Managing Scotland’s Finances
Good morning. The first item of business is a Labour Party debate on motion S3M-7330, in the name of Andy Kerr, on managing Scotland’s finances. Time is tight, so I ask members to be careful about their timings.
09:15
Scotland stands at a crossroads—a critical moment in its history. It is also, of course, a critical moment in the history of the Scottish Parliament. The cuts that have been announced by Mr Cameron and Mr Clegg will destroy at least 100,000 jobs. It is not only those who work for our councils and schools and in the national health service who are under threat; the things that they do are under threat, too. The services that local authorities and the NHS provide, such as our children’s education and meals on wheels, are part of the social fabric—the glue that keeps our communities together—and they, too, are under threat.
We have serious decisions to make in Scotland. The people whom we represent and the communities that we come from need us to defend them. The Scottish Parliament is in the front line in the fight against the new Thatcherites, and John Swinney and the Scottish National Party must decide which side they are on. At the moment, Mr Swinney looks like the best finance secretary the Tories have ever had. The evidence is there for all to see. It is not Cameron or Clegg who is responsible for 3,000 teachers losing their jobs—it is John Swinney. It is not Cameron or Clegg who is responsible for nurses losing their jobs—it is John Swinney. It is not Cameron or Clegg who is responsible for cancelling the Glasgow airport rail link, with the loss of 1,300 jobs—it is, of course, John Swinney.
The Tories have been beside John Swinney every step of the way. They have pressed their buttons to vote for cuts in jobs and services. We used to joke that Derek Brownlee was Swinney’s little helper, but things must be the other way round now. Let us not forget the words of Mr McLetchie, who said that the next best thing to a Tory Government is an SNP Government doing Tory things. The case is proven. Mr Swinney is the best finance secretary the Tories could ever have had.
Before Mr Kerr is too launched into his rant, will he tell us what level of cuts the previous Labour Government planned?
If Mr Brown had let me proceed, I would have got to that point.
We can sum up the SNP Government in just a few words. It began with pre-election focus groups, and then ill-thought-through and phoney manifesto promises. It was elected on a false prospectus and the nation is now ill prepared for the cuts that are ahead of us. The Government has been found out, and we have been left with Scotland’s abdication to the Tory view.
I turn to the economic issues in the SNP and Conservative amendments. Let us be clear. No serious economist takes the view that there is anything other than an international financial crisis. We are faced with an international economic and banking crisis, from a crisis in mortgages in the US to a crisis in the trading rooms of London and Edinburgh and throughout Europe. It is not a British crisis nor a Labour crisis: it is a global crisis.
If Mr Kerr is correct, why did Britain have the worst public finances in the entire G20 when Labour left office? Whose fault was that?
We took action that the Tories would not have taken to save the banks in Scotland and jobs throughout the country, and to prevent a recession from becoming a depression. The Tory policy was not to take that action.
Let us consider the facts. We went into the crisis with record quarter-on-quarter growth—such growth was never achieved in the United Kingdom before—and the second-lowest debt in the G7. The rising debt—we acknowledge that there was such debt—was a consequence of lower tax yields due to unemployment and, of course, the measures that Labour had to take, and was right to take, in the face of the recession. The decisions that we took ensured that repossession, business failure and unemployment levels were half the levels that they were under the Tories.
What would we have expected from our SNP Government in the face of the recession and knowing what was coming up the line? We would have assumed that the dynamic trio of Mr Action Man Swinney, Mind-map Mather and Statistics Stevenson would have seen the dire situation and would have sprung into action to address the greatest economic challenge that we have ever faced in Scotland. However, we would have been wrong to assume that. We have seen glaciers moving more quickly than the SNP Government. With a record budget, Scotland should have been positioned in the strongest place possible to resist the recession and the Con-Dem cuts that are to come. Instead, we are weaker. In the past three years, we have not had an SNP Government; rather, we have had a failing SNP election campaign. We have not had a Government that has acted in the interests of Scotland; rather, we have had a Government that has acted in the narrow interests of the Scottish National Party. The judgment of the people will be that, when they most needed leadership from the Government, in respect of education, budgets or making decisions, the SNP was posted missing.
Our motion represents not just a criticism of just one minister’s inertia in the face of recession, which is bad enough; it is an indictment of an entire Government’s casual incompetence in addressing what we face. Let us remind ourselves of Mr Swinney’s record. He squandered nearly £1.5 billion and still produced unemployment that is higher in Scotland than in the rest of the UK. He cut the economic budgets for enterprise, regeneration, housing and tourism in the face of a recession. He cancelled GARL, even though it was under way, with the loss of jobs and economic competitiveness for Scotland. On his watch, we have lost 3,000 teachers, 1,000 classroom assistants and 4,000 NHS staff, including 1,500 nurses, despite year-on-year increases in the Scottish budget. He sat idly by as the Scottish construction industry ground to a halt, and twiddled his thumbs as the Scottish Futures Trust paid out six-figure salaries for single-figure results. He turned his back on the Scottish construction industry with the abject failure that is the SFT. Not a single new school will have been commissioned and built within the lifetime of the Government. Some 40,000 builders have lost their jobs. Each and every one of them is paying a personal price for a cheap line in the SNP’s manifesto. On Mr Swinney’s watch, unemployment in Scotland is higher than it is in the rest of the UK, and youth unemployment is rising at its fastest rate since devolution. That is the Swinney and SNP legacy.
Where has the money been spent? It has not been spent on any promises in the SNP’s manifesto, which I have with me. Students are still waiting for their debt to be scrapped, and first-time house buyers are still waiting to receive a grant. We are still waiting for the SNP to build a single school, and children are still in classes that are bigger than the promised class size of 18. There has been broken promise after broken promise.
Mr Swinney claimed with a big fanfare that his number 1 priority was economic growth, but what did he do? It is no wonder that the Scottish business community was moved to say:
“What is happening now seems to directly contradict the SNP’s stated primary aim of growing the Scottish economy.
At the moment there are more harmful things for business than positive ones from the Scottish Government.”
That is a sad indictment of the Scottish Government. Did the Council of Economic Advisers tell Mr Swinney at any point over the meals at Edinburgh castle or Dumfries house that cutting the budgets of key economic drivers might be a bad idea? Did it say that conducting a national conversation was just the kind of activity that our money should be spent on, or that £9 million on a referendum bill would be of comfort to the 231,000 Scots who are currently unemployed? We should take that money and the £27 million that is being spent on the Scottish Futures Trust and use it to provide real jobs and opportunities for our young people. That is what would be in my budget.
Of course, we still do not know what the SNP’s plans are. I asked Mr Swinney months ago to come forward with his budget, but rather than act swiftly knowing the tsunami of the cuts to come, he ran away. He was frightened of taking action. His excuse was that the Government needed to know the exact figures, despite the fact that its chief economic adviser, Andrew Goudie, has been telling us all since July that there would be cuts of £1.2 billion.
Will Mr Kerr consider the difference in the approaches that the Welsh Labour finance minister and I have taken to setting a budget? Both Jane Hutt and I decided to wait until the comprehensive spending review had been undertaken before we published a budget. If that approach is good enough for Welsh Labour, why is it not good enough for Scottish Labour?
It is not good enough for Scottish Labour, because in this Parliament we know what information the Government has. We have seen the reports from the chief economic adviser and we have seen all the commentary, so we know that Mr Swinney can produce a budget. I am unsure of the position in Wales, but the point is about Scotland, not Wales.
I want to address the Liberal Democrat amendment. After a comprehensive spending review, a serious Government would publish a three-year budget. After keeping us waiting for all those months, will Mr Swinney publish a three-year budget? It certainly does not look as though he will. As Scotland’s finance secretary, does he seriously think that a one-year budget is responsible at this time, given the scale of the cuts that are to come? We need to plan, but we cannot do so because of Mr Swinney’s decisions. Can he assure Parliament that the police, higher education bodies, local authorities and our NHS will be satisfied with a one-year budget from the Government? His decision to publish only a one-year budget is irresponsible and will do more harm. Of course, it is all about elections and not recessions—it is all about the interests of the SNP and not the interests of the people. Scotland deserves better.
We have had layer upon layer of failed initiatives and repeated failures to act, as well as a host of broken promises and cheap words, but little action. That would be a let-down at the best of times but, as all members know, these are not the best of times. Scotland deserves a Government that will act more decisively in the face of the challenges. We deserve better on tackling joblessness, as our young people challenge the hopelessness that has already been created by the Governments in Edinburgh and London. Many members in the Parliament hoped that we had seen the end of the nightmare that was the Thatcher Government and that we would never again see the spectre of generational unemployment in Scotland. For Labour members, not only was that our hope, it was the primary reason why we fought for the Parliament to be created. Thousands of young Scots condemned to live from their school days to their dying day without the opportunity for work and the respect and dignity that it can bring—that is a ghost from our past being brought to the future.
As we come to the big debates on Scotland’s future, we on the Labour benches will keep our promises. Our manifesto, unlike the SNP’s manifesto for the previous election, will be fully costed and we will deliver it. Scotland needs a Government that is focused on the prospects of our people and not the prospects of its party. The SNP has let Scotland down—it has broken every promise that it made and it simply has not tagged its resources for those who are most in need, as a real Scottish Government would do.
We need to get Scotland building again by restarting what remains of the infrastructure programme that Labour left in 2007 to get the construction industry off its knees and back into work. We need to set a plan for recovery and invest in skills and training, not only for our young people, but especially for them, as we cannot afford to sacrifice their futures. We need to set a budget for three years, so that Scotland can plan for how to cope with the cuts, not by cutting thousands of teachers and nurses as the Government has done, but by protecting front-line services. That is a what a real Government and finance secretary would do.
We have had three and a half years of mismanagement from Mr Swinney and it cannot go on any longer. The people of Scotland deserve better. They are looking for the Parliament to stand up for them and for their jobs and services. Mr Swinney has to decide which side he is on.
I move,
That the Parliament notes that, despite the Scottish Government having the highest ever Scottish budget and £1.5 billion in reserves when it came to power, the Cabinet Secretary for Finance and Sustainable Growth’s wrong choices, which include the waste of money on the discredited Scottish Futures Trust, the cancellation of the Glasgow Airport Rail Link, the cutting of key economic budgets such as enterprise, regeneration and tourism and the dramatic rise in rates for some businesses, have contributed to Scotland’s unemployment rate rising above that of the United Kingdom; considers that the loss of more than 40,000 construction workers, almost 3,000 teachers, 1,000 classroom assistants, 1,500 nurses and 2,500 other NHS posts represents real people carrying out real services; notes that the number of young Scots who are not in work or education or training programmes has increased from 31,000 to 36,000 in the last year; condemns the UK Government for cutting back on support for young people when it is most needed; warns that the mistakes of the Thatcher years are being repeated, and calls on members to do everything in their power to prevent another generation of young people from being denied the opportunity of work or training.
09:28
The debate is an unusual choice for the Labour Party to bring forward in its own time, because it is a subject on which the Labour Party has absolutely no credibility whatever. Mr Kerr’s motion makes not a mention of the mess that the Labour Party made of the public finances in its 13 years in government, although we had the usual washing of the hands by Mr Kerr.
For clarification, and bearing in mind the decisions that Labour took that developed the deficit, which of the measures that we took—such as that on VAT, the car scrappage scheme, youth unemployment initiatives and support for communities—would he not have taken to avoid the debt that he is talking about?
I am talking about the fact that, if Mr Kerr is going to come to the Parliament and chastise ministers of the Government, and me in particular, for our record in office, it is only fair that the Labour Party admits to the spectacular failures of its term in office, which were legion. The Labour Party had the strongest public finances, but it utterly squandered them. [Interruption.]
Order.
It had a generational opportunity to fulfil Mr Butler’s welcome desire to tackle poverty, but it failed miserably to achieve any of those objectives. So, Labour’s motion is mightily unusual.
Will John Swinney take an intervention?
In a moment.
Let me address some of the charges in the Labour motion. It is important that we move forward on the basis of a shared understanding of the choices that Parliament has approved in our budgets since 2007, rather than the distorted picture that the motion presents. Some of those choices have been difficult, but they were the right choices for Scotland, both now and in preparing us for the future. I remind Mr Kerr that all those difficult decisions had to take place in the context of a spending review settlement in 2007 that was the tightest since devolution, with an average annual increase in our departmental expenditure limit of just 1.4 per cent, compared with an average of 3.4 per cent in the period before that. [Interruption.]
I remind the muttering Labour members—[Interruption.]
Order.
I remind the muttering Labour members that the Labour Government imposed a £500 million cut on our 2010-11 budget, which was the first real-terms cut since devolution. [Interruption.] Presiding Officer, a perpetual routine of muttering is going on this morning, but for all the muttering that goes on, I will carry on setting out the facts.
