supporting the growth of existing companies with a strong research and development element. During the Easter recess, I visited AGM Batteries in Thurso, which is a joint venture between HIE, AEA Technology plc and Japanese partners. It has a 190 strong work force, and an associated plant will shortly open in Golspie to deal with recycling batteries.

In 1995, HIE helped to establish Inverness Medical Limited. The company had an initial target of 120 jobs but currently employs six times that number, with 120 staff involved in research and development and an annual turnover in excess of £130 million. That is an excellent example of an internationally successful company. [Interruption.] Fergus Ewing says that the turnover is even more than that, so I am sure that he would agree that it is a very successful company operating in a competitive marketplace and doing so successfully because of its emphasis on quality and jobs based on knowledge.

With regard to skills, the need for such companies underlies HIE's support for the UHI Millennium Institute. By conducting research, the UHIMI will assist the transfer of knowledge locally, nationally and internationally. It is pursuing research opportunities in areas such as aquaculture and agronomy. This coming Sunday, ardent viewers of "Landward" will be able to see a profile of the agronomy institute in Orkney.

Other areas of research include nuclear decommissioning. When I visited AGM Batteries in Thurso, I also visited Dounreay to see a centre of excellence in nuclear decommissioning that provides opportunities for business contracts for many companies, including those further afield than the Highlands and Islands. There is also research into renewable energy. All that work will benefit not just the Highlands and Islands, but Scotland as a whole.

We support the minister's comments about the UHI. However, this week I learned that Inverness College is apparently planning to close the media course and that a decision is to be made later today. Will he join me in making representations to Professor Little that the decision should be considered very carefully indeed, because the course is valuable and represents the positive things that we all want to encourage?

I note what Fergus Ewing has said but, as he is aware, there are some statutory limits to what I can say about the delivery of any specific course in any specific institution. Obviously, I hear—and have read about—what he says and will make further inquiries about that course.

The UHIMI will also build the local skills base—the second strand. There is a continuing and successful effort to produce modern apprenticeships with more young people in training now than ever before.

Our growing businesses and highly skilled people in the Highlands and Islands need to be connected to the rest of the world, which is the third strand. Broadband coverage has more than doubled over the past year in the Highlands and Islands. Through our recent demand-stimulation activity and commercial announcements, it is estimated that around 80 per cent of households in the region will be able to obtain access to broadband by next summer. I am sure that everyone here would agree that the remaining communities must have the opportunity to benefit from broadband, too. On Tuesday, I announced that the Executive will intervene to support the supply of broadband to ensure delivery to areas where there will be no commercial provision. That action will prevent a digital divide and will ensure that every community in the Highlands and Islands, and across Scotland, has broadband coverage by the end of 2005. With the infrastructure in place, the important point now is that businesses take up the opportunities that broadband offers. We ought to ensure that we campaign to identify the opportunities and advantages that will flow from broadband connection.

The three key drivers of a smart, successful Scotland—growing businesses, skills and global connections—apply to the whole of Scotland. However, as I said earlier, we need to reflect local circumstances. That is why Highlands and Islands Enterprise also has a strengthening communities remit. Whether by supporting community land ownership or by building new, serviced workspaces in remote areas, Highlands and Islands Enterprise is sustaining and strengthening the whole region.

Many colleagues will have heard Jim Hunter speak passionately recently about the scale of change in the Highlands and Islands economy and the need to talk about optimism. I support his assertion that we have much to be positive about in Scotland. We should be confident about continuing with our current approach. I believe that the strategy outlined in "A Smart, Successful Scotland" is the right one. Its main themes are as relevant today as they were three years ago. However, we take account of the fact that the global environment and our economy are evolving, which is why we are looking at where "A Smart, Successful Scotland" needs to be refreshed.

Will the minister give way?

I will give way in a moment.

The case for consistency is strongly supported in the discussions that we have held across the business and skills communities. However, a key aspect of refreshing the strategy is that we will place more emphasis on sustainable economic development, both in the strategy itself and in developing more detailed proposals for a green economy.

I thank the minister for giving way. I am interested in the measures that he has in place to indicate to him whether the strategy is working. I am also interested in how he squares that information with the fact that it looks as though the Highlands and Islands is requalifying for objective 1 status by dropping further below the 75 per cent threshold of gross domestic product per capita across Europe.

As Jim Mather probably knows, a series of measures are in place for measuring the smart, successful Scotland strategy. Indeed, I think that I am correct in saying that those measures are reported on annually, and we will ensure that they are drawn to Jim Mather's attention.

I made an important point about the green economy. We made a commitment to developing and implementing a green jobs strategy, which will help us, as a country, to realise the significant business and environmental benefits of a greener economy. I expect to be able to launch a major public consultation exercise on the strategy very soon. I want the views of as wide a range of key stakeholders as possible on the strategy's shape and scope, and I encourage all those with an interest in sustainable economic development to respond to the consultation.

The Highlands and Islands already show considerable potential in green industries, particularly renewables. The European Marine Energy Centre in my constituency in Orkney provides the opportunity for Scotland to be a world leader in the development, manufacturing and distribution of marine technologies, such as wave and tidal power. Our objective is to create high-quality job opportunities in industries that are more sustainable for the natural environment, which is so very precious in the Highlands and Islands. HIE will also play its part in that work.

Of course, industry requires the underpinning of an effective infrastructure. That takes us beyond the remit of HIE. Having been a parliamentary representative of the islands communities in the north for almost 21 years, I came to the view long ago that transport underpins so many of the other economic, social and cultural needs and activities in the area.

Over the past few years, we have supported the development of HITRANS—the Highlands and Islands strategic transport partnership—which brings together all local authorities in the region, Highlands and Islands Enterprise and the Scottish Council for Development and Industry to form a genuinely strategic regional transport partnership.

As the minister is dealing with transport in his speech, does he accept that one of the main impediments to the economy of the Highlands and Islands is the tolls that are charged on the Skye bridge? Would he care to indicate when we might see the end of that discredited toll regime?

I wonder how I anticipated that question. I am sure that John Farquhar Munro would agree that Skye has had a good economic success story over recent times. However, I reaffirm and reassure members and John Farquhar Munro that the Executive is committed to ending the discredited tolling regime on the Skye bridge. Professional advisers have been appointed and discussions with Skye Bridge Ltd have already begun. Having conferred with the Minister for Transport on the issue in anticipation of such a question, I believe that we can achieve our goal by the end of this year.

We have worked closely with HITRANS to provide almost £5 million from the public transport fund for a range of improvements across the Highlands and Islands. Further one-off awards last year and this year amounted to around £2.7 million. Air services connect the Highlands and Islands to the global economy and provide lifeline services for remote and island communities. We are providing increased funding for Highlands and Islands Airports Ltd to invest in aviation infrastructure and we are working with HITRANS to develop its proposals for extending public service obligations across the Highlands and Islands air network to reduce fares and improve services.

Lifeline ferry services also have a crucial role to play in supporting the economies of island and remote mainland communities. Over £35 million has been invested in harbours and new ferries for the northern isles. The preparations that we are making to tender the Clyde and Hebrides services, currently operated by Caledonian MacBrayne, are intended to ensure that services and fares are protected under the new regime.

We must not forget roads. On the A9, we are investing in improvements to enhance safety and cut journey times, and we have commissioned a route action plan to identify how the A82 can be improved.

Will the minister give way?

I have been pretty generous and I want to conclude my speech.

Overall, I think that few would disagree that there has been a remarkable turnaround in parts of the Highlands and Islands. However, we should not hide from the challenges that remain. As I said in response to Margaret Ewing, GDP and wages are lower in rural Scotland and many Highlands and Islands communities continue to suffer from the economic disadvantages of a declining and aging population. Many areas are particularly fragile and the allocation of HIE's resources reflects their difficulties. Through the initiative at the edge programme, we will continue to support effective partnership in the most fragile areas.

We will also continue to support key sectors in the Highlands and Islands economy, particularly in important areas such as Shetland, which has a diverse economy that ranges from oil to sea fishing and fish farming. We are committed to pursuing sustainable fish stocks and supporting a sustainable fishing industry in Shetland as well as in other areas of Scotland. We are actively pursuing a positive outcome from the European Commission's planned review of the Shetland box access arrangements in 2004. Similarly, the aquaculture sector has had its challenges in the past, but we must ensure that we retain the advantage in establishing high-quality niche market products in that sector.

The Highlands and Islands is an important tourism destination. We must continually strive to improve standards of service and accommodation, which must match our breathtaking scenery, history, culture and, of course, hospitality.

As part of the Executive's fresh talent initiative, the relocation advice service announced by the First Minister earlier this year will open for business from October 2004. The Executive will work closely with stakeholders in the Highlands and Islands to raise awareness of the opportunities in the area and ensure that those who express an interest in relocating to the Highlands and Islands are fully supported to do so.

Work in partnership is vital and I believe that the recent changes we made to the remit and membership of the convention of the Highlands and Islands will ensure that it can make a dynamic contribution in helping to resolve the key issues that face the region.

Will the minister take an intervention?

No. I am just concluding.

The Highlands and Islands economy has continued to expand and diversify, but the challenge now is to sustain that growth and prosperity. A number of major projects lie ahead. I mentioned the marine energy developments. There is also the Aviemore development and the possibility of an international container hub in Scapa Flow, and 2007 will be the Scottish year of Highland culture. The Executive is committed to building on the area's existing strengths and encouraging new opportunities.

I move,

That the Parliament endorses the ambition to create a diverse, dynamic and sustainable economy in the Highlands and Islands; congratulates Highlands and Islands Enterprise on the progress it has made with local partners towards realising this ambition, particularly in the areas of telecommunications, research and development and renewable energy; further welcomes the significant investment in critical transport infrastructure in the Highlands and Islands; recognises that serious challenges still lie ahead for the Highlands and Islands economy, not least in terms of sustaining more fragile areas, but believes that these can best be addressed through continuing the approach set out in A Smart, Successful Scotland.

Let me start by congratulating the minister on his announcement on the Skye bridge, which is very welcome. It has put a smile on faces in all parts of the chamber. Let me also highlight the fact that the Highlands and Islands has continued over the years to produce many talented people, including Robbie the Pict, and many committed public servants, who persevere in difficult circumstances and regularly succeed in innovating and surviving in economic conditions that would cause others to fail. My contention is that their success owes little to Government policy, and I intend to prove that.

The objective of the Scottish National Party amendment and our contribution to the debate is to prove the absence of, and the need for, a comprehensive strategy for the Highlands and Islands that is backed up with credible, pro-Highland polices with clearly announced objectives. To prove that, I will do three things: I will explain our immediate concern and reservations about the Executive motion; I will expose the major structural flaws in the current Executive-led stewardship of the Highland economy; and I will give a clear indication of how much better our economic outlook could be and how that can be delivered.

First, I will deal with our concerns about the Executive motion. It is undoubtedly well intentioned, but it fails early on in its wording. The key word in the motion is "ambition", but it is required to be "endorsed" by the Parliament rather than, for example, passionately driven by the Parliament. That ambition is immediately diluted and deserted by the weak and illogical call to believe in a strategy that is failing all Scotland—the smart, successful Scotland strategy, about which I will say more later.

Surely for an ambition for the Highlands and Islands to be credible, the Executive needs a strong, publicly stated strategy that has specific, measurable, top-level objectives that are jointly owned by the Executive, local government and the development agencies.

I seem to recall clearly that Jim Mather's predecessor, Andrew Wilson, warmly endorsed the principles and direction of "A Smart, Successful Scotland". Are we witnessing a U-turn on the part of the SNP, or opportunism on the eve of an election?

If Mr Wallace waits until I refer to other matters, of which more later, he will learn.

Essentially, I am looking for objectives that confront, or seek to reverse, the serious challenges that face the Highlands and Islands. The challenges include the loss of economically active people, the threats to services and the markedly lower life expectancy in the lower-income groups, but the objectives to confront those challenges do not exist. In addition, the Executive's motion mentions

"significant investment in critical transport infrastructure",

which does not sit comfortably with the question mark over the availability of, and UK commitment to, European Union structural funds, the unfulfilled Campbeltown to Ballycastle ferry route, the investment uncertainty caused by the Caledonian MacBrayne tender delays, or the poor roads across the Highlands and on islands such as Mull.

The motion's deepest flaw is its facile mention of its favourite get-out-of-jail card, "A Smart, Successful Scotland", which, to its credit, the Executive does not refer to in the motion as a strategy, which it never will be. Of course we must train and retrain, but "A Smart, Successful Scotland", on its own, has been properly dismissed by The Scotsman as a cruel deception for which we will all pay a heavy price. Although that is a generic Scottish truism, it is nowhere more true than in the Highlands and Islands, given that more than 90 per cent of Highlands and Islands graduates are forced to migrate for want of graduate-level jobs in their home territory.

Is Mr Mather telling us that the SNP's U-turn on "A Smart, Successful Scotland" is entirely down to Andrew Neil?

It is down to neither of the Andrews. What I am telling members is that we believe that we have to train and retrain but that we have to root our people in Scotland. Training them to enrich economies in other parts of the UK is not a sensible way to go forward. In other words, what I am saying is that the Executive's motion uses as a fig leaf a major flaw in its own stewardship—a strategy that, without other measures, results in most of the brightest young people from north and west of the Highland line being educated for export in the 21st century. I see a pattern here, for Andy Kerr is now using our charge of powerlessness as his defence.

Could Jim Mather explain what mechanism he would use to ban bright young people from leaving Scotland in the future if he had control?

We intend to give them a return ticket, and a compulsion to come back, of which I will tell members more in a moment.

The second major point—and this is where George Lyon will get illumination on the matter—is that there is a fundamental flaw in the strategy. There is a fundamental structural flaw in the Executive's stewardship of the economy.

Will Jim Mather give way?

Will Jim Mather give way?

