Plenary, 05 Nov 2009

Meeting date: Thursday, November 5, 2009

Official Report 755KB pdf

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First Minister's Question Time

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Engagements

To ask the First Minister what engagements he has planned for the rest of the day. (S3F-1976)

Later today, I will have meetings to take forward the Government's programme for Scotland.

It has been another week of upheaval for our banks. A year ago, the First Minister promised to "strain every sinew" to keep jobs and banks in Scotland. He

"called an emergency meeting of the Financial Services Advisory Board".

He said that FiSAB was

"particularly important at a time such as this."—[Official Report, 18 September 2008; c 10984, 10988.]

He was to chair FiSAB's meetings. When did FiSAB last meet?

FiSAB has met throughout the year. If I am correct, the next meeting will take place in two weeks' time. In addition, FiSAB has established a jobs task force. The financial sector in Scotland has mobilised to ensure that we have positive announcements as well as the disappointing job losses that have inevitably occurred. Among the positive announcements are the headquartering in Edinburgh of Tesco retail bank, whose headquarters I was delighted to open, and the 500 job gains in insurance through esure's investment. The Scottish Government supported both those investments. I am sure that Iain Gray would be the first to welcome that positive action for jobs in Scotland.

FiSAB last met four months ago, on 1 June, but the First Minister was not at the meeting. He has not met that key body since February. At that meeting and in the report that was published in June, it was said that FiSAB would start to meet regularly. Why has it not met since 1 June?

FiSAB meets throughout the year and the jobs task force that it established is in constant communication. The Cabinet Secretary for Finance and Sustainable Growth and I meet people from the financial sector constantly. Only this week, John Swinney and I have had extensive discussions with the Royal Bank of Scotland, Lloyds TSB and the permanent secretary to the Treasury to try to secure and save jobs in Scotland.

One of our many key concerns is about the disposal of the Royal Bank of Scotland's insurance businesses such as Direct Line and particularly about the 1,600 jobs that could be at stake in the city of Glasgow. Will the Labour Party join the Government in ensuring that those 1,600 vital insurance jobs in Glasgow are secured as an independent insurance business in that city?

I have had such discussions with the banks and with the workforce this week. However, the First Minister said:

"FiSAB is the key body to look at, promote and enhance the skills of the financial sector in Scotland."—[Official Report, 15 January 2009; c 14066.]

FiSAB should have met on 29 September, but an e-mail from the Scottish Government's financial services team said:

"Hi All

We have been contacted today by the First Minister's office advising us that, the First Minister may not be able to attend the agreed FiSAB date of 29 September … The new proposed date is Tuesday 27 October."

That would have meant a month's delay, but a couple of weeks later, an e-mail said:

"Sincere apologies in advance—but I'm afraid I am going to have to cancel the next scheduled meeting of FiSAB on Tuesday 27 October at the request of the First Minister."

That e-mail rearranged the FiSAB meeting for 9 December, which will be 11 months since the First Minister turned up at a meeting. Will he manage to go along to the next meeting?

The First Minister and the Cabinet Secretary for Finance and Sustainable Growth have had a range of meetings with key people in the financial sector. FiSAB meetings and communications continue throughout the year. That is why we have been able to take the action that I identified to secure jobs in the financial sector in Scotland. Do we have the Labour Party's support to retain the 1,600 vital insurance jobs in the city of Glasgow?

Questions should be to the First Minister, not by the First Minister.

I think that the First Minister's problem is that he does not have an answer to my question.

Of course Scottish Labour supports any attempts to keep those 1,600 jobs in Scotland. Those are exactly the discussions that I have had this week with the banks and the unions that represent those workers.

It is true that the First Minister meets FiSAB throughout the year—he met it in February and he will meet it again in December. The point is that the First Minister promised to strain every sinew for the Diageo workers, but he blew off the chief executive to draw a raffle on television. He promised to strain every sinew for the bank workers, but he blew off the Financial Services Advisory Board in June, in September and again in October. On 1 June, he was at home in the north-east; on 29 September, he managed to get to a homecoming party at Edinburgh castle; on 27 October, he was at a reception at Stirling castle. He is straining Scotland's patience, but he is not straining his sinews. He has been posted missing again and again. Is the First Minister not the problem—capital T, capital P—yet again?