Mr Kerr’s motion demonstrates clearly that he is not keeping up with the information on end-year flexibility. He criticises the use of the £1.5 billion that was apparently left for the current Administration. The first point that Mr Kerr conveniently forgets is that the previous Labour Administration, of which he was a member, allocated £655 million of that money to be spent in one year and one year alone—2007-08, which was the year that Labour doled out large sums of money in a failed bid to win re-election at the Scottish Parliament elections.
In not one single year for which I have been Scotland’s finance minister have I allocated that amount of end-year flexibility for one financial year. While we were allocating that money in an orderly fashion over the three years of the spending review through a deal that I negotiated with the Treasury, Mr Kerr was not demanding that budgets be cut and that the money not be spent; instead, Mr Kerr and all his colleagues were queueing up to demand that we spend more money than we had negotiated from the Treasury to spend in an orderly fashion.
I agree with the cabinet secretary 100 per cent on what Labour did immediately before the previous Scottish Parliament elections. To avoid the risk of that happening again in Scotland, will the Scottish Government publish more than simply a one-year budget for the coming year?
Mr Purvis knows what the First Minister told Parliament last Thursday, which was that the scale of the reductions in public expenditure that are coming merit our looking carefully at the medium-term position. We cannot simply continue with a roll-on of budgets as they have historically been. We need to fundamentally reconsider public services and the way in which they are designed. That is why we have the Christie commission and why we will consider the issues and set out thinking that will inform the focusing of medium-term financial priorities.
My final point on end-year flexibility is absolutely fundamental. If Mr Kerr was keeping up with the news, he would have realised that, if we had not spent the end-year flexibility that was held at the Treasury—which we did in an orderly and agreed fashion over a three-year period to boost spending in the Scottish economy and to protect us against economic decline—we would have lost that money, because the Treasury has now ended the end-year flexibility routine. In that case, Mr Kerr would have been here complaining about the fact that we had lost access to the supposed £1.5 billion of resources that he allegedly left for us.
The Labour motion goes on to address the difficult decision that we took, very reluctantly, to cancel the branch-line element of the Glasgow airport rail link. I said that we had to do that because of the long-term sustainability of the capital budget. If Mr Kerr wishes to reinstate the scheme, which I understand from the Labour Party conference is a fully costed Labour Party commitment—I will be interested to read more about that in the next few weeks—he must reconcile that commitment with the £800 million cut in next year’s capital budget that has been applied by the United Kingdom Government. I point out that all but £150 million of that cut in the capital budget was planned by the Labour Government before it left office in 2010.
Before the cabinet secretary leaves the subject of GARL, will he confirm whether options for the next Government—whatever its kind—will still be in place or whether the land on the site of the GARL branch-line development is being sold off by this Government?
The Government has a responsibility to manage the assets under its control. If there is no use for those assets, the Government takes steps to dispose of them in circumstances where it considers that to be the most appropriate step to take.
Mr Kerr’s motion talks about support for Scottish business. The comments in his motion and speech are absurd. I remind Mr Kerr and the chamber that, under the previous Administration, between 1999-2000 and 2006-07, business rates increased by 29 per cent. We had a higher poundage rate in Scotland than in the rest of the United Kingdom. This Government has put in place measures to support the business community through the small business bonus scheme. Has the Labour Party supported that proposition? Has it baloney! The Labour Party has been among the strongest critics of the small business bonus scheme. Every time that I go to Mr McNeil’s Local Government and Communities Committee to be questioned by Labour members, I get criticised about the small business bonus scheme.
Before I leave the budget, I remind the Labour Party of its sad history on budget decisions. In 2008-09, Labour Party members abstained on the final budget proposition in which I had accepted their amendment. In 2009-10, so determined were they not to get in a mess, they inadvertently voted against the budget. Within days, I secured Labour support for my 2009-10 budget by offering Labour members exactly the same deal that they rejected a week before. At the outset of today’s debate, we need to be somewhat chary about the credibility of the Labour Party on managing Scotland’s public finances. We all know that significant public expenditure challenges lie ahead. We have heard the comprehensive spending review and we have also heard, although not from Mr Kerr, the words of the previous chancellor that the Labour Party’s cuts were going to be “deeper and tougher” than those under Margaret Thatcher.
We face acute challenges to public expenditure in the period ahead. The Scottish Government has made clear our view that the reductions in public expenditure are too far and too fast. We think that they jeopardise economic recovery in Scotland, which is in its early stages. In the second quarter gross domestic product figures for Scotland we have seen growth of 1.3 per cent, with particular strength in the construction sector. Why is there particular strength in that sector? Because this Government, contrary to what Mr Kerr alleged, brought forward capital expenditure and supported the construction sector at a time of economic difficulty. We introduced capital projects and delivered an infrastructure programme in 2010-11 worth £3.3 billion. In the course of this Administration, we will build or refurbish more schools than the previous Administration did and we have committed to delivering social housing. That will be the record on which we argue our case to the people of Scotland.
The budget will be set out in the next couple of weeks and I will engage in dialogue on it with Parliament. However, the challenge and debate that we will have in Parliament will be around a limited financial envelope constrained by decisions that are taken by the United Kingdom Government. If there were ever a set of circumstances in which the people of Scotland needed to look at the facts in front of them and ask, “Are we in a better position if we have our budget axed by a United Kingdom Government or should we take our own decisions about how to grow and strengthen our Scottish economy, deliver employment for our people and deliver opportunities?” it is now. That approach rests with having financial powers in this Parliament and that is exactly what this Government will secure.
I move amendment S3M-7330.3, to leave out from second “that” to end and insert:
“the dire condition of the United Kingdom’s finances due to years of Labour economic mismanagement; regrets the impact of the UK Comprehensive Spending Review that takes £1.3 billion out of the Scottish budget, including £800 million from the capital budget; regrets that UK Government cuts go too far and too fast, jeopardising the Scottish economy and putting jobs at risk, and calls for the Scottish Parliament to be given full financial responsibility as the best means of ensuring that Scotland can build sustainable economic recovery.”
09:39
This has been a depressing debate. Within two weeks we will face what will probably be the most challenging budget that we have had during devolution and the public probably expect politicians to work together to deal with the consequences. Instead, we have heard a tirade from the Labour Party and an attempt to blame everyone else for the problems that we face. Any hope that people might have had that Parliament would reach consensus on the Scottish budget has been shattered by the Labour motion today. That motion is not a vision for the future; it is a rant about the past.
In this two-and-a-half-hour debate, we could have debated the substance of policy options or any one of the long list of spending commitments rolled out by the Labour Party in Oban last week. Instead, we have a motion from Andy Kerr that blames everybody else for the problems that the country faces, airbrushing out the role of Labour in Government. If only we could airbrush out the debt that Labour left this country, we would all be in a much better place.
Given that we had the second-lowest debt of the G7 nations and quarter-on-quarter record growth, which part of the Labour intervention in recession measures would the member not have taken thereby incurring the subsequent debt? It is a simple question.
The simple thing that the Conservatives would not have done is to start increasing the deficit in 2001. Seven years before we had a recession or the banking crisis, Labour doubled the national debt, but it does not like to talk about that. It left the largest deficit in the G20, but it does not like to talk about that either.
It is ironic that the Labour motion includes a condemnation of the Scottish Government’s use of the reserve. That is ironic on so many levels that it is not true: first, because as we heard the Labour Party wanted to do that itself; secondly, because it was a Labour chancellor who authorised the drawdown of the reserve; and thirdly, because the Labour Party once voted for a budget that would draw down that money in the week after it voted against it. Most ironic of all, however, is that today the Labour Party condemns the devolved Government for spending the reserve when the Labour Government at Westminster had not a reserve but the largest deficit that we had ever seen. The Labour Party condemns another party for spending money that it had, whereas Labour was busy spending money that it did not have. It is absolutely astonishing.
We have heard a rambling rant from Labour today condemning a host of cuts, all of which are a consequence of the mismanagement of public finances by the Labour Government. The Labour Party does not propose to reverse all those terrible cuts that it talks about and it is interesting that it is careful not to mention whether it will reintroduce transitional relief, whether all those teachers who have lost their jobs will get guaranteed employment or whether it will take on people in the construction sector. Labour is careful to complain about things and not to make promises.
As we heard again today, Labour is fond of saying that the deficit is all down to the banking crisis. Andy Kerr is fond of telling us that Labour’s recession was a global phenomenon. To be fair to Mr Kerr, the largest deficit in the G20 was certainly noticed worldwide. Labour’s position on the deficit would be more credible had it not begun to increase that deficit in 2001.
Does the member concede that, going into the financial crisis, Britain had the second-lowest debt of any of the G8 nations? Yes or no?
We had the longest and deepest recession that this country had ever known and the Labour Party had doubled the national debt—[Interruption.]
Order.
If the Labour Party wants to hear about the national debt, I will quote someone on that debt:
“Labour was insufficiently vigorous in limiting or eliminating the ... structural deficit.”
Who said that? Tony Blair. We do not hear much about that from the Labour Party, do we?
When Labour started increasing the deficit, we were nine years into 16 years of uninterrupted economic growth. In the good times, Labour relied on borrowing so that when we got into economic difficulties, the deficit went out of control.
Today the SNP has made its argument again that the coalition’s spending restrictions are
“too far and too fast.”
The SNP is perfectly free to make that argument, but we must remember the consequences of taking a different view. There are only two alternatives to not having a spending squeeze: one is to borrow more and the other is to tax more. Until and unless we hear from the parties that condemn the UK Government’s spending plans about their proposed alternative, they will have no credibility. We remember of course that the Labour Party proposed that we should be borrowing for 17 years, which is simply an unacceptable level of debt to pass on to future generations.
The debate that we should be having is not about the spending totals set by the UK Government, but about what the Scottish Government will do with the budget that it gets. In the next two weeks, when we have the substantive budget proposals from the Scottish Government, we will all have to confront difficult choices. Those are choices not just for the next year but for the long term. We think that the Liberal Democrat amendment addresses an issue of substance: the need for a longer-term spending review from the Scottish Government.
We argued against those who demanded that the Scottish Government publish a budget before knowing what the spending totals would be, but the totals are now clear; they are set out for four years. There really is no reason why the Scottish Government cannot publish a spending review for four years. The only reason that it might have for not doing so is that it fears the electoral consequences of setting out its spending proposals.
That is why we support in principle the Liberal Democrat amendment, as we made clear last week when the First Minister let the cat out of the bag in relation to his plans for a one-year budget.
The Labour Party has let the SNP off the hook today, because by ranting about the past rather than debating the future, it has demonstrated that it has learned absolutely nothing from its election defeat in May. Labour simply has not changed. It has shown that it is stuck in the past and is unable to offer a vision for the future other than more debt, higher taxes and a wish list of spending demands. As always, it will be left to the other parties in this Parliament to face up to the reality, offer the leadership that Scotland needs and clear up the mess left by the previous Labour Government.
I move amendment S3M-7330.1, to leave out from “despite” to end and insert:
“the previous UK administration presided over a deficit in each year from 2001, seven years before the longest and deepest recession in British history and the banking crisis and nine years into a 16-year-long period of sustained economic growth, until its ejection from office in 2010; notes that the previous UK administration intended to continue running deficits for a further seven years if it were re-elected; regrets the failure of the Labour Party to acknowledge any responsibility for the state of the UK public finances and the impact that the fiscal mismanagement of the Blair/Brown years has had on the devolved budget, and calls on all parties in the Parliament to ensure that the Scottish budget for future years protects the vulnerable from the consequences of Labour’s legacy of overspending and debt.”
09:46
If, together with more significant things, Gordon Brown had not called a woman in Rochdale a bigot on 28 April, if history had been different and if Labour had won the general election, we know that there would not have been a separate budget in June. We know what Alistair Darling’s figures would have been and we know what the consequences for Scotland would have been, had his budget been implemented.
Labour has recently enjoyed quoting the Institute for Fiscal Studies, so I went back to the IFS’s paper, “Filling the Hole: How do the Three Main UK Parties Plan to Repair the Public Finances”, in which it presents its analysis of the different party platforms. Of course, it analysed the Labour Party’s plans very closely before the general election.
We know the areas that would have been protected in the coming spending review and the areas that would not have been protected, over what period they would have been protected and what level of cuts Alistair Darling and the Treasury would have proposed. We know that they would have protected health spending, but for only two years of the spending review period, not the four years. We know that they would have made other reductions. In fact, the IFS said that the unprotected areas would face average reductions of 7.1 per cent a year. Given that the revenue reductions over the whole spending review period up to 2015 in Scotland are 6.8 per cent—not 7.1 per cent—we know that, under the Labour plans, the Scottish DEL would have been lower over the four years than what we are now seeing.