Members should give me a break and let me make my next few points about the Executive's stewardship of the economy in the Highlands and Islands. There is a flaw that totally undermines the motion and exposes its half-hearted commitment. It is a flaw that undermines the confidence of young people who are considering investing their lives or their capital in the Highlands and Islands.

Increasingly, people are seeking a viable strategy—one that has resources, and there are resources about—but there is no clear-cut ownership of the Executive's strategy and, as I said, there are no specific, measurable objectives. The minister could not even mention them when I put the question in the context of "A Smart, Successful Scotland". There is no evidence-led feedback loop to inform future strategy and policy and, crucially, there are no mechanisms whereby Government and local government can invest to do the right thing and increase their own revenue. That, by the way, is called financial independence, which enables Government to invest with a view to increasing its own resources by improving competitiveness in the local economy and strengthening its financial position through growth and increased levels of economic activity.

Will Jim Mather give way?

George Lyon has had a chance to intervene, and I want to crack on.

We all know that Scotland lacks that power nationally and locally, so, as long as that remains the case, any attempt to produce a transformational national or Highlands and Islands strategy will remain holed below the waterline. Instead, we have a Government that selectively focuses on positive results, ignoring problems and poor outcomes. Worse still, that approach creates a false feedback loop that allows it to justify sticking with policies that have failed the Highlands for generations.

Jim Mather says that there are no measures, yet the measures that are being used to justify why we think that the Highlands and Islands is doing well show that, compared with the situation 40 years ago, 50 per cent more people are in work, the population is up by a fifth, we are delivering more business start-ups in the Highlands than in the rest of Scotland and regional unemployment is now below the Scottish level. What other measures would he introduce to add to that? Surely that is a reflection of the fact that the policies are actually working.

If George Lyon drills below those data, he will see subsistence self-employment, the export of talented people, low wages and low life expectancy for those on the lowest incomes. He may be happy with that, but I certainly am not. Those are the poor outcomes that I am talking about with regard to the lack of a feedback loop. Plugging into the Inverness area, which has done well out of improvements to the A9, the new bridges to the north, the airport, its city status, its public sector jobs and its overall momentum, is not enough. That great city is doing well, and I rejoice in that, and my joy is undented by the disgraceful and unsympathetic vagaries of the Scottish Premier League.

The wider Highlands and Islands is the litmus paper that tells us that Scotland's branch economy does not work, but the feedback is ignored in an attempt to continue Scotland's ignoble experiment as the only powerless junior-partner economy in the free world. Meanwhile, the experience of other countries is moving on, while we slip back. That tells us that, without a full-bodied, fiscally independent strategy, we have no credible means by which to transform Scotland or the Highlands and Islands. We will have no strategy to improve consistently our competitiveness, without which we will be undermined in our attempts to attract and retain people and wealth. Instead, what we hear are platitudes and hype. There are good intentions, but the problems continue. That would be forgivable if we were talking about an academic exercise or a computer simulation of some imaginary economy, but the issue affects real people—our people—and it undermines the historic role of the Highlands and Islands as one of the most prolific sources of talented people in the world. It causes stresses and strains on family life as people have to work long hours in multiple jobs for low pay, and it fragments families as people have to migrate. Equally, it produces a legacy of markedly lower life expectancy for those at the lower end of the income spectrum.

It is right for Jim Hunter and his colleagues at HIE to take a positive view of the Highlands and Islands in their public statements and productions. They are, after all, a sales force and the recipients of public money, and I support them every time they are out pleading their cause. However, I draw comfort from my belief that, in private, those same men will be seeking to obtain from the Executive what every successful individual and organisation needs—help to remove the barriers to growth and further development.

Every winner must whinge from time to time or accept a cascade of second-best inputs and permanent problems that give comfort only to their competitors. Every successful entity has a track record of progressive, consistent eradication of problems, to produce consistent, perpetual improvement. It would be madness to deny that in a Highlands and Islands context, where problems must be confronted and factored into future Highlands and Islands strategies. The problems include the repeated threats to services, especially in primary and acute health care, the lack of affordable housing, the lack of major employers outside Inverness, the drift of young people out of the area and the gravitational pull of the central belt and beyond. Transport infrastructure is poor and fuel costs are high, and there is even a threat to post offices. In addition, there is weak, belated support for indigenous industries, and actual bodily harm to our fishing and whisky industries.

Let us contrast that with our strategy, which provides a powerful vision of national and regional recovery, allowing Scotland and the Highlands and Islands to cherry pick, and to amend to meet Scottish needs, those policies that will allow us to follow the Faroes, emulate Iceland, imitate Ireland and yet be uniquely Highland and uniquely Scottish, capitalising on long-standing positive attributes that others would give their eye teeth for. I acknowledge the fact that we are now likely to be able to add to those attributes renewables, broadband and post-9/11 security.

We also have the potential fully and properly to connect with, and meet the commercial needs of, our diaspora and of an affectionate and admiring world that is hungry for Highland produce, Highland skills, Highland traditions and Highland holidays—to say nothing of an army of Highlands and Islands entrepreneurs who have proven that they can deliver and prosper on anything that starts to look like a level playing field. However, delivering that level playing field can logically be achieved only when this Parliament and the Highlands and Islands control their own finances and are able to generate and maximise income. That is the only proper way to justify and prioritise spending decisions, enabling the Scottish nation and local government to generate income from increased economic activity and creating a virtuous circle in which we collect more taxes, pay less out in benefits and have more money available for our public services. That will provide, at last, a chance for our public services to invest in developing people and infrastructure in a fulsome way, delivering that on the back of a solid policy agenda, rather than having to handle the problems of failure.

Our SNP formula will herald a new dawn, and local competition will enable the creation of increased growth, improved public services and dramatically better physical infrastructure. That will build on proven policies, with a strong feedback loop to ensure that those policies are allowed to establish themselves and subsequently be flexed and amended to produce the results that we need. Those policies will include control of all of the fiscal levers, which—as Andy Kerr has acknowledged—prevent the Executive from having macro targets and proper ambitions for this country and all its people. They will include a move from the council tax to a local income tax; a revamp of business rates with a ceiling on rates and scope for local competition; and—most certainly—a focus on learning from others and the adoption of Scottish versions of international best practice from around the world. All of that would have a huge impact on the Highlands and Islands. There will also be the benefits of a national spatial strategy; a policy that is fair to the west and the Highlands in the location of inward investment jobs; and road equivalent tariff pilots.

The Executive must begin to understand that, in the absence of a credible strategy, the people of the Highlands and Islands will not join in with its woeful self-deception about the true nature of the Highland economy. People in the Highlands and Islands are already judging the Executive on its results and finding it wanting. I am thinking primarily of low average incomes; the real and deep pockets of deprivation; the falling population of economically active people; the scandal of the loss of objective 1 status; the equally scandalous requalification for objective 1 status; and the continuing threat to hospitals and general practice services.

After five years in Government, ambition is not enough. The SNP has the policies, ideas and accountability. Happily, the scales are falling from Highland eyes. According to a recent Ernst & Young poll, only 28 per cent of business people are opposed to the Scottish Parliament gaining more power. The Executive will be painfully aware that opposition in the Highlands and Islands is even lower.

I have explained the immediate concerns and reservations that the SNP has about the motion, I have exposed the structural flaws in the Executive's lack of strategy and I have given a clear indication that we can have a better future. I ask the chamber to support the SNP amendment.

I move amendment S2M-1395.2, to leave out from "endorses" to end and insert:

"believes that the Highlands and Islands have both the right and the potential to be an economy that is diverse, dynamic and sustainable; commends the progress that has been achieved to date by individual endeavour, quality local services, business resilience and innovation in spite of hurdles which must be overcome in order for that potential to be realised; considers that these hurdles include the threats to primary and acute healthcare, the failure of the Scottish Executive to mount a coherent campaign for the contribution of adequate EU structural funds, the lack of affordable housing, poor transport links, higher fuel costs and an overall failure adequately to address the needs of key industries, and urges the Executive to produce a comprehensive strategy that will overcome these inhibitors and enable the Highlands and Islands to achieve its full potential."

As an expatriate Highlander, I always welcome the opportunity to debate the economy of the Highlands and Islands. As members have said, the Scottish Highlands and Islands is one of the most sparsely populated areas of Europe: it has a distinctive economy with unique challenges and needs.

For centuries, the story of the Highlands and Islands economy was one of decline. Traditional industries such as farming, forestry and fishing have seen a continual downward pressure on income and a loss of jobs. As we know, the population declined as young people in particular left to seek better employment opportunities elsewhere. As much of the Highland economy is dependent on tourism, for many of those who remained in the Highlands and Islands, jobs were often low paid, seasonal and insecure.

Of course, the turnaround in the Highland economy since 1990 happened largely under a Conservative Government. Perhaps the most important factor in that turnaround was the substantial transport infrastructure investment that that Government made. As Jim Wallace acknowledged, transport infrastructure is a key element in economic growth.

Large-scale improvements to the A9 opened up the Inverness area in particular to the central belt. The Kessock bridge was constructed, creating a new economic area to the north and west of Inverness and reducing considerably the journey times from the north and north-west to the south.

Does Murdo Fraser include as one of the Conservative achievements the shutting down of the British Aluminium smelter at Invergordon?

I appreciate that throughout Scotland there were many heavily subsidised industries during the 1980s that were no longer able to compete in the marketplace. As the minister acknowledged, the economy has turned around. Does Maureen Macmillan not agree with what the minister said about the economic success of the Highlands and Islands? That is the message that we have heard this morning from the coalition front bench.

The Skye bridge was constructed under a private finance scheme, which ensured that it was built long before it would have been had it been paid for under traditional methods. There is no doubt that the tremendous economic expansion that has taken place in Skye, to which the minister referred, is a direct result of the construction of the bridge.

I could go on. I could list the Dornoch bridge, the Kylesku bridge and all the many transport improvements that the Conservative Government funded. The contrast to that long list is the story of the past seven years. How many new bridges have been constructed in that time? Where is the list of roads that have been made into dual carriageways in that time? I am struggling to think of one—what a contrast to our record in government.

Murdo Fraser boasts about the Skye bridge public-private partnership. Is he really holding it up as a model of financial prudence? Is it not the case that it was the most expensive, extortionate and ludicrous deal that Scotland had seen until, of course, Jack McConnell foisted Holyrood on us?

I will, of course, have to disagree about the method of funding. I want to make it absolutely clear that the people of Skye are far better off with the bridge—even a toll bridge—than they would have been if they had continued to have to rely on the ferry. As the minister acknowledged, there is no doubt that the economic success of Skye is a result of the bridge.

Will the member join me in welcoming the investments that have been made in the new airport terminals at Stornoway and Kirkwall, in the new causeways at Eriskay and Berneray and in the new ferry infrastructure at Stornoway, Hatston and Scrabster?

I am interested to hear the minister's list of achievements in the islands. What about the economy of the mainland Highlands, however? What about the important road links? After all, most businesses depend on roads to get their goods to market.

Will the member give way?

I am sorry, but I need to make progress.

The Highland economy was assisted not only in relation to transport infrastructure. The Conservatives also created Highlands and Islands Enterprise, which, despite its faults, is a considerable improvement on its predecessor, the Highlands and Islands Development Board.

Will the member take an intervention on that point?

I am sorry, but I will make some progress if I may.

Highlands and Islands Enterprise's decentralised structure is particularly suited to the diverse and geographically scattered Highland population. The Conservatives also made an historic investment in the Gaelic language; that investment assisted in the regeneration of Gaelic, which benefited not only the Highlands but Scotland as a whole. Moreover, the Conservatives established the UHI Millennium Institute to provide university-level education in the Highlands and to help to reduce the number of young people who had to leave the area at 17 or 18.

The result of all those initiatives was that the economic decline of the Highlands and Islands was reversed. In turn, as we have heard, the historic population decline was also reversed. Indeed, between 1991 and 2001 the population of the Highlands and Islands actually grew. That was a huge turnaround on the historic position.

Not everything in the garden is rosy. Serious challenges continue to face the economy of the Highlands and Islands. Many of the Executive's initiatives have had, at best, a minimal effect in helping the situation. For example, although the Executive's land reform legislation, which was intended to rejuvenate rural communities, has undoubtedly resulted in changes in ownership in some remote and island areas, it is highly questionable whether it has had any long-term impact on economic growth. Indeed, many would argue that it deters investors from elsewhere in the United Kingdom and overseas from putting money into Highland properties.

On that point, the Gigha buyout is probably one of the best known to date in Scotland and has unleashed entrepreneurial spirit on the island. Six new companies have been set up and the population and the school roll have grown. There is tremendous enterprise now in the island economy, which we never saw under the old feudal land ownership system. Does the member agree that that is progress?

I have no wish to denigrate the success of Gigha. I am happy to see the encouragement of entrepreneurial spirit wherever it happens. All that I would say is that, if the people of any community in Scotland were given the equivalent of £40,000 each, I am sure that that would make a substantial difference to their economic outlook.

Let us take the example of the island of Eigg. Again, I do not wish to denigrate what has been achieved in such communities, but the jobs that have been created on Eigg are, almost without exclusion, funded by the public sector—they are funded by grants, either from Highland Council and HIE or from other public bodies. The serious question is whether that is a proper use of public money and why we are not properly encouraging private sector entrepreneurship.

The fishing industry, which is still hugely important in the Highlands, particularly in the north-west, continues to suffer from our membership of the common fisheries policy. Moreover, farming has had a number of years of difficulty; although incomes are now improving, the outlook cannot be said to be secure.

The development of renewable energy, about which we heard from the minister, offers opportunities, but it is absolutely vital that the Highlands and Islands does not become one giant wind farm to provide power for the rest of Scotland. It would be far better, both from an economic point of view and in the interests of our vital tourism sector, to look at new technologies such as wave and tidal power, which the Highlands and Islands have in abundance. That is where the Executive could be putting its energies.

