Plenary, 06 Nov 2008

Meeting date: Thursday, November 6, 2008

Official Report 664KB 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-1142)

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

The question provides an opportunity for all of us to welcome the huge election victory of President-elect Obama and all that that victory means for the world in promoting an atmosphere of hope and expectation as opposed to the politics of fear and despondency. [Applause.]

Throughout Scotland, local authorities are struggling with the budgets that the Scottish Government has given them. Let us look at Fife Council, for example. Home care charges are up from £4 a week to £11 an hour; £51 is now being charged for a home alarm whereas previously everyone who needed one got one free; and charges of £7 for shopping deliveries have been introduced for the first time that service is no longer free. Is that what the First Minister meant when he said that he had given local government the flexibility in funding to meet the priorities of our people?

I wonder why the leader of the Labour Party chooses Fife as his example. If Fife is the example, let us welcome the 10 per cent increase in the education budget there and Fife Council being one of the councils in Scotland that is moving ahead with employing new teachers in this academic year. [Interruption.] I see that Lord George Foulkes is again disgruntled. Let us make him even more disgruntled by mentioning the fact that Glasgow City Council, North Lanarkshire Council, Clackmannanshire Council, Dundee City Council, North Ayrshire Council, East Dunbartonshire Council, East Renfrewshire Council, Inverclyde Council, Midlothian Council and South Lanarkshire Council are Labour-led councils that have home care charges.

It is true that other councils levy home care charges. In Glasgow, for example, the average charge is around £10 a week—not £11 an hour—and that is for home care and shopping services. This is about change—abrupt overnight change for the worse when the Scottish National Party takes power.

Rose Ritchie of Cardenden uses a wheelchair because a spinal condition has left her unable to lift her head. With some support, she manages to live alone; her community alarm is—literally—her lifeline. However, the SNP has changed that. On her tight budget, she simply cannot afford the new bill of £51, so the SNP Fife Council has set its debtor team on to her. Will the First Minister take some responsibility for the plight of Rose Ritchie and others like her in Fife and tell his council to call off the bailiffs?

I am glad that Iain Gray talks about responsibility, because that has been totally lacking in the Labour campaign in Glenrothes. We should consider, for example, what the Labour candidate said the other night at The Courier hustings. He said that he had tried to reassure people, but that he did not know what the criteria were. If he had taken the opportunity to find out what the criteria were, he would know that 1,000 people who were paying charges under the Labour Party are now no longer paying charges under the SNP-Liberal Administration. It is true that 8 per cent of people are paying charges at the full rate as a result of an income assessment that is based on their ability to pay, but exactly the same position prevails in many Labour councils in Scotland. I wonder whether, in future by-elections, the Labour Party will want to feature those examples, in which its councils are in charge of home care charges that are based on the ability to pay.

Earlier in this exchange, the First Minister mentioned events in the election in America. I have to say that the First Minister is no Barack Obama. [Interruption.]

Order.

Indeed, the First Minister is less about the audacity of hope and more about the effrontery of hype. One thing is certain sure: with the power that Barack Obama has taken on comes enormous responsibility. Always with power comes responsibility for those who are big enough to accept it. The SNP leader of Fife Council has taken responsibility. He stands by his cuts. He said this week on the "Today" programme:

"I've no problem taking responsibility for everything the council has done".

That must include the council's cuts. Will the First Minister now accept his responsibility for the SNP cuts in Fife and throughout Scotland?

It is certainly true that I am no Barack Obama; the problem for Iain Gray is that he is no Jack McConnell. The campaign in Fife has included a range of accusations that have been levelled at the SNP council. The Labour Party in its campaign has said that there have been education cuts in Fife, despite the fact that the Fife education budget has increased by 10 per cent. The Labour candidate for Glenrothes says that there are education cuts in Fife. That is absolutely true. I have here a letter that he wrote to councillors in Fife complaining about the slashing of his school budget, before the last election, when the Labour Party was in charge in Fife. As we examine the items one by one, there is no doubt whatever in Scotland about which party is pursuing the politics of hope and expectation and which party pursues the politics of fear and despondency.