Not only do we have a legacy of the biggest deficit in our nation’s history, but the plans that Labour published before the election would have had a worse effect on Scotland than what we will see over the coming four years. That is not according to me, but according to the Institute for Fiscal Studies—and, post-election, according to Alistair Darling, too.
Some issues about debt have been bandied about this morning, but let us not forget the real consequences of the debt. Members have talked about the comparative levels of debt around the world, but the IFS was very clear that we were in the worst comparative position. I am sure that Wendy Alexander knows that, but she forgot to mention it.
The point is, of course, that the current debt derives from the fact that, outside the United States, we have the largest financial sector in the entire world. As the member knows, the rescue went overwhelmingly to Scottish institutions. Does Jeremy Purvis want to comment on the budget deficit in Ireland, which is not the 12 per cent that we find in Britain but 32 per cent? His comments would be very welcome.
It is interesting that Labour is now praying in aid Ireland. On the issue that Wendy Alexander raises, I looked at what the IFS said about the situation before the international crisis. Let me quote the IFS back at the Labour Party, which has been very good at quoting it. In its election briefing note number 6, “The Public Finances: 1997 to 2010”, it states of the period that the Labour Party was in government that
“over the same ten years the vast majority of other leading industrial countries reduced their borrowing by more than the UK. And most also reduced their debt by more ... the UK was in a worse position relative to most comparable countries.”
What does that mean today for debt interest payments? In Scotland, we are paying £12 million a day, not to pay off the debt, but to pay off the debt interest. This year we will pay the same amount of money in interest payments alone that we pay the entire local government workforce. That is unprecedented and colossal. To whom are we paying the money? Our debt interest payments are providing profits for the bond traders, financiers and foreign Governments that are buying our debt. To those who say that they want the debt repayment to happen more slowly and to a lesser degree, I say that we would be paying more profits to the bond traders and the financiers who got us into this difficulty. We have to be honest about that.
Will the member take an intervention?
I will, if I have time later.
We know that Labour’s plans would have gone further than what we have at the moment. The Labour Party made many policy announcements over the weekend and we look forward to its costings. I was very interested to read that the Labour spokesman who was asked how Labour would pay for all those policies said:
“they will pay for themselves”.
There is a precedent for promising big without the commitment to deliver: there is the SNP manifesto of 2007, and we know what happened to that.
For today’s debate we have options for where we want to reform the public services and reduce expenditure, to ensure that front-line services are protected and to ensure that public services can plan properly. What we are hearing from councils and colleges is no surprise. Even today, Linda McTavish, the respected chair of Scotland’s Colleges said on BBC radio that a one-year settlement would be very problematic for Scotland’s colleges. Councils need more than one year’s figures for their workforce planning and expenditure profile.
John Swinney said today that it is impossible for the Scottish Government to give figures for more than one year. That impossibility did not seem to exist at the SNP conference in Perth, when the SNP made spending commitments beyond next April. To quote the cabinet secretary, it is “baloney”.
Our public services need indicative figures going forward. The Scottish Government has not suggested a series of reforms; it has asked someone else to produce another report. We have had the independent budget review group report and now the Christie review is under way. When will the Scottish Government put forward its proposals for reforms in the public sector?
We have said that Scottish Water should borrow not from the taxpayer but from the market and that it should be generating energy. We have called for national quangos to be wound up and for better services to be delivered more efficiently and more cheaply. We have called for consultant distinctions awards—a fully devolved area of expenditure—to be set at zero over the spending review period. Other bonuses in the public sector should not be paid. Reducing top pay in the public sector over the spending review period would save £0.25 billion.
We have said that efficiency in the public services should be increased. The independent budget review group report said that it should be increased by an additional 1 per cent. We think that it is reasonable and sensible for it to be 0.75 per cent. Over the spending review period, that would save £2 billion.
We have said that the ballooning prescriptions bill in Scotland needs to be tackled over the spending review period, which would save £475 million.
Government can reform. It needs to reform. It needs to identify savings that can be freed up for front-line services. If we have more debates like this one, in which the Government says that it will not present more than one year’s figures, and if we get the same messages from the Labour Party, the same mistakes that were made in 2007 will be made again, which will let down the people of Scotland.
I move amendment S3M-7330.2, to leave out from first “notes” and insert:
“believes that, in order for local authorities, NHS boards, universities, colleges and the wider public sector to plan services most effectively, the Scottish Government should publish a spending review for the period 2011-12 to 2014-15 in addition to its one-year budget proposals for 2011-12.”
09:54
My main theme today is the way in which the cabinet secretary and the Scottish Government have been playing politics with the public finances and making the wrong choices.
However, lest I seem to be too negative, I will start by praising the cabinet secretary—briefly, in case I alarm my colleagues—in relation to two constituency issues. First, I commend the responsible way in which he has responded to the tram crisis by setting party politics aside and calling for the project to be completed, given that it cannot possibly be in the interests of Edinburgh or Scotland for it to fail.
Secondly, I commend the approval that the cabinet secretary has given to £84 million of borrowing by the City of Edinburgh Council for developments at the waterfront in my constituency being paid for by the retention there of new business rates income. In the summer, I called for some of this tax increment finance to be used to complete the tramline to Newhaven, and I am pleased that Jenny Dawe, the council leader, and Charles Hammond, the chief executive of Forth Ports plc, have supported that proposal this week.
Unfortunately, when it comes to public finances more generally, party politics come to the fore. We can see that in the wording of the SNP amendment, which talks of
“the dire condition of the United Kingdom’s finances due to years of Labour economic mismanagement”.
That ignores the low levels of debt in 2008, before the recession, which—I remind Derek Brownlee—were much lower than those in 1997. It ignores the banking rescue and the international financial crisis; it ignores the way in which Labour prevented recession becoming depression and saved thousands of jobs in the process; it ignores the fact that the cabinet secretary and the SNP supported the spending decisions of the Labour Government and—as far as I can remember—repeatedly called for more spending; and it ignores the way in which the cabinet secretary admitted at the Finance Committee that a period of fiscal consolidation must occur.
As far as I can see, while believing, like us, that what is proposed by the current UK Government is going too fast and too far, the cabinet secretary has agreed with most, if not all, of the economic and financial measures that were taken by the previous Labour Government, yet we still have the party-political nonsense that is evident in the motion. [Laughter.]
Order.
The second example of the Government playing party politics with the public finances is seen in the lack of leadership in the budget discussions. That leadership was called for by the Finance Committee’s report in June, but most, if not all, of the recommendations of that report were simply ignored by the cabinet secretary. We did not need a full detailed budget, but there should have been an outline to kick-start debate and avoid the paralysis that we have seen over the summer and autumn months. That evasion for party-political purposes has now been compounded by the astonishing news that we are to get a budget for only one year—news that has not just astonished but alarmed public bodies throughout Scotland. The rhetoric is all about the defence of front-line services, but how on earth can front-line services be protected without planning on a three-year basis? Once again, supposed party-political advantage is to the fore and the sensible planning of public services is very much in the background.
When it comes to choices, there is the same conflict between rhetoric and reality. Sustainable economic growth is supposed to be the number 1 priority of the Scottish Government, but as the Finance Committee, the Economy, Energy and Tourism Committee and many outside commentators have pointed out, the main areas that were cut in this year’s budget were the capital and revenue areas that are usually linked to economic development. Several examples of that are referred to in the motion, but I will give a local dimension to it. Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, wrote to me in the late summer about the decision to remove transitional rates relief, pointing out that
“many businesses have faced rates increases of 50%, 100% and even 200% this year.”
The UK Labour Government’s transitional relief scheme limited annual increases to 12.5 per cent. When I took the matter up with the cabinet secretary, I received the same negative response as some of my colleagues.
It is, however, not too late for the cabinet secretary to do some good. The motion flags up the coming crisis for young people—a crisis that has already arrived for those who are not in employment, education or training. We have already seen the largest annual increase in that group since the establishment of the Scottish Parliament. That is why Labour’s announcement of a Scottish future jobs fund, which would provide 10,000 jobs or training places for young people, is so important. That pledge, coupled with the commitment that we have given to the provision of apprenticeships for everyone who leaves school with the relevant qualifications, shows our determination to avoid the mistakes of the Thatcher years, when unemployment was a price worth paying and young unemployed people were a group worth ignoring.
I hope that the cabinet secretary will take up those suggestions, so that I can praise him on a future occasion, just as I did briefly at the start of my speech.
09:59
I read Andy Kerr’s motion with a sense of, “Oh, no. Here we go again.” We have heard the rant before—as always, against the background of Labour’s cynical and uncosted promises, which were this time outlined at the Labour Party conference. We had already heard of Labour’s plans to increase council tax; now, Labour has announced its spending plans. In these times of cuts that are being imposed by Whitehall, they would mean an additional tax burden on Scotland of some £3,000 per family over the four years of the next Parliamentary session. Can Andy Kerr tell us what those income tax rises—pre and post-Calman—would mean for families in Scotland? They would not be progressive tax rises, because they would hit only those who pay the basic rate.
I note, too, the warning in the motion that
“the mistakes of the Thatcher years are being repeated”
by the UK Government. I cannot help but think back to the spring when Alistair Darling, the then Labour Chancellor of the Exchequer, admitted that under a future Labour Government there would be cuts “deeper and tougher” than Margaret Thatcher’s cuts of the 1980s. Furthermore, he planned to keep cutting for a full seven years. I condemn the savagery of the Conservative-Liberal Democrat Government, but we should never forget that the Labour way is to take credit in the boom years and to run for cover when an admission of responsibility is required. The mistakes of the Thatcher years are indeed being repeated—by Labour, by the Conservatives and by the Liberal Democrats. Denis Healey once promised to
“squeeze the rich until the pips squeak.”
Labour’s intention and the Conservatives’ action is to squeeze our services until the public squeak, and to keep on squeezing.
The council tax freeze in South Lanarkshire next year will cost the council £15.31 a year per household and £45 for those in the highest band, which is band H. That is how we fund our services to the community. We have not said that we are in favour of a council tax increase; we want the Government to fully fund the freeze.
Labour has always insisted on a non-progressive council tax and we have had to ameliorate the effects of that on families. If Labour members had truly cared about families in Scotland, they would have backed the proposal for a local income tax, which would be fair and progressive.
The cuts started under Labour and have been continued by the current coalition Government. It is interesting that when the benefits system changes were announced, Labour’s big concern was for the higher earners who would lose out in child benefit. If it is also concerned about the loss of universality, how come that does not extend to the universality that was introduced by the SNP Government? In Scotland, Labour has abandoned the ethos of collectivism and the common weal: for the Labour group in this chamber, universality is conditional. That is a measure of how far the Labour Party has shifted from the labour movement, which once espoused aspirational core values. How times change.
On “The Politics Show Scotland”, Andy Kerr said:
“we’ve got areas of Scotland which are deprived, which will never come back up again.”
What a lack of ambition, and what an admission by the party that controlled urban Scotland locally for decades and which controlled Scotland nationally for 13 years in its most recent stretch of government. Scotland trusted Labour for far too long. Thankfully, with an SNP Government, Scotland now sees alternatives.
I hear Labour politicians—members of the party that walked us blindfolded into this economic mess—mocking other nations for having to make cuts. We have heard them talk disparagingly and, sadly, somewhat gleefully about an “arc of insolvency” that includes Ireland, Iceland and Norway. That is not only crass; it is a faulty analysis. The Organisation for Economic Co-operation and Development expects those countries to recover from recession more quickly than the UK. The figures already show that they are moving in the right direction, and each of them has a better economic future than the UK, to which Scotland is currently tied. The UK is the only one of these nations that has a balance of trade deficit. Moreover, its growth rate is exceeded by that of Ireland, and Norway has exports that are worth almost three times as much as those of the UK. The arc of prosperity is now the arc of recovery, and Scotland should join that arc. Scotland should take control of its own finances so that it can join those independent countries, which best serve their populations.
The Calman proposals, which have been discussed many times here already, will not serve Scotland well or give us any powers to address the country’s real and deep-seated problems. We know about the gap that will appear because of the effect of Calman on Barnett and we know that there will be no short-term borrowing powers to help us to manage Scotland’s finances for the duration of that gap. A problem is that, if Calman is imposed, there will be a disincentive for Scotland.
We need to be in a position to take responsibility for our economy and taxation system and we need to have the freedom to alter the system to Scotland’s benefit. Last night, I heard businessmen talk of the benefit to Scotland of our country’s being able to deal with corporation tax in order to give investors incentives to be here.
No matter where they hail from or how well intentioned, a UK Chancellor of the Exchequer can never set a course that is uniquely to Scotland’s benefit. Scotland needs more than that. We need the economic freedom to move in a different direction and to provide a different set of economic and fiscal alternatives and incentives. Scotland needs the measures that John Swinney has set out in his amendment. I commend it to the chamber.