Of course, the problem with the current regime of renewables obligation certificates is that it does not distinguish between technologies. That means that all the investment is going into onshore wind production, because that is the cheapest system.

I did not mention wind power in my speech but I mentioned wave and tidal power. I am sure that Murdo Fraser would want to acknowledge the multimillion pound investment in the European Marine Energy Centre in Stromness in Orkney, which shows a clear commitment to the development of those new technologies.

The minister's problem is that the current regime of renewables obligation certificates incentivises the development of wind power, because wind power is far cheaper for power companies to develop than any of the new technologies. Rather than blanketing the Highlands with wind turbines, which is what the Deputy Minister for Enterprise and Lifelong Learning seems to want to do, we have to examine that regime and ensure that the market delivers new offshore technologies.

Will the member give way?

I am sorry, but I need to make progress.

Yes, Mr Fraser, you have been very generous with your time. You should make some progress now.

Above all, we need to remember that economic growth is the product not of Government action, but of the activities of people in the business community. If we are serious about the growth of the Highlands and Islands economy, we have to ensure that businesses there at least compete on a level playing field with the rest of the United Kingdom. It is worth remembering that, to a far greater extent than in the rest of Scotland, the economy in the Highlands and Islands is built on small firms.

As elsewhere in Scotland, businesses in the Highlands and Islands face higher business rates than those down south—a factor that regularly tops the list of concerns in surveys of business people. They also suffer from the impact of excessive regulation, because quangos such as the Scottish Environment Protection Agency and Scottish Water stand in the way of economic progress to an extent that does not happen south of the border.

Businesses need to be able to move goods to market, which is where transport infrastructure becomes vital. The major strategic link between the central belt of Scotland and the north is the A9. On numerous occasions in the chamber I have raised the need for the upgrading of the A9 between Inverness and Perth. Not only does the road have a high accident rate, but it is the economic lifeline of much of the Highlands and Islands. Inverness has held the title of Europe's fastest-growing city and traffic on the A9 is now as much as five times what it was when the dualling programme began in the 1970s.

Will the member give way?

In a second.

In the long term, our objective must be to dual the A9 in its entirety between Inverness and Perth. In the meantime, safety improvements need to be considered urgently. Nothing will do more to hamper the economic growth of the Highlands than if the Executive drags its feet on that. In light of that, I was dismayed to read the First Minister's comments recently in an interview with The Press and Journal, to the effect that he did not consider the upgrading of the A9 to be a priority. Although I accept that roads such as the A96 and the A82 are also in need of improvement, there can be no doubt that the A9 is the major strategic link between the central belt and the north of Scotland. The First Minister's comments show just how out of touch he is with what is happening on the ground in Scotland.

Murdo Fraser answered the question that I was going to ask, but did he notice that, at the recent transport seminar in Inverness, Bristow Muldoon said, "Oh well, we can look at all these things and maybe we'll call the transport minister in front of the transport committee"?

I am sure that if the First Minister listened to what people in Inverness were saying he would hear the clear message that, although improvements to the A96 and A82 would be welcome, the major link between Inverness and the Highlands and the south is the A9. That is the road that most people use and it is the one that needs to be upgraded.

Is Murdo Fraser speaking for the whole Tory front bench? Does Mr McGrigor agree that the A9 should be a priority over the A82?

Mr McGrigor will be winding up the debate, when George Lyon will have the opportunity to address the question to him.

The one other point that I want to touch on, to which the minister referred, is the UHI millennium project. People in the college sector are somewhat depressed at how little progress has been made in the past seven years. It would be interesting to hear from the minister when he winds up what plans there are to ensure that the project progresses, so that UHI is granted full university status. It was an exciting project when it was first launched, but that was more than 10 years ago. It seems to be dragging along at a snail's pace. It would be interesting to hear what the Executive intends to do to encourage it along.

The economy of the Highlands and Islands has come an awful long way. Investments made by the Conservative Government, especially in transport infrastructure, laid the groundwork for much of the success that we have seen, but much more needs to be done. The Executive needs to start ensuring that businesses throughout Scotland, not just in the Highlands and Islands, compete on a level playing field with those in the rest of the United Kingdom. Moreover, it must tackle the remaining transport infrastructure problems, which most of all means committing to the upgrading of the A9.

I move amendment S2M-1395.1, to leave out from "congratulates" to end and insert:

"acknowledges that the long-term economic decline of the Highlands and Islands was reversed under the last Conservative government; believes that strong businesses are essential in bringing about further economic growth in the Highlands and Islands; notes with concern that businesses in the Highlands and Islands continue to be hampered by high business rates, excessive regulation and poor transport infrastructure; recognises, particularly, the need for improvement of the A9 as the major strategic link between the central belt and the north, and calls on the Scottish Executive to improve the business environment in the Highlands and Islands by lowering business rates, cutting regulation and investing in transport infrastructure improvements."

The amendment in my name would not delete the first two clauses of the Executive motion, because I am happy to endorse the concept of creating a diverse, dynamic and sustainable economy in the Highlands and Islands—who would not be?—and to congratulate, with some reservations, HIE.

The Executive's motion has probably been inspired by the recent speech by the outgoing HIE chairman, Dr James Hunter, which, due to a combination of circumstances, I have sat through twice. His upbeat vision of the expansion and diversification of the economy of the Highlands and Islands would perhaps be recognisable in booming and overheated Inverness and would probably strike a chord in the surrounding inner Moray firth area, but it would become progressively less recognisable as one moves further away.

I start by citing the "Rant of the Month" in the Scottish islands network newsletter, which I am sure all members get. The article examined the worrying population projections for the Highlands and Islands, such as the projected 25 per cent decline in the number of under-15s by 2015. I know that there is such a demographic trend in other places, but it is particularly acute and its effects are particularly serious in the Highlands and Islands. Although the article agreed with moves to attract people into the area, it noted the need to prevent young people from leaving in the first place. It mentioned a population seminar that was recently held in the Highlands, saying that it is, of course, easier to attract people in than to influence fertility.

The article cited jobs and affordable housing in particular as major issues that need to be tackled. That relates to the availability of land for housing. I do not have time to go into that, but I hope that other members will cover the issue in their speeches. It was said that in some communities—in the islands in particular—the fall in the population is such as to threaten their viability.

There has always been a tendency to believe that, if Inverness does well, the rest of the Highlands and Islands will benefit from a trickle-down effect. That is still believed in some circles, yet time and again it has been shown not to be the case. Indeed, the opposite is true. Inverness exercises a gravitational pull on services and populations.

I said that I would congratulate HIE but with some reservations. There is a definite perception in the Highlands—which I am sure HIE will try to refute—that HIE favours big inward investments of a high-profile nature rather than help for small indigenous businesses that are struggling.

In his opening speech, the minister mentioned Inverness Medical as a success. In a way, it is a success. HIE emptied its entire coffers into that company to bring it to the area—nobody else could get any money from HIE that year. Inverness Medical has produced some worthwhile jobs in research and development. It employs a lot of people, most of whom are assembly line, long-shift workers who earn about £10,000 a year. Those jobs are important, but they are not the high-quality jobs that we want. I wonder whether Inverness Medical was such a good investment.

Far be it from me to defend the Executive, but is Eleanor Scott aware that all the money that was paid to Inverness Medical has been paid back? Is it really Green policy that we should not have Inverness Medical in Inverness?

I was using Inverness Medical as an illustration of the high-profile inward investments that HIE is fond of attracting. I hope that Inverness Medical will flourish for years—for the foreseeable future. The trouble is that past experience of large inward investments is that they tend to pass through our lives. At most they stay for a generation. We have had smelters and oil fabrication. When they go, they leave a big gap, usually with a dislocated population that moved in to follow the jobs. Huge social problems in the area of Easter Ross have flowed from that. I hope that that will not be the case with Inverness Medical, but there is no guarantee that such companies will not be enticed to other places by the promise of cheap labour and grants. I hope that Inverness Medical will stay.

My intervention is intended to be helpful. Eleanor Scott mentioned social problems in Easter Ross. For the record, does she agree that one of the Inverness effects is the boom in property prices in Easter Ross and in southern parts of Sutherland, which is creating a social problem in relation to young people's access to the rented sector or the private property ladder?

That is a valid point. I mentioned that prosperity does not trickle out of Inverness. In some ways the situation is worse, because what trickles out is a property price boom as people move out and commute in.

As I said, large developments tend to pass through our lives in the Highlands and Islands and I hope that in future that will not be the case. Rather than being wooed by large corporations and extractive industries, we should have an economic policy that sustains the sustainers; we should invest in community organisations and small businesses that sustain local development in the Highlands and Islands and that are rooted in the area.

Mr Wallace mentioned a number of business start-ups, but I want to talk about community enterprises that are struggling. One of the start-ups that the minister mentioned was the battery recycling business in Golspie, which I welcome. However, until that business started up, the only four new jobs that had been created in Golspie in recent years were those created by the Golspie Recycling and Environmental Action Network, which flakes newspaper for animal bedding. Four jobs do not seem like a lot, but in somewhere the size of Golspie they are really important. The jobs are community based and rooted in the area, but the network's funding is completely uncertain, because Highland Council's waste strategy fund does not cover community enterprises.

I know that we cannot build a strong economy on community enterprises alone, but neither can we build a healthy, cohesive society without them. We should think of the region as an industrial ecosystem, which is biodiverse, with lots of small populations involved in many different kinds of businesses, all interacting in complex ways. That model is healthy and we should invest in it. We do not need industrial monocultures in the Highlands and Islands, so I get worried when I hear about giant corporations being encouraged to make plans for the region, whether in renewable energy, tourism, waste management, agriculture, fish farming or telecommunications. In all those fields, we have to listen carefully to what communities want and follow their lead.

Policy makers in the central belt might underestimate the significance of local markets in the Highlands and Islands. A lot of the businesses that do well in the region are trading locally and finding and developing local markets for their produce, rather than just extracting local resources or producing goods for export. We should put much more emphasis on growing local markets.

In the renewable energy field, we should consider how we can generate energy for local use. At the moment, renewable energy policy seems to be based on the assumption that it is all about exporting electricity to the south, which is fine up to a point, but I am much more interested in finding out how we can use our renewable resources to fuel local businesses, heat buildings and run vehicles in the Highlands and Islands. Let us consider reducing our region's dependence on oil, rather than increasing our dependence on distant markets.

Will the member give way?

No. She is a minute over already.

In that case, I will skip quickly through the rest of my speech.

I highlight the final part of my amendment. As a Green, I consider the crude measurement of economic growth to be a poor indicator of societal well-being. The last part of my amendment deals with that and, given that it refers to "A Smart, Successful Scotland", rather than to some academic green thesis, I hope that all members will feel able to support it. The biggest natural asset in the Highlands and Islands is its people. Only with healthy vibrant communities that are confident in their cultures will we have a healthy economy and only in a healthy environment will that economy be something that we can bequeath to our grandchildren.

I move amendment S2M-1395.3, to leave out from "particularly" to end and insert:

"; notes the lessons to be learned including the need to engage with, and invest in, local communities in areas such as telecommunications, research and development and renewable energy; further notes the need for investment in sustainable transport; recognises that serious challenges still lie ahead in terms of sustaining more fragile areas, and endorses the view expressed in A Smart, Successful Scotland – the Highlands and Islands dimension, that economic growth must be achieved in tandem with no less important aspects of Highlands and Islands life, such as social cohesion, vibrant cultures and natural environment, and that development activity must remain aware of the legacy it leaves for the future."

I will begin with a quotation from the outgoing chairman of Highlands and Islands Enterprise, Jim Hunter. I know that many members in the chamber were at the reception at the beginning of last month at which he said:

"in Scotland, we just don't do optimism – especially in an economic context."

That was perfectly true a month ago and it is equally applicable this morning, given some of the speeches that we have heard. Thankfully, the morning began with another Jim—Jim Wallace, who has responsibility for the Highlands and Islands—detailing encouraging statistics on the region.

Dr Hunter, in his speech, listed a great number of successes in the Highlands and Islands. His speech was excellent and wide ranging; it covered the Gaelic language, land reform, the need for more affordable housing, transport links and other important matters. I know that Jim Hunter is giving up his post shortly, but he has ably led the main economic driver in the Highlands for the past six years. He is also without question one of the best historians that the region has produced and his analysis of our economic and social well-being is always competently set in its proper historical context.

Although Jim Hunter and Jim Wallace have a positive overview, they do not avoid focusing on the challenges that exist in the Highlands and Islands. One area that faces many challenges is my constituency, although much of what I will say about the Western Isles is relevant to other parts of the Highlands and Islands. During the past financial year, more than 20 per cent of HIE's budget was spent in the Western Isles—a constituency that contains less than 8 per cent of the population of the Highlands and Islands. HIE and the Executive were absolutely right to have the courage to channel resource of that magnitude to places such as the Western Isles. I know that some people will scoff and try to dismiss that level of commitment, but I believe that, in being so committed, the Executive and HIE remain true to the values of two men who championed the Highlands and Islands in years gone by—the late Tom Johnston and Willie Ross, who were leaders of vision and courage.

I am sure that many members know that the Western Isles is a great place to live and bring up a family. Increasingly, it is also well suited to doing business in the 21st century. For there to be an expansion in the businesses that choose to set up or locate there, we need further investment. This week's announcement on investment in broadband technology was significant and encouraging, because that is exactly the type of investment that will help us to attract inward investors.

We have already seen the public sector leading by example. HIE located 25 jobs on Benbecula, so that work that was done previously in its head office in Inverness is now being done in the Western Isles. Although I cannot be sure, I would guess that the First Minister's enthusiasm for job dispersal was galvanised when he visited those offices on Benbecula. Jack McConnell heard first hand from those who had moved back to the island of their birth and from those who had sought employment in a part of the world in which they had previously holidayed. Irrespective of their background or country of origin, those people are making a positive contribution to life and work on Benbecula and North and South Uist.

