Plenary, 06 Oct 2005

Meeting date: Thursday, October 6, 2005

Official Report 780KB pdf

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Scottish Economy

Good morning. The first item of business is a debate on motion S2M-3377, in the name of Jim Mather, on the Scottish economy.

This is the first economic debate since the publication of the 1974 McCrone report and the pace of political evolution continues apace. This week, 90 per cent of the members of the Catalan Parliament supported a new statute of autonomy, which is in effect a claim of right to the nationhood of Catalonia and a demand for tax powers and for the creation of a Catalan inland revenue. Meanwhile, the Tories have tabled their so-called "plans" for what they deem "fiscal autonomy". That is a matter to which I will return.

On Monday night, the Minister for Enterprise and Lifelong Learning admitted on BBC radio that there are significant problems in business growth and other aspects of our economy and he called for consensus. Well, for the record, John Swinney and I made a similar call on 3 September 2003 and Wendy Alexander did the same in her book, "Chasing the Tartan Tiger", which was published the next day. Yet such consensus looks a long way off—we are well short of the 90 per cent support that was achieved in Barcelona. We must ask ourselves why that is. Although I accept that many people in other parties genuinely want the best for Scotland, views remain polarised.

Public opinion has been solidly in favour of more powers for the Parliament since 1999, but the parties in power have failed to heed that mood. I recognise that several leading Liberal Democrat MSPs and some Labour politicians have appeared open to the idea of more powers for the Parliament, but none of them has been forceful or courageous enough to progress that. It looks as though Lib Dem members have been motivated by their desire to stay in government and to avoid giving sustenance to a Scottish National Party argument. Labour politicians in that category—by and large the bright ones who are not in ministerial office—have been inhibited by old loyalties and the rigours of reselection.

The greatest obstacle to achieving political consensus on a workable basis is the fact that for many it would mean admitting that the SNP has been right all along. Nevertheless, the signs are there that the process is under way. The Catalan statute of autonomy helps. The 1974 McCrone report helps. Nicol Stephen's call for consensus helps. Even this week's call by the Tories for more fiscal autonomy helps, although I can see little sign that the Tory measures would improve Scottish competitiveness. Like many of my generation, I am cynical about Tory promises. We remember the turbo-devolution promised by Alec Douglas-Home and John Major's "taking stock".

Most of us will never buy the false hope of a better future from those who are willing only to tinker with a failed model. The people of Scotland are already forming an orderly queue to reject the Tories' proposals, with their uncertain timeframe, their desire for the long grass of consultation, the lack of detail and the bland acceptance that nothing can be done on corporation tax.

The view that the model on which Scotland's economy has been run is a failure is bolstered and highlighted by a piece of counter-history that SNP researchers have carried out since the publication of the McCrone report. They have calculated what the outcome would have been if the Scottish economy had grown at the Norwegian rate for the past 30 years. The result is astounding. Instead of bumping along the bottom with the lowest growth rate in Europe for that entire period, gross domestic product would have been £46 billion—or 59 per cent—higher than the current level and average incomes would have been £11,779 per annum higher.

Is Jim Mather prepared to accept that that is not what the McCrone report says? Indeed, the report appears to say that Scotland's economy would have overheated and possibly collapsed under those circumstances.

It is intriguing how McCrone and the Tories can take a godsend and make it a curse.

Given that an extra £18 billion of income per annum would have been generated, it is easy to see how, over those 30 years, we could have accumulated the £100 billion that the Norwegians have in their oil fund for future generations. In addition, that economic climate would have created greater life expectancy, a higher population, a better demographic structure, a better ratio of private to public sector employment and a quality of service and infrastructure that would have boosted our competitiveness.

How would the SNP create that oil fund given that there has been a deficit for the past 15 years? Would it take out an overdraft to fund the surplus?

I hear George Lyon, in his new ministerial role, talking Scotland down at an early opportunity. It is absolutely incredible. He is also talking down the business of the Royal Bank of Scotland, HBOS and Standard Life, because statistics put our national viability at 55th out of 60 developed and developing countries. George Lyon is undermining the key component of our economy. It is a black stain on his record.

We have a second chance, because oil, renewable energy and the dynamics of the global economy suit small, capable countries such as ours. We have plenty role models. Even Catalonia—the location of cheap holidays when I was a lad—has a GDP per capita per annum £4,000 higher than ours. Negotiations are under way for Catalonia to move even further forward. The Finns, under the shadow of the Soviet Union for so long—that big neighbour that inhibited its growth—now tops the world competitiveness league table.

The people continue to want more powers and our opponents are blinking. We are about to have a majority of party leaders in the chamber wanting more power for the Parliament. Three of the past four enterprise ministers want more powers for the Parliament. The previous two chief executives of Scottish Enterprise want more powers for the Parliament. That is what convinces me that we will get the consensus that we want and that that consensus will be based largely on the SNP's proposition.

The challenge is to convince the majority of people. If the foregoing words are not enough, I ask members to ponder on this. W Edwards Deming, one of the world's foremost quality gurus and the guy who turned round the economy of Japan, developed a theory called the 85:15 rule. The rule is that 85 per cent of organisational problems are caused by system failures, poor plans or procedures, a lack of measurable performance criteria and poor processes, whereas only 15 per cent are caused by people. Deming and others established that the potential for eliminating problems lies primarily in improving the system, not in blaming employees.

However, current research indicates that that 85 per cent may be fallacious; the proportion might be 95 per cent or 97 per cent. The poor people of Scotland, therefore, who are struggling to make ends meet, struggling to get a job and struggling to move forward, and who blame themselves and suffer low self-esteem, need to consider the Government and the failed system, the proof of which is staring us in the face day in, day out. If that proof does not constitute a sufficient basis to generate consensus, it will deliver a working majority for the SNP.

I move,

That the Parliament accepts that it is the duty of government to create conditions that foster meaningful levels of economic growth and result in rising living standards, increased life expectancy and a growing demographically balanced population; regrets the fact that the policies of the last 30 years have failed to meet this test, and believes that the time is now right for the Scottish Parliament to exercise full competitive control of the Scottish economy in order to achieve these objectives.

What part of the 85:15 theory would account for the SNP's absolute failure to excite the population over its economic strategy? Mr Mather says that the people of Scotland are queueing up to endorse his position. He could have fooled me. As members will appreciate, I do not have much sympathy for the nationalists or their current plight. They are languishing behind even our Liberal Democrat partners in the popularity stakes and are completely incapable of securing the trust or confidence of the people of Scotland. With all due respect, we have just seen one of the reasons why. It is a largely self-inflicted phenomenon, which is down the absolute failure of the nationalists to articulate a credible or even vaguely plausible economic policy to challenge our management of Scotland's resources.

Will the minister take an intervention?

Let me develop the point first.