I was straining every sinew when I helped to open the Tesco bank headquarters in Scotland. I was straining every sinew when I announced, with Peter Woods, the 500 new esure jobs in Glasgow. I was straining every sinew when I was on the Diageo march in Kilmarnock—which Iain Gray did not manage to attend. He sent the reassuring message that he would have attended if he had been the First Minister.

It is important that we not only defend Scottish jobs in Kilmarnock but engage with the financial sector, not just to mitigate the potential damage of forced sell-offs, but to engage in the positive announcements by Tesco bank and esure in Glasgow. I am delighted that Iain Gray eventually committed the Labour Party to helping to secure jobs in Glasgow. What a pity that it took two goes to get from him an assurance of commitment to jobs in the great city of Glasgow.

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Prime Minister (Meetings)

To ask the First Minister when he will next meet the Prime Minister. (S3F-1977)

I have no plans to meet the Prime Minister in the near future.

The Audit Scotland report on public finances that was published today is extremely worrying in identifying up to £3.8 billion in budget cuts. That must be a wake-up call for the Scottish Government. The report is Labour's legacy, but it is the Scottish National Party Government's problem. It blows out of the water the First Minister's pretence that he can prevent budget cuts in Scotland. Gordon Brown had to be dragged kicking and screaming to admit that cuts were necessary. In the light of Audit Scotland's report, does the First Minister now accept that cuts are unavoidable?

We have already faced up to the first real-terms cut in Scottish public spending in a generation—that is what the Cabinet Secretary for Finance and Sustainable Growth has done in setting the Scottish budget. I hope that the parties across the chamber will start to address the reality that, under the Labour Party—or, indeed, under the Conservatives—the outlook for public spending in Scotland is extremely bleak. Luckily for the people of Scotland, choices will be available in next year's general election. The perspective from Labour and the Tories is identical: a sharp, real-terms decline in Scottish public spending. For those who have different priorities, who want to put jobs and services before nuclear missiles in Scotland, there is a clear alternative at the ballot box.

The figures are not my rhetorical invention; they are in an independent report and cover the next four to five years of the Parliament's activities and the Government's responsibilities. If the First Minister is not prepared to accept an entirely independent report on our public finances, how can anyone look to his Government to provide leadership through these desperately difficult times? Let us get back home to Scotland and the problems that confront us now. Will the First Minister now consider taking Scottish Water out of public control? Will he reconsider his plans to give free prescriptions and free school meals to people who can already afford to pay for them? If he will not do any of those things, what will he do or, on the issue of budget cuts, is Alex Salmond lost for words for the first time in his life?

The figures that are quoted in the Audit Scotland report are the same as the forecasts by the Centre for Public Policy for Regions that I brought to the chamber's attention at First Minister's question time on 10 September. Incidentally, when I did so Andy Kerr told me to

"focus on the facts and not on the fictional forecasts."—[Official Report, 10 September 2009; c 19503.]

Annabel Goldie should concede that the Government has been first to identify the £500 million cut from Westminster in Scottish public spending this year and the danger of looming cuts under Labour or the Conservatives in the medium-term outlook for public spending. John Swinney's management of the Scottish budget has allowed us to identify efficiency savings that put us in a much better place than we would otherwise be in.

If Annabel Goldie is asking me whether there are real choices to be made about what is really important for the future of public spending in Scotland, I absolutely agree with her. That is why I do not want £100,000 million to be wasted on nuclear missiles in the Clyde when it could be invested in jobs and services in Scotland. In the headlong rush, as the mask slips on Tory privatisation plans, perhaps Annabel Goldie should remember that Scottish Water is providing a better service, at lower cost, to businesses and people in Scotland than any of the English privatised water companies, on average. If privatisation is the Tories' renewed agenda, let them tell the businesses and people of Scotland that there will be higher costs, higher charges and a lower level of service than they are getting at present.

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Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-1978)

The next meeting of the Cabinet will discuss issues of importance to the people of Scotland.

This week the United Kingdom Government announced that a further enormous wallop of taxpayers' money should be given to Lloyds Banking Group and the Royal Bank of Scotland, which is cutting 600 branch jobs across Scotland. Those banks are now focused not on our economy but on internal fire sales, rights issues and the Government's rules, yet we are in a recession and need banks and their money to move the economy forward and to create jobs. That is what banks are for, is it not? Last year, the First Minister said that the Lloyds takeover of HBOS was

"the deal of the century".

Has he changed his mind?