Further north, in Stornoway, the UK Government has located Whitehall jobs from the Department for Work and Pensions. Recently, we secured 30 more good UK Government jobs, with Consumer Direct locating in the village of Shawbost on Lewis, which is another fine example of how we can attract island graduates back to the Hebrides.

I certainly do not endorse the new policy that Jim Mather of the SNP has outlined, as he said that there would be an element of compulsion in getting the brightest people to return to Scotland and the Highlands in particular. It would be a sort of "Haste ye back or we'll jail ye" approach to attracting people back.

I advise the member to read the Official Report of the debate afterwards. What steps does he intend to take to encourage the Scottish Executive to have a proper, understandable strategy for the relocation of not just civil service jobs but private sector jobs to balance the economy of the Western Isles?

Jim Mather should also check the Official Report. If he had been listening in the past minute and a half, he would have heard me outline exactly what the Scottish Executive and its agencies and the UK Government have been doing. If we continue to invest in broadband technology, transport links and links to our airports in the Highlands and Islands, private businesses will locate there. I am sure that Jim Mather will pore over my speech when the Official Report is published tomorrow morning.

As well as encouraging the type of investment that I have outlined, we must protect our indigenous industries, such as through the reform of the common agricultural policy. Fisheries reform is currently under active consideration and some reforms have already been implemented, without the support of the SNP and, bizarrely, without the support of the Scottish Green Party. If we protect the stocks, we protect the communities that have depended on the seas for many generations. It is sad that fish farming continues to be attacked by shadowy forces that are determined to ruin what is not only a great success story for the Highlands but something of which all Scotland can rightly be proud.

There have been major achievements in the Highlands and Islands over the years, but a great deal still needs to be done. I turn lastly to renewables. I mentioned Tom Johnston, who built ambitious hydro schemes. If he had pursued that agenda today, rather than in the middle of the previous century, I wonder how far advanced his plans would be. I am sure that the same coalition that opposes wind farms would have scoffed and dismissed his plans as fanciful at best and nonsensical at worst. We have to ensure that we remain focused on that agenda.

In the Highlands and Islands, we have wind, wave and tidal regimes, which, from an energy-generation point of view, have the potential to be among the most productive in the world. We have a desperate need to tap into that resource if we are to counter global warming and related climate change, from which Scotland could suffer more than most.

I will finish on a point that relates to my constituency. Many of my constituents are amazed by those who oppose wind farms. Senior representatives of RSPB Scotland and Scottish Natural Heritage fly into the islands and then fly out again, having told us that our peat-lands are precious and that they must never be compromised in any way. However, when ministers asked some of those SNH people to move closer to the peat-lands, they went into open revolt. Of course, they were not actually being asked to go to the peat-lands; they were being asked to go to the wilderness that is the city of Inverness. I hope that the Executive remains focused on its renewables targets and on the policy of dispersal.

We move to the open part of the debate. I intend to allow six-minute speeches, but I might have to reduce that time as we draw nearer the end. It would be helpful to other back benchers if members could keep within their allotted time.

In 1965, I welcomed the debate about the Highlands and Islands Development Board, unlike James Hunter, who has said that, when he was at school, it was the last thing on his mind. All these years later, it is obvious that he has changed his mind, as he is now in charge of it. In 1965, it was widely agreed that the best measure of success for the development board—which became Highlands and Islands Enterprise—would be the health of the remote mainland and island groups. While no one would compare the transformation of their economies and their state of mind with today—they are much better now—those groups remain the measure of the success or failure of the Government's policies, as set out in the motion. There is an endemic problem that is yet to be solved if 21st century ambitions are to be satisfied.

The big question is about commitment by Government to take the principled steps that are needed and to admit that an enterprise agency is only as successful as the political will behind it. The policies in "A Smart, Successful Scotland" must embrace every community or the Executive will confirm the suspicion that, under this Administration, policies stop at Stirling, far short of Stromness and Stornoway, not to mention Wick, Golspie and Invergordon—the very areas on the mainland that suffer from poor economies and are not addressed by the motion.

The Government claims success in the development of telecommunications infrastructure, research and development and renewables, but success in comparison with where? The umpteenth assurance that broadband will be rolled out was repeated two days ago. Jim Wallace hailed broadband's arrival in Kirkwall, but what about Stromness, where the cluster of learning and research businesses is deeply disappointed by the news that they must wait until next year to be globally competitive? When will they get broadband?

In the same part of Orkney, the research and development that is achieved at the European Marine Energy Centre is most welcome. There is potential to build a centre of excellence there, but one of the key players, Heriot Watt University, which was part of the international centre for island technology, is ceasing to send its MSc degree students there. Further, Heriot Watt is withdrawing from its Borders campus to retrench in Edinburgh. Is that a message about spreading jobs in academia into the areas that need them? Will the Deputy First Minister and Minister for Enterprise and Lifelong Learning do anything about that?

How is the Scottish Executive lobbying to keep a flow of European research projects coming to the nascent UHI and the existing faculty in Stromness? Will the European Commission's plans to favour a sort of ivy league of leading European institutions mean that small institutions in the Highlands and Islands will have difficulty in getting a flow of cash with which to build on the research and development that is vital if we are to use our wonderful natural and human resources properly?

The lack of strategic direction by the Scottish Executive with regard to renewables is a result of the fact that the Scottish Executive has control over only part of the issue. It must look to London for the rest, which means that it does not have its hands on all the levers of power. Interconnectors from the northern isles to the mainland or a ringmain in the north of Scotland are urgently needed. The ministers need to talk about when those facilities will be delivered and not just tell us that it will happen some time in the future. If wave and tidal power were in local hands, they would provide a steady income stream that would support new, sustainable jobs.

If our Highlands and Islands economy is "good and getting better", as James Hunter stated in his recent lecture, comprehensive policy development is essential. However, the real tests for such sustainable solutions are the issues of population growth and housing. In his chairman's report for 1999-2000, James Hunter stated:

"We need the people of this area to have confidence in cultures that were long disparaged and neglected. We need our communities to be empowered to take on the management of land and marine resources that were too long in the hands of outside interests. Most of all and fundamentally we need our folk to have the confidence to go into business on their own account."

How do we create that confidence? Low pay is endemic and disparities between men's pay and women's pay are marked. Moray is the worst area, followed by the remoter mainland and island areas where, as I was told this week, key administration staff in successful businesses would earn more as cleaners elsewhere.

Land reform is only beginning. In the crofting areas, one third of the Highlands and Islands, community buyouts are painfully slow. The vast majority of us have yet to hear how land can be acquired cheaply for affordable housing in villages where planners will approve ecology-friendly designs and where young families do not get pushed out to the big centres as depopulation goes on by stealth, demoralising many people. Will the minister tell us how a comprehensive approach to affordable housing takes on all the things that Highlands and Islands Enterprise cannot do?

The Government must say how it will build community confidence based on a rich cultural inheritance and a vibrant, self-generated traditional arts scene and how it will put in place the means for families to flourish where they wish, especially in their home areas. We cannot build community support merely by bringing people into the Highlands. There is no social stability in that. The roots of our argument are that a vibrant economy in the Highlands must be built on the base of the communities that deserve this Government's support. As Willie Ross said, the Highlands are on the conscience of every Scot and the Scottish Parliament has yet to realise the area's potential as a mainspring of the Scottish economy.

As a resident of the capital city of the Highlands, I am delighted that we are having this debate. I agree with the point that most ministers tend to raise, which is that we need to build confidence and self-esteem. I am pleased that that idea cuts across the Executive's departments.

It is my belief that it is wrong to bar MSPs from the Highlands and Islands convention. I say that with due respect to all my colleagues from the Highlands and Islands who are in the chamber today. All of us—Liberal Democrat, Labour, SNP and Conservative—have proved that we often put the interests of the Highlands and Islands ahead of our party politics. We are all mature and professional in our approach. I hope that that decision will be reconsidered.

Does the member agree that the Scottish Parliament provides a forum for MSPs to debate issues of relevance to the Highlands and Islands, as we are doing this morning?

It provides a forum for debate, but it does not allow us to meet all the Highland organisations in one room. That has been acknowledged by Mr Morrison's party and others.

There is good news for the Highlands. The reverse of its population decline and the investment in its communication and transport infrastructure started in the 1990s under the Tory Government. We are now reaping the benefits of economic investment and the opportunities that were set in place by that Government. As our Invernessian enterprise spokesman, Murdo Fraser, said, it was Michael Forsyth who gave the green light to the UHI's foundation. I am pleased to commend the Scottish Executive when it acts in the best interests of the economy of the Highlands and Islands, but I ask that the Executive acknowledge the excellent economic management of the previous Government. We should remember that the crofters' buyout in Assynt and the partnership working at Strathmashie forest in Laggan were both Michael Forsyth's initiatives. We should remember that Michael Forsyth started the crofting buyouts in the Highlands.

We must be careful when we say to people in towns and villages throughout the Highlands and Islands that unemployment is low. They are quite likely to respond that many of the working members of the population are working away from home.

That was evident when the Barmac yard—

Jimmy Gray.

I acknowledge Jimmy Gray's contribution to the Barmac yard's search for contracts that would require up to 4,000 people. However, there were not 4,000 suitable unemployed men locally because most were working abroad on short-term contracts. We recognise the figures, but we should do as Jim Mather said and look behind the figures as well.

Does Mary Scanlon agree that, during the Tory years, Highlands and Islands Enterprise was extremely reluctant to give money to the Assynt crofters? Will she join me in welcoming the existence of the land unit? Does she agree that its activities should be rolled out in the central belt?

HIE was certainly not reluctant in doing what Michael Forsyth told it to do, and I commend Michael Forsyth, who was Secretary of State for Scotland at the time, for taking no nonsense and moving that initiative forward.

The Executive should not be coy about declaring the social and economic criteria for job dispersal. If the Executive is to be a good economic manager, it is fair for us all to know what the social and economic criteria for dispersal are. It took two ministerial directives for the SNH plan to happen, and the trade unions talk of seriously distressed staff. Of the 200 jobs to be dispersed—

Will Mary Scanlon give way on that point?

May I finish, please? Of the 200 jobs that are to be dispersed to the Highlands, I understand that less than 30 per cent of the staff are likely to move. Of 270 jobs, fewer than 70 staff are coming to Inverness.

Will Mary Scanlon give way on that point?

May I please finish my point? I will call George Lyon when it is his time, and I ask him to be patient. He should not meddle with a woman when she is in the middle of a rant.

Especially not Mary.

Yes, especially not me.

As I said, fewer than 70 staff are coming to the Highlands. I welcome that, because it means 200 extra jobs in Inverness. If the negotiations had been conducted professionally and amicably, however, and had some sensitivity been shown to the staff and their families, I do not think that we would be facing much of the current bad publicity around the jobs dispersal.

You have one minute left.

If we knew the social and economic criteria that made Inverness the top priority for SNH, we would understand why Wick, Elgin, Fort William, Stornoway or Kirkwall were not made the top priority instead. All that I ask is for the founding principles of the Parliament—openness, transparency and honesty—to be followed.

May I take George Lyon's intervention now, Presiding Officer?

No—you are in your last minute.

I will make a couple more points to finish off. House prices in the Highlands are extortionate. Much of the reason for that is not the booming economy; rather, it is to do with people buying houses to let. There is not an incentive to save or to invest in the stock market; there is hardly an incentive for people to put their money into pension funds, given the way in which the Chancellor of the Exchequer has managed them. The best advice that people are being given is to buy to let. In the street where I live in Inverness, there are four houses up for rent.

I commend the UHI for its latest degree—a BA in health studies—which people can access by e-learning and distance learning, wherever they are in the Highlands or the rest of Scotland. That is innovation at its best. I commend the UHI for leading in the provision of training and education opportunities.

I will talk about what I believe to be some very real success stories in the Highlands, particularly in my constituency. I will also highlight some of the obstacles that I think still need to be tackled, particularly in the most remote and economically fragile parts of the Highlands.

During my working life—since the late 1970s—the economy of the north has undergone massive change, the vast majority of which, in terms of sustainability and diversification, has been very much for the better. However—this is close to my heart, as ministers know—we must all continue to strive to secure work for Barmac at the Nigg yard. The nature of the oil sector has changed, probably forever. Alas, it is possible that the days of the construction of vast production platforms, like those that were built at Nigg, are behind us. Nevertheless, we must continue to strive to secure conventional shipbuilding contracts for the yard. When it came to the bidding to build the Royal Navy's new aircraft carriers, one of the bidders—the international company, Thales Naval—was actively considering making use of the Nigg yard.

Building on Mary Scanlon's point, we have the skills pool in the area. We have one of the finest graving docks in Europe. The skills originally came from the Clyde to Nigg in the 1970s, and they are still there. I believe that all of us in the Parliament, with a leap of imagination—I apologise for reiterating this point, which I have made in the chamber many times before—might yet hear the crash of steel and see the sparks of the welding torches in that yard.

Does Jamie Stone agree that the potential for the construction of wind, wave and tidal power machines at Nigg offers the way forward? There are many areas of the Highlands and Islands for which Nigg would be the nearest large facility.

I do not think that that is the only way forward, but it would be complementary. I do not see why both types of development could not take place. As Mr Gibson knows, the construction of parts for wind turbines has been carried out in the big sheds at Nigg, but that still leaves the graving dock. The modular approach to the building of both civil vessels and warships could be the way forward; that is where work at the yard could kick in.

I cannot but compliment the enterprise network's energetic activities in reacting to the downturn in oil work. Highlands and Islands Enterprise, Caithness and Sutherland Enterprise—CASE—and Ross and Cromarty Enterprise, in conjunction with the Scottish Executive, have all pulled their weight, and the results are there to be seen.