10:05
I welcome the opportunity that the Labour Party has given Parliament this morning to scrutinise all the spending commitments and promises that it has made, and its attempt to try to square that with a reducing budget to the Scottish Government. After all, I am sure that we all agree that it is important that all political parties have credibility when it comes to finance issues. The public will not treat lightly any party that comes forward with a huge list of uncosted pledges when there is not enough money to go round.
That was exactly the point that was put to Mr Whitton on Monday evening when I was on the radio with him. His defence to the charge was an interesting one: he said that the SNP had broken all the promises that it made at the last election and that, because the SNP had not delivered on so many of its key pledges, it is all right for Labour to do so. His argument was rather like that of the little boy whose only defence, on being challenged when caught stealing a biscuit, is that his little sister had stolen two. I see that Mr Whitton is on his feet. I give him another chance to make his defence.
I rise to speak in defence of both my little sisters. They would never say such a thing of me.
The member has misquoted me. When I was on the radio, I spoke about the commitments that we debated at our party conference. If Mr Fraser had been listening, he would have heard me say how the commitments would be paid for.
I listened very hard. Perhaps when Mr Whitton winds up for the Labour Party later in the debate, he can explain in detail how those commitments will be paid for.
On the subject of daft things that Labour politicians have said, I have a word to say about ginger rodents. Members may be well aware of my long-standing interest in championing the red squirrel. Cynics and those in other parties may say that, as a Scottish Conservative, I have a natural affinity for an endangered species. That said, it is worth reminding the chamber that the Scottish public holds the red squirrel in very high regard. I remind members on the Labour benches—their leader, in particular—that such is the public affection for the red squirrel that a recent opinion poll showed that nearly 70 per cent of the population support a cull of the grey squirrel. I am glad to say that the high priestess of political correctness, Ms Harriet Harman, has now retracted her outrageous gingerist comments about the Chief Secretary to the Treasury, Danny Alexander, who is doing a fine job in the coalition Government of controlling public spending. Instead of resorting to playground insults, I wish that Labour would take a leaf out of his book.
A serious challenge faces us in how to deal with the reduction in the Scottish Government budget. Let us be clear: the reduction is not as bad as the Scottish Government had anticipated. It is £900 million as opposed to the expected £1.2 billion. The SNP is claiming that the cut is larger than that. However, as the Scottish Parliament information centre has made absolutely clear, the bigger gap that the Scottish Government alleges results from the Government having decided—entirely at its own initiative—to defer to next year the £300 million cut that was due to be made in the current year. Of course, that decision increases the challenge that we have in the coming year.
On this side of the chamber, we have set out a range of proposals on how we would help to make the budget reduction. We have suggested a recruitment freeze, except for essential posts; taking Scottish Water out of state control; keeping prescription charges for those who currently pay; an initiative to cut absenteeism; and a public sector pay freeze for those who earn more than £21,000. Taken together, our proposals add up very close to the £900 million that needs to be found. In addition, we can find the money without having a negative impact on front-line services.
If we listen to some of the comments that are made about the cuts that are coming, we would think that they were taking the country back to the dark ages. In fact, it is now clear that by the end of the spending review period, all they will do is put Scotland back into the spending position of 2006-07. In those days, we had a Labour-led Administration at Holyrood. Not even its harshest critic would now say that, at that time, we all were living in squalor and poverty. Difficult decisions will have to be made, but let us not overstate the impact of the cuts.
What is Labour proposing? At its conference last weekend, the party came forward with a whole set of commitments. Notwithstanding Mr Whitton’s protestations, the commitments have not been costed properly except by some very helpful researchers in the Scottish National Party who came up with a figure of £1.7 billion over the next four years. That is a tax bombshell of almost £3,000 for every Scottish household over the next session of the Parliament. [Interruption.] If Labour members want to dispute the figures, let them say how Labour has costed the commitments and where the money will come from. Indeed, far from identifying where the money will come from, Labour is falling over itself to make new spending commitments, yet the same Labour Party has the gall to criticise the SNP for playing the same trick at the elections three years ago. We should also not forget who has ultimate responsibility for the mess that the country’s finances are in. In 1997, Labour inherited a golden economic legacy that turned to dust under its watch.
Will the member give way?
I am sorry, but I am in my last minute.
Labour said that there would be no return to boom and bust, but delivered both. Those on the Labour benches will argue that the cause of the recession was—
The global crisis.
—the global crisis, as Mr Kerr has just said, and that the Labour Party should be absolved of blame because other countries were affected, too, but we know that, on leaving office, Labour left us with the worst set of public finances in the G20. As Jeremy Purvis said, Labour left us with debts that cost us £120 million a day in interest payments alone.
Let us not see any attempt by Labour to shift the blame on to anyone else. Labour was in charge; it made a mess of the public finances. Labour must bear the responsibility. What a pity that no member on the Labour benches has had the good grace to at least show a hint of contrition today over the problems that the country now finds itself in. The Parliament should reject the ludicrous and impertinent motion from the Labour Party—a party that is clearly not fit to be back in office.
10:12
In this morning's debate, we have already heard a number of members outline a litany of the Scottish Government's mistakes, mismanagement and muddles. Given the plethora of bad decisions that this Government has made over the past three or more years, no doubt we will hear many more as the debate progresses.
While the Government's financial incompetence has resulted in a catalogue of broken promises, wayward priorities and puerile policies, there has at least been consistency in the way the SNP has pursued its populist polices against all the evidence that has been arrayed against it. There has also been consistency in the way the Conservative party has always supported the Government on the budget and in pursuit of its aims in moving forward. When a Tory budget is being delivered, it is hardly surprising to find the Tory party supporting it.
In spite of the evidence of the damage that has been caused to local government services by the previous three years of underfunding, and regardless of the service reductions and job losses that we have already witnessed in local areas, Mr Swinney is ignoring the conclusion of his own independent budget review and is persisting in trying to sustain his underfunded council tax freeze. I am aware that discussions are on-going with the Convention of Scottish Local Authorities and that another deal might be done under which a quid pro quo will be cobbled together that will see the council tax freeze extended for another year.
Holding a gun to councils’ heads may achieve the short-term populist outcome that the SNP wants to take into next year's election—
Will the member take an intervention on that point?
At times, being in the chamber feels like being in an episode of “QI”—we just have to say the buzzword and Mr FitzPatrick is on his feet. I am happy to hear his pearl of wisdom.
Iain Gray said on television that Labour would cap council tax at 2 per cent. How will the cap be enforced?
The legislation is in place for that to happen
The Government's dependence on populist rhetoric to attempt to attain political advantage with the electorate has clearly blinded it to the damage that it is doing to Scottish local government. A key criticism of the council tax freeze has come from the Chartered Institute of Public Finance and Accountancy, which believes that a consequence of the freeze
“is that local autonomy has effectively been limited”
and that
“accountability has been impaired by this national arrangement.”
Unlike Mr Salmond and Mr Swinney, I respect the autonomy and local democratic accountability of local authorities and I share councils’ contempt for the shameless politicking behind the SNP’s commitment to a two-year freeze based on a one-year budget. That was outlined in last week’s letter in the press from COSLA leader Pat Watters, who exposed the baloney that is Mr Swinney’s two-year commitment.
I fully recognise that it will be for local authorities to decide whether they accept the one-year budget that Mr Swinney proposes and whether it will include a continuation of the council tax freeze. However, regardless of the outcome of those negotiations, this question will remain for us: just how many services is John Swinney prepared to see being cut from our councils for Alex Salmond to save the price of a good curry on his council tax per month?
As the Institute of Revenues, Rating and Valuation pointed out a few months ago
“the current year-on-year council tax freeze ... could not sustain the present level of service delivered by local government, even in the medium term.”
The freeze appears at best to have simply put off the inevitable and, at worst, to have seriously damaged local services.
The Government puts the council tax freeze before all else, even though the concordat had commitments such as support for kinship carers. Those hard-pressed grandparents are still waiting for the concordat to deliver for them.
The concordat also pledged to bestow class sizes of 18, but all we got was another broken promise. Already, 3,000 teachers and 1,000 classroom assistants have gone under the agreement, along with the long-term commitment to maintain teacher numbers. It will be interesting to see the outcome of the discussions with COSLA on what further damage the teaching profession is to face.
Who else will be offered up as a sacrifice on the altar of an underfunded populist policy that is unsustainable and damaging to local government? No one likes to pay more tax, and promising to abolish a tax is a popular policy. Unfortunately for Mr Swinney, he has made that promise before and has no credibility left.
George Bernard Shaw once said:
“For every complex problem there is a simple solution that is wrong.”
If the council tax is the complicated quandary, then the local income tax is the easy, but misguided, response. No doubt the SNP will try to resurrect that populist pledge for the next election, even though it jettisoned it in this session when it found out the damage that it would do.
In spite of the expert opinion against the Government’s position, Mr Swinney continues to ignore the facts, prefers to bury his head in the sand and ploughs on with his economic mismanagement regardless. The council tax freeze fig leaf is wilting, but a forest of fig trees could not provide enough cover to hide the Government’s economic incompetence. Mr Swinney wants our councils to pay for that ineptitude but, ultimately, the Government will pay the electoral price because Scotland knows that it deserves better and will get better with Labour.
10:17
Today’s motion sums up the Labour Party’s approach to politics in Scotland for the past few years: rather than put forward constructive alternatives for dealing with the cuts—most of which were planned by Labour, members should remember—it has a list of spending commitments that grows by the day.
The Labour Party’s alternative reality absolves it of all responsibility for the mess that it left. Labour members seem to think that, if they keep blaming others, people will be conned into believing them. As a wise man once said and as has perhaps been overquoted,
“You can fool some of the people all of the time, and all of the people some of the time”.
However, no matter how often Labour recites its negative messages or how loud Labour members rant, the vast majority of Scots will not be taken in. We see confirmation of that in a recent Ipsos MORI poll, which showed that 81 per cent of Scots put the blame for the current financial problems where it belongs: at the door of the Labour Party first and of the coalition second.
Despite appearances, there are some intelligent minds among Opposition members. That makes it all the worse that they allow their hatred of the SNP to cloud their judgment. Labour has never really accepted that it lost the election. Admittedly, the result was close, but the Labour Party lost the confidence of the Scottish people and its current approach to the budget will make the choice for the electorate in six months’ time very straightforward. This time round, Labour might find that it is not so close.
Let us move on from the fantasy of the Labour motion and examine the facts. Jobs are being put at risk by the UK Government and the current constitutional set-up that lets it govern. That is the set-up that our colleagues on the Labour benches are so keen to support.
I ask Labour members to put their hands up if they would prefer sovereignty to be returned to the people of Scotland in this Parliament rather than our continuing to be ruled by the Tories from London. I am not surprised that none has their hand up. There we have it: the Labour Party prefers the Tories to the people of Scotland governing themselves. It is absolutely clear and we now have it on the record. [Interruption.]
Order.
At the election in May, Labour members throughout the country will call for a Tory-Liberal coalition to take all the important decisions on the future of Scotland at the same time as they argue against those decisions. They talk about the dark days of Margaret Thatcher, but they opened the door to the Tories regaining power by refusing even to consider discussions for a rainbow coalition. [Interruption.]
Labour members might want to try to blame the Liberals for the coalition, but they would not even open the door and give the Liberal Democrats the opportunity to enter a rainbow coalition to prevent the Tories from getting in. The Liberals are the Tories’ little helpers, but so is the Labour Party because it opened the door.
While he is rewriting history, I remind Mr FitzPatrick that 11 SNP members of Parliament—including one who is sitting behind him—let Margaret Thatcher in.
To go back to the history lesson, once again the Labour Party preferred the Tories to be in power to giving sovereignty to the people of Scotland. Let us come back to the more recent past and remember that a Labour chancellor promised spending cuts that would be “deeper and tougher” than Thatcher’s and that a Labour Prime Minster invited the iron lady round for a cup of tea and some advice.
Despite the limited powers available to our Scottish Government, we have been able to make a real difference to families and businesses throughout Scotland. Due to the SNP Government’s economic recovery plan, the recession has been shallower and shorter in Scotland than in the rest of the UK. The total fall from peak to trough in Scotland as a result of the downturn was 5.8 per cent—lower than the comparable drop in the UK of 6.4 per cent.
The most recent figures available for the economy, from the second quarter of this year, show that the SNP’s economic recovery plan is continuing to work. GDP in Scotland grew by 1.3 per cent compared with growth of 1.2 per cent in the UK. The Scottish construction sector also grew by a massive 10.4 per cent over the quarter, and there was an increase of 2.5 per cent in the production sector. Both outperformed the UK as a whole.
I am not saying that everything is rosy—it is not and these are difficult times—but our Government’s decisions are clearly the correct ones and make best use of our limited powers.