Unfortunately for Tavish Scott—actually, unfortunately for me—I watched an interview with him on BBC Scotland on Sunday, in which I heard him imply, on the basis of my comment that the Lloyds takeover of HBOS was

"the deal of the century",

that I was somehow in favour of the deal. I therefore traced the exact quotation, which I will read to the chamber so that there is no room for misunderstanding:

"Emphasising the Lloyds deal is ‘likely but not inevitable', Salmond says: ‘It would be, in my view, in Scotland's interests for there to be competition in this matter. If Lloyds TSB get through the next few months, then the potential they have as a bank of that scale, with that share of the marketplace, is from their commercial interest extraordinary. This is the deal of the century.

‘From their point of view it's perfectly legitimate of them to pursue their commercial interests. From a Scottish point of view, it would be useful if we were able to compare other possibilities.'"

The quotation is from the Sunday Herald of 2 November last year.

I am shocked—actually, I am not shocked, but ever so slightly disappointed—that we have uncovered yet another Liberal Democrat distortion. Now that the whole chamber knows, will Tavish Scott withdraw the implication that somehow I was in favour of the takeover of HBOS?

We will all be delighted to look back at how the First Minister expressed himself last year. He did say that it was

"the deal of the century".

If he wants to get worked up about the matter, it is up to him. More important than the First Minister's attempts to get out of what he said last year is the shape that he wants for Scottish banking.

The Chancellor of the Exchequer could not say whether he wants more bonuses-are-back and greed-is-good banking, or separate retail and business banks that get the economy moving. The governor of the Bank of England was clear when he made the case in Scotland for breaking up banks. Does the First Minister agree that we should split the casino banks that can fail, from the solid, reliable business banks that cannot be allowed to fail? Would that not give taxpayers something to show for all the money that has been spent? Would that not be good for business and good for Scotland's reputation in the world?

Tavish Scott should have been quick enough on his feet to adjust his third question after I discovered the misquotation in his second question. He and I have previously agreed at First Minister's question time that the best outcome for Scotland would have been for HBOS to remain as an independent organisation.

To answer Tavish Scott's question, there are potential benefits for Scotland in having more competition in the retail banking sector. If there is the opportunity to establish a new bank with Scottish headquarters or a Scottish-owned bank, that would be good for customers, good for competition and a good thing for Scotland.

However, I have concerns about the Royal Bank of Scotland insurance sell-off that has been mooted with the divestment of Direct Line and Churchill. Direct Line and Churchill have not been an obstacle to competition in the general insurance and car insurance sector; they have been the competition. They are part of the reason why that is an extremely competitive market. I hope that Tavish Scott will join me—I know that he will do it more willingly than Iain Gray did—in trying to ensure that those vital assets are not taken over by another general insurance company, which would reduce competition and would be a substantial threat to 1,600 Scottish jobs in the city of Glasgow. Yes, let us have more competition in banking, but let us ensure that those vital assets remain an important asset for competition in the sector, and let us ensure that Glasgow retains those 1,600 vital jobs.

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SCRA Referrals (Dungavel)

To ask the First Minister how many referrals the Scottish Children's Reporter Administration has received regarding children held at the Dungavel immigration removal centre in the last 12 months. (S3F-1991)

The Scottish Children's Reporter Administration has advised that it has received no referrals in the past year in respect of children held at Dungavel immigration removal centre. The Scottish Government remains fundamentally opposed to the detention of children in Dungavel.

Will the First Minister clarify whether any discussions have taken place with the Home Office specifically to ensure that any child who will be or has been referred under the Protection of Children (Scotland) Act 2003—broadly speaking, children at risk—will not be deported until investigations by the children's reporter have been concluded? Such children were deported under the previous Liberal-Labour coalition. Will he also convey the widespread revulsion of most Scots to the imprisonment of children in detention camps in Scotland—a practice that has no place in a modern, progressive, compassionate society?

Although there have been no referrals to the SCRA in the past year, 103 children have been detained at Dungavel. That statistic is in the public domain. We have repeatedly made clear to the United Kingdom Government our opposition to the policy of the detention of children in Dungavel. On Tuesday this week, my officials were in contact with the UK Government specifically about that, and they will continue the dialogue.

We are also in regular contact with the Home Office about how we can best improve the position of the children of asylum seekers and unaccompanied asylum-seeking children in Scotland. We have made it absolutely clear on every occasion that this Government is fully opposed to the detention of children in Dungavel. We will continue to fight that battle.