Jim Wallace mentioned AGM Batteries in Thurso. Mr Wallace and I visited that company, which is an example of inward investment with the backing of Highlands and Islands Enterprise, only a few weeks ago. The company now has a 190-strong work force and is soon to open a battery recycling facility in Golspie. Those are welcome jobs, not least in east Sutherland. The Scottish Executive, Highlands and Islands Enterprise and CASE have rolled up their sleeves and gone about tackling unemployment black spots. I cannot say how strongly that development is welcomed. I highlight that example from my constituency to Jim Mather, as evidence of how the challenges that face the Highlands and Islands are being met. Unless I am mistaken—and I do not think that I am—AGM Batteries is involved at the cutting edge of technology that gives me and many others confidence in the company's long-term future.

Having used the expression "cutting edge", I must touch on issues around Dounreay. From figures that I got this morning, I can say that decommissioning at Dounreay pumps no less than £95 million per annum into the Caithness and Sutherland economy. Around 3,000 people are employed at Dounreay, and many other jobs are underpinned by the decommissioning activity. As Jim Wallace said, there is a real opportunity there, and we must build on what is happening. AGM Batteries was, in part, a spin-off from the nuclear industry. In the future, Dounreay, in conjunction with the enterprise network, can help to create new, innovative forms of business. I believe that those businesses will, in turn, be the signposts to sustainable, broad-based employment in the future, as the process of decommissioning proceeds and changes.

Dounreay is a world-class centre of excellence for nuclear decommissioning, so let us give it the title that it deserves: skills for the future. It is about training people up and stealing a march on the world. Why should not Dounreay, in conjunction with the UHI, become the university of decommissioning? There is no reason at all why not. The minister and I saw the potential in that. Why do we not have a department of robotics or a department of environmental studies in the UHI? That can all be done, and it could bring about long-term benefits for the future.

I will finish by highlighting one or two problem areas. In all that we are trying to do to regenerate the economy of the far north—getting young people to come in and take jobs at AGM Batteries and the like—the continuing uncertainty over health services in the area, including the availability of general practitioners and consultants, is, as the minister has heard me say many times, a detractor, which stands in our way somewhat. As far as transport is concerned, the reason why I do not fly from Edinburgh to Wick is that the service gets into Wick just before lunch and flies out again just after lunch. There is work to be done on the scheduling and costing of those flights.

Unlike Jim Mather, I do not believe anything that I read in The Scotsman. However, I believe quite a bit of what I read in The Press and Journal, which has a far bigger circulation. Although Mr Michael Howard is being completely irresponsible by advocating protests and so on in today's P and J, the fact remains that the fuel price issue—which is a matter of the international price of oil, rather than of taxation—is creeping up on us again. Fuel prices hit places such as Benbecula, Wick, Thurso and Stromness, in the minister's constituency, particularly hard. Responsibility for taxation does not lie in our hands—although my colleague at Westminster, John Thurso, has long advocated a derogation in VAT, as happens in parts of Greece and Sardinia—but I ask ministers to keep an eye on the issue, because it affects everything from the cost of oil for houses to the price of a tube of toothpaste.

I suppose that I should make a declaration of interests. I was born and brought up in Argyll and went to school there. I lived for a while in Lochaber and I have lived in Easter Ross for the past 35 years. Because of my age, I have lived through many of the Highland economy's highs and lows. I do not say that to belittle what has been said in the debate by other members who do not have the same experience as I have, and I do not doubt their commitment to the Highlands, but perhaps I have a perspective that some members do not have.

I remember the hydro schemes being built, particularly at Cruachan, forests being planted and Willie Ross setting up the Highlands and Islands Development Board, and I saw the start of the tourism boom in the Highlands in the 1950s. My folks did bed and breakfast. We saw the industry collapse when everybody went off to Spain for their holidays, and saw it being built up again, only to be almost destroyed by the foot-and-mouth epidemic. The industry, particularly environmental tourism, has grown again.

I lived in Fort William when the pulp mill was built and I was in Easter Ross when British Aluminium came to Invergordon and when the Moray firth was awash with oil money and the fabrication yards were set up.

Does Maureen Macmillan agree that last year was a very good year for tourism in the Highlands and that the indicators so far are that this year could be similar or even better?

I absolutely agree and am delighted about that.

I was there when the pulp mill closed, British Aluminium shut and Nigg and Ardersier were mothballed, and I have direct experience of the rollercoaster that has been the Highland economy.

I have great empathy with what Jim Hunter said in his speech to MSPs the other week. That speech was much criticised by the Opposition for its upbeat message, but Jim Hunter and I come from the same corner of Argyll and we have seen the same Highland story unfold over the past 50 years. There is steady economic growth in the Highlands, which must be seen in the context of what happened previously—the highs and lows, the inappropriate developments and the fact that sometimes we could do nothing but reel from blows. We now have sustainable development and opportunities for the taking. We are facing up to problems, dealing with them and building on our assets—our skills and our environment—in the Highlands.

There have been spectacular success stories. I am sure that George Lyon will talk about the turnaround in Campbeltown, with the advent of Vestas, although there are obviously still problems, particularly with some dairy farmers in Kintyre, who have been in contact with me.

The employment statistics in Lochaber should be considered. Who would have believed such unemployment figures five years ago? That is not to ignore the problems that hinder expansion, such as the lack of affordable housing—my colleague Sylvia Jackson will expand on that later—or the need to find solutions to the west Highland hospitals question, which will have an impact on the economy of Lochaber and Lorn. However, those problems can be addressed and we are addressing them.

As Jamie Stone said, there is a success story in Caithness with Dounreay and the battery factory, which provide high-quality jobs and apprenticeships. High-quality jobs are needed. Many members have mentioned the low-wage economy in the Highlands and that issue must be addressed.

I want to tell members about a question that I had answered today that involves high-quality jobs being brought to Wick. Some £340,000 is to be invested in an NHS dental unit in Wick, which will employ 12 people—three full-time dentists in the NHS, a trainee and others in supporting roles. That investment is very welcome and I am sure that it will be welcomed in Wick, which has had a problem with NHS dentistry.

In the west, the aquaculture industry is reviving. Recently, I was at the opening of Marine Harvest's new salmon station at Mallaig and saw over its new state-of-the-art well boat. That is a signal for the healthy, sustainable future of the industry, which plays a crucial part in the economies of remote and rural communities.

In the Moray firth, Inverness is expanding. The airport is developing its international links and plans are well under way for improving air links within the Highlands for the benefit of business and tourism and for the future benefit of the island communities in Argyll and elsewhere, which are some of our most fragile areas.

The development of renewables gives tremendous opportunities to use the engineering skills that were put into cold storage when Nigg and Ardersier closed. We must use those skills—it is an absolute disgrace and a waste of talent that skilled engineering workers are stacking shelves in Tesco's. I urge the Executive to work with the DTI to provide a level playing field for Highland engineering businesses to compete for work in the manufacturing of wind, wave and tide turbines.

I welcome the setting up of the Highland Renewable Energy Group, which is an association of engineering businesses in the Highlands that will work together to secure orders. I welcome, too, the input of Amicus, which has lobbied us and the First Minister, to promote the facilities in the former fabrication yards for the manufacture of turbines for the renewable energy industry.

I have no patience with those who wish to halt the development of renewables. I understand their concerns about the visual impact of wind turbines on the landscape, but I have confidence that local authorities and the Executive will not allow inappropriate developments to go ahead. I understand the nervousness of local authorities and I ask the Executive to work more closely with them to reassure them about what is and is not appropriate in terms of wind farm development. There seems to be something of a stand-off between local authorities and the Executive on the issue.

We cannot hold up the development of renewables, but we must quickly put in place strategies for community benefit. We should be mindful of the development of the hydro schemes that were built in the teeth of opposition from landowners and the House of Lords. Their heirs are alive and well and living in the Highlands.

Broadband is being rolled out to Highland communities. I expect that we will see it throughout the Highlands before it is seen in Nepal. Perhaps Rob Gibson will confirm that, or perhaps we should ask Kenny MacAskill.

I call Margaret Ewing, who has six minutes. After that, I shall reduce members' times to five minutes; I may then have to reduce their times to four minutes.

I will start on a positive note. Earlier today, I walked up the Royal Mile with the Deputy First Minister and Minister for Enterprise and Lifelong Learning, who opened the debate. In passing, we discussed the fact that we have not really had a specific debate on the Highlands and Islands economy since the Parliament began. There have been several debates on the rural economy, but the rural economy impacts elsewhere in Scotland. I am therefore pleased that we are having this debate.

I remember our regular discussions in the Scottish Grand Committee. Of course, we were peripatetic at one time and we often met in the Highland Council offices in Inverness. At that time, we eventually extracted from Michael Forsyth an announcement that the UHI would go ahead—I think that he made the announcement after an intervention from me. It was going to be his big announcement of the day, but I managed to anticipate it and the commitment was made. I, and people in all parties, welcomed the announcement.

I endorse what Mary Scanlon said about the Highlands and Islands convention. That MSPs and MPs from the Highlands and Islands are excluded from the convention is appalling—it is important for us to be there. When the Highlands and Islands convention met in Elgin, I went along as a spectator, which was all that I could be. I had no speaking rights, although I have represented the constituency since 1987 and know its problems inside out. I have won the seat five times in a row, as some Government ministers know to their cost. Being in such a situation seemed ridiculous. Staff at the town hall asked me what I was going to talk about, but I had to say that I did not have any speaking rights. Is that the accountability and transparency that we want in the new Scotland?

I say to the minister who will reply to the debate that there is an organisation that deals with islands, mountainous regions and sparsely populated areas that comes under the umbrella of the European Union. At our own expense, Fergus and I attended a conference on that subject in Brussels some 18 months ago. Representatives were there from throughout Scotland's Highlands and Islands. We heard about all the ventures that had been undertaken in places such as the northerly regions of the nordic countries, but nobody was there from the Scottish Executive. If there is a commitment to the Highlands and Islands, surely the Parliament should send someone from the Executive to such conferences.

Much has been said about transport and I will not repeat some of the arguments, but transport is one of the major issues that I face in my constituency. All sorts of planning applications have been submitted to the Executive. One of the current problems with Dalcross airport, which many of us use regularly, is the planning issue relating to the installation of the new radar system. There is one outstanding objection. Many times, I have been diverted to Kinloss airport—from where I could have got home in 10 minutes—but have had to go back to Inverness to collect the car or my luggage. Can the Executive give us any indication of when it might make a decision on that?

I turn to roads in general. Clearly, I have a vested interest in the A96, and I have argued its case for a long time. However, I do not argue that case in isolation from the overall strategy. The A82 needs attention, and the A9 does not stop at Inverness but goes further into the Highlands and Islands. We must build around all the roads a mechanism whereby we can link up good developments. That is a major priority. We must ensure that we have not piecemeal road improvements but development that is integrated—a word that is sometimes overused when we talk about transport.

Businesses in the Highlands and Islands depend heavily on road transport. A number of products come out of the Moray constituency and we put a large amount of money into the economy, yet our drivers and transport industries face difficulties, not the least of which is the rising price of fuel. Jamie Stone will be pleased to hear that I will quote from The Press and Journal, which states that the cost of diesel puts the north behind its EU rivals. We are told:

"A Moray haulier, who did not wish to be named, said he was at the mercy of UK fuel prices as his firm only worked in Britain. He added: ‘North-east communities already pay the highest fuel prices in Europe and purely using price mechanisms in order to cut demand will surely hit those least able to afford it the most.'"

The Executive should make representations that at least Gordon Brown's tax hike, which is expected later in the year, should not be implemented.

A great deal of work needs to be done on our railways. I like travelling by rail, as I can do quite a lot of work at the same time. I would like to know what the Executive is doing about the structural funding issue, as it will change radically post-2006. The Highlands and Islands have benefited from structural funds in the past.

Finally, business rates affect many of the small organisations that provide employment and attract tourists to our area. The Executive has sent out a document entitled "Small Business Rate Relief 2004-05", in which it sets out the amount of rate relief that could be given to small businesses. The rate assessment for this year for one small business in my constituency is £2,444.80, and despite the fact that it has only a small turnover, it will receive only 10 per cent rate relief. That is not acceptable. The Executive's policy should be reviewed.

Who could disagree with the Executive's ambition to create a diverse, dynamic and sustainable Highland economy? Nevertheless, I agree with Murdo Fraser and Jim Mather that the welcome success of the area has had little to do with the efforts of the Executive. Maureen Macmillan talks of perspective. I worked as a commentator and reporter on Highland affairs for more than a quarter of a century and nobody could be happier than I that the great land of mists and missed opportunities, as I once described it, is now on the threshold of economic success. Still, great challenges lie ahead.

Although I seek to take nothing away from the excellent efforts of HIE—and of its forerunner, the HIDB, and politicians of various hues—to kick-start the Highland economy, I suspect that its success has had more to do with the galvanising effect of the discovery of North sea oil. The old Brahan seer got it hopelessly wrong when he predicted that the tribulations of the Highlands would begin with the coming of the black water. The reverse has been true. The wise decision of the Almighty to site all the UK offshore oil fields in the waters north of Montrose, having previously ensured that there were plenty of deep-water firths in the Highlands in which to build production platforms, meant that the Highland economy got a huge injection of funds as well as people.

Yesterday, in his speech about affordable housing, Ted Brocklebank said that if people could not afford a house in St Andrews, they should simply move away. Does he apply that principle to the Highlands as well?

We will leave yesterday's speech to yesterday and talk about the Highlands today. We are talking about a different area.

Oil has had a major impact on what has happened in the Highlands over the past 30 years. Three key factors have helped to shape the success: North sea oil; the revitalisation of the area's language and culture; and the resurgence of confidence in the area and the reversal of population drift. Oil may have underpinned the economic revival, but without a simultaneous revival of the culture and language, the Gaidhealtachd could have ended up like the vast empty tracts of Colorado, with their ghost towns and abandoned silver mines. Oil was always going to be a finite resource.