That is exactly the effrontery that the First Minister deploys. In Fife, £300,000 has been cut from the budget for classroom assistants, £500,000 has been cut from the budget for teachers, and £460,000 has been cut from the budget for transport for disabled pupils. The cuts in Fife are unfair and unjust; they are being made to services for the elderly and the disabled and in Fife schools, too. Will the First Minister stand alongside his council and his candidate and say that he, too, has no problem with the council's cuts? Is he with Peter Grant, or is he with Rose Ritchie? Today, he cannot be both. Whose side is he really on?

The problem for Iain Gray is that the budget for education in Fife has increased by 10 per cent in the current year. There is no doubt about that—the figures are there. I accept that the previous Labour council reduced the education budget, as the Labour candidate helpfully pointed out when he was a headmaster rather than a Labour candidate.

On the generality of local government funding in Scotland, we hear repeated complaints from Labour members who are unable to accept that the historic concordat has proven that the local government settlement in Scotland is the most generous for a generation. I was interested to note the following words in a Finance Committee Official Report:

"I would always acknowledge the costs of providing services in local government. This is set against the backdrop of the Government providing local authorities with a record level of resources."—[Official Report, Finance Committee, 16 September 2008; c 700.]

That was said by Jackie Baillie. I know that she is a non-person and is no longer in Iain Gray's team, but if she acknowledges that there are record resources to local government across Scotland, why does Iain Gray not?

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Secretary of State for Scotland (Meetings)

To ask the First Minister when he will next meet the Secretary of State for Scotland. (S3F-1143)

I will meet the Secretary of State for Scotland this Sunday at the service of remembrance at St Giles cathedral.

This week, it was confirmed that the national health service in England should not withdraw treatment from patients who choose to pay privately for additional drugs. Will the First Minister confirm that that facility will now be available to NHS patients in Scotland?

We are looking carefully at the report that was released in England. We will be able to announce our response to it shortly, but that measure is certainly something that we are considering. A review is in place and we will make an announcement shortly.

The First Minister rightly misses no opportunity to laud Scotland's virtues, but it is unacceptable complacency if he fails to address negative impacts with the same urgency. Health care in England is now more flexible and, therefore, arguably better. Why should some NHS patients be forced, particularly at a time of grave ill health, to make a choice between staying in Scotland or selling up and going to live in England to benefit from that improvement? How is that, to quote the First Minister's words from only a few moments ago,

"the politics of hope and expectation"?

What is he going to do about it?

The burden of argument has been that the Scottish system of determining drug availability through the Scottish Medicines Consortium is generally recognised as more flexible than, and superior to, the one that prevails down south. We are always willing to learn lessons and take advice based on the most recent information, which is exactly why we are studying the report that was released this week. If we can improve the Scottish situation on the basis of advice that is taken elsewhere, we will do so, because it is our obligation to the national health service and the people in Scotland. However, Annabel Goldie is wide of the mark if she does not acknowledge that the present Scottish system for determining the availability of medicines—which will always be a difficult and agonising issue—is generally considered to be substantially superior to the one that prevails south of the border.

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Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-1144)

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

I join the First Minister and other members who have congratulated President-elect Obama—a very liberal Democrat.

This week, Unite the Union told me that there is now no doubt that we face losing thousands of banking jobs in Scotland. Only minutes after its meeting with the First Minister, Lloyds TSB told the City that it would cut 20,000 jobs. What levers does his Government have to influence HBOS shareholders to keep Scotland's bank Scottish?

The Parliament made a substantial statement of concern about these issues last Thursday. I recall that Tavish Scott and I voted in the same manner. That vote enunciated by a substantial majority a parliamentary view of the concern that is rightly felt about jobs, decision making and competition in the Scottish banking sector. There have been some well-reported developments over the past week. The Scottish Government's view is that if any bid for HBOS were to emerge beyond the one that is on the table from Lloyds TSB, it would be our duty to evaluate it in exactly the way in which we are evaluating the Lloyds TSB one: on the basis of its impact on jobs in Scotland, decision making in Scotland and competition in the Scottish economy. That seems to me to summarise the interests of Scotland.

The First Minister inherited a position in which the Scottish Government is hardwired into the Scottish financial services industry. That needs to be exploited. There is now a fight to find an alternative way forward for HBOS. How is it acceptable that the bankers' first instinct is to pay one another £60,000 a month to advise one another on the mess that they made? The taxpayer is now a £1 billion shareholder in our banks, and we want our money to do more than lose 20,000 jobs, send other jobs overseas and close down branches on the high street. Will the First Minister tell bankers that, when the taxpayer has to cough up billions to bail them out, we expect them to listen to the interests of customers and small businesses, not tell us to leave them alone?