The most recent attempt was Nicola Sturgeon's bizarre—indeed, economically illiterate—call for economic patriotism, whatever that may be. Equally bizarre, it must be said, was the resurrection of the 1970s slogan, "It's oor oil," or words to that effect. That will not substitute for a complete lack of a monetary, fiscal or exchange rate policy and the absence of any strategy for combating inflation, securing full employment and growing the economy more generally. The SNP instead adopted the one policy that for years in the chamber did not dare speak its name: so-called independence. Its members have substituted slogans for strategy.

Having heard everything that the minister has to say, may I suggest to him that he be courageous enough to join me in debating the Scottish economy in front of an audience of real businesspeople and that he have the patriotism to do the right thing by Scottish Power?

I strove for a Scottish Parliament so that we could debate these matters in a forum of public opinion. People such as Jim Mather stood on the sidelines, refused to join the constitutional convention and did nothing. I remember the SNP's leader across the water accusing the Scottish Labour Party of being incapable of delivering a pizza. Instead, we delivered the Parliament, where we properly debate the issues that matter to our nation.

I am happy to talk about Scotland's oil anytime, anywhere. Interestingly enough, "It's our oil" does not even make it into the motion. Perhaps that is an early indication that that slogan is going the way of its predecessor. The McCrone report is 30 years old. It is an interesting period piece. However, figures from "Government Expenditure and Revenue in Scotland 2002-03" show categorically that, as my colleague George Lyon pointed out—Mr Mather steadfastly refused to answer his point—even if oil revenues were apportioned to Scotland, our position would remain one of net borrowing compared with the rest of the United Kingdom. The oil fund that the SNP boasts about would be, as George Lyon said, an oil overdraft.

GERS also includes an analysis of longer-term developments and provides evidence of a long-term structural net fiscal deficit in Scotland. I notice that oil only becomes "our oil" when the price is high. The economic illiteracy of tying our economy to the fluctuating price of one world commodity is ludicrous. The effect on our currency and exchange rate, measured against a basket of other international currencies, would be disastrous for this country's manufacturing exports. The whisky industry, on which so many Scots rely for employment, springs to mind. To face the challenges of a globalising world—

Perhaps Mr Swinney will let me explain my point; this is a debate and I have already given way to his front-bench colleague. If Mr Swinney had stayed on the front bench, I might have given way to him.

Our commitment to securing sustainable economic growth includes working to ensure that all parts of Scotland benefit from our policies to improve transport connections, to reform the planning system and to secure a smart, successful Scotland. We are committed to securing economic and social regeneration throughout Scotland. We have made good progress under devolution, but we have more to do in growing our cities and urban communities and in regenerating our former coalfield and deindustrialised areas. That is a challenge in which all our agencies have a major role to play in working together to build a better Scotland.

People could choose SNP instability over stability; they could choose unemployment over employment; they could choose perpetual constitutional navel-gazing and the infamous, never-ending referendum over the settled will of the Scottish people; and they could choose a flight of capital, inward or indigenous, from these shores over investor confidence. However, I have confidence that the people of Scotland will not choose those options. We in the Executive are with the grain of the Scottish people; the nationalists are not and never will be.

I move amendment S2M-3377.2, to leave out from "create conditions" to end and insert:

"help create the conditions that foster a sustainable economy, rising living standards and an improving quality of life and welcomes the commitment of the Scottish Executive to sustainable economic growth, record levels of investment in public infrastructure and transport connections, its support for competitive business, skills development, training and education, and its promotion of Scotland as a vibrant place to live, work and do business."

I thank the SNP for allocating some of its business time to the economy. There is no more important subject that the Parliament could discuss today. If any members are sceptical about that, I simply remind them that, without a strong, stable, wealth-generating economy, we could not deliver the quality public services that we all want.

Economic debates in the Parliament are sometimes surreal. Although the primary duty of virtually all Parliaments is to manage the national wealth through the raising and allocation of revenue, our Parliament has no such duty. On the contrary, the Executive is merely an agent of the Treasury—it has been assigned the task of spending money that it has not earned. That means that the Executive has little or no accountability for the money that it spends. It also means that it has presided over a growth in the public sector that is starting to damage our economy, a point that was acknowledged as recently as yesterday by the chairman of Scottish Enterprise, Sir John Ward.

I welcome much of the spending that was outlined in the Executive's budget—indeed, I would like to see more spending on areas such as road building. However, the overriding conclusion from any study of the Executive's spending plans is that vast sums of money are being squandered on waste and bureaucracy. That is damaging our economic health, because the public sector has become so large that it is crowding out the private investment that we need.

The proof is in the figures: zero growth in the first quarter of this year; significantly lower levels of entrepreneurship and business start-ups than in the rest of the UK; 100,000 manufacturing jobs lost since 1997, with figures that came out yesterday showing a further fall to a 10-year low; and a fall of four places in the UK regional competitiveness index from fourth in 1997—under a Conservative Government—to eighth in 2005.

Those are not just statistics; they are figures that matter in the lives of ordinary Scots. They tell us that the small businessmen and businesswomen and entrepreneurs in our constituencies are struggling to cope and that the Executive has failed, in the words of the SNP motion,

"to create conditions that foster meaningful levels of economic growth".

What should the Parliament be doing? The SNP's solution, as outlined in Mr Mather's motion, is that the Parliament should have

"full competitive control of the Scottish economy"—

or, in normal speak, independence. That would be a disaster not only for the economy, but for Scotland as a whole. We Conservatives believe that there is a debate to be had about the fiscal powers of the Parliament. However, we understand that the massive constitutional upheaval that tearing Scotland from the United Kingdom would entail would be a futile distraction from the action that we can take here and now to help our businesspeople and entrepreneurs.

Worse than that, the SNP's approach lets the Executive off the hook. By talking about the need for constitutional change, the SNP suggests that nothing can be done now to turn around our economic underperformance. There is much that the Executive could and should be doing today with the powers that it already has.

What level of increase in economic growth does the member anticipate that the measures outlined in his amendment would generate?

I am not going to set a target for them. However, it is entirely possible that growth in the Scottish economy could at least match that of the other parts of the United Kingdom; indeed, it should exceed that if we gave Scotland a competitive advantage. The important point is that the Executive already has the necessary powers. We do not need constitutional change to bring about improvements. That is the difference between our view and the SNP's. We are happy to look at the whole question of the powers of the Parliament and how we might use them to deliver competitive advantage for Scotland, but we believe that the Executive should be using the powers that it already has—it could use them today without waiting for that process of constitutional change.

What would we do? First, we would bring forward the cut in business rates. Later today, the Parliament will hear an announcement of the timing of the cut. It has been too long since there was uniform poundage and it is time that something was done.

The Executive needs to tackle the problems of excess regulation and red tape. Every Executive department should be tasked with scouring the statute book for every regulation that is of no proven worth or is in need of abolition. That would allow small businessmen and businesswomen to spend more time on their work and less time on Government forms.

Example?