I remember the night that I first saw John McGrath's play "The Cheviot, the Stag and the Black, Black Oil". That night, McGrath, an Oxford-educated Liverpudlian, turned us all into Highlanders. His seminal work was later screened nationwide on BBC to rave reviews. More important, the 7:84 Theatre Company toured the play around every village hall and community centre in the Highlands. The effect throughout the Gaidhealtachd was electrifying.

I am not saying that Jim Hunter's polemics on land reform in The Press and Journal would not have been as effective. I am not saying that Brian Wilson would not have made such a success of the West Highland Free Press. I am not saying that Iain Noble would not have founded the Gaelic college at Sabhal Mòr Ostaig or that Runrig and Capercaillie would not have emerged. Sorley MacLean would still have been Europe's greatest poet since the war and Norman Maclean its funniest comic. I am not saying that international sculptors such as Gerald Laing would not have decided to base themselves in Easter Ross or that Jethro Tull's Ian Anderson would not have set up his salmon farms on Skye. I am not saying that hundreds of businesses—many of them, these days, not oil related—would not have relocated to the Highlands. I am saying that, after "The Cheviot, the Stag and the Black, Black Oil", nothing was ever quite the same. Suddenly, it was cool to be Gael.

As Murdo Fraser has mentioned, Michael Forsyth and Malcolm Rifkind launched a Gaelic television fund to allow young Gaels to make programmes in their own language about their own culture. It was a brave decision by two Tory ministers who, at the time, knew that there was barely a vote for them in the Gaelic heartlands.

I welcome and share Ted Brocklebank's recognition of the seminal importance of "The Cheviot, the Stag and the Black, Black Oil". Does he recall that the central message of that play was the importance of land reform and community land ownership?

Yes. I am going to come to that later in my speech.

Primary schools throughout the Gaidhealtachd began to teach kids from all ethnic backgrounds in Gaelic and English, and Iain Noble's belief that only when the culture marched hand in hand with economic success would the future of the Highlands and Islands be secured began to make sense.

In his distinguished role as the chairman of HIE, Dr Hunter would argue that the key element that I have missed—to which Lewis Macdonald has just referred—is land reform. I believe that there may well be arguments for community buyouts at some level, especially if buyouts do not just translate into handouts. However, I have always been less interested than Jim Hunter in who owns the land. What most modern Highlanders are interested in is how well the land is managed for the benefit of all. No one can defend the Highland clearances, just as no one can defend the lowland clearances or the clearances from Ireland at the time of the potato famine. Nevertheless, current Highland land policy should not be based on any sense of guilt about either real or perceived injustices in the past. It should be based on what is best and most equitable for the people of the Highlands and Islands today.

The jury is still out on whether the £40,000 per person that is invested in places such as Gigha and Harris, and which is proposed for South Uist and Benbecula, will ever give value for money. I imagine that dispersed Gaels in places such as Castlemilk and Easterhouse, as well as in other parts of the Highlands, could also make excellent use of £40,000 a head.

I welcome the Scottish year of Highland culture in 2007. We have much to be happy about in the restoration of confidence to the Highlands and Islands. I am happy that Jim Wallace takes pride in the new-found success, but I am less convinced that the Executive has had much to do with it. If he can do one thing to make me change my mind, let us have Inverness Caledonian Thistle Football Club restored to the Scottish Premier League, as it fully deserves to be.

The debate has highlighted a number of issues relating to the Highlands and Islands economy. Maureen Macmillan has said a lot about the good news in the area, but there are also issues of concern. Members may wonder why the constituency MSP for Stirling is speaking in the debate. I want to highlight some of the issues that I have encountered with affordable housing in the rural communities in the Stirling constituency because, as Rob Gibson said, the common problems that exist across the Highlands and Islands also exist in rural areas throughout Scotland.

The lack of affordable housing affects those who have local connections. Often, the people who have the key jobs start to move away from the area. That prevents the development of the local economy and it leads to the very situation in my constituency that we are trying to reverse in the Highlands and Islands. The need for affordable housing is a common problem across Scotland.

I want to highlight the many barriers that rural housing associations face—infrastructure issues, such as water and sewerage; planning issues; the cost of development; the right-to-buy issue—but I will start by giving some statistics. At present, the Rural Stirling Housing Association has more than 700 people on its waiting list. The list is due for review, but it is undoubtedly true that the number who require housing in the rural Stirling area greatly exceeds the number who can be housed each year. Those statistics are borne out by the recently developed local housing strategy, which confirms that Stirling Council's central, south and west rural areas are pressured. In that, they are like other areas throughout Scotland, including the Highlands and Islands. Additional investment is needed.

Like elsewhere in Scotland, the people who seek rural housing in my constituency are often in relatively low-paid employment, such as traditional, local, land-based industries or the tourism trade. In common with other rural areas, there is a high incidence of people who live in tied accommodation, short-term private lets and caravans. Many live care of family and friends. Indeed, the person living in a caravan who was shown in the Scottish Federation of Housing Associations film—which the cross-party group on affordable housing viewed when we heard about the SFHA's "We need homes" campaign—was someone who lives in my constituency.

Last year, Rural Stirling Housing Association was able to house only about 60 people. Half of those were housed by reletting existing property and the other half were housed in the new-build scheme at Balfron. On current funding assumptions, the association is likely to be able to develop only a similar number of new properties each year. I welcome the recently announced rural housing initiative, which is a good start. Thanks to that, the association hopes to build six new homes on a site that is currently owned by the council.

Unfortunately, the existing supply of affordable rented housing is being progressively reduced by the right to buy. Over half Stirling Council's stock in most rural settlements has been lost in that way. When such properties re-emerge on the market, they are often priced well beyond the reach of local people who are in need. From now on, new schemes that the Rural Stirling Housing Association develops will also be subject to the right to buy. However, that will be the modernised version of the right to buy that was introduced by the Housing (Scotland) Act 2001, so the cost-floor requirements will at least act as a disincentive to purchase during the first five years. At the moment, all the association's stock is scheduled to be subject to the right to buy by 2012. That may seem a long way off, but it should be viewed in the context of a gestation period for new affordable housing that lasts often several years.

For example, sewerage capacity is a major issue. When the Rural Stirling Housing Association used Communities Scotland funding to purchase a key site in Buchlyvie on which it hoped to develop more than 20 houses—it was only one of several such new sites that have been designated outwith the bigger towns—Scottish Water indicated quite late on that there was insufficient sewerage capacity. That came as a surprise both to the council and to the association.

You have one minute.

In my final minute, let me home in on the fact that that is not a singular problem. A similar thing happened in Callander, where Scottish Water again indicated that there were problems with the infrastructure only some time after that larger scheme had started development.

Costs of development are a big problem, given the amount of grant that the housing association receives. For example, the association is about to develop a site of 33 houses in Oakwood, Kippen, but it has first had to carry out enabling work, including the installation of an access road and the replacement of an existing bridge. That has increased the work costs of an already expensive scheme by more than 5 per cent. Such costs are not covered by the money that the housing association receives.

Let me just summarise—

You must sum up rather than summarise.

To sum up, I am sure that similar problems are faced by housing associations in all rural areas, especially in the Highlands and Islands. I hope that ministers will take note of that.

I regret that we will need to move to speeches of four minutes if I am to get everyone in.

I support the SNP amendment, because I think that it is important that, in participating in the debate, members should make a realistic assessment of the outcome. We need to focus on strategies and solutions rather than on flattery and fawning. We must recognise the requirement to have a vision and the need for the structures and strategy that go with that. Fundamentally, such a strategy must be predicated on a realistic assessment of the situation.

We come back to Scotland's perennial debate on whether the glass is half full or half empty. It is perhaps important that we take the perspective that the glass is half full. After all, nobody else will stand up and speak for Scotland. If our country cannot rely upon its own parliamentarians, on whom can it rely? It is also important that any strategy is not based on a false perspective. If there are problems, it would be a mistake to deny them by trying to wash away or wish away the negatives.

Clearly, some areas of the Highlands and Islands are doing well. Inverness is doing exceedingly well. In many ways, it has been a victim of its own success. I refer not only to the promotion of its football team but to its traffic chaos and house prices. However, such success is not replicated throughout the Highlands and Islands. Some areas are facing significant problems, ranging from rural depopulation to low wages and other aspects. We need to address those.

We must also take cognisance of the need to look globally. With the expansion of the European Union eastwards, the Highlands and Islands finds itself on the EU's north-west periphery, facing competition from the many new lands therein. We need to recognise that Inverness needs to compete not simply with Inverbervie but with the likes of Galway in the west of Ireland and Oulu in Finland. Perhaps Maureen Macmillan could consider that in the context of what she said about broadband roll-out. I wish the minister well with where we are going, but we have a long way to go if we are to achieve Oulu's join-up rates.

Given the need for the Highlands and Islands to see itself competing on a global basis, we need to deal with two matters that affect competition. First, we cannot make matters worse. As Jamie Stone mentioned, if we continue to price ourselves out of the market through high fuel costs, we have 10 new accession states that will take our place. All the accession countries compete with the United Kingdom, and many of them compete with the Highlands and Islands in particular, yet currently our fuel costs are by far the highest of any of them. Fuel in Scotland is significantly more expensive than in other areas, and it is 50 per cent more expensive than in Latvia. We cannot allow that to continue without making it uncompetitive for firms to locate in and carry out their business in the Highlands and Islands.

Secondly, we need to take cognisance of global competition and other factors. As others have mentioned, that means that transport links are very important. One thing that must be re-examined is the private finance initiative scheme for the terminal in the Highlands and Islands. I recognise that the Executive has acknowledged that that is an issue, but we need to move towards a solution. We will not get anywhere by apportioning blame. Hindsight is a great thing, but the PFI scheme for the terminal was entered into before the take-off or lift-off of the low-cost carrier market. Apportioning blame will take us nowhere. Given the Civil Aviation Authority stats, which show that Inverness had a total of 54 scheduled international passengers in March 2004, we need to recognise that Inverness will not be able to compete globally with those numbers. We need a solution.

We also need to consider how we can maximise the advantages of the geography of the Highlands and Islands—the minister mentioned the Scapa Flow development—and minimise its disadvantages. We could minimise the disadvantages if we stopped continually upping the price of diesel, which is fundamental to the movement of goods. We should maximise the advantages by going hell for leather for the Scapa development and by improving transport links. As Mr Fraser correctly said, we need to dual the A9, which is the spine of Scotland. We must recognise that.

We need a joined-up vision that is shared by all members throughout the Parliament because the solution will not be delivered in one session by one Executive. Like the developments that were delivered by Tom Johnston and others, the solution will take many years and many Executives, but it can be done.

I apologise to Jim Wallace for being five minutes late for his opening speech. Unfortunately, I was stuck in a city traffic jam.

Members might wonder why I, who represent one of Scotland's southernmost constituencies, should speak in a debate on the economy of the Highlands and Islands. Indeed, although many of my forebears hailed from the Highlands and Islands, I have never lived there myself, so I was somewhat surprised to be asked to contribute. However, I may have an interesting perspective, because I think that we in the south of Scotland are quite envious of the success that has been enjoyed by the Highlands and Islands.

After all, the Highlands and Islands has a very strong brand image, which has been successful in attracting tourists both from the UK and from abroad. The area is strongly associated with wildlife tourism, walking and climbing and, indeed, heritage tourism. It also has a strong cultural image. That was enhanced by Inverness's bid to become European city of culture last year. I thought that it was an excellent bid and I was extremely sorry that the judges were not sufficiently attracted by it.

Does the member agree that the South of Scotland could also benefit from the Highland area's rejection of genetically modified crops to make itself a GM-free zone?

I do not want to get into that in my four minutes.

I am pleased that some of the ideas in the city of culture bid have been transferred to the proposals for the Highland year of culture in 2007, which I am sure will be a great success.

Inverness has become a city recently and it is a successful one. When I go to Inverness, I am struck by how similar it is to my home city of Dumfries. As we regenerate Dumfries, there is much that we can learn from the way in which culture has built Inverness's success.

Inverness has been successful in obtaining job relocations. I say that through gritted teeth as we have lost more United Kingdom and Scottish civil service jobs in certain parts of the South of Scotland than we have gained. We are envious of the degree of investment that there has been in UHI over the years compared with the investment in the Crichton university campus in Dumfries.

The Highlands also benefit from having an airport, which is something that we would like to see in the South of Scotland, because it would help to build our economy. The Highlands have been successful in using structural funds to support infrastructure development. Indeed, in the south, we sometimes fear that policy makers equate "rural" with the Highlands to the detriment of the South of Scotland. As I am sure Mr Purvis would agree, we want some of that action down in the south.

However, we cannot just be jealous; we must also look at the similarities between the two areas and look for common solutions. As has been mentioned, one of the problems is demographic change. According to the Scottish census for 2001, 18.6 per cent of the Scottish population was above pensionable age, whereas the figure was 22.4 per cent in Dumfries and Galloway, 22 per cent in the Borders and 19.4 per cent in the Highlands. As others have said, in those areas we have problems retaining and attracting young people, which has resulted in a shortage of skilled workers. The shortage of dentists is a common problem in many rural parts of Scotland, as is the shortage of occupational therapists, social workers, teachers, construction workers and plumbers.

As Rob Gibson and Sylvia Jackson said, there is a shortage of affordable housing in many rural areas. Although housing is traditionally cheaper in such areas, we also have problems with people who have been able to sell their houses in high-value areas and then outbid local people and first-time buyers. That contributes to the problems that we have in retaining young people and attracting skilled people to rural areas.

I do not want to overrun my time because I do not come from the Highlands, but I was pleased to hear this week's announcement about broadband. That will make a great deal of difference to rural areas up and down Scotland.