There is broad agreement that a variety of practices in the financial sector, which have been well noted and well reported, should come to an end. That seems a reasonable position for all of us to adopt.

On the guts of the issue, I take it that Tavish Scott agrees that the Government should have discussions with Lloyds TSB on what is in the best interests of Scotland—I know that he does because he supported that position. I take it that he agrees that, if another offer comes on the table, it should be assessed and evaluated against exactly the same criteria. That is also in the interests of Scotland. In turn, I think that every single one of us should acknowledge that people's concerns about employment and jobs are entirely legitimate—they arise from an entirely reasonable assessment of the situation. The concerns about decision making in Scotland are also legitimate, as are, as the Office of Fair Trading report indicated only last Friday, the concerns about the impact on competition.

In terms of pursuing the public and national interest in Scotland, as Tavish Scott well knows, we do not have authority over the financial sector at present—would that we did. Nonetheless, within the powers that we do have, we shall represent the interests of the Scottish people to private organisations, the United Kingdom Government and any other interested party and we will keep those paramount in how we approach this situation.

The First Minister will recall the devastating loss of life at the Vale of Leven hospital due to Clostridium difficile. Since then, constituents have come forward to report that relatives have died of C diff when it was not diagnosed and that, in other cases, patients have been discharged carrying the infection, yet tests gave them the all-clear. Is the First Minister aware of a study that was published in The Lancet that suggests that up to a quarter of C diff cases have been misdiagnosed? Will he ensure that the central recommendation of that study, which is that double tests be undertaken in all cases of suspected C diff, is implemented in every Scottish hospital to help to reduce the mortality rate for C diff?

The general concern about diagnosis and death certificates is well noted. If there are specific matters affecting Jackie Baillie's constituents in terms of the recent understandings, she should approach the Cabinet Secretary for Health and Wellbeing, who will give her specific concerns a very willing hearing.

The First Minister will be aware of the devastating job cuts that have been announced in Hawick this week. On Monday, we were told that Hawick Knitwear Ltd would cut 15 per cent of its workforce due to the economic climate and, last night, it was announced that Hawick Cashmere would cut further jobs due to a company restructuring. That news comes on the back of the decision by Pringle of Scotland earlier this year to stop production in Hawick, which has left that proud town reeling. What action does the Scottish Government plan to take to protect the skilled workforce in the Borders and, in particular, to save the textile industry from cheap overseas imports?

As the member will know, John Swinney has already intervened in the Pringle situation and he indicates a willingness to visit and intervene in the latest development, which is a blow to jobs in the Borders. Equally, the Scottish Enterprise partnership action for continuing employment team will be put on the case in order to develop skills and find alternative employment. The member can be satisfied that the Scottish Government will be fully engaged in addressing the employment position that is developing across the country as a result of the general economic climate.

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Icelandic Banks (Asset Recovery)

To ask the First Minister what discussions the Scottish Government has had with HM Treasury about ensuring that an estimated £46 million of local authority investment, along with charity deposits, are recovered from Icelandic banks. (S3F-1150)

The Scottish Government is working with the United Kingdom Government and Scottish local authorities to secure and retain all the assets that local government and other Scottish depositors have placed in Icelandic banks in good faith.

The Cabinet Secretary for Finance and Sustainable Growth is in regular contact with the UK Government and the Convention of Scottish Local Authorities to ensure that everything possible is being done to recover those assets. He wrote to the Chancellor of the Exchequer on 9 October outlining the strong concerns in Scotland about the developing situation. He met the Secretary of State for Scotland, the Treasury and COSLA representatives on 15 October. On 31 October, he again wrote to the chancellor outlining the agreement reached that Scottish local government be represented at future meetings between the Treasury and the Local Government Association on the situation as it develops. He has offered to meet the chancellor to review progress and discuss the wider developments in financial services and the economy. To date, no response has been received.

Does the First Minister agree that it would be indefensible if HM Treasury, which has used our money to bail out banks—and we have heard what they have used that money for in some cases—is not prepared, in the event that the Secretary of State for Scotland's persuasive powers fail him during his trip to Iceland, to underwrite those potential losses to local authorities and charities? Does the First Minister agree that, together with hikes in energy bills, such losses will put unacceptable pressures not just on our local authorities but on household budgets? I am sure that he is hearing that concern on the doorsteps of Glenrothes.