Mr Rumbles asks for an example; I will give him one. The Executive is consulting on proposals to introduce regulations that will require small businesses to undergo an annual inspection of private water supplies. That will put a substantial burden on small businesses in rural areas; it is completely unnecessary and exactly the sort of burden that we should be scrapping. I see that Mr Rumbles is nodding.

We can go further. We should privatise Scottish Water and help to bring down the costs, making the situation more competitive for business. We should also invest in our roads network.

We must reject the SNP's failed tonic because we can take action today, within the devolved settlement, to help our businesses and to revive economic growth.

I move amendment S2M-3377.1, to leave out from "regrets" to end and insert:

"notes, however, that under the stewardship of the Scottish Executive economic growth has consistently trailed that of the United Kingdom; believes that independence would be a costly and unwelcome distraction from the concrete action that can be taken within the devolved framework to boost economic growth, and therefore urges the Executive to cut red tape, privatise Scottish Water, increase investment in transport and cut business rates at the earliest possible opportunity."

I offer my apologies to the chamber for being slightly late this morning.

I read the SNP publication "Scotland in Surplus: The Economic Platform for Independence" with great interest. Believe it or not, for some years of my life I served as a private soldier in the Territorial Army—not with particular distinction, but I wore the Queen's uniform. The issue of defence in the SNP paper is particularly interesting and we have to pose some questions to the SNP about it.

However, I will first quote from the paper "Our policies for defence", on SNP.org.uk. It says:

"The priority of the Scottish Defence Services (SDS), in partnership with Scotland's neighbours and allies, will be to safeguard our land, sea and air space."

That means an army, a navy and an air force. The document expresses other laudable sentiments. For example, it says:

"Defence policy should be made in Scotland's national parliament."

That is fair enough, if we support the Scottish National Party, and I look forward to hearing its comments on that in its summing up. The document goes on to say:

"Scotland's armed services should be well-remunerated, equipped and trained."

That might mean that they should be remunerated, equipped and trained better than they are at the moment—I do not know. We are then told:

"Military facilities, including strategic airforce stations should not be downsized at the present time."

That poses a very interesting question. We also hear Margaret Ewing saying, quite rightly, that the bases in her constituency should be kept open. However, what does that mean? I will return to that.

When I served in the second 51st Highland Volunteers, it was an infantry regiment. When the SNP talks about saving the regiments—something that my party also talks about—we have to remember that we are not just talking about one regiment or six regiments; we are also talking about all the back-up functions for those regiments.

Will the member give way?

I will give way to Mr Neil in a moment.

We cannot have an army that consists merely of infantry, because it needs other functions to back it up. I am thinking of engineers, light armour, heavy armour, artillery, intelligence—

Mr Stone, I assume that you are talking about the impact on a local economy.

I am. We are debating the SNP's economic policy and I argue that the economics of an independent Scotland are greatly governed and dictated by what will be spent on defence.

Will the member give way now?

I will, but perhaps Mr Neil would like to tell us a little bit about the other functions that are necessary for defence.

Does the member agree that, if Scotland was independent, we would not have been part of the illegal and immoral war in Iraq? An independent Scotland would have saved £1 billion, which could have been made available for peacekeeping and getting rid of hunger in the world, instead of for butchering people in Iraq.

I congratulate Mr Neil on quoting my party's policy.

We need clear answers on what the SNP means by defence—perhaps Mr Stevenson could give us them. What about bases such as Rosyth and Kinloss? Are they to be paid for out of the Scottish exchequer or budget, or will an English air force, army and navy take up temporary residence in an independent Scotland?

I never resist temptation. Will the member tell us what share of the United Kingdom's defence expenditure is spent in Scotland? We already have an army, navy and air force. We already pay for them, but we get little benefit.

Not through the block grant.

Not through the block grant—I quote my Tory colleague. I have the SNP's figures on defence.

The issue is pertinent to the debate and the SNP has to come clean and give some serious answers. If I say nothing else in this debate, I will say that. The SNP has to think carefully about the issue because, until it answers such questions, it will have a major credibility gap. I support the amendment in the minister's name.

These short debates constrain argument, but I have to ask members to stick to four minutes in the open debate.

I quote from John Horgan who, when writing about Sean Lemass, said:

"History is always to some extent what we make it, an attempt by the present generation to take possession of the past and to use it as a route map to the future."

This is the first opportunity that we have had to debate in the chamber the revelations in the McCrone document. Notwithstanding what Mr Johnstone seems to think, the paper did not appear to indicate that independence would be a disaster for Scotland, and it shows how our economy could be transformed. We can look back and compare the 30 years that we have wasted with what other nations have done. Some of those nations, such as Norway, have been blessed with oil, and others have succeeded without the benefit of oil, but all have put us to shame, and we have the opportunity now to decide where we go. We have wasted 30 years and there is no reason why we should waste another 30 years.

It is no wonder that the McCrone document was marked as secret when it contains quotations such as:

"This paper has shown that the advent of North Sea oil has completely overturned the traditional economic arguments used against Scottish nationalism. An independent Scotland could now expect to have massive surplus both on its budget and on its balance of payments and with the proper husbanding of resources this situation could last for a very long time into the future."

It goes on to the killer quote, which is:

"Thus, for the first time since the Act of Union was passed, it can now be credibly argued that Scotland's economic advantage lies in its repeal. When this situation comes to be fully appreciated in the years ahead, it is likely to have a major impact on Scottish politics."

No wonder they tried to keep the document secret. However, we had to go through unmitigated Thatcherism and the devastation that it wreaked upon our communities.

Will the member take an intervention?

The minister has had his opportunity. When the First Minister said that he was waffling, at least he had the good grace to sit down; the minister should learn from that.

Mr Johnstone should note what the document says about the only thing that the SNP got wrong:

"Thus, all that is wrong now with the SNP estimate is that it is far too low; there is a prospect of Government oil revenues in 1980 that could greatly exceed the present Government revenue in Scotland from all sources and could even be comparable in size to the whole of the Scottish national income in 1970."

All of that was kept from us and what we got from Mr Wilson's colleagues and, indeed, from other political parties was the prediction first that all the oil and gas would be gone by the 1980s, then that it would all be gone by the 1990s and then that it would all be gone by the start of the new millennium. Now we know that there are 30, 40 or 50 years of oil and gas left.

We now have further revelations—it is not oilgate but mediagate. The Government was so frightened and intimidated by a television programme that it decided to interfere. When a Government starts to interfere with and distort the media, it fundamentally subverts the democratic process. Harry Ewing MP, from the Labour Government, is quoted as saying that the programme that the BBC proposed to transmit before the 1977 district elections was

"serious enough indeed, to warrant intervention by the Government at the most Senior Level."

Ewing described the proposed timing of the programmes as

"absolutely devastating in that they will be screened just prior to the District Council elections in Scotland. There can be absolutely no doubt that their effect on the outcome of the District Council elections will be to say the least quite disastrous, not only for the Labour Party but for other political parties in Scotland as well."