In recent times, the Labour Party has been more concerned with scoring cheap political points than doing what is best for the people of Scotland. Voting the budget down is an example of that, but the latest politicking comes in the form of demanding that a budget be published within hours of the UK spending review announcement.
Originally, Labour demanded that a budget be produced even before the Scottish Government had the figures, but that was quickly changed to a demand that John Swinney should produce a budget the way that Iain Gray does, with a raft of uncosted commitments that bear no relation to reality. That is good for headlines but not for the families and businesses of Scotland. Labour might be willing to do a budget on the back of a fag packet but, thankfully, John Swinney is more meticulous.
The SNP Government has made clear some of the measures for which it will seek support: a council tax freeze; maintaining free personal care and concessionary travel; keeping Scottish Water under public ownership; applying Barnett consequentials from health to the health service; and abolishing prescription charges.
I am hopeful that Labour will start to make amends for years of wasteful spending on trams, Trident and the private finance initiative but, if today’s debate is anything to go by, we can expect it to continue peddling its negative message of doom spun together with uncosted commitments while we in the SNP continue working with the Scottish people to get through the hard times. Working together, we can make Scotland better.
10:24
I will borrow a phrase from Mr Francey, who used to commentate for BBC Radio Scotland—oh dearie, dearie me. When I read the debate’s title, I thought, “Good.” I thought that the general clamour that was evident some weeks ago for the Parliament to devote more time to discussing in a concrete and constructive way how we would manage Scotland’s finances had been taken on board and that, even better, the Labour Party had given up some of its parliamentary time to contribute to that process.
I listened with great care to Mr Kerr. The longer I listened, the more I realised that he had turned the debate into a board game—a sort of financial Cluedo in which we had to work out which chancellor at what time and in what place is alleged to have mugged which economy with which blunt financial instrument. That board game is relatively simple but—unfortunately—it took Andy Kerr 12 minutes and 47 seconds to make his first move. Even when he did that, we were still left in the dark about which economic instrument he would deploy and where he would deploy it in the current financial crisis. It was deeply disappointing.
As Wendy Alexander said, we have a crisis. It is sad that the banking situation had much to do with businesses in Scotland. Of course, we can argue about who, where, when or what, but the one point with which we cannot argue is that the United Kingdom faces the prospect of paying £120 million every day in interest. If people tell me that they are seriously interested in not burdening the next generation with debt, I find it difficult to accept that they do not mean addressing the payment of that £120 million. Each one of us in the chamber can convert that £120 million into something different on which we would prefer to spend it—whether it is more doctors, nurses or teachers or more schools or hospitals. Members can work out how much they would get for £120 million a day.
I am sad that the focus of attention has not been on aspects such as the independent budget review’s report, which set out at least a framework for discussion. We might disagree with bits of it, but it merits at least a longer discussion than is normally accorded in our timescale for setting budgets. Before anyone intervenes, I say that I have long felt that that timescale is not long enough.
I understand that the cabinet secretary would like to have a perfect budget, but his credibility on that is undermined because he and his fellow ministers announced at their party conference budget commitments that entailed three-year spending commitments. Unless he has also costed those commitments and included them in an overall budget, he cannot have it both ways. If part of the budget can be announced, the outline of that budget can be given to the Parliament. What the cabinet secretary has said is not a credible proposition and does not help him.
The defence that John Swinney gave in his opening speech and which Linda Fabiani repeated relates to independence. It is that, somehow, only the Scottish National Party has thought of growth, which the Government at Westminster does not think of and has excluded. That is interesting. In that case, the SNP must explain exactly what the Bank of England is doing when it undertakes the difficult exercise of introducing more quantitative easing.
Quantitative easing is not about restricting monetary policy or curbing growth. The difficult task of monetary management is aimed directly at trying to reoil the financial wheels of our banking institutions, to get the economy moving and to help with growth. If anyone in Scotland thinks that they are ill done by because the Bank of England engages in that exercise—which is a nonsense proposition that should not be listened to—they are dealing in economic illiteracy. The Bank of England and the Government in Westminster are just as concerned about the need to deal with growth. However, we are dealing with a structural deficit. By definition, such deficits do not lend themselves to being eliminated by the normal process of economic growth. However they arise, structural deficits require to be addressed in their own terms.
Here in Scotland, the budget is coming quickly on us. It is a great sadness that we have not used the valuable time this morning to engage more constructively with the propositions that were laid out in the independent budget review’s report. All parties in the Parliament would have benefited greatly from having more time to begin to explore with the cabinet secretary a constructive way of developing our budget. Instead, we have been given somewhat selective, not very careful and not even very considered history lessons, none of which will provide a lesson for the future or help to construct a better budget for Scotland this year.
10:31
Parliament’s role is of course to hold the Government to account. When SNP ministers first came to talk to the Economy, Energy and Tourism Committee three and a half years ago, they were keen to tell us that their central purpose in government would be sustainable economic growth, that they would be friendly and supportive to business and that they would champion renewable energy. Alas, in all those respects, their record has failed to match their rhetoric.
From the SNP’s first budget onwards, the central importance of sustainable economic growth has been undermined in the devolved areas for which John Swinney and Jim Mather are responsible. We have witnessed year-on-year real-terms reductions in the budgets and responsibilities of Scottish Enterprise, Highlands and Islands Enterprise and VisitScotland—the agencies that ministers should use to support businesses and achieve sustainable economic growth.
Not only that, SNP ministers have removed powers and responsibilities from the enterprise agencies, which has reduced the agencies’ ability to do their job and their input to the wider Scottish economy. Ministers have centralised decision making in Glasgow and Inverness by abolishing local enterprise companies and have failed to replace them with effective local consultative structures.
This week, the Economy, Energy and Tourism Committee took evidence at Sabhal Mòr Ostaig on the Isle of Skye from 14 witnesses from across the Highlands and Islands who represented councils, businesses, community enterprises and chambers of commerce. From every perspective, the story was the same: that the remit and activity of Highlands and Islands Enterprise has been diminished since 2007 and that HIE no longer acts as the fantastic economic driver that it and its predecessor, the Highlands and Islands Development Board, have been in the past 50 years.
That is little wonder when the cut in HIE’s budget has been nearly three times as great as that in Scottish Enterprise’s budget. However, that is not all. Ministers have imposed on HIE a narrower version of the Scottish Enterprise business model, at the expense of what HIE used to do—the provision of integrated and locally based support for a wide range of small businesses and community enterprises across sparsely populated rural areas. That integrated local support has gone because ministers failed to recognise or to value the difference between Scottish Enterprise and HIE.
HIE’s distinctive contribution has been valued in the Highlands. We heard that some 60 per cent of the people of the Western Isles now live on land that belongs to the local community. The population of the Isle of Gigha has doubled since the island came into community ownership. The revival in the culture and confidence of Gaelic speakers in the Hebrides has had direct economic benefits—in Stornoway alone, more than 200 jobs are associated with Gaelic. HIE played a key role in community land buyouts, the Gaelic renaissance and the birth of community energy companies. The clear view of many of our witnesses was that HIE could not have played that role with the limited remit and the reduced resources that it has today. It is hard to think of a harsher verdict on SNP ministers’ stewardship in the Highlands.
Business representatives from throughout Scotland have come to the Economy, Energy and Tourism Committee in the past three years to raise a wide variety of concerns. Many of them are reflected in Labour’s motion—they range from the failure to maintain the pipeline of public sector construction projects, long before any hint of global recession, to the threat to jobs and businesses of introducing an extra Scottish income tax to fund local government. We have heard time and again how, on the key policies for which it is responsible, the SNP’s actions and inactions have hindered sustainable economic growth. For many businesses, the final proof that SNP ministers do not understand their needs was John Swinney’s decision to provide no transitional relief for those that were hit by the highest increases in non-domestic rates following this year’s revaluation.
If the Labour Party were to win the election next May, would it introduce transitional relief in the present revaluation period? Would it increase the budgets of the enterprise agencies?
The Labour Party will campaign for the transitional relief that businesses are looking for and we will continue to press John Swinney—who I am sorry is not in the chamber—to provide it.
Mr Swinney still places stories in newspapers that lead on statistics such as
“almost 60% of businesses in Scotland are paying less or no more in business rates.”
The actual figures are that only 44 per cent of businesses are paying less and 41 per cent are paying more. The statistic that really matters is that more than 45,000 businesses across Scotland face an increase in their rates liability of in excess of 12.5 per cent. That is an astonishing hike for a huge number of companies. It is simply bizarre that Mr Swinney was quoted in the press this week as saying that a transitional relief scheme that capped annual rates increases would benefit only
“the public sector and a relatively small number of large businesses.”
A figure of 45,000 is hardly a relatively small number.
When Alex Salmond goes to Moray, as he will, to talk about the need for private sector resilience in the face of public spending cuts, he may want to explain why 1,617 local businesses in Moray alone face rates increases of more than 12.5 per cent. The Scottish Government cannot blame that one on Westminster.
This week, Mr Salmond was enthused by the opportunity to announce a renewables infrastructure fund of £70 million over four years, perhaps to make up for the decisions by the Liberal Democrats and Tories at Westminster not to deliver on the fossil fuel levy and not to set up a green investment bank before 2013. The First Minister loves to make announcements. It is just a shame that John Swinney forgot to tell the Economy, Energy and Tourism Committee where the cash-strapped enterprise agencies would find the money, given what we know from our continuing inquiry into that subject.
Perhaps Mr Swinney can take the opportunity to tell us—if his colleagues will tell him—whether any of the £70 million is new money, what the enterprise agencies will not do to pay for it if it is not new money and whether all of the £70 million is still available, or whether some of it has already been committed to particular projects. Those are the kinds of things that he might have told us in advance if there had been a carefully considered and fully costed scheme. If he cannot give us those answers, the suspicion will grow that this was another example of ministers making it up as they go along, and that is no way to manage Scotland’s money.
10:37
Part of the Labour motion warns that
“the mistakes of the Thatcher years are being repeated”.
If they are being repeated, that must be happening at the hands of the Government in London, because when we talk about the potential for Scotland, we must assess ourselves in the light of Labour’s claim that the worldwide recession was not Labour’s fault but was something that happened to it, for which someone else was responsible. Let us never forget that people on the trading floors of the casino banks could not believe their luck, because Gordon Brown let financial services rip.
Would the member care to comment on the First Minister’s oft-used remark that it is about time that we got rid of the “gold-plated” regulation of the Scottish financial services sector? How does that tally with what he has just said?
I remind the Labour Party that John McFall said that under Gordon Brown, there was a soft-touch, not a light-touch, approach.
The unionist parties are very quick to claim that economic problems such as those that Royal Bank of Scotland and HBOS had are impossible to solve in small European countries. Scotland’s current economic problems have occurred when it has been part of the UK. How on earth can those problems be used as an argument for the union?
Will the member take an intervention on that point?
Not at the moment.
The only way in which the UK Government could bail out the banks was to borrow a whole lot, thereby adding to the already huge deficit. When we look at Scotland’s condition, the real lesson from the economic downturn and the slashing of public spending is that Scotland needs financial responsibility so that we can grow our way to recovery and protect the most vulnerable in society. Evidence from the OECD countries shows that decentralisation of economic powers leads to increases in GDP, longer-term economic growth and greater revenues from Government to spend on services.
What are we being presented with by each of the parties that opposes the Scottish Government? We are being offered the Calman financial proposals. We do not know the detail of what will be offered by the Con-Dem Government, but let us think about it. Under Calman, Scotland would be given control of only 20 per cent of our revenues, so 80 per cent of the tax that was raised in Scotland would continue to go to the UK Government. As my colleagues have mentioned, key powers such as those relating to corporation tax and control of North Sea revenues, as well as key elements of environmental taxation, would remain reserved.
Under Calman, any unexpected drop in income tax revenues, such as the one experienced during the downturn, would leave Scotland facing a huge funding gap and inevitable cuts. As I have said, countries normally avoid that problem by using short-term borrowing to plug any unexpected gaps when receipts are low, which they pay back when receipts are high. The UK Government has that power—indeed, as part of the bail-out of the banks, the Treasury is making a profit from it. However, under Calman, Scotland would have no short-term borrowing powers. Any increased revenues that were generated as a result of improvements in Scotland’s economy would go to London, not to Scotland. That would create a disincentive to grow the economy. If that is the proposal that the Labour Party is making in its motion, there has to be another way. There could be something to be said for recycled wish lists, but they must contain something that is worth recycling. In this case, Labour’s recycled wish list does not.