I think that, in the current situation, the guarantees that have been indicated for retail depositors should be extended to wholesale depositors. Given that we know that there were some early indications of the position as it developed, and given that bodies such as the Audit Commission south of the border are among the organisations that have been hit, I do not think that it is reasonable to hold individual councils responsible.

On the wider concern about heating bills, I absolutely agree. The biggest concern that I detect for homes in Scotland is the heating bills that are thumping through people's letterboxes that show increases of 30, 40 and 50 per cent. In that light, it is welcome that the additional £10 million for the central heating programme that was announced by the Cabinet Secretary for Health and Wellbeing will ensure that record numbers of installations of new heating systems will be pursued throughout Scotland and in Fife.

I welcome the discussions that the First Minister and his team have had with the Treasury. Is he aware that the Minister for Local Government, John Healey MP, has given an assurance to the Local Government Association that any English local authorities facing severe short-term difficulties will be offered assistance? Will the Scottish Government give the same assurance to our local authorities? Has the Cabinet Secretary for Finance and Sustainable Growth indicated to COSLA that he is willing to consider ways to help any Scottish council that faces cash-flow difficulties arising from such deposits not being returned at contract times?

The cabinet secretary is in constant contact with COSLA on that issue. Indeed, COSLA and the cabinet secretary are at one in their approach to the issue. However, I know that Alison McInnes would not like to divert attention from the fact that financial regulation is a UK Government responsibility. We would not want to remove from the Treasury the obligations that it most certainly has in that regard.

Does the First Minister recall the Government's approval in December of Aberdeen City Council's much delayed schools renewal programme on the basis of £120 million in funding from an Icelandic bank that has since gone into administration? If it is confirmed in the next few days that new private finance providers are required to get the job finished, will the Government offer whatever financial guarantees may be necessary to bring such financiers on board?

The Cabinet Secretary for Finance and Sustainable Growth is already in correspondence with Aberdeen City Council and is looking at the situation as it develops. Although the local member said that the schools project had been much delayed, I know that he welcomed the fact that the current administration on Aberdeen City Council pursued the project. I know that we will be at one in ensuring that that project—and the non-profit distribution model schools that it brings into being—comes to fruition, to the great benefit of the folk of Aberdeen and north-east Scotland.

Does the First Minister agree with the comments of his colleague Keith Brown, who told the chamber last week that the United Kingdom Government was guilty of "despicable bullying of Iceland", or does he think that the steps that were taken were justifiable in order to protect the deposits of Scottish savers, including local authorities and charities?

The detail that has emerged about the early discussions that took place some time ago between the Icelandic Government and UK Government officials at the highest level indicates that there was rather more warning of the developing situation than we were perhaps led to believe at first. I think that it is right and proper that action is taken to protect the interests of Scottish and UK depositors. I am not altogether convinced that it is the wisest thing to do to give people the impression that they are being branded as terrorists or as part of a terrorist organisation. Negotiations, which I understand are now proving fruitful and beneficial, are not best conducted in that way, by name calling or by depicting people as something that they obviously are not.

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Repossessions

To ask the First Minister what further actions the Scottish Government will take to ensure that repossession is used only as a last resort by lenders when home owners are having mortgage repayment difficulties. (S3F-1160)

The Mortgage Rights (Scotland) Act 2001 provides significant protection for those at risk of repossession. Owners have the right to ask the sheriff to give them time to pay off arrears and lenders are obliged to comply fully with Financial Services Authority regulations.

In addition, Government officials met the Council of Mortgage Lenders on 23 October. The CML confirmed that its new guidance on repossession, which was issued that day, applies to all United Kingdom members, and emphasised that lenders should consider all alternative options to repossession when dealing with home owners in mortgage difficulties.

This Administration believes that home owners in Scotland have protections that are better than the protections in the rest of the UK, given that the Government has made available extra money to support families who are struggling to meet their mortgage payments—that is not in place in England and Wales. As part of our action plan on the economy, we are of course keeping the situation under review.