No wonder that there was Labour and Tory unity to do down the SNP, as the headline in today's edition of The Herald suggests. Had that been done at Westminster by a Labour Government to a Tory Opposition or by a Tory Government to a Labour Opposition, there would have been outrage. It would have been viewed as Sovietesque tactics—something fit for a banana republic. We now know that our oil wealth has been hidden from us and that those in the pan-unionist coalition that has acted against the interests of Scotland colluded not just to do down the SNP but to subvert the democratic process in Scotland. Thankfully, we still have oil left. When we form the Administration, we will ensure that it is used for the benefit of the people of Scotland, not for Thatcherite policies and to subsidise mass unemployment.

This is an instance of the old songs not necessarily being the best ones. Last week's election results underlined the political ineptitude of the SNP. This morning's debate highlights the extent to which it is completely out of touch with the interests and aspirations of the people of Scotland. People are not interested in what happened 30 years ago. They are interested in what happens now and what should happen in the future—how their economic prospects and personal interests can be advanced.

Let us be absolutely clear: for 18 of the past 20 years, oil revenues would not have covered the level of public expenditure in Scotland, even on the most optimistic assumption. Public expenditure in Scotland is 20 to 25 per cent higher than that south of the border. Unlike the SNP and the Conservatives, I believe that that is a good thing. Ever since my election, I have worked hard to overcome the barriers that have held back the people of Clydebank from participating fully in the tremendous economic success that the UK and Scotland as part of that dynamic economy have enjoyed. I have campaigned for regeneration of the site of the former John Brown shipyard, to bring new life, better housing and more jobs to the centre of the town that I represent. I have campaigned for measures to be taken to improve health, bearing in mind the legacy of poor diet and unhealthy lifestyles that is at the root of the mortality and morbidity statistics that affect so much of the west of Scotland. I have campaigned to improve educational standards, given the low proportion of people from West Dunbartonshire who go on to higher education.

In each of the areas that I have mentioned, we have made tremendous progress. The regeneration of the Clydebank waterfront is going on apace, generating real confidence and commitment among the people of the town. The unused private hospital that was built under the Tories has been brought into the national health service, making a terrific contribution to the reduction of waiting lists. It is now to become the flagship centre in Scotland for cardiac care. Clydebank is to have new secondary schools and a new college, so that its young people can have the best facilities available to build on the fact that this year West Dunbartonshire showed the most improvement in exam performance of any local authority in Scotland. All those developments depend on public expenditure, which both the SNP and the Tories seem in general to regard as a bad thing.

Most people in Scotland want to ensure that they get the investment in their area and community that will drive the economy forward and make things better for them. It is crucial that public expenditure is well spent and well used. It must focus on the interests of ordinary people, so that they get the chance to participate. That is what an opportunity society is all about, and the Labour Party is determined to deliver that for people. We are not interested in highfalutin' economic theories that do not mean anything, debates that may have taken place 30 years ago or conspiracies of the past. We are interested in what happens now, what is good for the people of Scotland and what is good for the people in the communities that we represent. That is what is crucial in politics.

When the chairman of Scottish Enterprise says that the economy of parts of the west of Scotland is like that of eastern Europe, does that make the member proud of the Executive's record?

It raises questions about what Scottish Enterprise should be doing for the towns and cities of the west of Scotland and how its work can be advanced. I hope that ministers will take up that issue steadily. However, I ask Murdo Fraser what Tory chancellor in England would create a situation in which the Conservatives could argue that there should be tax cuts paid for by tax transfers. The Tories are ending up in a fundamentally implausible position.

The question that we must ask is how, collectively, we can advance the interests of the people of Scotland and of economic growth and social conditions in Scotland, because the two are intertwined. The Parliament must focus particularly on the interests of west-central Scotland—not just Clydebank and Ayrshire, which the minister represents, but Glasgow and the towns around it. That is where we need to work to unlock the opportunities and potential of our people. I am fed up with SNP and Conservative members arguing against the advancement of the west of Scotland because they have pet schemes elsewhere. We must argue for the whole of Scotland, but we must argue particularly for those areas in which the people are, the deprivation is and the growth potential is the greatest. The west of Scotland must be the top priority for the future.

It is clear that the publication of Gavin McCrone's report has given some in the SNP a chance to go into retro mode—to go back to the oil dreams of the 1970s. We must be clear about the fact that basing the future of Scotland's economy on North sea oil is like some imaginary SNP finance spokesperson of the 1850s proposing to base Scotland's economy on whale oil and finest blubber.

Has the member ever heard of Norway? It is a country slightly to the north and east of us that has based its economy on the discovery of North sea oil and gas. Norway is now the most successful country in the world and the best place in which to live. It has been recognised as such for years. What is imaginary about that?

In the environment section of its manifesto, the SNP talks about how it will climate proof its policies. However, when it comes to the economic section, it talks as if oil is the future of Scotland's economy. That is the problem.

Will the member give way?

I have already taken an intervention from an SNP member.

Future generations will boggle at the amount of oil and other precious hydrocarbons that we have and the amount of them that we have burned, given the huge variety of things that can be done with hydrocarbons. They will boggle at the impact of climate change. Hopefully, they will realise that we cannot base any economy on continuing to burn oil at the current rate and that we cannot base the economy of Scotland on continuing to pump oil over all else.

I agree with Jim Mather on the need for us to have more control over the Scottish economy. I was one of the MSPs who attended the Scottish Enterprise briefing yesterday morning. Unlike many MSPs, I listened to the litany of woe from Scottish Enterprise on the state of the Scottish economy. Labour members often criticise Jim Mather for being a doom monger on the Scottish economy, but what he says is nothing compared with what we heard from Scottish Enterprise. Scottish Enterprise representatives talked in airy terms about the fact that Scotland had lost its advantage in wind energy generation to Norway, as if Scottish Enterprise was not there when that happened. We may now lose our advantage in wave energy generation to Portugal, unless we get the proper investment in research and development to take forward that industry.

I share Des McNulty's concerns about the role of Scottish Enterprise in regenerating the deprived communities of Scotland. We need a Parliament with the powers to make a difference to the Scottish economy and to build a sustainable economy for Scotland.

I am pleased that Allan Wilson's amendment refers to the need to

"foster a sustainable economy, rising living standards and an improving quality of life",

but I would like to tempt the minister to explain what he means by "a sustainable economy". Does it simply mean that increases in GDP will be sustained year on year, without any reference to social or environmental sustainability, or does the Executive want a truly sustainable economy—a wider vision of the economy? Recently we heard that almost half of all Scots and almost a quarter of all Scottish households live on less than £10,000 a year. Is that socially sustainable?