I have five minutes left. I intend to give John Farquhar Munro three minutes and John Swinburne two minutes.

I welcome the chance to participate in the debate. Over the past half century, the economy of the Highlands and Islands has waxed and waned under the influence of major industries that have flourished and then left. The most obvious example of that can be found in the oil industry. We had the yards at Nigg, Ardersier and Kishorn, the aluminium smelter at Invergordon and the pulp mill at Fort William. All those activities provided welcome employment, but they left in their wake mass unemployment and social problems.

We can learn from our mistakes. Although the old Highlands and Islands Development Board had some notable failures at the time, it had many successes in the end. The HIDB taught us that small is beautiful. Its success showed us that it is much better to encourage small, indigenous businesses than to import a few large ones. That is the future that I would like to encourage and support in the Highlands—helping new and young entrepreneurs to start up on their own.

Today, I am glad to say that the economy has picked up and that unemployment is lower than it has been for many years. In fact, 714 new enterprises were set up last year. That is a record number for the Highlands and Islands and is ahead of what is happening in the rest of the country. However, the economic revival has happened mainly in the Inverness area. Simply because of the better transport infrastructure, many businesses have based themselves where they have the potential for customers, goods and services. Although I welcome that, it is important that Highlands and Islands Enterprise continues to prioritise outlying areas to the west and north.

Therefore, I welcome the Scottish Executive's efforts to increase the availability of broadband throughout Scotland and I fully support the Enterprise and Culture Committee's report—endorsed by Jim Wallace this week—which demanded 100 per cent coverage in Scotland. Broadband is a tool that sets aside natural geographic disadvantage and which will put businesses anywhere in the world on an equal footing.

The Executive's smart, successful Scotland agenda is to be encouraged, especially in its commitment to broadband, which could help to reverse depopulation and thereby put the life back into many dwindling communities.

There is one issue to which I return in most debates that affect the Highlands and that is housing, which others have mentioned. The Highlands will never flourish unless there is enough affordable housing throughout the region. As members know, house prices have risen dramatically in the past few years although wages have remained almost static, thus putting houses beyond the reach of many young families. At the same time, social rented housing has dried up, which has left some people with no option but to leave to find alternative employment where it is available.

Time is short—

Time is not short; time is finished.

Okay, my dear.

I do not know about the "my dear". John Swinburne has two minutes.

It is with certain trepidation that I rise to speak in today's debate, as my background could not be further removed from the Highlands and Islands.

One of my regional constituents called me about the plight of her daughter, who is married to a dairy farmer in the Arran, Bute, Kintyre and Gigha area. It seems that bureaucracy is stacked against them to such an extent that their dairy farm will run at a loss of £40,000 for the second year in a row. Only Maureen Macmillan mentioned dairy farming in the debate this morning.

The problem is associated with the ring fencing of milk quotas, which severely disadvantages dairy farmers. A great deal is written, rightly, about the plight of Scotland's fishing communities. Sadly, few people seem to appreciate that many people are also involved in milk production in Scotland and contribute enormously to the prosperity and wealth of our nation.

In the good old days of the Scottish Milk Marketing Board, farmers received a fair price for the milk produced. Since its demise, the number of milk producers in Gigha and Kintyre has been reduced from 129 to a mere 40.

Quotas were introduced in 1984 and deregulation took place in 1994. We now have a major monopoly involving supermarkets and the milk processors, who between them have squeezed all the profit out of milk production and have left the dairy farmers with impossibly low margins on which to work. Ring fencing surplus quotas has been disastrous and, unless Ross Finnie gets his act together, more farmers will give up and walk away from that loss-making situation. He removed ring fencing from Islay. Argyll and Bute Council's consultation typically excluded individual farmers, but consulted 60 other sources. The National Farmers Union of Scotland seems to be disinterestedly ineffective in its approach to the problem.

What would be a sensible solution? A minimum price should be negotiated and set for milk production. Ring fencing of quotas should also be addressed urgently.

I support the SNP amendment.

We move to winding-up speeches. Mark Ruskell has six tight minutes.

We began this morning's debate by discussing how we can measure whether the Highlands and Islands are performing well as an economy and as a society. As Eleanor Scott has already said, GDP is a very crude measure of economic sustainability and growth. For example, it does not take into account quality of life indicators.

The Minister for Enterprise and Lifelong Learning, Jim Wallace, said earlier that the Highlands and Islands are repopulating. That is a good quality of life indicator, because it shows that people want to come to the Highlands and Islands. However, as Jim Mather pointed out, the problem is that the area also has an aging population with a short life expectancy. As a result, it is very difficult to find out from the measures before us whether the Highlands and Islands' economy is improving or worsening. Moreover, as Eleanor Scott mentioned, the situation is further complicated by the gravitational pull of Inverness and I wonder whether that is also distorting quality of life and economic improvement figures.

I welcome the Executive's announcement today that the Skye bridge tolls will be removed, not soon or in due course, but by the end of the year. I congratulate the Executive on actually setting a timescale. Surely the bridge represents one of the worst excesses of free market globalisation and I say to Murdo Fraser that I see no reason why we should build any more bridges in Scotland under similar arrangements.

As members have pointed out, there have been numerous calls to dual the A9. As far as that road is concerned we should focus on improving safety and reducing speed. We should also improve junctions, as has already happened at Ballinluig.

Does the member agree that we need to examine the fact that spending on railways has been slashed? Indeed, we really do need a bridge over the Dornoch firth if we are to make the railway competitive with the road in the far north.

Rob Gibson must be reading my mind. I was just about to say that we need to dual railways as well as roads.

I am surprised that the cost of fuel has not been mentioned more in this debate, although I am sure that Fergus Ewing will raise it in his closing speech. We need to consider the full cost of motoring, not just the cost of fuel. As a car owner, I believe that we should not tax car ownership; instead, we should remove vehicle excise duty.

Many members have highlighted renewable energy and energy policy in general. There is much good news to report in that respect. As Jamie Stone pointed out, we now have a world-class nuclear decommissioning industry at Dounreay. That is to be commended and I am delighted that it will also be involved in dismantling the nuclear industry in other countries.

Will the member give way?

I am sorry; I need to move on.

The ex-oil fabrication yard at Nigg has a potentially bright future as a manufacturer of offshore renewables technologies. As Maureen Macmillan and other members have said, in the past hydroelectricity generating schemes experienced difficulties and met with public opposition. Now there is opposition in some areas to wind farms. I think that we need to draw out some similarities between the two situations.

In response to Murdo Fraser, I believe that, although we should consider altering the payments that are available for different technologies through renewables obligation certificates, that step alone will not solve the question of where wind farms should be located and how many should be located in a particular landscape. That is an issue for the planning system, which we can begin to tweak to ensure that wind farms are established in the best possible location. In areas such as Highland and Perthshire, where there have been many applications for wind farms, we should think about batching them to allow planning authorities to consider them in the round. Moreover, we should not simply decide to locate wind farm and renewable energy technologies offshore but should ensure that proper marine spatial planning takes place to make such an option sustainable.

Will Mr Ruskell enlighten us as to where in Perth and Kinross he would be prepared to support wind farm development?

As the member very well knows, Perth and Kinross Council has issued excellent guidelines that strategically zone the locations where it thinks that wind farms should go. Those guidelines represent a very good first step. However, it is difficult to talk about all the applications in such a way, because we need to take individual applications into account.

We have had a somewhat limited debate on housing. As we saw in yesterday's members' business debate on housing in north-east Fife, affordability is a key issue. Indeed, in response to Jim Mather's question about how to keep people from leaving the Highlands and Islands, I would say that a good first step is to give people a roof over their heads. We must consider innovative models of developing housing sustainably in rural areas. In that respect, we might think about areas such as west Lothian, where the lowland crofting scheme provides a model that could be used in the Highlands and Islands. In fact, I know that Highland Council is interested in that model, which could enable low-cost and perhaps self-build housing to be constructed in the Highlands and Islands.

A key aspect of the debate has been community ownership and enterprise. As a member of the Green party, I believe—along with many other members in the chamber—that that will be a strong political and social force for change in this century. The Executive has already made some important moves in that direction, including the extension of the crofting counties and the introduction of the Scottish land fund. We must continue with that agenda.

As several members have already mentioned, Jim Hunter eloquently showed MSPs that the recent story of the Highlands and Islands is a good one. However, other members have pointed out that although some of the key indicators that Jim highlighted in his speech illustrate that the Highlands and Islands is making good progress, major on-going problems such as low wage levels have still to be overcome. Some of the islands and the western side of the Highlands are missing out on the prosperity. Ted Brocklebank made much of the premise that oil delivered for the Highlands; however, I should point out to him that although it delivered for the west Highlands for a very short time when one or two rigs were built, it did not deliver in the long term.

The Highlands also has major pockets of deprivation and poverty. As for the problem of depopulation, I believe that the aging population in the Highlands is an even greater worry. Many island communities in my constituency are afflicted by that problem, and people are concerned that in the long term areas will lose their active population and become glorified retirement homes. I do not think that any members have touched on that yet.

We need to tackle two major issues that have been mentioned in the debate. First, I am convinced that improved transport links for our remote and rural areas represent a key economic driver and liberator. In that respect, I am grateful that the minister mentioned the A82, because improvements must be made on that road. For example, even though it is dubbed a trunk road, a 10-mile section of the A82 north of Tarbet is no better than a single-track road. It is constraining the development of the west Highlands, and I am sure that all members will support the funding and implementing of that route action plan once it is drawn up. Such improvements are absolutely essential.

As far as the Highlands and Islands air service is concerned, it seems to me that in this day and age cheap air travel with a frequent service is fundamental if we are to liberate and develop the Highlands and Islands and bring the economic prosperity that Inverness and its surrounding areas have enjoyed to the wider Highlands. When he sums up, the minister must indicate when the Highlands and Islands air service, which the Executive is committed to, will be rolled out and what the first step towards that will be. An air link is vital to the west Highlands, Oban and north Argyll, not only for future economic prosperity but for the Executive's health agenda. One of the major complaints that I receive in my bit of the world is the journey that people have to make from Oban and north Argyll to the central belt if they need an operation. A good air service would be one way of shortening that.

Ferry services must also be improved. I acknowledge that substantial investment in new ferries has been made. For example, a new ferry has been introduced—albeit with one or two niggles—on the Mallaig to Armadale service; the small isles have a new ferry service; and new piers and linkspans have been installed. However, we need further investment. The Clyde needs new ferries and the service to Islay requires another ferry.

Will the member give way?

Yes, as long as the time is added on to my speech.

Does the member agree that although piers and harbours that are attached to ferry services receive support there is no budget to fund many other piers and harbours? Is he also demanding investment for them?

I should tell the member that that time will not be added on.

All I can say to Rob Gibson is that improving ferry services is key to improving prosperity in these areas.

As one or two others have mentioned, progress is required on upgrading the national grid. The Highlands, and especially the west Highlands, have some of the best wind, wave and tidal regimes of anywhere in the world. It is all very well to say that we want that to be harnessed, but we have to put the infrastructure in place. That is where the public sector has a role. I disagree with Murdo Fraser: the public sector has a key role in putting infrastructure in place to allow businesses to flourish and economies to prosper. It is crucial that the national grid be improved in the west and north Highlands. Substantial investment is needed to ensure that the benefits of renewables are brought to all our communities.

The key to upping the pace of progress in the development of renewables is to ensure that communities benefit from the projects. That could mean community ownership of the land, of some of the towers, or preferably of the whole renewables project. We do not want a rerun of what happened with hydro, when Powergen and Scottish Power came in, built the dams and brought a short burst of activity that benefited the local area, but then all the financial benefits were stripped out of the Highlands to the benefit of shareholders south of the border. We must ensure that some of the financial benefits from renewables remain in the communities.

I will touch finally on the cost of fuel. That is a growing concern, but the last thing that we need is an attempt to bring the country to a standstill. The last time that that was attempted, shortages arose in key provisions such as foodstuffs and huge economic damage was done to businesses. The chancellor must respond to the hike in oil prices, which has been caused in large part by the instability in the middle east because of the Iraq war. The chancellor must forgo the 2p increase in the budget. That is important for the future of the Highlands and Islands.

I do not think it fair that this Executive should congratulate itself on progress in the past seven years, despite Dr Hunter's interesting videos. Perhaps the Executive has not been in touch with areas north of Balloch. It cannot have been reading the local newspapers, which have focused on health care—or rather, the lack of it. Malcolm Chisholm, the Minister for Health and Community Care, must know what I am talking about. He will have received many letters complaining about the downgrading of maternity services from Wick in Caithness, to Dunoon and Helensburgh. The threat to downgrade from acute status the Belford hospital in Fort William and the Lorn and Islands district general hospital in Oban has been a huge blow to local confidence.

Quite apart from the situation with hospitals, why are so many rural communities such as Helmsdale, Applecross, Dalmally and Lochgoilhead worried about not having a resident general practitioner, and also worried about whether out-of-hours health cover and adequate ambulance services will be provided in future? People will not relocate to areas that do not have adequate health services and they will not relocate to places such as Campbeltown and Inveraray, where the smell of sewage is the only tangible result of the Executive's so-called progress.

Will the member take an intervention on that point?

No.

How can this Executive seriously think that it will encourage people to live and work in the Highlands and Islands when it is in the process of downgrading health and public services? Why have we heard this morning, through the medium of The Scotsman, an excellent newspaper, that this Executive is now allowing Scotland the Brand to die? That body was set up in 1994, with £300,000 from Scottish Enterprise, to manage the "Made in Scotland" brand. It was successful. Recently, the high-quality board of directors were all giving their time free of charge. Nick Kuenssberg, the chairman, said yesterday,

"I believe the Executive will come to regret this. The whole idea of a national brand will be undermined. Most companies I've spoken to are saying ‘why should we spend our money on another branding company when the last one was doing OK … ?'."