The Liberal Democrats share the view of the Government and many people throughout Scotland that it is deeply offensive that children are locked up because their parents are failed asylum seekers. Will the First Minister tell me how many families have benefited from the pilot project in Glasgow? A similar scheme in Kent dealt with only a tiny fraction of the families that it intended to help. Is the First Minister satisfied that the Glasgow project is not facing the same problems? How can we have any hope that the UK and Scottish Governments will put an end to Scotland's shame at Dungavel when similar efforts have fallen so far short of their modest targets?

It is early days for the family return project, which was established in May and which I know has general support and approval throughout the Parliament. It can provide a range of support to five families at any time. Its aim is to reduce the number of children who are held at Dungavel and to encourage and assist voluntary return in a proper and humane manner. I fully accept that the family return project, well-intentioned and important though it undoubtedly is, is only a small part of the answer to the overall question. Mike Pringle is correct to point to the number of children who are being detained at Dungavel and the inevitably small number of people who can be assisted in the project.

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Draft Budget 2010-11 (Police Services)

To ask the First Minister what the Scottish Government's position is on the view of the Association of Scottish Police Superintendents that the draft budget will lead to cuts to front-line services and "an inability to respond appropriately to major civil or criminal contingencies". (S3F-1979)

Anybody in the public services is entitled to express concern, given this year's £500 million cut in Scottish public finance and the grim outlook of the Labour Party forecasts from Westminster, which we discussed earlier this question time.

However, I remind Richard Baker that our draft budget states that in 2010-11 we will pay a police grant of £586.7 million, a 3.1 per cent increase on the current year. That is at a time when we face the Labour-induced cuts in planned expenditure that were imposed on Scotland by the UK Government. I know that Richard Baker will have looked at Her Majesty's inspectorate of constabulary for Scotland's annual report, which was published only this morning, which states:

"the police service in Scotland has made significant inroads this year in identifying strategic priorities, actively aligning performance measures, building capacity and capability and developing leaders to meet current and future challenges."

Moving on from the £600 million increase in the Scottish Government's budget, is it not the case that the ASPS and Grampian Police have raised concerns about the impact of the draft budget and that Strathclyde Police still face a shortfall next year of some £12 million? Given the potential that that creates for compulsory redundancies among support staff, does the First Minister agree that forces must be able to recruit and retain new police officers and that they should be on the beat, not doing jobs that were previously carried out by civilian staff?

Luckily, we have 1,044 more officers in Scotland to do the jobs. As I said, we have a 3.1 per cent increase in the police grant in Scotland at a time when, in real terms, the Scottish budget is declining, thanks to Westminster cuts. I say as gently as I possibly can that Richard Baker's credibility on this issue is rather strained, because, as a member of the Labour Party, which is imposing real-terms public spending cuts in Scotland now—and by all forecasts will do so in the future—he should be thoroughly ashamed to complain about a 3.1 per cent increase under those circumstances.

If we had listened to Richard Baker's forecasts, the 1,044 police officers would not exist. Iain Gray told us just a year ago that it would take 13 years for this Government to achieve that target—13 is a Baker's dozen. We achieved the target 12 years early in June of this year. Will Richard Baker bring himself to welcome the fact that, thanks to this Government, there are more than 1,000 additional officers keeping communities in Scotland safe from harm?

One might well reflect that there are 1,044 additional officers as a result of the Conservative party's intervention two years ago.

Does the First Minister agree that, bearing in mind the grim economic circumstances that we will all have to face in two years' time, it is essential that front-line policing is a major priority? Will he guarantee that that will be the case when next year's budget is considered?

We are facing the reality of the constriction of the Scottish budget this year. That is why Mr Swinney has been able to put forward a budget that combines protecting front-line services such as police and the health service with ensuring the efficiency savings that will be necessary to manage the constraint on public spending.

I acknowledge that the Conservative party is prepared to admit, accept and even claim the credit for the fact that there are 1,044 more police officers in Scotland. I hope that, in that spirit of good will, Bill Aitken, who is concerned about expenditure on law and order in Scotland, will prevail on his leaders and his Westminster colleagues not to go down the line of public spending cuts that the Labour Party has forecast and the Conservative party has endorsed but, instead, to spend the money on things that matter, such as policing our streets as opposed to putting Trident missiles on the River Clyde.