I turn to the SNP’s conference and the attitude of the Opposition parties to our pledges to attempt, through the budget process, to freeze the council tax for another two years. We have heard that their attitude is that we must come up with the money to give local government a chance to develop. We want to try to keep free personal care as it is. Under the SNP, concessionary travel is safe and Scottish Water will remain in public ownership and will make more of its own energy, thereby reducing the cost to the taxpayer. The Barnett consequentials arising from the UK Government’s protection of spending on the health service will be applied to the health service in Scotland and prescription charges will be abolished. It would have been interesting to hear some sort of response from the Opposition parties to all those proposals. Do they intend to protect things such as the health service and concessionary travel? We have heard absolutely nothing about any of that.
Will the member give way?
I am sorry, but I am in my final few seconds.
I think that Scotland has been bucking some of the economic trends. In 2008, Scotland entered the recession a quarter later than the rest of the UK—output in Scotland fell for five consecutive quarters, whereas output in the UK fell for six consecutive quarters. As the UK experienced a deeper recession than Scotland did, output grew by more in the UK than in Scotland during quarter 4 of 2009. We will have the opportunity to make a difference only when we have the borrowing powers that the other parties would deny us.
10:44
I think that it was during the most recent attempt by the Labour Party to debate such matters in the Parliament that I compared the nature of the debate to the situation following a minor car crash, when everyone gets out of their car and stands in a circle blaming everyone else for what happened. I had hoped that we might get a more constructive approach today, but I am reassured to find that we have made no progress whatsoever in that department—the same revisionism has been taking place and I will conduct the same defence.
We seem to be in the peculiar position in which members feel that they can invent elements of history and state them in the Parliament in the hope that they become facts. The phrase that has been rolled out time and again is that we are suffering the worst cuts since the days of Margaret Thatcher. Would that be the same Margaret Thatcher who gave year-on-year, real-terms budget increases to Scotland throughout her period in government? Yes, we are in the peculiar position that we are suffering worse cuts in Scotland than were made by that imaginary person—the skeleton that the Labour members like to rattle when elections come along.
The debate has been about rattling skeletons. The Labour Party has made the revision of history its stock in trade, starting with the opening speeches of the debate. We were told that everything that happened to the economy under the Labour Government was the result of international deficiencies. International problems caused Labour’s problems in government, and yet everything that happened in Scotland was the SNP’s fault; that is a strange combination of understanding. Furthermore, everything that has happened since May this year is the fault of the Tory-Liberal coalition in London.
That kind of rhetoric will not go down well with the Scottish people, who want to see their politicians working together constructively, looking forward and attempting to find a way out of the current crisis. The Labour Party’s tunnel vision, characterised by the 1,000yd stare that can be seen in its members’ eyes every time that someone raises a point that criticises their perceived logic, means that we do not have the support of the Labour Party in achieving that necessary consensus. Labour is isolated in Scotland, and it will remain isolated because it will not see the bigger picture.
The problem that we have in Scotland is that, increasingly it would seem, we believe that the public sector and public sector expenditure is the only way out of the crisis. If we look at the Labour Government that was in power in London for 13 years, we see a party that enjoyed the benefits of a booming economy for a long time, but failed to realise that what it should do with a booming economy is grow the tax base and not just enjoy the fact that the tax yield happens to be buoyant at the time. That is why we had a structural deficit before we had an international crisis. That is why this country had a crisis that took us from being one of the most buoyant economies in the G7 to being one of the least buoyant, with the biggest deficit at the end of that period. We are worse off because of the way in which Labour conducted itself.
Earlier in the debate, Jeremy Purvis took the opportunity to point out very clearly that Scotland’s budget after the spending review is rather better than it might have been if Labour had won the election. The spending commitments that Chancellor Alistair Darling made prior to the election suggest that, for Scotland to be any better off than it is today, he would have had to propose a second budget in which he abandoned all his plans. Perhaps that reflects the sudden review of policy that the Labour Party has enjoyed under its new leadership.
Scotland needs politicians who work together. That is why I would love to see the Labour Party come on board and get involved in the process of discussion, engagement and involvement that other parties in the Parliament are prepared to consider. Yet we hear the same criticisms time and again. Labour takes the year zero approach. It seems to believe that, if it denies everything that happened on its watch and starts from year zero, it can argue a completely different case and retain its credibility.
Malcolm Chisholm’s Freudian slip seemed to tell the truth, although he did not quite realise what he had said; it was a truth repeated time and again by other speakers. We have heard the extraordinary idea that budgets can perhaps be increased in Scotland, but it is not the Labour Party’s job to say whether that will happen through tax increases or some form of borrowing, or whether, as it would seem, it will simply make local authorities pay for it all by ending the council tax freeze and pushing up the level of council tax. I was interested to hear that we will see a flowering of local democracy by ending the council tax freeze and allowing local politicians to make decisions about how they will raise taxes—up to a limit of 2 per cent.
We are very lucky. The 6.8 per cent real-terms cut over four years in the Scottish budget is not nearly as bad as it could have been. Scotland can survive this if its politicians pull together and if we engage constructively in the process of improving the efficiency of our public services and ensuring that they are adequately funded through this difficult period. Let us work together and reject Labour’s motion.
10:50
I particularly welcomed Ross Finnie’s contribution, and that of my colleague Lewis Macdonald, who spoke about what the forthcoming budget should do for Scottish business. The Scottish Government’s strategy for business is too rarely debated in the chamber. I note that, at the moment, John Swinney, Jim Mather and Stewart Stevenson are absent from the chamber. We have just one minister in the chamber, and he has no direct responsibility for the Scottish business community or the economy. I hope that those ministers will have the chance to read the Official Report later.
I congratulate the Government on its ability to dine, meet and eat for Scotland, but the question is: where is the beef? The Government will be judged on its deeds, not its words. It has been exceptional at speaking warm words, but it has a weak will. The economic strategy was published exactly three years ago this month, and it has never been debated again.
Of course, the Government’s key pledge was to match the UK growth rate by 2011. That pledge has been systematically undermined by anti-business actions. Having got almost every call wrong during the financial crisis, the Scottish Government sat back and did nothing to protect the small businesses that were affected by the consequent credit crunch. It took the SNP Government more than 18 months to call on the Office of Fair Trading to investigate small business banking in Scotland. Indeed, it only got around to doing that once it knew that that was going to happen anyway. The Government promised that there would be a Scottish investment bank, but not a single loan will have been made in three years and nine months. All that is evidence of warm words and a weak will.
We should consider Scottish infrastructure and recall that, in 2007, we were promised a replacement for public-private partnerships. That has not happened. Under Labour, half the infrastructure pipeline was funded by traditional capital, and half was funded by non-traditional capital. An example is schools. Given the fact that we are now facing big cuts in traditional capital spending, the SNP has left us with not a single new non-traditional school building project in the pipeline. It is not just that no schools will be bought from revenue; no single planned health project will be funded by capital from revenue. In the rest of the UK, all those forms of non-traditional procurement are coming back following the credit crunch, but in Scotland, our Government has simply opted out. In the transport field, the plans to build the final 10 miles of the M8 have been sitting on the Minister for Transport, Infrastructure and Climate Change’s desk for more than two years. Warm words, but a weak will.
I will be fair to the SNP. It made a good start with the extension of Labour’s rates relief scheme, which it rebranded as the small business bonus. However, it has even wiped out that benefit. Rates revaluations are meant to be neutral, but this year the SNP will take £150 million extra from Scottish businesses. On top of that, the revaluation has fleeced and punished flourishing businesses with one-off rises of more than 200 per cent in their rates bills. More warm words and weak will.
Let us look at our once proud enterprise network. Scottish Enterprise’s chief executive was paid for not turning up—
Will the member take an intervention?
Let me finish this point.
Scottish Enterprise’s chief executive was paid for not turning up for the first half of this year, while Scottish Development International—our key agency for growing the export base—was left without a chief executive for 12 months. VisitScotland was left without a chief executive for only four months—we should be grateful for small mercies. Meanwhile, the cash cut to Scottish Enterprise has been 16 per cent on a like-for-like basis since the SNP came to power, and the cut to HIE has been an eye-watering 43 per cent after exceptional items are excluded. No wonder Scottish unemployment is now above the UK average.
Given what Wendy Alexander has said about the danger of simply having warm words without real actions, would the Labour Party increase the budget of Scottish Enterprise and HIE and would it introduce transitional relief within the current revaluation period?
I will talk about what I think that the budget should do to address some of the issues.
There were warm words on the Government’s world-leading legislation on climate change, but the energy efficiency action plan was delayed by three and a half years. On the SNP’s watch, the nuclear industry—a source of low-carbon power—has been blighted, and even in renewables it will be next April before any port development moneys are available in Scotland. That is four years after the SNP came to power, and in the meantime General Electric, Siemens and Mitsubishi have all committed to manufacturing facilities in the rest of the UK. We have seen more warm words but a weak will.
What do we have to look forward to with the SNP? We will see the return of the local income tax to clobber Scottish businesses, an empty pipeline for schools and health, all the rainy day money spent and, finally, Scottish universities left high and dry.
Wind up, please.
In the next five years, our biggest decision will be the fate of our universities, and the SNP has done nothing: no independent report, no high-powered commission, no modelling or research and no wide-ranging debate. We have had just the promise of a white paper—
The member’s time is up.
It is time to make way.
10:57
When I read the subject of today’s debate, I was a wee bit surprised. I actually had to check the calendar to make sure that it was not 1 April. Let us face it, I thought. If Labour members are talking about managing public finances, they are either being ironic or showing barefaced cheek, with selective amnesia thrown in for good measure. I continued to read the motion and realised that they are clearly out of touch with reality and with the electorate.
Only last week we learned of the now infamous leaked Labour document with its wish list of uncosted proposals. We have already heard much of Labour’s uncosted wish list and it warrants even further scrutiny but, as time is not on my side, I will be able only to scratch the surface of how Labour wants to provide a tax hammer blow to taxpayers in Scotland.
Apart from being unionists together, the other thing that links Labour, its on-off coalition partners the Lib Dems, and the latter’s masters, the Tories, is support for the disastrous Edinburgh trams project. This week, their pet project sank to a new low, and I am sure that next year the good people of Edinburgh who day in, day out suffer the shambolic trams project—or the no-trams project, as it should now be called—will remember who inflicted the disaster on them.
I genuinely want to ask a question to get a straight answer. Can the member confirm that the SNP members on the City of Edinburgh Council now favour and support the project too?
Certainly. As we have already heard this morning in the debate, the comment was attributed to John Swinney that the project should move forward as soon as possible. Everyone who pays tax would recommend that, too.
If the Edinburgh farce was not bad enough, Labour is determined to reintroduce the GARL project in the west. Public opinion is not for it, and the money is not there—there has been an £800 million cut in the capital budget. Where will the money come from to build GARL?
Another item of public spending is free personal and nursing care. The Sutherland report highlighted that free personal care had been underfunded since its inception and Nicola Sturgeon was congratulated on providing an additional £40 million per annum to improve the operation of the policy. If Labour is now saying that it would remove that additional funding and, according to its wish list, spend it on providing recycling bins in town centres and buying free newspapers for all 18-year-olds, that tells the Parliament and the electorate in Scotland of Labour’s priorities.
I clarify that the leaked document is actually a published Labour Party document. It is not our manifesto, but I have the SNP manifesto in my hand. One of its commitments to students was on financing of £1.7 billion, which was never paid. The member should not say that our party is misleading the Scottish public; the SNP did that from the outset.
It is in the Labour wish list that it wants to provide newspapers to 18-year-olds and therefore to remove the money.
Labour’s motion also talks about 3,000 teachers who are out of work. I know that facts and figures are not Labour’s strong point—otherwise, the shambles that are the UK public finances would not be getting slashed too far and too fast by the Tories and Lib Dems down in London—but I would have expected someone from Labour to read the Official Report of First Minister’s question time last week, when the First Minister was challenged on teacher numbers. In reality, 575 teachers were claiming jobseekers allowance—not 3,000. That is 575 too many, but if Labour members are serious about employing more teachers, I suggest that they cease their politicking on this critical issue and tell the councils where Labour is in power to start employing teachers again. Of the fall in the number of teachers in employment, two thirds come from councils where Labour is in power.
Will the member give way?
I already have done, and I will now make some progress.
Labour members also talk about the NHS and job losses. What they have conveniently forgotten is that there are more nurses and NHS staff now than when the SNP came to power in 2007. Added to that is the additional investment of the dental hospital in Aberdeen.
The summary of today’s debate is thus: a vote for Labour will stop investment in free personal care for the elderly, but it will buy newspapers for 18-year-olds. It will cut the number of nurses and doctors after the record numbers provided by this SNP Government. With GARL, Labour will introduce the farce of the Edinburgh trams to the west of Scotland so that our economy can suffer too. It will scrap the Scottish Futures Trust, which has already brought in £111 million of savings according to independent reports, and it will extend the hugely costly PPP/PFI hammer-blow projects. Labour will scrap the council tax freeze, affecting the poorest and the elderly the worst, and it will introduce a basket of taxes to make Scotland the most heavily taxed part of the UK. The plans are estimated to cost Scottish households some £3,000 in additional taxation over the next four-year parliamentary session.