Scotland emits 26 per cent more greenhouse gases per capita than do England and Wales. Is that a record of environmental sustainability of which to be proud? We need a sustainable economy, but that means a different kind of economy—one that has all three legs of sustainable development and that is not just based on increasing GDP.

The SNP motion talks about "competitive control"; as oxymorons go, that is right up there with leisure shopping. Recently, I have been spending all my time in Cathcart—members may have read about it in the sports pages. It was a difficult home game. I was called off the bench to play in goal and, although I was a wee bit short of match practice, I had to face a penalty kick that was taken by the Opposition striker Big Eck. He hit the corner flag from the penalty spot and I scored the winner direct from the resulting goal kick. It would be fair to say that Big Eck was as sick as a parrot, but he has resolved to take his team's next 20 penalty kicks.

It is nice to see you, Bill.

It is nice to see you, too.

Is the member not aware that, according to the rules of football, it is impossible to score a goal direct from a goal kick?

Well, there may have been a slight deflection, but I am taking the credit.

Cathcart is prospering under Labour. Unemployment in the constituency is down 42 per cent since 1997 and, last year, youth employment went down 9.9 per cent, which compares well with the average national reduction of 6.5 per cent. Also since 1997, 1,800 people in the constituency have found new jobs under the new deal.

Glasgow, too, has been growing. Around 70,000 new jobs have been created in the city region over the past seven years; property investment is at record levels, at about £3.4 billion; and the regeneration of the River Clyde alone is worth £2.3 billion and counting—I played in goal for that team as well.

So Cathcart and Glasgow have had growth, as have Scotland and the UK. It does my heart good to know that we have a Chancellor of the Exchequer who is committed to low inflation and full employment. Labour is committed to growth, whether that is through more sensitive regulation such as we are seeing in planning reform; more infrastructure, such as the completion of the M74; or lifelong learning, which is here to stay.

The SNP is entering a period of introspection—it is a case not so much of "Hail Catalonia!" as of "Hail catatonia!" Cathcart makes that essential. The SNP should reflect on the fact that Labour is delivering growth, and is doing so—to borrow the words of that well-known football fan, Kenny MacAskill—

"By delivering on the economy, not being perceived as obsessed with the constitution."

The SNP motion says that the SNP wants to see

"meaningful levels of economic growth"

that

"result in rising living standards".

The Labour amendment does not say much that it is different: it says that Labour wants to

"help create the conditions that foster a sustainable economy"

and "rising living standards". Both parties claim that they want to grow the economy.

I accept that over the past decade or more there has been growth in the economy in Britain and in Scotland. I also accept that there has been wealth creation in Scotland, as there has been in the UK as a whole. Surely that must mean that we are living in a better-off society. Charlie Gordon has just claimed that we are, but that is not so. Whether someone is better off depends on the class that they come from. Over the past decade or more, some people have become much wealthier and are now better off than they could ever have imagined being in their wildest dreams. The top 10 per cent have more than doubled their wealth, but people in the lowest percentages are hardly better off. Although it is true that the shareholders and directors of the transnational corporations have done nicely through pension funds, bonuses and income, we still have enormous inequality in Scotland. Economic growth has not benefited the people of Scotland as a whole.

The biggest question in the debate concerns our reason for growing the economy. Are we doing it to line the pockets of the people in the boardrooms and of the shareholders—to increase the wealth of the top 10 per cent—or to raise living standards as a whole? If the reason for growing the economy is the latter, how do we address the enormous inequality in the country? Scotland has the greatest inequality of wealth distribution that we have seen for centuries. That is the issue that the SNP and the Labour Party should consider. The problem is that both parties talk a good game, but their policies only increase inequality.

Scotland has the lowest social mobility of any advanced capitalist country in the world with the exception of the United States of America. We are a wealthy country and yet people cannot pull themselves up by their bootstraps; they cannot, in a generation, move from the lowest 10 or 20 per cent of the population to the wealthiest.

The countries with the greatest social mobility are the Nordic countries: Norway, Denmark, Finland and Sweden. Those countries also have the least inequality. That is the issue that we need to address in the debate.

The four countries that the member mentioned are models of social democratic capitalism and not of revolutionary Trotskyism.

I think that they can be called social democratic countries. It is sad that Frank McAveety and others in the Labour Party abandoned that model in the neoliberal revolution of the 1980s and 1990s that dictates Labour's current economic policy.

As part of the mountain of evidence that Professor Richard Wilkinson assembled, he found the view that, no matter how rich a society,

"it will still be more dysfunctional, violent, sick and sad if the gap between social classes grows".

That is the situation in which we are today, and the neoliberal policies that the SNP and the Labour Party have accepted create an economic macro situation that gives neither party room to manoeuvre. Both parties have accepted the global laws that are set up for the multinational corporations.

If the SNP had independence, would it bow the knee to the World Trade Organisation? Would it privatise Caledonian MacBrayne? What would it do? Unless it took on organisations such as the WTO and the multinational corporations, the SNP's powers would be limited.

I note with interest that Labour members who have spoken in the debate have said that every time the SNP discusses oil, we look back to the past. In the few minutes that are available to me, I want to talk about oil, Scotland's energy resources and the future for Scotland.

As other members have said—I am thinking in particular of Kenny MacAskill—Scotland has a second chance at its energy future, in particular in the case of the oil industry. I want to scotch some of the myths that are peddled by the unionist parties who sit in an unholy alliance on the other side of the chamber from the SNP. Their only interest is in protecting their future careers; they are not interested in doing what is best for Scotland.

The message from the McCrone report of the 1970s is just as relevant today as it was when McCrone outlined the booming economy that Scotland could have had if we had had control of our oil revenues. A few weeks ago, I attended the offshore Europe 2005 exhibition and conference in Aberdeen, for which 45,000 delegates from around the world descended on Aberdeen to discuss the future of the North sea. There was a spring in their step. The North sea—in Scotland's territorial waters—is moving into a new era that gives huge potential for Scotland's economic future.

The Labour Party always tells us that Scotland's oil industry is in decline, but British Petroleum has just announced that it is to build a brand-new headquarters in Aberdeen. Cautious oil companies do not make multimillion-pound investments like that unless they have full confidence in the future of the oil industry.

Even the Department of Trade and Industry's official statistics—and the DTI is the most conservative body in Government—say that there are at least 30 more years of oil and gas in the North sea. Even the DTI is saying that for every barrel of oil that is extracted, another one remains to be extracted.

The SNP manifesto says:

"An SNP government will climate change proof our policies".

Given that even Tony Blair argues that the UK needs to cut carbon dioxide emissions by 60 per cent by 2050, how will the SNP climate change proof oil extraction?