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Flood Management

To ask the First Minister whether, in light of the severe flooding experienced across the north-east at the weekend, the Scottish Government considers that provisions for flood management are adequate. (S3F-1980)

I thank Alex Johnstone for raising that issue. Communities throughout Scotland have been affected by flooding over the past few days, particularly in the north-east. It has a devastating impact on people's lives. All our thoughts are with them. I also put on record my thanks to all the emergency services for their hard work and swift action, which I witnessed for myself in Huntly in my constituency on Monday.

I will update Parliament on the situation. A significant number of rivers were affected by the heavy rains of 1 and 2 November. As of 9 am on Monday, for example, there were no fewer than 21 flood watches, six flood warnings and one severe flood warning in Scotland. However, there are currently no flood warnings. The last one, on the Stirling rivers, was removed at 10 o'clock last night.

Work has been under way since the weekend to ensure that people can return to their homes. All major roads are now operational, although there is still some rail disruption between Aberdeen and Inverness and between Dundee and Aberdeen. We continue to be updated on the situation.

Flooding is becoming an increasing problem and is affecting more and more communities. The Flood Risk Management (Scotland) Act 2009, much of which comes into force on 26 November, speeds up the decision-making process for flood protection schemes, as well as creating a new duty on the relevant authorities to reduce flood risk. The Scottish Government has also made record levels of funding available to local authorities for flood prevention measures.

I associate myself with the tribute that the First Minister paid to the emergency services and others who were instrumental in ensuring that the disaster was not worse than it could have been. Will he join me in extending sympathy to the people whose homes and businesses were affected in Huntly, Arbroath and, particularly, Stonehaven—my home town, where I saw at first hand the effects of the flooding at its peak? Will he undertake to ensure that, whatever recommendations are made, resources are available to enable remedial action to be taken to ensure that there is no short-term repeat of the flooding disaster that affected those towns? Will he also undertake to ensure that, where necessary, local authorities are able to take action to ensure that the incident is not the first of a number? Will he further—

Be brief, Mr Johnstone, please.

Is the First Minister aware that the extreme weather conditions of Sunday evening caused further slippage in the Bervie braes to the south of Stonehaven? Given his experience and knowledge of the situation at Cullen, is he willing to prioritise expenditure in that area, should it be deemed necessary?

There is also the situation in Pennan. The Cabinet Secretary for Finance and Sustainable Growth is considering an application from Aberdeenshire Council with regard to the Bervie braes in Stonehaven.

The average expenditure on flood prevention in the Parliament's first eight years was £7 million across the local authorities in Scotland; in the past two years, it has averaged £42 million a year—an increase of six times. However, we face an unprecedented situation: the rainfall in a 24-hour period on 1 and 2 November was the equivalent of the normal rainfall for the entire month of November. My understanding is that, in Stonehaven, areas were flooded that had not been flooded in a generation or in living memory; my certain knowledge is that that was the case in Huntly.

The Flood Risk Management (Scotland) Act 2009 will assist substantially. Of course, the Belwin formula still applies for assisting local authorities that encounter and deal with severe natural disasters of any kind, but the member and, indeed, the entire Parliament will need to accept that the 2009 act is important, the improved flood warnings are vital, and that the unity of the various services in mobilising resources, as the Tomkins report advises, will help us enormously. As a country and, indeed, as a world, we are facing an unprecedented challenge and we must all mobilise to try and meet it.

I will take a supplementary question from Mike Rumbles.

The First Minister is well aware of the devastation caused at the weekend by flooding in his constituency at Huntly and in my constituency at Stonehaven. As he just mentioned, the Belwin fund is available to assist local authorities, but Aberdeenshire Council has already said that it will not apply to that fund because it would have to spend over £1 million to access it. Will the First Minister assist the council—our council—in dealing with the floods by lowering the Belwin threshold, as he was recommended to do by the 2007 flood summit?

I am sure that the Cabinet Secretary for Finance and Sustainable Growth will look at that suggestion as part of the range of measures that we are taking to help deal with this unprecedented situation. I appreciate the way in which the member asked the question, because it must be dealt with in that manner. However, he will have heard what I said about the amount that is being spent on flood prevention schemes compared with what was spent in the past. He will know—and I am sure will support—the legislative and other action that our agencies and authorities have taken. In the same light, I know that the finance secretary, even in these times of enormous financial stringency, will look at Mr Rumbles's suggestion to see what can be done.

Meeting suspended until 14:15.

On resuming—