There are many more examples, but I am sure that most of us in the chamber are depressed enough by the long list of despair that Labour will be offering Scotland next year. I am sure that the telephone lines out of the Parliament will be busy as MSPs and staff call their general practitioners to get a prescription for Prozac at the thought of Labour waging war against local communities and our constituents if it wins next May. Thanks to the SNP Government, prescription charges are down to £3 and will be free from next April. As we know, Labour wants to hike the prescription charge as well. I do not know what has happened to the air of optimism that Ed Miliband is talking about, but it certainly has not filtered into the Labour psyche up here. The bottom line is that voting Labour will seriously damage our health.
I spoke in Labour’s economy debate in April, and things have not moved much further forward since then. The only way in which progress can be made and that this Parliament and Scotland can move forward is with the normal powers of an independent Parliament, rather than the pocket money Parliament so favoured by the unionist parties. I urge the chamber to back the amendment in the name of John Swinney.
11:03
It is a shame that Stuart McMillan was not able to deliver that speech to SNP members earlier, because he might have ended up a bit higher up their list in his attempts to return to this Parliament.
Jeremy Purvis made some prescient points about the three-year budget, which I will return to, but one thing that has come out in this debate is that we need leadership, maturity and statesmanship from Government ministers. They are the ones who have the facts and figures at their disposal; they are the ones who understand what is ahead of us. The rest of us—the other parties in the Parliament—can only guess at this stage about exactly what is to come. There is therefore a duty on them to start showing some leadership and to take some responsibility.
I had hoped that the SNP had moved beyond its opportunism of 2007. The exchange that took place a short time ago on student debt was interesting. I remember the letters going backwards and forwards to The Herald. Allan Wilson, my good friend, pointed out that there was no way that the SNP could deliver its policy on that. He pointed out that they were telling lies, and there was a flurry of letters from people who are now ministers in this Administration to say that he was misleading the people of Scotland. Who has been proved correct? Allan Wilson was the one who told the truth.
There were misleading comments—to say the least—on class sizes. We know from an answer under freedom of information legislation that the First Minister and others misled the Parliament and that officials in this Administration told university principals that the promises would not be delivered, and not just by 2011; they said that they might not even be delivered by 2015.
On two occasions, the member has used words that I would not wish him to use. He should not talk about people lying and he should not talk about ministers misleading the Parliament.
With all due respect, Presiding Officer, my comments about lies were about things that were said before 2007 and outwith the Parliament. I think that I am at liberty to make such comments. As far as misleading comments by ministers are concerned, I refer you to the answer that Alex Salmond gave me in September 2007 and to the minutes of a meeting, attended by Donald Henderson and university principals, that prove that the promises made by the SNP would not and could not be delivered by 2011. If that is not misleading, Presiding Officer, I will take a word from you that does describe it.
Order. The member is not to accuse other members of misleading the Parliament. I hope that I have made myself clear and that the member will continue with his speech.
Presiding Officer, I refer members to the official records of what was said and to the Official Report. I will move on.
The promises on class sizes would not be met. We are still waiting for the SNP to do a U-turn on student financing. The one-year budget is simply another device for the SNP to use to try to get elected. The SNP wants to hide the truth and defer the debate. I can understand some of its decisions to defer. I can understand why Alex Salmond is deferring on the referendum. He conned his activists into supporting the idea of a referendum and he has conned them again into delaying a referendum until some future date. Everything has to be delayed in order to try to save Alex Salmond.
We need some honesty from Government ministers. The information is available to set out a three-year plan. Members should not be surprised if Opposition parties resort to a political knockabout when we have an Administration that is prepared to hide the reality rather than engage in constructive discussion. Even the promise of a two-year council tax freeze has no money on the table beyond one year. We need the full facts so that the Parliament can start to face up to its responsibilities. It is this Government’s responsibility to create the opportunity for a mature debate. The Government has the facts.
We are prepared to pursue projects such as a Borders railway on a shaky economic analysis. The house building programme has collapsed, the costs will overrun and a permanent revenue subsidy will be needed. Even so, there has been no discussion about the maintenance backlog on council property of £1.4 billion; the road spending requirements of £1.7 billion; the university estate backlog of £0.7 billion; or the NHS estate backlog of £0.5 billion. Sports facilities in this country need to be upgraded at a cost of £2.7 billion. There are school improvements that will take 20 years to deliver and a problem in our prison estate, with numbers projected to increase by 20 per cent.
This Administration needs to come forward with the facts. We can only conclude that it is prepared to hide the facts in order to get by the election and then, if it is re-elected, it will present the reality. That is wrong and it is irresponsible.
We now move to the wind-up speeches.
11:09
This has not been the Parliament’s best day. The fact that the debate has been somewhat unedifying is perhaps epitomised by the earlier exchange between Stuart McMillan and Andy Kerr. I share Ross Finnie’s sadness about the aridity of the content of the debate, which was set by the motion.
Today we have had shadow boxing before the Scottish budget. It is notable that the motion and amendment from the two largest parties in the Parliament fall into two camps on different sides of cloud cuckoo land—both equally remarkable for being equally irrelevant. Malcolm Chisholm’s verbal mistake when he castigated the motion as party-political nonsense perhaps unintentionally set the tone of the debate. Labour suffers from a major problem of amnesia.
On that point—
I will make some progress if Mr Kerr does not mind.
Labour tries to forget that its Government left us the biggest structural deficit in the G20, costing us £44 billion a year in interest alone, and heading, under Labour, for £70 billion a year. The least progressive thing that we can do is to burden future generations with Labour’s debt. Every day that we ignore the deficit it gets worse and costs more. Yet all Labour can offer is the ultimate in blandness.
On blandness, I will take an intervention from Mr Foulkes.
Is Mr Brown not aware that the structural debt is at one of the lowest levels since 1900? Is he not aware that less than a third of it is owed to overseas Governments and institutions? Most of it is owed to the United Kingdom—to pension funds and to the Bank of England. It is being totally exaggerated by the Tories and the hapless Liberal Democrats as an excuse—
Order, Mr Foulkes, please.
That was answered earlier in the observations about where the payments of that interest go. It is a good point, which the Labour Party might consider.
The SNP, on the other hand, lives on planet Zog. Someone told me that the SNP was the Scottish Government. However, instead of acting like a Government and offering the country a programme to deal with the public sector fiscal deficit as it affects our domestic Parliament, it first denies the need for the cuts—against all the evidence, not least from our near neighbours, Ireland and Iceland—then peddles Dr Swinney’s magic pills that will cure all ailments. Independence lozenges are guaranteed miraculously to balance budgets, win football matches and grow economies. In the words of the old advertisement, they also kill flies.
In fact, independence has been dead in the water since the day that Alex Salmond told us that an independent Scotland would have thrown £100 billion—three times the Scottish budget—at Northern Rock, and since those later days when the resources of the United Kingdom had to rescue both Scotland’s largest banks from disaster. It was unbelievable to hear Rob Gibson talking about the need for borrowing powers as if borrowing did not have to be repaid or backed by resources adequate to the situation.
Will Mr Brown take an intervention?
No. I have taken an intervention already.
It is perhaps no surprise that the finance secretary devoted one sentence of his opening remarks to that issue, so central to the philosophy of the Government’s amendment. However, that was made up for later by the eloquence and persuasiveness of Joe FitzPatrick and Stuart McMillan.
The Liberal Democrat amendment argues for a four-year Scottish spending review to give a stable structure to the bodies that depend on Scottish Government funding: the councils, the health boards, tertiary education and the wider public sector, including key voluntary sector agencies. That is an indispensable start, and the necessity of that has been recognised by the lead speakers of both the other Opposition parties. I hope that the finance secretary will take Jeremy Purvis’s advice on that point.
Michael McMahon’s comment about a two-year freeze based on a one-year budget was spot on. The Liberal Democrats, too, have contributed their ideas on how to free up £2 billion over the four-year period. Part of that is linked to the need to reform the enterprise quangos so that they do a better job of growing the Scottish economy. However, we also want to pursue the fairness agenda and curb the excess pay and bonuses that have got so out of hand at the top of the public sector.
We had a clear statement on the important issue of GARL and the way in which, by selling off the land, the Scottish Government is making a GARL project under a new Government almost impossible to achieve.
Most of us in the chamber came into politics because we wanted to change our world for the better, according to our various lights. We wanted—and we want—to deliver more opportunities for young people, to help create better housing and stronger communities, to fight poverty and injustice, to enhance civil liberties, to offer full employment, to empower Scotland through the establishment of the Parliament and to give power back to local communities. None of us came into politics to cut public services or to add to the financial burdens of hard-pressed citizens.
The world-changing circumstances of the past two years, however, mean that it has fallen to our generation of politicians to restore the public finances, bring back responsible concepts of saving and prudence in the management of public resources, make difficult decisions and implement unpopular measures. It is no use girning about it or pulling up the barricades and pretending that it is not happening. It is up to political leaders in the Scottish Parliament to show leadership and build agreement on the way forward. It is the rather lowly role of Government ministers, in particular, to do that. This is a testing time for our Parliament and we cannot afford to fail to rise to the challenge in the way that this debate has done.
11:15
It was courageous of the Scottish Labour Party to wish to debate the issue of managing Scotland’s finances today. It has been a rather different debate from the one that I thought we might get when I saw the rather positive title. We heard the words “George Foulkes” and “bland” being used in the same sentence, which is a first—and, hopefully, a last. We heard discussion about red squirrels and, of course, a mention of Harriet Harman. It is nice that she got a mention because I note that her speech to the Scottish Labour Party conference, which I was keen to read, has been taken off the party’s website.
I am pleased to announce, however, that Andy Kerr’s speech from that conference is still available on that website—the speech that he gave today in the chamber was basically a cut-and-paste job, so that gave us helpful notice of what was coming up. I was tickled by one comment in his conference speech. Describing the past year, he said:
“In that time I’ve grown 365 days older, but no wiser”.
There were a couple of other peaches that he did not repeat today. He said:
“We have the blame game. We have the unaffordable pledges”.
I will not say what else he said, as it is not as interesting.
Today’s debate has, I fear, been pretty negative. People have commented on Malcolm Chisholm’s slip of the tongue, which resulted in him saying that the motion is party-political nonsense. Among the points that are made in the motion is the complaint that the enterprise budgets have been reduced, despite the fact that we have not heard the Labour Party say, in any budget discussion in the past three and a half years, that it wants those budgets to be increased. That has never been part of its platform. Today, neither Lewis Macdonald nor Wendy Alexander was prepared to pledge to increase the enterprise budgets that they complain about in their motion. Similarly, we heard the Labour Party complain about transitional relief but were given no commitment that it will introduce a transitional relief scheme if it is elected as the Government of Scotland next year.
It is surprising that the Labour Party would not make those commitments because, at the weekend, it committed to about £1.7 billion-worth of pledges and things that it wants to do if it forms the Government. Of course, we were given no idea at all about where that extra £1.7 billion will come from, when we know that the Scottish budget will be reduced in April next year. David Whitton explained that he told us last night where he intended to find that money. I have to say that I am looking forward to his wind-up speech, in which he will tell us, line by line, how he intends to pay for those pledges.
We heard a commitment to scrap the Scottish Futures Trust, which will save Scotland about £23 million a year, so that is a start towards the £1.7 billion.
It came as a surprise to me to learn that the Scottish Labour Party is not too committed to the Borders railway. Hugh Henry described the case for it as being “shaky” and gave the impression that he thought that it ought not to be going ahead. I would love to know whether he discussed the matter with Rhona Brankin or David Hamilton MP before making his announcement in the chamber today.
We now know the position of the Labour Party, but I have yet to receive a response to a letter that I sent to Jackson Carlaw, of the Conservative party, about his recent statement in the chamber that he has yet to see a “convincing case” for the Borders railway. Could Gavin Brown quash that statement and give a categorical assurance that the Conservatives are in favour of the Borders railway?
As Mr Purvis knows, we have supported the Borders railway. However, as he also knows equally well, Mr Carlaw has been pretty busy of late. I am sure that he will get back to Mr Purvis at some point.
The mantra of the Scottish Government on the cuts is that they are too far and too fast. It is about time that the Government, Mr Swinney or any of the SNP members told us what they believe not to be too far and too fast. We have asked that question on countless occasions and have never been given an answer. Does the SNP believe, as the previous Labour Administration did, that we should wait until 2018 before we have a balanced budget? How much extra does it think the UK Government should spend next year? More important, should that additional money come from an increase in taxation or an increase in borrowing? We have asked that question many times and I think that we are now entitled to an answer.
I call Bruce Crawford. You have no more than nine minutes, Mr Crawford.