The simple fact that seems to escape Mark Ballard is that Scotland needs fossil fuels such as oil and gas if its economy is to keep going and not close down tomorrow. It will take 20, 30 or 40 years to switch to a low-carbon economy. Mark Ballard is telling the Scottish people that we cannot do anything about climate change unless we close down North sea production tomorrow and bring our economy—and, indeed, the economy of other countries—to a complete halt. That would lead to economic dislocation. The oil industry has to help Scotland's economy until we switch over to renewables. As I have said, that process will take decades. The difference between the SNP on the one hand and the Green party and the unionist parties on the other is that they want North sea oil revenues over the next few decades to go to London and not to Edinburgh, where they could be used to boost the country's economy.

On the future of North sea production and renewables, a couple of weeks ago, I met representatives of Talisman Energy, which is the biggest independent operator in the North sea. They told me that, under the company's stewardship, oil fields that BP was supposed to close in the 1990s will continue to produce oil until 2023 and that other oil fields will pump oil and gas until around 2050. The industry has a huge future. That is why when we talk about oil and Scotland's energy potential, we concentrate not on the past but on the future.

Does the member agree that an important component of the new exploration in the North sea is the Government's fallow field initiative?

Although I welcome many of the measures that have been taken, we need to take many more if we are to support the oil industry. Unfortunately, the UK Government in London sees the industry as a cash cow, not as a source of other skills and technologies that should be invested in.

We must learn lessons from Norway. For the fifth successive year, the United Nations has declared Norway to be the best place in the world to live. That is because the Norwegians use their natural and energy resources to boost their economy and to protect their people's interests. We should do the same in Scotland.

Is it not funny how the SNP wants to talk about independence only after an election, never during one? The sadly departed Ronnie Barker once brought us news of a strange happening during a performance of Elgar's "Sea Pictures" at a concert hall in Bermuda, when the man playing the triangle disappeared. Perhaps he went out looking for the SNP's commitment to independence in Cathcart and Livingston. In both campaigns, it was the dog that did not bark.

However, after yet another gubbing at the polls, the nationalists are safely back in the chamber, well away from the electorate. Now they can get on with doing what they do best: talking to each other—or to whoever is left in the chamber—or, more accurately, talking to their activists in a bid to top up the ballot for list seats. I suppose that that is one election that an SNP candidate might stand a chance of winning.

The SNP's double life extends beyond its embarrassment about independence. As far as the economy is concerned, I cannot believe that the nationalists have the cheek to try to lecture us about the virtues of enterprise. Is this the same SNP whose list of wild spending promises makes even our colleagues the Liberals look like iron-fisted skinflints? Is this the same SNP that demands more money for—to pick but a few examples—a Scotland-only honours system, the fishing industry, the arts and whatever the Fèisean movement is? I hope that it does not involve Highland farmers and their cattle. Before Mr Mather dismisses those pledges as the ramblings of a lunatic fringe, I should point out that he himself likes splashing the imaginary cash. He has demanded more funding for the Highlands and Islands, the creation of an independent office of national statistics, the waiving of fresh talent application fees and much, much more.

Will the member give way?

No.

Is this the same SNP whose ideological hatred of the private sector is such that it would leave the sick to suffer on waiting lists instead of using the capacity in private hospitals to get operations carried out quicker? Is this the same SNP that would have our kids educated in cold, crumbling classrooms because of its dogmatic opposition to public-private partnerships? Is this the same SNP that can hardly say the word "profit" without spitting? Is this the same SNP that promised money left, right and centre during the Cathcart and Livingston by-election campaigns?

Yes, it is the very same SNP. Now, a mere week later, the nationalists expect us to believe that they have suddenly turned into the party of fiscal prudence. No one needs to get the Windolene out to be able to see through that.

In short, if the SNP is to have any credibility as a serious political party—and I realise that that is a big if—it cannot continue to lead this double life. It cannot be a sober bank manager during the week and dress up as a showgirl at the weekend—or perhaps it is the showgirl who dresses up as a bank manager at the weekend. I am not sure which metaphor is more apt.

Until the SNP decides whether spreadsheets or sequins suit it best, the people of Scotland—as they did in Cathcart and Livingston—will keep sending it homeward to think again.

I congratulate Charlie Gordon on making his maiden speech this morning. It was nice to see the new MSP for Glasgow Cathcart, who I am sure will represent his constituents extremely well, taking his part in the Labour Party's traditional battle against the running dogs of capitalism. I hope that those are the only running dogs that he, unlike his predecessor, will be concerned with.

We are here at the SNP's behest to discuss its economic policy. The debate has certainly raised many questions that need to be answered. However, as far as economic policy is concerned, the nationalists remain split down the middle. It does not matter how many responsible SNP front benchers set out in sensible terms how their party would run the country; look at the myriad individuals behind them, such as our dear friend Christine Grahame, who is notorious for spending half a billion pounds every time she gets to her feet. There is an inconsistency in a party that seeks to be responsible but calls for expenditure at every opportunity.

That said, we must address the issue of the McCrone paper, which has now been made public and which, before its publication, formed the mainstay of Alex Salmond's speech to the SNP conference a few weeks ago. The publication of the paper has led to some great revelations, but the SNP has once again taken all the good points out of a particular idea while ignoring its more difficult aspects.

Although the paper, written all those years ago, highlighted some positive aspects for Scottish nationalism, I want to provide some balance. For example, it says:

"Scottish banks could expect to find themselves inundated with a speculative inflow of foreign funds."

R G L McCrone also points out that any Scottish currency could inflate in value by 20 per cent in the first two years of independence, which could have disastrous effects on industry and export; that Scotland would be too expensive for tourists; that Scottish farmers would find European Union subsidies worth a lot less; and that there was a

"grave risk that the economy would be driven more and more to depend on the oil industry and other activities would tend to wither"

on the vine.

Will the member give way?

No, I will carry on with my quotations.

Although Scotland would have "a good income" from oil—which I am prepared to admit—McCrone then says that

"it could never be an adequate source of employment with the rest of the economy in decline."

Although Scotland could be rich, a higher proportion of the workforce would be on the dole and the population would begin to fall.

Norway has been mentioned many times this morning. I speak to Norwegians quite often—many live in the north-east because of their involvement in the oil industry—and I see some of the things that they have told me about present-day Norway reflected in the picture that McCrone painted all those years ago. For example, although Norway is wealthy, it is not necessarily the kind of country that we would want Scotland to be. Our relationship with our UK partners has benefited us greatly, and over the past 30 years oil moneys have flowed through the Exchequer back into this country.

The SNP talks a good game, but it fails to understand the rigours of true international capitalism. There is no better example of that than the attempt by Nicola Sturgeon to encourage revulsion at the idea that Scottish Power could be taken over by a German company. In recent years, the most successful Scottish companies have grown through acquisition. Scotland is part of a world economy and it cannot exist in isolation. In that world economy, Scotland is already doing a very good job.

We move to winding-up speeches. I must ask members to stick to their allotted times.

The SNP has lost this morning's debate on the economy, just as it loses every debate that we have on the economy. It has lost the debate on the motion because my colleagues have successfully shown that, when it comes to promoting economic growth and rising living standards and addressing demographic trends, it is the Executive rather than the SNP that has the right strategy. We are building on eight years of economic success, record employment and consistent growth, thanks to our being part of a strong UK economy under the stewardship of Gordon Brown.