There might be disagreement about whether protections in Scotland exceed those south of the border. A number of commentators have suggested quite the opposite. Will the First Minister therefore agree to consider the introduction of pre-court protocols in Scotland and to report back to the Parliament on the matter? Given that the Parliament legislated in 2004 to regulate the private rented sector, will he urgently consider using the powers that are available to this Parliament to regulate so-called sale-and-leaseback landlords?

Cathy Jamieson will acknowledge that the Deputy First Minister made an initiative on the matter in the past few days. The Deputy First Minister is looking for the UK Government to implement as soon as possible the recommendations of the Office of Fair Trading report on sale and rent back in the private sector.

As Cathy Jamieson well knows from experience, the legal system in Scotland is substantially different from the system in England and Wales. Before we go down the route of thinking that pre-court protocols are a panacea, we should consider the words of Judge Robert Jordan, the chairman of the Civil Justice Council, which drafted the "Pre-action protocol for possession claims based on mortgage or home purchase plan arrears in respect of residential property". On 22 October, he said:

"The protocol does not change the courts' limited powers to deal with these cases."

The Scottish Government is by all means willing to listen to suggestions and examine further improvements that can be made. However, we and home owners in Scotland should take comfort that practical arrangements are in place in Scotland, not least the new home owners support fund, which has a budget of £25 million over the next two years. The fund is in place now to help people who cannot access support elsewhere to stay in their homes. No such scheme is in place elsewhere in the UK, despite some soundings to that effect, so my remark that the position on public support is in many respects better in Scotland than it is elsewhere in the UK was well justified.

What representation has the Scottish Government made to the UK Government in relation to the OFT report, "Sale and rent back", which calls for regulation by the FSA to ensure that home owners who face financial difficulties are protected from rogue companies?

The question has almost been answered, but the First Minister may make a brief comment.

The issue is worthy of further explanation, because it is important to the people of Scotland. People who are under pressure from threatened repossession are worried about sale-and-rent-back schemes in the private sector.

The OFT report specifically called for the compulsory regulation of sale-and-rent-back schemes and for the Department for Work and Pensions to provide

"greater clarity on the eligibility of sale and rent back tenants for housing benefit."

Members will acknowledge that the recommendations touch on what are currently UK Government responsibilities. Therefore, it is entirely appropriate that the Deputy First Minister should this week have written to the UK Minister for Trade, Investment and Consumer Affairs, to see that the recommendations, which I am sure are supported by members of all parties, are fully and properly implemented.

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Lord Advocate

To ask the First Minister whether the Scottish Government, in liaison with the United Kingdom Government, has plans to redefine the role of the Lord Advocate. (S3F-1147)

We have had no discussions with the UK Government on redefining the role of the Lord Advocate. Our national conversation—to which I know Bill Aitken is on the cusp of submitting a contribution—is considering all aspects of our constitutional arrangements, but we have no immediate plans to change the role of the Lord Advocate.

The First Minister should never anticipate my actions, but he will be aware of the problems caused by the volume of appeals on so-called devolution issues. Many may be spurious, but a great many are related to the currently defined role of the Lord Advocate in relation to convention rights legislation. Is there not a case for seeking, through the UK Government, an amendment to the Scotland Act 1998 to exclude the acts of the Lord Advocate from section 57(2) or to redefine the Lord Advocate's role between the prosecution function and that of the Government's legal adviser, which would seem to be one way of obviating what is becoming an increasing problem?

I do not anticipate what Bill Aitken is going to do but, when we came to office and one of our first actions was to agree that the Lord Advocate and Solicitor General would no longer routinely attend the cabinet, emphasising the separation of the political and judicial, I am pretty certain that Bill Aitken welcomed that move.

Bill Aitken should also be aware that the Lord Advocate has indicated on several occasions that she is open to the constructive consideration of the future of the role. For example, in the KPMG annual law lecture last February, she said:

"I think it is perfectly valid and proper for people to debate the proper role of Law Officers. I also believe it is important, though, for that debate to be informed not only by history but, crucially, by the needs of a modern 21st Century … Scotland."

With that in mind, Bill Aitken invites me to consider amendments to the Scotland Act 1998. I must confess that I am considering amendments to the Scotland Act 1998, although the amendments that I have in mind may be more all-encompassing than those that Bill Aitken has in mind. However, there is a degree of consideration and flexibility, and if we pursue that in good faith and while acting jointly, I am sure that Bill and I will come to the right conclusions.

Meeting suspended until 14:15.

On resuming—