Bruce Crawford? What does he have to do with it?
11:22
I see that the muttering from the Labour benches continues—
On a point of order, Presiding Officer. Surely it would be more appropriate for the debate to be replied to by a minister who has responsibility for the item on the agenda.
That is not a point of order.
I inform Mr Foulkes that every minister in the Scottish Government has responsibility for the economy.
I applaud Ross Finnie for his mature and constructive approach. I might not have agreed with all that he said, but I appreciated his tone, his approach and the way in which he delivered his message. That was in stark contrast to Mr Kerr and his colleagues. Frankly, I almost gave up listening to the Labour speakers due to the tsunami of negativity that was coming from that side of the chamber. It is deeply depressing. What a depressing way to start a debate during a financial crisis the likes of which we have never known—not one new Labour proposal, not one new Labour idea and not one constructive utterance. All we got was name calling and hot air. The people of Scotland deserve better. They want people to make positive suggestions about how we can get through this situation.
Will the member give way?
I will come back to the member—actually, I will not. I will not give way to any Labour members because I almost wanted to go home at the beginning of their contributions and, if I heard one more, I would have to depart this place.
In the motion, Andy Kerr says that the Scottish Government has squandered £1.5 billion-worth of reserves. What the motion does not say is that £255 million was drawn down in EYF from the 2007-08 budget by the previous Labour and Liberal Democrat Administration. Half of it went in that direction.
With regard to council tax, Michael McMahon should know well that we have put in £70 million a year in order to freeze council tax.
Could Bruce Crawford clarify Michael McMahon’s other point and say how it is possible to have a two-year council tax freeze based on a one-year budget?
One thing that Mr Swinney has achieved throughout his time as cabinet secretary is the delivery of a balanced budget. He will continue to achieve that, and will manage to deliver exactly as we have said.
Michael McMahon talked about the need to respect local authorities and their ability to take decisions. That seems to run slightly contrary to the fuss that Labour members were making when ring fencing was removed to help local authorities to deal with their budgets in a much more constructive way. To cap it all, he went on to say that Labour is going to hammer the councils by bringing in legislation to cap council tax levels.
Will the minister take an intervention on that point?
I will take an intervention from Michael McMahon.
Surely the cabinet secretary recognises that the council tax freeze has been underfunded and has damaged local authority services. The powers that are available to the Scottish Government are not the same as the ones that he uses to hold a gun to local authorities’ heads by threatening to take away the money that is rightfully theirs in the first place to sustain the council tax freeze.
The council tax freeze has been fully funded every year, with £70 million on every occasion, and Scotland’s local authorities accept the situation.
I wish that Malcolm Chisholm was still in the chamber; other members have mentioned the slip of the tongue by which he attempted to accuse us of playing party politics while actually referring to a Labour motion that is blatantly party political. The motion is so devoid of ideas and constructive proposals as to be rendered meaningless.
It is obvious from Labour’s approach that it is delighted that it is no longer in government at a UK level. That has freed up Labour members to be at their most depressing best and to embrace a default position of negativity. When Labour goes into the Scottish elections, there is no way that it will come out as the largest party in the Parliament.
I am somewhat puzzled. The minister says that the council tax freeze has been fully funded. Will he explain then why the SNP and Liberal Democrat-controlled Aberdeen City Council is making cuts? [Interruption.]
Order. I can do without the continual run of interventions from Mr Foulkes, which makes it difficult for me to hear what members are saying.
On a point of order, Presiding Officer. The Government’s spokesman is able to reply to the point that Mike Rumbles has just made only because John Swinney has whispered the answer in his ear.
That is not a point of order, Mr Foulkes. I ask you to sit down.
In response to Mike Rumbles, I say that it is clear that Aberdeen City Council is facing particular challenges because of the way that it has dealt with its budget in previous years. It may be that the council was living beyond its means on occasion.
With regard to Gavin Brown’s point, I reiterate a fundamental premise. The UK Government cuts to public spending are too fast and too deep, and they threaten economic recovery, jobs and public services.
I accept that fiscal consolidation is required to return the UK public finances to a sustainable footing; that is an unavoidable consequence of the previous Labour Government’s mismanagement of the public finances. However, in the next four years we will see the deepest cuts to public spending since the second world war. Spending will be cut by more than £80 billion by 2014-15, while taxes will be increased by £30 billion.
As we all know, two thirds of the fiscal tightening that lies ahead was planned by Labour. It is wrong to ask us to withstand another shock at that level in year 1 of the spending review period, because the levels of economic activity are still below pre-crisis levels, and recovery and the state of the economy are so fragile. That is why all three devolved Administrations issued a joint declaration to George Osborne last month that outlined collective concern at the proposed cuts.
In June, the Scottish Government published forecasts that went past 2020. We are asking the Government, as it believes that the reductions are too fast and too deep, to tell us what would not be. What level of reductions does the Government believe would be appropriate?
It would not be difficult for any Government worth its salt to do some reprofiling with regard to the first year, in which the cuts are particularly acute and particularly deep.
No cuts next year?
That is not what I said, as Jeremy Purvis knows.
What are the implications of the comprehensive spending review for Scotland? It is clear that the Scottish budget faces significant cuts next year and beyond. The budget will fall by £3.3 billion in real terms over the next four years, which is an 11 per cent cut in real terms. Within that, our capital budget will fall by £1.2 billion—or 36 per cent—in real terms. Next year alone, our budget will be cut by £1.3 billion in cash terms. That includes an £800 million reduction in vital capital spending, which is estimated to threaten some 12,000 jobs in Scotland.
I listened with interest when members argued against those figures; the Tories in particular disputed them. However, Scottish Government spending in 2010-11 was £29.2 billion, as approved by this Parliament. In 2011-12, it will be £27.9 billion. Whatever the issue, and however we make the sums work, that is a reduction of £1.3 billion.
11:30
I welcome the opportunity to participate in today’s debate and to speak in favour of the Labour motion.
How do we sum up what we have heard this morning? We brought the debate to the chamber in advance of the budget announcement to illustrate the SNP’s lack of direction on stimulating the Scottish economy, and my colleagues have more than done that with their excellent contributions. [Laughter.]
There was plenty of laughter when the Tories were making their contributions.
The SNP may complain, but it is just hard luck. It is the Opposition’s job to bring the Government to account, which we are trying to do. The SNP repeatedly states that its primary purpose is sustained economic growth for the Scottish economy. We do not disagree with the sentiment behind that statement, but we question the SNP’s delivery, which is all talk and very little action.
We agree that Scotland needs a strong economy for the benefit of those whom we seek to represent: Scotland’s people. People need to know that there will be jobs, that they can put food on the table and provide a roof over their heads, that their local authority will deliver good schools and services and that, if they fall ill, the health service will be there to help.
A good, strong economy fuels all that. When Mr Swinney said that Scotland’s economy had underperformed, and promised in 2007 to exceed the UK’s growth by 2011, I hoped for all our sakes that he would achieve it. He entered government with an extensive list of manifesto commitments and a promise to prioritise sustainable economic growth and increase efficiency; we waited with bated breath for the change to come.
We might as well have turned off the lights to save money, because the reality was that the SNP had kept the Scots in the dark about its real intentions. What we have had, as Andy Kerr and other Labour members have outlined, is a raft of broken promises. There is precious little evidence that programmes to support economic growth have or had been prioritised. Three years on, the Finance Committee is still seeking clarity on how economic growth is being prioritised. No amount of creative accounting or moving responsibility can give any signs that economic growth is a priority.
In truth, the earth was promised but nothing moved. Budgets for the development agencies Scottish Enterprise and Highlands and Islands Enterprise have been cut. The budget for VisitScotland, which was tasked with growing our tourism sector, was also slashed. Valuable infrastructure projects such as the Glasgow airport rail link, which would have provided 1,300 jobs and credible economic benefits, were dumped.
To follow up Gavin Brown’s point, would Mr Whitton like to tell Parliament on which occasions the Labour Party has proposed to me—privately or publicly—that the enterprise budgets should be higher than they were in any of the budgets that I have brought forward?
I have not been present at every discussion that Mr Kerr has had with Mr Swinney, but I think that we have argued on every occasion for advances in the skills base. That is part of the responsibility that the Government passed on to Skills Development Scotland.
When he axed GARL last year, Mr Swinney said that it was desirable but not affordable. Apparently 1,300 construction jobs are not affordable, but £40 million thrown down the drain in cancelled contracts—to which Robert Brown referred—is affordable.
Jobs were dumped while vanity projects such as the national conversation, an independence referendum, the council of economic diners and the Scottish Futures Trust continued to be funded. Indeed, the proposed referendum was still in last year’s budget, without the anticipated costs of £12 million or thereabouts being allocated. We know that the SNP likes to cost other parties’ policies, but those proposals would have cost hard-working Scots about £40 million. They are ideas that owe more to the use of Government resources for party campaigning than to growing the Scottish economy.
For the benefit of Murdo Fraser, and more especially those SNP members who seem to have spent the past week going through Labour’s policy document line by line, I say that we will produce a fully costed manifesto before next May’s election. That is what we said at conference that we will do and that is what we will deliver.
Ross Finnie said that he was deeply disappointed in Andy Kerr, but I would wager that he is not as disappointed as the thousands of Lib Dem supporters who are appalled by their MPs, who are now the new Tories in Scotland. Speaking of Tories, I note that Alex Johnstone claims that Labour is isolated in Scotland. It is not half as isolated as David Mundell, the sole Tory MP north of the border, who cannot even get his election expenses right. No wonder he was not good enough to be the Scottish secretary.
Linda Fabiani said, “Oh no, here we go again.” I felt the same as I listened to her speech and those of other SNP members. For her benefit and that of others on the SNP benches, I say that the majority of Scots do not want to go it alone and the majority in the Parliament does not want independence. What sense would that make when our biggest market is our nearest neighbour?
When will Mr Swinney take responsibility for his Government’s actions, or the lack of them? The issues were clearly illustrated by Wendy Alexander. The SNP now brags about the number of apprentice places that it has created yet, two years ago, Labour had to fight tooth and nail to have apprentice places reinstated after Mr Mather cut budgets and limited places to the construction and engineering sectors. There were no places for tourism, which is one of our major industries, no places for those doing information technology despite the huge skills shortage in that area, and no support for adults who need a chance to train for a second career. We had to wait until last month, three years after the SNP took office, for it finally to produce a refreshed skills strategy that we could support. However, that was easy for it to do as most of the strategy came from Labour anyway. Mr Swinney, his Government and his back benchers have to focus on the powers that they have to do something rather than moaning about the powers that they do not have but dream of having.
Mr Swinney also said that Mr Kerr should keep up with the news. Well, here is some breaking news for the cabinet secretary. It comes from Wales, of all places. The Welsh finance minister in a Welsh nationalist coalition Government will produce a three-year budget on November 17. Perhaps Mr Swinney should pick up the phone to Plaid Cymru and find out how it runs the economy down there.
Scotland’s economy needed to be stimulated, and a key part of that could have been to ensure that infrastructure projects were approved and started. The Scottish Futures Trust, which the SNP estimates will cost £27.5 million by 2013-14, has been a costly mistake. The ideology that makes the SNP opposed to private finance is Mr Swinney’s choice, and that choice has cost jobs rather than creating them. More than 40,000 jobs have been lost in the construction industry and apprentices, skilled workers and allied professionals have lost their livelihoods.
“The Scottish Government should recognise the crisis affecting industry and be bold by allowing councils and health boards to use existing PFI models to bring new schools and hospitals forward now.”
Those are not my words; they are the words of the Scottish Building Federation, which is the lead voice in the construction industry in Scotland. Sadly, like other dissenting voices, it has been ignored by Mr Swinney.
The confusion over the SFT is another indictment of the SNP’s lack of financial rigour. We all know about the broken manifesto commitments on school class sizes, student debt, help to first-time buyers, the local income tax and even the independence referendum. We might well ask what we get from the SNP that might be its positive economic legacy. Sadly, it has only a record of failure.
What did the SNP Government do when the money and the opportunity to act were there? Where is the much-vaunted Scottish Investment Bank? Why the lengthy delays to so many wind farm projects? Why did it take a year to approve the Beauly to Denny power line? Even yesterday, the First Minister was at it. He announced a £70 million national renewables fund. That sounds great, but is it new money or not? When will it be introduced? Has the money been taken from the enterprise agencies? In addition, the lack of a transitional rates relief scheme will come back to haunt the Cabinet Secretary for Finance and Sustainable Growth.
Economic recovery in Scotland will be a myth unless it is supported by initiatives that contain more than broken promises and worthless words. The economic incompetence of Salmond and Swinney leaves Scotland standing on the brink of losing another generation to unemployment. They have failed to stem the rise in unemployment. The SNP has totally failed Scotland and Scotland deserves better.