The fact is that the gap between growth in Scotland and growth in the rest of the UK continues to increase. In the first quarter of this year, growth was 0 per cent. Where is the success in that?

Scotland has had consistent growth at a time when other parts of Europe have gone in and out of recession. That consistent growth has been a great reward for Scotland.

It is the SNP's lack of a coherent strategy that is based on growing the economy, rather than the frailty of its arguments on the economy, that has been the overriding factor in the failure of the people of Scotland to trust the nationalists with their prosperity. The emphasis of Kenny MacAskill's speech was rather different, but Charlie Gordon was right to say that, instead of being perceived as being obsessed with the constitution, the SNP should aim to deliver on the economy. Alas, that was a forlorn hope, given that the SNP motion again focuses on the powers of the Parliament.

Alex Neil closed a debate on the economy that we had earlier in the year with the words, "freedom, freedom, freedom." That was rousing stuff, I am sure, but it is because the SNP tries to bend its economic strategy to the goal of what it mistakenly calls freedom that it ends up with no real strategy at all. We initiated and refreshed the smart, successful Scotland strategy with the goal of economic development in mind; that is why it is working for Scotland.

What the SNP proffers as its strategy is hopelessly confused. I do not doubt for a second that Jim Mather wants Scotland to perform effectively in the global marketplace, but the concept of economic patriotism that his deputy leader came out with implies that we could have a new policy of protectionism, when that would cut us off from the rest of the global marketplace. We cannot adopt such a policy under devolution and we could not do so under independence; to pretend that we could is to deceive the Scottish Power workers. Other Scottish companies that are succeeding abroad would find it a costly policy.

Will the member give way?

I am sorry, but I cannot.

We now know the SNP's policy on oil as the oil overdraft. The nationalists revel in high prices one day, as they say that they would mean that an independent Scotland would be economically viable after all, but the next day they say that high prices are bad for Scottish business. That is a policy of confusion and hypocrisy.

The SNP's favourite game is to pick a single aspect of an independent small nation's economy and to hold it up as a beacon, but that approach is flawed, too. We have heard a huge amount about Norway and its oil fund from Mr Maxwell and others, but The Economist—which I am sure that Mr Mather must read—writes:

"many of Norway's 3.4m-odd voters do not share the view that they live in nirvana. With all that oil wealth, they cannot understand why the welfare system has so many defects. There is a shortage of kindergartens, hospitals are understaffed, taxes are high, petrol costs as much as in non-oil countries and pensioners have problems making ends meet."

It is no wonder that the Labour Party won the election in Norway, that Scotland beat Norway 2-1 in the football or that, with such an obviously flawed economic policy, the SNP performed so pitifully in the election that Charlie Gordon—who gave an excellent maiden speech earlier this morning—won for Labour in Cathcart.

The SNP has lost the argument on the economy this morning, just as it lost that argument in Cathcart. It is clear that, when it presents its woeful excuse for an economic strategy to the rest of the people of Scotland in 2007, it will be roundly rejected again.

I join other members in welcoming Charlie Gordon to the Parliament. I congratulate him both on his maiden speech and on taking over my mantle as the new boy. I wish him well.

The debate is important. The Scottish economy is crucial to everything that the Parliament does and to everything that it aspires to do. We need a successful economy to fund the public services on which we all rely. As Bill Clinton famously reminded his campaign team, "It's the economy, stupid." Perhaps all of us should reflect on that daily; we might or might not wish to drop the "stupid".

The SNP motion talks about Government having a duty to create

"meaningful levels of economic growth".

I agree, but I would go further than that. It ought to be the duty of Government to foster the conditions in which we can deliver the highest levels of sustainable economic growth. Perhaps that is what Jim Mather was driving at. The motion refers to the failed policies of the past 30 years. Some policies have failed—in some cases, fairly spectacularly—and Governments of all parties have made mistakes. What is important is that we learn from those mistakes.

It is not surprising that the SNP constantly brings the debate back to independence—which is what I assume it means by the phrase "full competitive control" that is used in the motion. If the SNP does not stand for independence, it does not really stand for anything. However, I wonder whether independence is a meaningful concept when we talk about the economy, because the impact of international trade and the development of the global economy mean that although Scotland could well be independent in name, it could never be independent in practice.

As Murdo Fraser pointed out, it is the policy that is important. Independence would certainly provide a different framework in which to implement economic policy, but it would not necessarily provide a better economic policy. It is true that the Parliament does not have the powers over the Scottish economy that some members of all parties would like it to have. There is a proper debate to be had on that, but if we do not use the powers that we have responsibly and effectively, we will struggle to convince a sceptical public if or, indeed, when we ask for greater powers. I disagree with Jim Mather that there is a public appetite for greater powers at the moment.

Does the member agree that the people of Clydebank—who were mentioned earlier—would have been delighted if the order to build three aircraft carriers had gone to the Clyde rather than to France and if the Ferguson yard in Duncan McNeil's constituency had been awarded the contract for building a fishery protection vessel? That could have happened if the contract for that vessel had been put under a Ministry of Defence mantle.

I am sure that people in Clydebank would look forward to any form of regeneration. It is certainly true that there are parts of Scotland that have lagged behind the rest of the country.

This afternoon we will hear an interesting statement on business rates. In all probability, the announcement that is made will be welcome, even if it is long overdue. As we prepare for that statement, it is worth reflecting on the policy on business rates that has operated over the past five years. Has the higher level of business rates increased economic growth, made our businesses more competitive and created jobs? I think that we all know the answer to that question. Perhaps the minister will give us his response this afternoon.

The economy is a hugely important subject and I am glad that the SNP has used some of its time to focus on what the Parliament can do to improve matters, even if—this will come as no surprise—I do not agree with every aspect of what it said. It is important that we explore what we can do within the current boundaries of devolution. There is no reason why we should be pessimistic about what we can achieve for the Scottish economy, unless we lack the political will to change direction when our policies are seen to fail. That is the real test for the Executive.

I, too, begin by congratulating Charlie Gordon on his maiden speech. He was right to say that, in Cathcart, there was an open goal, but I disagree that when Big Eck took the penalty it hit the corner flag; I think that Big Eck fell on his face in the run-up and did not manage to kick the ball at all. Although Mr Gordon is a new boy, someone should point out to him that, unlike Glasgow City Council, the Executive is a two-party coalition and not a one-party state.

The debate has been a bit like "Groundhog Day" in that, as usual, the SNP has portrayed Scotland as the victim—the big, bad English boy beat us up and ran off with our oil money. Kenny MacAskill came up with his conspiracy theories and his good old chip-on-the-shoulder rhetoric. Poor helpless Scotland was mugged and robbed of its oil cash—if only. That is complete and utter nonsense, as the facts clearly demonstrate.