But let us not worry about that, because the Executive is undertaking a review and will be reporting in a few months.

Nick Kuenssberg also said:

"I have talked to Jack McConnell and left convinced that we were part of his ‘big vision' for Scotland—yet just weeks after we went private it was made abundantly clear that we were surplus to requirements".

I wonder who else has heard that. Scottish Opera perhaps.

My friend Murdo Fraser has talked about the onus of tax burdens on Highlands and Islands businesses. I endorse what he said. Those burdens are holding back the economy. Why are Scottish businesses paying extra rates? Why do excellent small high-tech businesses, such as Dunbeath Engineering Ltd in Caithness, still not have broadband? Such things make companies uncompetitive.

The Highlands and Islands depend to a far greater extent on primary industries such as agriculture, fishing, fish farming and forestry than do other areas in Scotland. So, why is the Executive removing the livestock improvement scheme? Why do we have a national modulation tax? We are the only country in Europe that does. Why are our white-fish fishermen so restricted in what they are allowed to catch? Why are our prawn fishermen refused their deserved increase in prawn quotas? Why are our fish farmers still struggling with excessive red tape and threats from the Norwegian-owned sector of the industry that it may pull out altogether? That would be disastrous for jobs. When will we see more help for Scottish fish farmers—for example, with the provision of a one-stop shop, such as the Norwegians have, for applications for the use of medicines?

We have to make our businesses competitive, which means having the minimum of red tape and the minimum of Government interference so that businesses in the Highlands and Islands can get on with creating and selling their products. That must be underpinned by good transport infrastructure and an integrated transport policy. The Conservatives have been responsible for practically every major infrastructure improvement in the Highlands—from the Scalpay bridge to the Skye bridge to the Berneray causeway. Such projects link communities and make things easier for businesses. The Eriskay causeway, which the minister mentioned, was of course planned by the Conservatives and funded by objective 1 European Union money. Objective 1 status has been lost by the Government and I hardly call that progress.

The recent oil price hikes have put rural fuel prices through the roof once again. The Conservatives are asking Gordon Brown to forgo his intended hike in fuel duty because of the rises in oil prices.

Further dualling of the A9 can only save lives, as well as giving the Highlands a transport backbone that it sorely needs.

Will the member take an intervention on that point?

No.

The A82 is also a huge priority.

Tourism will always benefit from improved infrastructure. I have said before that it is VisitScotland's job to advertise Scotland as a destination for people in the rest of the United Kingdom and abroad. It is not up to VisitScotland to tell tourism operators what to do. The operators know the local attractions and the pride and passion of the tourism industry should be left in their capable hands. Unfortunately, tourism businesses find it increasingly difficult to carry out basic maintenance and improvements because of a lack of skilled tradesmen. There must be more vocational training in further education so that more people have practical skills. There is an increasing demand for those skills in the Highlands and Islands.

Yesterday, I received the Scottish islands network newsletter, which told me of the awful prediction that there will be a 50 per cent reduction in population by 2015. The Executive should take that prediction as a warning and do something about it.

As the text of the SNP's amendment acknowledges, the Highlands and Islands is home to perhaps some of the most ingenious and resilient characters in Scotland—none more so than Rennie McVicar, whom I had the pleasure of meeting last Thursday in Strontian to launch her business. It is a website business—www.scottish-holiday.info—which, without any financial help whatsoever, Mrs McVicar has launched to promote Scotland throughout the world in 12 different languages. Anybody who keys in the phrase "scottish holidays" will go to her website. It is a shame that VisitScotland, which receives £1.5 million of public funds, could not have thought of that, but I am proud that Mrs Rennie McVicar thought of it and that she is carrying out her business in west Lochaber.

By and large, this has been a positive and good-humoured debate. I hope that the opportunity to debate the Highlands and Islands will become at least an annual fixture. I want to use my limited time to continue in my characteristic vein of relentless constructiveness.

On that point.

As one person who is relentlessly positive to another, I give way to George.

In a constructive way, will Fergus Ewing clarify whether the SNP position is to reject "A Smart, Successful Scotland"? How will he compel the brightest of our young people to stay in Scotland? His answer could be a constructive contribution to the debate.

The idea of having a strategy that would promote Scotland as being a place for dumb losers would seem to be a bit bizarre. That is why we recognise that we want Scotland to be smart and successful. Although those aims are worthy, the problem is the lack of a coherent strategy to achieve them.

I want to return to the positive note. I ask the minister to intervene to persuade Mr McAveety to bring about something that all parties have supported—namely, the restoration of Castle Tioram, which is being promoted by a local man from Lochaber, who followed Ted Brocklebank's example of going furth and coming back to his native heath. He wants to invest £5 million of his own money in refurbishing the castle as his home. Although he has the support of the local people and of a cross-party delegation, which I led, I am afraid to say that Historic Scotland continues to block the way to a move that all elected representatives have supported.

It is recognised that housing—or the availability of housing that is within the reach of young local people—is a key issue in the Highlands. I have a suggestion to make. The lack of available land with servicing that is suitable for housing is a major problem. Dr Murray will confirm that that is almost as much of a problem in the south of Scotland as it is in the Highlands. Why is it that the major landowner in Scotland has not come forward with a coherent, detailed and thought-out strategy? Why has the Forestry Commission not produced proposals to make available massive parts of its land estate for housing? That land is already publicly owned. It is a strange omission that that has not been dealt with.

I will move on to a matter that Ted Brocklebank has already mentioned, in which the minister has a personal interest. As the local member for Inverness, I am devastated that Inverness Caley Thistle's rightful place in the Scottish Premier League—or the self-preservation league, as the fans call it—has been denied to them by the SPL, which, as the minister will recognise, has meant the loss of around £1 million to Aberdeen. I make a plea to all members for them to support the motions of John Farquhar Munro, Maureen Macmillan and me. If those motions are supported by a clear majority of MSPs in the Parliament, we will send a clear message to the SPL about what we believe the outcome of the pending appeal should be.

Fuel has been mentioned. I do not want to disappoint members who eagerly await my remarks on that topic. I ask the Executive to indicate at what point—at what price per litre—it will say to Gordon Brown, "Enough is enough." Is that price £1 per litre? In Port Ellen, fuel already costs 98p a litre, as George Lyon can confirm. At least three parties have raised the matter. It is of massive concern because, for most people in the Highlands, a car is a necessity, not a luxury. I am sorry that the Greens take a different view. I am afraid that I could not understand their amendment anyway—it seems to be an escape from reason.

In conclusion, the SNP praises the success of Inverness Medical in coming to Inverness—in spite of the fact that the proposal was passed by only one vote on the local planning committee, because the Labour party representatives were not too keen on it at the time. We praise the success in Aviemore: we praise the funicular railway. However, we acknowledge that there are failures and our amendment sets out a comprehensive strategy for dealing with them. In many cases, such as that of Castle Tioram, not a penny piece of Government money is required to overcome the hurdles; all that is required is a Scottish Government that behaves like a Government and tells the civil servants that they are servants, not masters.

It has been good to have an opportunity to focus on the successes of the Highlands and Islands economy and on some of the challenges that lie ahead. As has been said, there is much to be positive about in the Highlands and Islands. There are attractive places to live and work; technology that enables enterprise to locate in the area; an increasing population; and in many regards a broadening business base. There is diversity; there are companies, jobs and prosperity. Our challenge is to build on that.

It was fascinating to hear Jim Mather and Fergus Ewing explaining their rejection of "A Smart, Successful Scotland"—a strategy that Andrew Wilson supported and warmly endorsed many times in the Parliament when he was the SNP's economic spokesman.

That is a total misrepresentation of what I said. I said that there is a need to train and retrain. We endorse that view. Is there any lower level of economically active people in the Highlands and Islands that would force the minister to start questioning current policies?

That makes not one but two U-turns by Jim Mather in the debate. He has gone from saying that he no longer supports the smart, successful strategy to taking the opposite position.

Jim Mather told us that his party plans to introduce a compulsion for young people to return to the Highlands and Islands after they have left. Although he used the word "compulsion", he did not say what form it would take. He also suggested that there was no way of measuring the success of "A Smart, Successful Scotland", but there are many such measures. Just one example is the proportion of businesses that trade online—which is very important for the Highlands and Islands—as reported year on year. Jim Mather will be interested to learn that the latest figures show that, according to that measure, Scotland was ahead not only of the rest of Britain, but of many of our international competitors, such as the USA.

That strategy is delivering. To build on that strength, this week we announced our new targets for the roll-out of broadband. Rob Gibson complained that yet another broadband announcement was being made. We made yet another announcement because earlier this year we met yet another target ahead of schedule. That means that we can now seek to provide broadband access to every Scottish community by the end of next year. That should be welcomed by all parties.

Can you tell us when broadband will arrive at the high-tech cluster in Stromness?

If Rob Gibson had been listening, he would know that the commitment was that broadband would be available to every community by the end of this year. Only this week, my colleague the Deputy First Minister had a meeting with British Telecommunications and learned that it is considering Stromness as a priority in that roll-out process. [Interruption.]

Order, order.

As for the Tory speeches, it was a bit rich for Murdo Fraser to boast about his party's contribution to the success of Highlands and Islands Enterprise, given that the Conservative's enterprise strategy nowadays is based so firmly on hostility to the enterprise networks. Once again, we heard the bizarre proposition that it is possible to promote renewable energy in theory while, in practice, opposing the roll-out of wind power and the many jobs that it brings.

Eleanor Scott said much that I could agree with about community enterprise and the importance of the Highlands and Islands building on their strengths, but she appeared to say that Inverness Medical was not the kind of business that we should seek to attract. If she believes that those jobs are important to the Highlands, she should acknowledge that it is important that politicians of all parties welcome such enterprises and investments when they speak about them in public places.

I think that I made it clear that the history is that, although such large inward investments are welcome at the time, the companies that make them tend not to stay. I expressed the hope that Inverness Medical will not follow that pattern and will stay, although there is no guarantee of that.

The important thing is not just to welcome such developments at the time, but to continue to welcome them and to make the businesses concerned feel welcome in the Highlands and elsewhere.

I was pleased that Ted Brocklebank and Mary Scanlon both appeared to recognise the merits of land reform and the positive influence on policy debate in the Highlands and Islands of "The Cheviot, the Stag and the Black, Black Oil". That is a good thing. The Land Reform (Scotland) Act 2003 is designed precisely to help rural communities throughout Scotland to overcome barriers to economic development by encouraging diversity of ownership. The community and crofting community rights to buy in parts 2 and 3 of that act will be implemented later this month, which will allow communities to make those decisions to strengthen their economic position.

To sustain the progress that is being made through having the right land ownership and the right economic strategy, we need to take further action to provide good-quality, affordable housing, as Sylvia Jackson and several other members have said. That is why, through Communities Scotland's rural development programme, we are providing £65 million this year to support regeneration and to provide new and improved housing throughout rural Scotland.

We are also examining the operation of the Scottish housing market—

May I interrupt you for one minute? I ask members please to keep quiet. If anyone has to take part in a conversation, I ask them to take themselves and their conversation out of the room.

Thank you very much, Presiding Officer.

We are also examining the operation of the housing market, reviewing affordable housing supply and identifying ways to address the imbalance between supply and demand. We are committed to taking new action to ensure that affordable housing of the right size, type, tenure and quality is provided in the right places in future. We have already announced an additional £20 million of funding to act this year on any requirements that emerge from that review.

Will the minister comment on the need to discuss with Scottish Water the infrastructure problems that are prevalent in many rural areas?

There is wide awareness in the Executive and in Scottish Water of the importance of addressing those issues, and my ministerial colleagues will continue to take those matters forward.

A number of members have highlighted the importance of transport infrastructure. That is why ministers have commissioned a route action plan on the A82 and why we are committed to improvements on the A9 at the Ord of Caithness and elsewhere. In recognition of the range of priorities in the Highlands and Islands, we work with local partners in the Highlands and Islands strategic transport partnership on identifying and meeting those priorities—for example, work is progressing on the air network study. Another example is that of improvements to the instrument landing system at Inverness airport, which Kenny MacAskill mentioned. The last delay to those improvements was an unresolved stopping-up order on a minor road close to the runway, but I confirm that ministers resolved that matter earlier this week and that the project will now go ahead.

Along with Highlands and Islands Enterprise and many other stakeholders, we believe that renewable energy will be hugely beneficial for the economy of Scotland, including the economy of the Highlands and Islands. We recognise that the ambitious targets that we have set for renewable energy will be achieved only if we are able to develop new renewable energy technologies in Scotland. Wave and tidal stream technologies are critical to the exploitation of our renewable energy potential, and the Highlands and Islands are particularly critical to that. We also agree with the point that was made about the importance of upgrading the national grid to ensure that the additional power from renewable energy is delivered to the market.

We also need further development of the existing renewable energy technologies: onshore wind and hydro power. Those technologies are already available in the Highlands and Islands, as they are elsewhere, and the opportunities that arise from them are already being exploited. When I addressed the "All-Energy Opportunities" conference in Aberdeen last week, I was struck by the number of Highland companies and individuals who are already immersed in the renewables industry—the jobs that already exist in Kintyre and the potential for jobs in Nigg, Stornoway and other places have also been mentioned. In Aberdeen last week, I announced that we will shortly consult on proposals to provide additional income for councils that deal with the largest wind farm proposals to ensure that all such proposals can be dealt with efficiently and effectively.

Land and housing and energy and jobs remain critical issues for the Highlands and Islands, and particular issues remain for the more remote communities, which is why we have built on the successes for many such areas of the initiative at the edge. We will continue to work with our partners in Highlands and Islands Enterprise, local enterprise companies, local government, large and small businesses and communities to ensure that the Highlands and Islands continue to build on such successes and go from strength to strength.