In 1974, when McCrone's paper was produced, the price of oil was at an all-time high as the Organisation of the Petroleum Exporting Countries hiked up the price and economies round the world were hit with the first of the two oil shocks. McCrone could not have foreseen then that the price of oil would collapse to $10 a barrel, which is what it was through much of the 1980s and the early 1990s—in fact, right through to recent times.

The facts are that, even if all the oil revenues from North sea oil had been apportioned to Scotland, we would still have been in overall deficit to the UK over the past 30 years. The real question is how well the oil money was invested during that time. We got the answer from Mr Brownlee in his wind-up speech, because he admitted that the Tories had made huge numbers of mistakes during their stewardship of the economy at that time.

Not huge numbers.

Mr Brownlee was certainly more than willing to admit that a substantial number of mistakes had been made.

As I said, the real question is how well the oil money was invested. The answer is that it was wasted on unemployment benefit and on throwing people on to the scrapheap.

Does the minister really believe that the Scottish people are incapable of learning and taking messages from other countries and converging on best outcomes? Does he think that we would go for a disastrous outcome and stick with it?

No, the Scottish people are extremely wise and they can see through the rhetoric that the SNP keeps putting before them. In the past three elections, they have rejected the SNP's view of the world in favour of the real world. As Charlie Gordon said, it is a day of catatonia for the SNP, and the real question that confronts the SNP is what its fiscal and monetary policy would be if it was ever fortunate enough to persuade Scotland to vote for independence. Would the SNP adopt the high tax, high public expenditure Scandinavian model? Norway and Finland are the only two small countries that have been mentioned in the debate; there has been no mention of Ireland, which is the other alternative, of course—the low taxation, low public spending Irish model. Alternatively, would it adopt the Alice in Wonderland economic model that combines the Irish taxation level and the Scandinavian spending level? That is the position that is so often articulated by SNP spokespeople in debates in the Parliament. The electorate rightly sees that for what it is: economic illiteracy. That is why it has rejected the SNP so many times over the past three to four years.

The Executive is investing in education, skills, support for research and development and entrepreneurial dynamism. From next year, we will be spending £22 million a year in our schools to promote enterprise and risk taking to our young people. We are also investing record amounts in improving our transport infrastructure. Later this afternoon, the Minister for Finance and Public Service Reform will confirm that we will cut Scotland's business rate poundage and bring it into line with that of England. Currently, rateable values in Scotland are lower on average than those in England and combining that with a business rate poundage that is equal to England's will mean that we will have taken a major step towards delivering a key competitive advantage for Scottish firms.

I believe that the Executive has created a great environment in which to do business. Those words are not just mine; they are also the words of Tony Froggatt, the chief executive of Scottish and Newcastle plc, who last night was designated Cable and Wireless businessman of the year. He stated that Scotland is a great environment in which to do business, and I ask colleagues to support that notion.

I, too, congratulate Charlie Gordon on his maiden speech. I am sure that the First Minister, with gritted teeth, would have been watching it closely on a monitor. I first met Charlie when he was campaigning for independence for Scotland as a member of the breakaway Scottish Labour Party. I hope that he has not changed his mind, even though he has changed his party. I disagree with him on one issue, which is his claim that Glasgow is booming under Labour. Glasgow has a real unemployment rate of about 28 per cent. With that level of unemployment, to claim that the city is booming makes Charlie look a Charlie—a real Charlie.

Let us start with the facts about the Scottish economy.

Will the member take an intervention?

I will take it later.

After eight years of a Labour Government and six years of a Lib-Lab pact in Holyrood, let us look at the facts. Fact one is about unemployment. The real level of unemployment in Scotland is about 250,000 people. About 90,000 unemployed claim benefit, but another 50,000 or 60,000 officially unemployed do not claim benefit. Thirty-five thousand 16 to 19-year-olds are not in employment, education or training, which is the highest percentage in Organisation for Economic Co-operation and Development countries, according to the Executive. In addition, there are many thousands on incapacity benefit who can and want to work and tens of thousands in part-time employment who want to be in full-time employment.

Let us be clear: the idea that Gordon Brown has solved unemployment in Scotland is total nonsense. We continue to have very high, very concentrated levels of unemployment in Scotland, most noticeably in the constituencies of Des McNulty, Duncan McNeil and Charlie Gordon, as well as in many other Labour representatives' constituencies.

On that point, in this horrible country that Mr Neil describes, why did the voters in the desperate constituency of Cathcart singularly fail, only last Thursday, to accept the SNP's arguments as a positive statement for Scotland?

I am sure that they will reverse that decision in 2007. They will recognise that 300 years of the union has been a disaster for Scotland and for Glasgow.

Let us look at facts and the investment record. Our competitors invest about 20 per cent of their GDP in their economies; in Scotland, we invest less than 10 per cent. The figures on manufacturing exports that we got yesterday are some of the worst ever produced. Two weeks ago, we got the new figure on research and development expenditure. It is not going up; it is going down, although it is already one of the lowest in the OECD.

Can Mr Neil explain to us how an independent Scottish pound tied to the price of a barrel of oil would help to improve Scottish manufacturing exports?

It would improve them enormously, because of exchange and interest rates. For example, our industry would not face an interest rate that is twice the real rate in countries in the euro zone or North America. A lower interest rate would be a massive boost to industry and manufacturing jobs in Scotland.

Let us deal with oil, not by looking at the past, but by looking into the future.

I will not give way again.

The reality is that we now have a second chance with oil. All the lies that were told about oil 30 years ago, as Gavin McCrone pointed out, are now being retold today. However, the reality is that we are in for a long, sustained period of high oil prices. As Lord Oxburgh, the chairman of Shell UK, has pointed out, we are in a situation in which, no matter what scenario we paint, oil will remain at $60, $70 or perhaps $80 a barrel. We are also in a situation in which Gordon Brown is depending on oil revenue this year to bail him out of his economic black hole. I find it amazing that the unionists argue that we could not be independent because Scotland would have a small deficit. Gordon Brown is running up record deficits. Does that mean that the UK cannot function as an independent country?

The real question is what the SNP's fiscal and monetary policy would be if Scotland was independent. Would the SNP adopt the Irish or the Scandinavian model? We have not heard clarity on that from Mr Neil.

George Lyon has heard clarity; he just does not want to listen.

If we had control over not only oil but all our financial and economic policy, we would be able to do something that I would have thought every Liberal and Labour member would want to do—we would be able to use the natural resources of Scotland, and the resultant revenue and downstream jobs, to solve the problems of unemployment, deprivation and poverty. Instead, we have nothing but a litany of complacency from the two coalition parties about the state of Scotland today.

Our message is very simple: put Scotland's wealth to work for the people of Scotland. The only way in which we will be able to do that is by freeing ourselves from the controls of London through an independent Scotland.